by Dennis Crouch
The text of the Patent Act suggests that obviousness is a straightforward inquiry: find how the claimed invention differs from the prior art and ask whether, based upon those differences, an objective artisan would deem the invention obvious. 35 U.S.C. § 103. In reality, the analysis is not easy or straightforward. At the end of the day, tribunals are often left guessing whether the invention went far enough—are the differences from the prior art meaningful in some way or are they merely points of distinction. There are myriad ways that patentees endeavor to show results that are important, surprising, or synergistic—all terms that connote non-obviousness. One way to show meaning is through the use of what the Supreme Court has termed “secondary considerations” and others term “objective indicia.”
Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented. As indicia of obviousness or nonobviousness, these inquiries may have relevancy. See Note, Subtests of “Nonobviousness”: A Nontechnical Approach to Patent Validity, 112 U. Pa. L. Rev. 1169 (1964).
Graham v. John Deere Co., 383 U.S. 1 (1966). When courts ask about the importance of the advance, they must take care to ensure a nexus between the advance and its import. Focusing on the importance of the advance incentivizes advances that are important. Nexus is always relevant when considering if an advance is meaningful, but in recent years the Federal Circuit has aggressively used nexus particularly to limit the use of objective indicia such as industry praise or commercial success. Rather than permitting a fact to weigh the evidence, the court requires a proven nexus before any consideration of the objective indicia and its impact. Often industry praise and commercial success are tied to a commercial product rather than “the invention.” In this situation—where a product has been successful and praised—courts have permitted the patentee to prove a nexus linking the praise to the invention by pointing to the product and showing the product is an embodiment of the patent claim and the claimed invention is not merely a small component of the invention. In various formulations, the court has seen this as requiring the product to be “commensurate in scope” or “coextensive” with the claimed features. See Polaris Industries, Inc. v. Arctic Cat, Inc., 882 F.3d 1056, 1072 (Fed. Cir. 2018); Asyst Techs., Inc. v. Emtrak, Inc., 544 F.3d 1310, 1316 (Fed. Cir. 2008); In re Grasselli, 713 F.2d 731, 743 (Fed. Cir. 1983); Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d 1120, 1130 (Fed. Cir. 2000); Demaco Corp. v. F. Von Langsdorff Licensing Ltd., 851 F.2d 1387, 1392 (Fed. Cir. 1988). A difficulty with this formulary is that there are always unclaimed features found in any product, and so it is difficult to know when the two are “coextensive.” In its important 2019 Fox Factory decision, the Federal Circuit drew a hard line, requiring the product and claim be “essentially” identical:
Although we do not require the patentee to prove perfect correspondence to meet the coextensiveness requirement, what we do require is that the patentee demonstrate that the product is essentially the claimed invention. While coextensiveness is an issue of fact that should ordinarily be decided by the fact finder in the first instance, no reasonable fact finder could conclude, under the proper standard, that the X-Sync chainrings are coextensive with the patent claims.
Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366 (Fed. Cir. 2019) (citing to Demaco Corp. v. F. Von Langsdorff Licensing Ltd., 851 F.2d 1387, 1392 (Fed. Cir. 1988)). I wrote about Fox Factory back in 2019 and explained:
The court here again raised the “nexus” hurdle by holding that a presumption of nexus can only be achieved by proving that the product being sold by the patentee is “essentially the claimed invention.” This is a situation where SRAM owned two patents in the same patent family — both of which covered aspects of its X-Sync bicycle chainring (gear). Each patent included elements not claimed in the other — for the court that was enough evidence to disprove coexistence.
Dennis Crouch, Nexus: Product must be “Essentially the Claimed Invention”, Patently-O (December 18, 2019). Since the product in Fox Factory included multiple inventions—each covered by its own patent—the patentee was unable to show that any one of the inventions had nexus with the product. (Note here in Fox Factory, we are not talking about some complex invention – it was only a chain ring, i.e. a gear, that sold well).
An important en banc petition is pending before the Federal Circuit in Zaxcom, Inc. v. Lectrosonics, Inc., 20-1921 (Fed. Cir. 2022) involving that nexus and asking the Federal Circuit to reconsider its Fox Factory precedent. The setup in the case is fairly typical: Zaxcom sued Lectrosonics for patent infringement back in 2019 (D.New Mexico); Lectrosonics responded with two inter partes review petitions. The PTAB granted both IPR petitions and then cancelled the challenged claims as obvious. On appeal the Federal Circuit affirmed, and Zaxcom has now petitioned for en banc rehearing.
The Zaxcom inventions relate to a wireless method for multi-track video recording. The problem with wireless was always timing, and the inventions here solve that with very particular time-codes. The invention here was said to change the industry, and the inventors were awarded both an Emmy and an Oscar. Here is the deal, the invention is embodied in the product, and the praise was tied to the new functionality offered. But, the invention also includes features claimed in a different patent. Because of that, the Board found no nexus and refused to consider the Emmy/Oscar results based upon Fox Factory. On appeal, the Federal Circuit affirmed. The petition now asks for reconsideration of Fox Factory and its progeny:
By deviating from established law, the Fox Factory panel precedent has triggered a need for en banc review. This Court has warned against unduly “strict requirements” in evaluating nexus. Rambus. Nowhere is the wisdom of this warning more apparent than in the present case. Here, it is undisputed that products embodying the claimed invention (Zaxcom’s wireless audio recording system) received industry praise, including a technical Oscar and an Emmy. Lectrosonics did not contend that the claimed invention is just a “small component” of this system. Under this pre-Fox Factory standard, this entitles Zaxcom to a presumption of nexus. Yet the Board and the panel not only rejected this presumption but quixotically failed to find that the claimed invention received any industry praise, because they found that another feature contributed to the praise but was not required by the claims. Put another way, the decisions below disregarded the fact that products embodying the claimed invention undisputedly received the equivalent of not just one Nobel Prize in its field, but two.
Zaxcom En Banc Petition. Retired Chief Judge Paul Michel added amicus support:
What started as a relatively straightforward evidentiary presumption to facilitate the obviousness analysis under 35 U.S.C. § 103 has now morphed into a complex analysis “requir[ing] the fact finder to consider the unclaimed features of the stated products to determine their level of significance and their impact on the correspondence between the claim and the products.” Teva Pharms. Int’l GmbH v. Eli Lilly & Co., 8 F.4th 1349 (Fed. Cir. 2021) (citing Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366, 1375 (Fed. Cir. 2019)). In addition to the new “level of significance” factor, recent cases have imposed an “essentially claimed” factor in the presumption analysis. See, e.g., Quanergy Sys., Inc. v. Velodyne Lidar USA, Inc., 24 F.4th 1406, 1418 (Fed. Cir. 2022). These new “requirements” of the presumption-of-nexus analysis conflict with this Court’s precedent.
Judge Michel brief. I expect responsive briefs from both the USPTO and the patent challenger Lectrosonics in late April 2022.