Tag Archives: motivation to combine

AI-Generated Invention at the Federal Circuit

Patent,

On Monday, June 6, the Federal Circuit will hear oral arguments in the pending  AI-inventorship case of Thaler v. Vidal, Appeal No 21-2347. The court does not release the identity of the individual judges until just before oral arguments, so all we (and the parties) know is that it is Panel A in Courtroom 201.

This case raises the novel legal issue of whether a patent can be obtained for an invention created by an artificial intelligence (AI) in the absence of a traditional human inventor (“AI-Generated Invention”). The United States Patent and Trademark Office (“USPTO”) and the District Court for the Eastern District of Virginia have barred such inventions from being patented. This ignores fundamental statutory and constitutional principles and also stymies innovation. While other countries are promoting the progress of science, the USPTO is belatedly adopting luddism.

Appellant’s brief.  In their responsive brief, the US narrowed the issue somewhat:

Whether the District Court correctly concluded that an artificial intelligence device comprised solely of source code cannot qualify as an “inventor” under the Patent Act, where the plain statutory language specifically defines “inventor” to be an “individual” and refers to an “inventor” using personal pronouns.

Appellee Brief.

That same panel is hearing two other IP cases:

  1. Samsung v. Dynamics, 21-2352.  PTAB sided with the patentee Dynamics.  On appeal, Samsung argues obviousness — that the Board failed to consider some aspects of the prior art and required motivation-to-combine be found in the primary reference.  Dynamics patents cover electronic emulation magnetic stripes (on, for instance credit cards).  The infringement argument is that Samsung’s digital wallet infringes. John O’Quinn (Kirkland Ellis) will argue for Samsung and Robert Morris (Eckert Seamans) for Dynamics.
  2.  In re A. Zeta S.R.L., 22-1178. Zeta is an Italian company seeking to register the mark PARMA COFFEE to be used for coffee, chocolate, tea, and other food/beverages.  Parma is a mid-sized city in Italy (200k people) and the goods in question apparently originate from Parma. The PTAB refused to register the mark — finding the COFFEE portion of the mark generic, and PARMA to be “Primarily Geographically Descriptive” under Section 2(e)(2) of the Lanham Act.  One issue here is about “origination” — the coffee is not grown in Parma but the PTO still argues that there is sufficient connection with the city (and also that Zeta waived that argument before the TTAB).  The parties waived oral arguments in the case and so it will be submitted on the briefs .

 

 

 

 

Generic Industry Skepticism Irrelevant to Non-Obviousness

Patent,

by Dennis Crouch

In a divided opinion, the Federal Circuit rejected a PTAB non-obviousness decision–holding that “generic industry skepticism” is irrelevant to the question of obviousness.  Auris Health, Inc. v. Intuitive Surgical Operations, Inc., 2021-1732, — F.4th —, 2022 WL 1275241 (Fed. Cir. Apr. 29, 2022).  I suggest the Auris Health majority departs from KSR by again drawing sharp lines rather than allowing for a functional, flexible analysis. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007). The opinion was penned by Judge Prost and joined by Judge Dyk. Judge Reyna wrote in dissent.

The Intuitive Surgical patent is directed to a “method for performing robotic surgery.”   The improvement is a servo-pulley mechanism for swapping surgical tools (e.g., scissors to scalpel to graspers).  In 2018, Intuitive Surgical sued Auris Health for patent infringement. Intuitive Surgical Operations, Inc. v. Auris Health, Inc., No. 1:18-cv-01359 (D. Del.).  In response, Auris petitioned for inter partes review. The PTAB instituted the IPR, but ultimately concluded in its final written decision that the claims had not been proven obvious.  On appeal, the Federal Circuit has vacated and remanded.

The IPR focused on the combination of two prior art references: Smith and Faraz (US5624398 and US5824007) that collectively teach all of the claim limitations. Smith is directed to a robotic surgical system; and Faraz is directed to stand for holding surgical instruments. In its analysis, the PTAB considered evidence presented that (1) combining the two references would create some complications and (2) conventional wisdom established substantial skepticism regarding the use of robotic systems during surgery.  Based upon this evidence, the PTAB concluded that a person of skill in the art would not have been motivated to combine the references in order to arrive at the claimed invention.  On appeal, the Federal Circuit altered course–holding that “generic industry skepticism cannot, standing alone, preclude a finding of motivation to combine.”

There are two areas where skepticism might come into play: (1) as part of the KSR obviousness analysis considering reasons to combine references; and (2) as a secondary consideration of non-obviousness (aka objective indicia).  In the second use-case (objective indicia), the Federal Circuit has previously tightened scope of relevant evidence to only those shown to have a tight nexus with the claimed invention.  Here, however, the skepticism was tied to the particular claim elements, but rather was general skepticism shown to be held by persons of skill in the art “about performing robotic surgery in the first place.”

Here, the Federal Circuit has taken the nexus requirement used for secondary indicia and brought it forward to also apply when considering motivation-to-combine.

[W]hile specific evidence of industry skepticism related to a specific combination of references might contribute to finding a lack of motivation to combine, that’s not what we have here.

Auris Health. It seems to me that this approach is unduly restrictive and in tension with KSR’s rejection of “[r]igid preventative rules that deny factfinders recourse to common sense.”  Rather, in KSR, the Supreme Court held that the question of whether a person of skill would combine references is a broad and flexible inquiry.  Here, it appears that the Federal Circuit is asking for evidence relating to motivation-to-combine to be tied directly to the problem being solved. But KSR rejected that approach as well.

The Court of Appeals failed to recognize that the problem motivating the patentee may be only one of many addressed by the patent’s subject matter. . . . Under the correct analysis, any need or problem known in the field of endeavor at the time of invention and addressed by the patent can provide a reason for combining the elements in the manner claimed.

KSR. One question to consider here is whether the Supreme Court intended its analysis to by symmetrical or balanced. The Supreme Court talked about “reasons for combining” involving substantial flexibility, but did not discuss whether “reasons for not combining” should receive the same treatment. It seems obvious that this should be a balanced inquiry.

In his dissent, Judge Reyna agreed that “general skepticism toward robotic surgery” should ordinarily not be enough–by itself–to negate a motivation to combine.  However, he argues that it should still may be relevant to the analysis.  Here, Judge Reyna found that the Board had included this reason as one among many, and that substantial evidence thus supported the Board’s conclusion of no motivation to combine.  (For example, the Board noted that the combination would restrict physician movement and would reduce surgical precision).

Judge Reyna also commented on the seeming rigid new rule:

I am also concerned that the majority opinion may reasonably be understood to announce an inflexible and rigid rule, namely that it is “impermissible” for the Board to consider evidence of artisans’ skepticism toward robotic surgery in determining motivation to combine. I find no authority for this assertion, and indeed it appears in tension, at a minimum, with the central thrust of KSR. See KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 415, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007) (rejecting the “rigid approach of the Court of Appeals” and articulating an “expansive and flexible approach” of determining obviousness). This is particularly true when considering art in fields of endeavor that are inherently dangerous or risky. Indeed, in past cases, this court has accounted for the attitudes of medical professionals toward certain types of procedures when determining whether a motivation to combine has been adequately demonstrated. See, e.g., Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342, 1369 (Fed. Cir. 2012) (finding no motivation to combine where “doctors were not using the disclosed devices and methods to heal wounds with negative pressure because they did not believe that these devices were capable of such healing”).

Reyna in dissent.

= = =

What’s really happening here.  In my view, the problem in this case comes down to the reality that the patentee’s evidence against combining the references is quite weak, and the majority disagreed with the PTAB’s conclusion giving it weight.  However, since the court must give deference to PTAB factual findings, it would have been much harder challenge the decision on that ground, especially because the obviousness analysis depends upon so many factors. So, instead of challenging the factual findings, the majority decided to create a bright rule of law barring the evidence from even being considered as relevant to the inquiry.

Preparing for Christmas and Shifting Arguments at the PTAB

Patent

by Dennis Crouch

The Federal Circuit’s April 12, 2022 decision in Everstar Merchandise narrowly focuses on PTAB trial procedure.[1] And, as a non-precedential opinion, it lacks weight.  Still, the case is important because of the fabulous Christmas Theme drawings found in the patent-at-issue.[2]

Willis Electric and Everstar compete in the decorative lighting marketplace.  In 2019, Everstar petitioned for post-grant review (PGR) of a Willis patent covering a “strength-enhanced, net-like decorative lighting structure.”[3]

These nets need to be strong enough so that they do not fall apart.  The prior art solutions of twisted-pair, thicker wires, and extra support wires solved the problem but had drawbacks of cost, bulk, and weight.  Willis improved upon the prior art with a single wire with internally reinforced strands and an outer insulating layer.  The obviousness case presented two references whose combination taught all of the claim elements: Kumada disclosed a net design; Debladis disclosed the internally reinforced wire.[4]  Although the PTAB initially granted the PGR petition, it eventually sided with the patentee—holding that a person of skill in the art would not have been motivated to combine the references.

During briefing, the patent challenger argued that cost reduction provided a motivation to combine the references.  This seemed like a natural argument because cost reduction is a stated reason for the Willis invention at issue as well as a stated concern in both prior art references. In response, the patentee got technical and provided evidence that the proffered combination would not necessarily reduce cost.  A cost reduction might come from reducing copper content, but the original petition did not particularly make the reduced-copper argument. In a reply brief, the challenger then made the link—arguing that the combination “would reduce the amount of total copper [and therefore] would reduce the cost of the system.”

The Board eventually refused to consider the particularized cost-reduction argument since it was not raised in the initial petition.  The result then was a holding that the challenger had not met its burden of proving the claims obvious.  On appeal, the Federal Circuit has vacated and remanded.

The Federal Circuit agreed that the initial petition controls the AIA trial, and that initial petition must identify the particular evidence that supports the grounds for challenging each claim.  Here, though the court distinguished between an “entirely new rationale” (which is prohibited) and responsively elaborating on prior arguments (which is allowed).  Here, the court concluded that the petition had sufficiently raised the cost-reduction argument and tied it particularly to the prior art references.  In its conclusions though, the court referenced materials beyond the initial petition itself by further noting that cost reduction was discussed in the institution decision, was the subject of expert testimony, and was briefed on the merits.  Those actions together constituted a “developed record” that allows for a “fair extension” of the original arguments. Further, “[a]ny ambiguity as to whether a reply constitutes a new argument is eliminated when the reply is a legitimate reply to arguments introduced in a patent owner’s response or the Board’s institution determination.”[5]

(more…)

Patent Law’s Fifth Column: Motivation to Combine with Reasonable Expectation to Success

Patent,

by Dennis Crouch

Apotex Inc. v. Cephalon, Inc. (Supreme Court 2022)

In its petition for writ of certiorari, Apotex asks the Supreme Court to revisit motivation to combine,  obvious to try and whether the non-obvious contribution needs to be an improvement over the prior art.   The petition argues that KSR v. Teleflex (2007) requires a flexible analysis, but that “over the ensuing decade-and-a-half, the Federal Circuit has … reverted to its old rigid ways.”  The petition also complains that the Federal Circuit has again masked its jurisprudence via Summary Affirmance without opinion.

The accused infringers here were seeking to market a drug treatment for chronic lymphocytic leukemia covered by several Cephalon patents and sold as Bendeka.  The defendants challenged the patent claims as obvious, but the district court sided with the patentee — finding a lack of motivation to combine the references with a reasonable expectation of success.  This test has become the sina non quo of post-KSR Federal Circuit obviousness decisions.  See, for example, Accorda Therap. v. Roxane Labs., 903 F.3d 1310 1328 (Fed. Cir. 2018) (“motivation to modify or combine with a reasonable expectation of success”);  In re Stepan, 868 F.3d 1342, 1345-46 (Fed. Cir. 2017) (“requires finding both that a skilled artisan would have been motivated to combine the teachings of the prior art … and that the skilled artisan would have had a reasonable expectation of success in doing so.”), etc. Apotex’s petition explains this as follows:

[T]he Federal Circuit seems to believe that if there is any uncertainty about whether an obvious-to-try approach will succeed, that potentially compromises the motivation to try an obvious solution to a pressing problem, and therefore produces patent monopolies for what is obvious to try. Indeed, so ingrained has the motive-to-try-what-is-likely-to-succeed test now become in the Federal Circuit’s obviousness psyche, that the Federal Circuit now sometimes includes motivation as a fifth Graham factor.

I also write about this same issue in the Federal Circuit’s recent decision in Teva v. Corcept (Fed. Cir. 2021). Cephalon’s response is due in about 2 weeks.

Federal Circuit Draws a Hard Line Against “Obvious to Try” Analysis

 

Sequencing-by-synthesis: Illumina defeats Columbia’s patents

Patent,

Columbia University v. Illumina, Inc. (Fed. Cir. 2021) (nonprecedential opinion)

In this IPR decision, the PTAB cancelled claims from five patents owned by Columbia — finding them obvious. US Patent Nos. 9,718,852 (clm 1); 9,719,139 (clm 1); 9,708,358 (clm 1); 9,725,480 (clm 1); and 9,868,985 (clms 1-2).   The patents are all related to methods of sequencing DNA using “sequencing-by-synthesis.”  Illumina believes that it owns the process. Columbia felt otherwise and sued Illumina for patent infringement in D.Del. That lawsuit has been stayed since July 2018 as the court awaits these IPR decisions. On appeal, the Federal Circuit has affirmed.

Here is a fairly easy to understand video about  how this work:

The likelihood of winning an appeal certainly depends upon the merits of your case.  The second most important factor is the level of deference afforded to the lower-tribunal.   The Federal Circuit gives deference to any factual findings made by the PTAB in its IPR decisions.  In particular, a PTAB finding of fact will be affirmed if it is based upon “substantial evidence.”  The words “substantial evidence” might sound like a lot of evidence, it is actually a quite easy threshold.  A decision is based upon “substantial evidence” if it is supported by “more than an iota” of evidence or if “a reasonable mind might accept the evidence to support the finding.”  On the other hand, questions of law are reviewed without deference — de novo.

Obviousness is a question of law reviewed de novo.  However, the ultimate conclusion of obviousness is always based upon a large number of factual findings, “including the scope and content of the prior art, differences between the prior art and the claims at issue, the level of ordinary skill, and relevant evidence of secondary considerations.”   See my simple tip-of-the-mountain drawing below.

Here, the patentee challenged three factual findings by the Board, and the Federal Circuit found that each finding was supported by enough evidence to pass muster.  The three topics: motivation-to-combine; and two reasonable-expectation-of-success arguments.

The patentee argued someone skilled in the art would not have been motivated to combine an allyl capping group into a sequencing-by-synthesis approach.  Their particular argument, was that a prior art reference indicated some problems with use of the capping group and thus discouraged its use.  As supporting evidence, Columbia pointed to the fact that other researchers ceased related experiments after the reference was published.  On appeal, however, the Federal Circuit noted that this “teaching away” argument requires “clear discouragement” which was not proven. Although the reference did not show the experiment to be a smashing success, it also was not a failure.  Thus, while researchers might have considered better alternatives based upon the reference, it did not actually teach-away.

While it may be true that … scientists ultimately chose to research alternative capping groups, “just because better alternatives exist in the prior art” does not mean that an inferior alternative “is inapt for obviousness purposes.” Quoting In re Mouttet (Fed. Cir. 2012).

Thus, the PTAB’s finding of motivation to combine was supported by substantial evidence.

Obviousness affirmed.

Easing into 2021 with PTAB Affirmance

Patent

Comcast Cable Communications v. Promptu Systems Corporation (Fed. Cir. 2021)

The Federal Circuit’s first decision of 2021 comes as a boring 5-page non-precedential opinion upholding a PTAB Final Written Decision that Promptu’s claims had not been proven invalid.  Love it! 💓💓🌼🌼🌼. 

Promptu’s U.S. Patent No. 7,260,538 claims voice-recognition processing using a cable-TV remote-control but processed server-side (cable head-end unit).  The chart below shows the communications pathway from the Remote Control via the Set-Top Box then to the Cable Company’s Head-End Unit where the speech processing actually occurs.

The cited prior art was quite similar in that it allowed speech processing via the remote.  However, the key difference appears to be the content of the messages. In particular, the invention here focused on receiving “command functions” that control the set-top box while the prior art involved accessing information over the network and causing actions at the server.  That difference was sufficient to win the day for the patentee.

Comcast raises a panoply of arguments challenging the Board’s final-written decisions. Primarily, it claims the Board erred by rejecting its construction of “command function” as overly broad and by finding no motivation to combine Houser with the primary references. We do not agree.

Slip Op.

= = = =

In a separate opinion, the Federal Circuit vacated-in-part another Comcast vs Promptu case — this one involving Promptu’s U.S. Patent No. 7,047,196. [Decision]  The court found that the PTAB had too-narrowly construed the claim term “received back channel.”

Obviousness: Known Solutions from other Fields of Art

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In re Robert Kross (Fed. Cir. 2020)

In this short decision, the Federal Circuit has affirmed the PTAB’s determination that Kross’s claimed invention would have been obvious. Apn. No. 13/275,400. (Real party-in-interest here is Poly-Gel L.L.C.).

The invention: A method of printing using “non-gelatin viscoelastic gel printing plates.” The gel used here is designed to solve cracking problems that were “a hallmark of gelatin plates.”  The claimed viscoelastic gel was already known in the art for its non-cracking properties. In its decision, the Board concluded that PHOSITA would have been motivated to solve the known cracking problem by using “known properties of a known material.”

The difficulty in this case involves the claimed viscoelastic gel. The prior art (Chen) discloses the gel and its non-cracking and ease-of-manufacture properties.  However, Chen only describes this outside of the printing context. On appeal, the Federal Circuit affirmed that PHOSITA would have been motivated to use Chen’s disclosure:

 [T]he fact that Chen does not teach the use of viscoelastic compositions in any type of printing does not undermine the Board’s finding of a motivation to combine. We agree with the Board that Chen’s silence “as to a particular application is of little or no moment given the teachings of the properties and the resulting general uses of the viscoelastic gel-like materials, which would have suggested those materials as, more likely than not, a successful solution to the problems of gelatin cracking and splitting.”

Slip Op. (Quoting PTAB determination).  Here, the Federal Circuit was guided by its reading of the prior art — which identified the particular problematic parameters (cracking, splitting) to be addressed. That guidance from this prior art brought this case outside of the “obvious to try” world and into one of “reasonable expectation of success.”  I’ll note here that the court was guided by its reading of the prior art — it turns out that there are many many problems with gel-based printing recognized in the prior art. The court skipped over how those additional problems might have guided PHOSITA off of the neat invention pathway offered by the opinion here.

Guest Post: Fast Examiners; Slow Examiners; and Patent Allowance

Patent,

Prof. Shine Tu (WVU Law) has been doing interesting work studying patent prosecution and how differences between patent examiners impact the process.  I asked him to provide a guest post to help readers get started on his work. – DC

by Shine Tu

Although we know that individual patent examiners can greatly affect an inventor’s chance to (1) get a patent at all and (2) get it in a timely way, there has been very little work determining how examiners are able to either delay or compact prosecution while still maintaining their quotas via the count system.  Understanding how examiners work the quota system with very different outcomes can be critical for practitioners trying to understand what sort of responses or claim narrowing they should make. It also has significance for those looking to understand and improve the very process intended to spur invention.

In a previous study, I have shown that there are extreme variations on allowance rates between examiners.  For example, in analyzing 10 years of patents from Technology Center 3700 I found that there were approximately 200 examiners from 3700 who had issued over 120,000 patents (approximately 51% of the patents from this Technology Center). In contrast, there was a group of approximately 300 examiners who issued less than 800 patents (less than 1% of the patents from this Technology Center). [See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1939508].  In this current dataset, I find that not only is there a difference in allowance rates, but there is a significant difference in prosecution times. Fast examiners allow applications in approximately 1.64 years, average examiners in 3.07 years, and slow examiners on average will allow a case in 5.85 years.  This delay of over four years (fast versus slow examiners) increases direct costs to applicants in the form of PTO and attorney fees, as well as indirect costs such as reduced growth, sales, and follow-on innovation.

In a set of two articles, I explored how examiners can either: (1) slow down the patent prosecution process by using a strategy of constant rejections [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3539731] or (2) speed up the patent prosecution process by using a strategy of fast allowances [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3546944]. To create a sufficiently large sample to be statistically significant, I coded the patent prosecution histories of 300 patents and reviewed 100 patents from slow, average, and fast examiners from workgroup 1610.  Every rejection issued by the examiner and every response and traversal argument by the applicant was recorded.

As an initial matter, these data show that examiners in each group have similar amounts of experience at the PTO and similar average current docket sizes. However, the allowance rates of these examiner groups vary dramatically, with 79.55%, 61.65%, and 27.7% allowance rates corresponding with fast, average and slow examiners, respectively.  The Office Action to Grant (OGR) score shows that these fast examiners grant a patent for every 1.5 Office Actions written, while it takes average examiners roughly 4 Office Actions and slow examiners a stunning 10.5 Office Actions before they grant one patent.

Fast examiners seem to be using a count maximization strategy based on allowances. A typical applicant who gets a fast examiner will usually have one or two Office Actions before an allowance.  Fast examiners do not use many prior art rejections.  Additionally, the rejections employed by fast examiners rely heavily on Obviousness-type Double Patenting (ODP) and/or 35 USC 112 rejections. Fast examiners have four times as many ODP rejections compared to slow examiners.  Most applicants can (and do) traverse these ODP rejections by simply filing a terminal disclaimer.  Interestingly, use of the ODP rejection is a super-efficient way to employ a count maximization strategy. This is because little work is needed to find an ODP rejection, due to the closed universe of patents, and an ODP rejection is relatively easy for the applicant to traverse. Thus, an ODP rejection followed by a terminal disclaimer gets the examiner to maximum counts with minimal effort.

In contrast, slow examiners seem to be using a strategy based on rejections.  First, slow examiners have a much higher restriction rate (almost twice) and encounter three times as many traversals to these restriction requirements.  These data are consistent with a rejection strategy because examiners can create a large patent family and cycle through rejections with less work, especially since they should already be familiar with the specification from the other restricted family members.  Furthermore, slow examiners may not be able to avail themselves of the ODP rejection strategy employed by fast examiners because of the safe harbor created by 35 USC 121.

Not only do slow examiners use more prior art, the sources of prior art differ for slow examiners versus fast and average examiners. Slow examiners employ a rejection strategy based on prior art, with five times as many 102(a/e) rejections and six times as many 103 rejections compared to fast examiners. For 102(a/e) rejections, slow examiners rely on both US patents as well as printed publications, while fast and average examiners rely on US patent applications.  Interestingly, for 102(b) rejections all examiners rely more on printed publications and secondarily on US patents. With 103 rejections, examiners also all mainly rely on US patents and, secondarily, on printed publications. Thus, all examiners search and employ prior art from different databases, however, they use the prior art that they find in different ways.

Unsurprisingly, applicants traverse prior rejections from slow examiners at a much higher rate than fast examiners. Specifically, with 102 and 103 rejections, applicants will push back against slow examiners most commonly with a missing elements argument.  In contrast, most applicants respond to fast examiner 102 and 103 prior art rejections by simply filing claim amendments.  Interestingly, applicants will also push back against 103 rejections from slow examiners by making a “no motivation to combine” argument. This may be because slow examiners use seven times as many references as fast examiners.

Slow examiners also put the brakes on prosecution by filing multiple 112 rejections.  Specifically, slow examiners utilize three times as many 112 second rejections, four times as many enablement rejections and seven times as many written description rejections. With slow examiners, applicants use arguments to traverse enablement and written description rejections. In contrast, applicants with fast examiners usually only make claim amendments to traverse enablement or written description rejections.

Practitioners need to understand what type of examiner they have.  Understanding and using this data is paramount to help manage client expectations as well as to help create a rational prosecution strategy.  I note that all of these data can be accessed through services such as LexisNexis PatentAdvisor® to help determine which examiner you may encounter.  This may also be important for patent prosecution strategy since slow examiners may require a strategy that involves an appeal.  While fast examiners may require a strategy that involves fewer amendments and more arguments.

Although I do not make any definitive judgements about the quality of the claims passed by different examiners nor even if there is an “optimal” or “ideal” allowance rate, these varying trends indicate a wide discrepancy in examiners’ methodology that may be affecting the overall quality and number of patents created. By analyzing the differences, my studies suggest how the counts system might be modified to ensure a more efficient and balanced process where all examiners apply the rules of patentability fairly and consistently. One possible solution, for example, would be to review applications from both fast and slow examiners at a higher rate. Another solution may be to deduct counts from examiners who make too many erroneous rejections.  Conversely, adding counts for examiners who dealt with difficult applicants could also be in order.  Alternatively, we could completely reform the count system and create an examiner incentive structure that focuses more on quality and less on quantity.  Only by looking in-depth at examiner behaviors will we be able to (1) better understand and navigate the current system and (2) make reforms to the current process that will truly encourage innovation.

Federal Circuit affirms Obviousness based upon General Knowledge of PHOSITA

Patent, ,

by Dennis Crouch

Philips v. Google & Microsoft (Fed. Cir. 2020)

Google & Microsoft teamed-up to challenge Phillips’ U.S. Patent 7,529,806 in an inter partes review (IPR).  The Board complied and cancelled claims 1-11 — finding the claimed quasi-streaming method unpatentably obvious.  On appeal here, the Federal Circuit has affirmed — adding important context to obviousness determinations based upon general knowledge.

In KSR, the Supreme Court indicated that the obviousness analysis should consider the “background knowledge possessed by a person having ordinary skill in the art.” KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398 (2007).   Under KSR, information deemed within PHOSITA’s general knowledge is more powerful than that found buried in a prior art reference because we assume that PHOSITA would consider using their general knowledge in combination with the prior art — even absent any express motivation to do so. Because of its potential power, the Federal Circuit has been somewhat concerned that the approach could serve as an end-run around traditional obviousness analysis.  Here though, the court found that Google had presented enough evidence to assume that the pipelining (see next paragraph) was part of the general knowledge of PHOSITA.

The invention: The claims call for downloading the “next file” in the background while playing the prior file. This setup is effectively a form of buffering (also known as pipelining or stream emulation).  The approach uses a client-side “control information file” that facilitates sequential file retrieval.  The claims have an additional feature of having a variety of media file formats, and the client device is able to “choose the format compatible with the client’s play-out capabilities.”

In its petition, Google alleged (1) anticipation based upon SMIL 1.0 (Synchronized Multimedia Integration Language 1.0 Specification); and (2) obviousness based upon SMIL 1.0 when combined with the general knowledge of PHOSITA.  In describing the general knowledge that “pipelining is well known”, Google cited a prior art reference (Hua) and also an expert declaration.

Extra Ground on Institution: Before getting to the obviousness issue, I’ll note an appeal/SAS issue decided by the Court.  The Board instituted the IPR on both grounds raised by Google, but also added a third ground: SMIL in view of Hua.  On appeal, the Federal Circuit found the third-ground improper — quoting the Supreme Court’s decision in SAS to the effect that the AIA does not “contemplate a petition that asks the Director to initiate whatever kind of inter partes review he might choose.” SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1355 (2018).  Under the statute as interpreted in SAS, the petitioner decides how to structure the IPR, and the initiation stage is a yes/no determination.  The Federal Circuit did not address the no-appealability-of-institution-decisions provision of Section 314(d).

Role of General Knowledge in IPR Obviousness: The first Obviousness-focused question that the court considered was an interesting albeit fruitless contention — that “obviousness” in IPR proceedings should be treated differently than in other areas of patent practice. In particular, the patentee noted that Section 311(b) of the AIA limits IPR considerations to only “prior art consisting of patents or printed publications.” As such, Philips argued that “general knowledge” could not be considered in the analysis.  On appeal, the Federal Circuit rejected that argument — holding that the 311(b) limits the types of prior art available in an IPR, but does not otherwise alter the obviousness analysis of Section 103.

Although the prior art that can be considered in inter partes reviews is limited to patents and printed publications, it does not follow that we ignore the skilled artisan’s knowledge when determining whether it would have been obvious to modify the prior art. Indeed, under 35 U.S.C. § 103, the obviousness inquiry turns not only on the prior art, but whether “the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious . . . to a person having ordinary skill in the art to which the claimed invention pertains.” 35 U.S.C. § 103. Regardless of the tribunal, the inquiry into whether any “differences” between the invention and the prior art would have rendered the invention obvious to a skilled artisan necessarily depends on such artisan’s knowledge.

Slip Op.  The implication here is that “general knowledge” is not “prior art” but instead part of the definition of PHOSITA under Graham.

General Knowledge: A primary case in tension with broad use of general knowledge is Arendi S.A.R.L. v. Apple Inc., 832 F.3d 1355, 1361 (Fed. Cir. 2016).  In that case, the court warned against invoking “common sense . . . to supply a limitation that was admittedly missing from the prior art” and that was not “supported by evidence and reasoned explanation.”  On appeal here, the Federal Circuit distinguished Arendi — holding that Google’s argument for general knowledge was supported by evidence and reason: 

In Arendi, the Board [improperly] relied on nothing more than “conclusory statements and unspecific expert testimony” in finding that it would have been “common sense . . . to supply a limitation that was admittedly missing from the prior art.” Conversely, here the Board relied on expert evidence, which was corroborated by Hua, in concluding that pipelining was not only in the prior art, but also within the general knowledge of a skilled artisan. Moreover, Philips offered no evidence to rebut the conclusion that a skilled artisan would have known about pipelining.

Id. “Pipelining” was the only claim feature not found in the asserted prior art reference.  However, since pipelining was part of the “general knowledge,” then its use was proper to invalidate the claims.

Nexus: Product must be “Essentially the Claimed Invention”

Patent

by Dennis Crouch

Fox Factory, Inc. v. SRAM LLC (Fed. Cir. 2019)

This is an important case for anyone arguing secondary indicia — not a good case for patent holders. 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.

(more…)

IPR: Evidence Relied Upon Must be Derived from the IPR Petition

Patent

In re IPR Licensing, Inc. (Fed. Cir. 2019) (Note – IPRL is a subsidiary of InterDigital).

After IPRL sued ZTE for infringement (D.Del), that ZTE (et al.) turned around and petitioned for inter partes review of IPRL’s U.S. Patent No. 8,380,244 (dual mode communications using cellular and WiFi networks).  The PTAB originally sided with the patent challenger — finding all of the challenged claims obvious.  On appeal, however, the Federal Circuit vacated that decision as to Dependent Claim 8 that particularly required CDMA compatibility. In particular, the Federal Circuit found insufficient evidence to “support the Board’s articulated motivation to combine the asserted references to arrive at the invention defined in claim 8.”  In particular, although the cited prior art states that data connections could be provided via CDMA, the reference did not teach using CDMA to “maintain a communication session”  as required by the claim.  IPRL I Decision.

On remand, the Board rewrote its decision but again concluded that Claim 8 was unpatentable as obvious based upon the same prior art record.  And, on appeal (before a new panel), the Federal Circuit has again faulted the Board’s analysis — this time on procedural grounds:

[IPRL] argues that the only additional evidence the Board cited in support of its conclusion on remand was not part of the record before the Board. We agree.

What happened here in particular is that the Board relied upon the Universal Mobile Telecommunications System Standards (“UMTS”) as prior art for showing the ability to maintain a communication session using CDMA.  The problem: UMTS had been introduced as prior art in the original petition, but only to Count 3; while in its pre-SAS institution decision the Board only instituted as to Count 1 (that did not rely on UMTS).

On appeal here, the Federal Circuit explained that:

The Board … cannot rely on evidence relating solely to grounds on which it never instituted. To hold otherwise would allow the Board’s final written decision to rest on arguments that a patent owner has no ability to rebut or anticipate. . . .

ZTE’s petition does not mention UMTS in discussing ground one—the only ground on which the Board instituted review. IPRL’s response therefore never referenced it either. Nor did ZTE’s reply. Dr. Bims, ZTE’s expert, also confirmed that the Board’s review was not based on UMTS. . . .

The Board’s decision to rely on the Draft UMTS Standards to fill the gap in its evidentiary finding was, thus, erroneous.

Slip Op.  The Federal Circuit then considered whether to remand for the PTAB to consider all of the grounds as required by SAS.  However, the Board found that ZTE had waived its right to request such a remand. (Although ZTE had briefed the case and presented oral arguments, it subsequently withdrew from the appeal based upon a settlement agreement between the parties).

Reversed and Vacated.

I’ll note here that it is unlikely that the PTO will touch this case again with ZTE’s withdrawal and the lack of remand.  However, it would be interesting if the agency did pick it up and reopen the IPR as to all of the grounds.

Note also that the patentee appealed the substance of the obviousness argument — arguing that the claim wasn’t obvious even considering UMTS. On appeal, the Federal Circuit “express[ed] no opinion on the merits of the Board’s reliance on the Draft Standards or its conclusions about what those standards might have taught one of skill in the art.”

Using a Technique in a Known Way is Usually Obvious

Patent, ,

Samsung Electroncs v. UUSI (Fed. Cir. 2019)

In the inter partes review (IPR), the PTAB sided with the patentee UUSI — finding that Samsung had failed to prove the obviousness of UUSI’s U.S. Patent No. 5,796,183.  On appeal, however, the Federal Circuit has vacated that decision — holding that the Board’s findings of no motivation-to-combine or reasonable-expectation-of-success were not supported by the evidence.

The patent is directed to multi-point capacitive sensing circuity – the type used for the multi-billion dollar touchscreen market. It’s 1996 priority date situates the invention before a substantial amount of prior art.  However, Samsung identified several key prior art references, including U.S. Patent Nos. 5,565,658 (Gerpheide), 5,087,825 (Ingraham), and 5,594,222 (Caldwell).

Obvious by Combination of References: Most often, obviousness is proven with a combination of references that collectively teach the claimed elements.  In addition to providing the set of prior art references, the patent challenger must also show that a person of skill in the art (POSITA) would have a “motivation to combine” the references in the way claimed and that such a combination would have a “reasonable expectation of success.”

In KSR v. Teleflex, the Supreme Court explained that the motivation to combine analysis is flexible and not bound to rigid limitations or requirements. The High Court explained: “[I]f a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill.” KSR.

Here, the PTAB decided to exclude Gerpheide from the analysis because its approach was directed toward single-point capacitive sensing rather the multi-point approach of the patentee.  On appeal, the Federal Circuit vacated that holding:

The Board’s categorical rejection of the teachings from a single input device to those of a multi input device is not supportable. . . . Samsung presented uncontested evidence that the combination of Ingraham and Caldwell would experience electrical interference, and Gerpheide taught a way to address electrical interference in capacitive touch devices. The fact that Gerpheide and Ingraham/Caldwell involved different types of capacitive touch devices (single versus multi input) does not undermine the motivation to combine the teachings of Gerpheide with Ingraham/Caldwell since
both devices can experience electrical interference. Gerpheide recognized this as a problem and provided a solution to reduce such interference. Thus, a person of skill in the art would have been motivated to include such a feature from analogous prior art in a multi input capacitive touch pad device (i.e., the device of the Ingraham/Caldwell combination). The Board’s contrary conclusion is not supportable.

With regard to reasonable expectation of success, the Federal Circuit also vacated — primarily holding “that the Board’s implicit claim construction was erroneous.”  Here, the Federal Circuit found that the PTAB had unduly narrowed the claim scope and that under the broader scope there may indeed be a reasonable expectation.

Federal Circuit has No Opinion; Senju Asks the Supreme Court for Its

Patent

by Dennis Crouch

Back in 2017, I published an article condemning Federal Circuit’s ramped-up practice of issuing R. 36 judgments in cases on appeal from the USPTO.  Rather than simply arguing about policy, I looked at the statute and concluded that Section 144 of the Patent Act requires the Federal Circuit to issue its opinion, not just judgments. Dennis Crouch, Wrongly Affirmed Without Opinion, 52 Wake Forest L. Rev. 561 (2017). Over the past two years many petitioners have raised this argument to both the Federal Circuit and the U.S. Supreme Court.  However, neither court has responded (denying those petitions without opinion).

Now comes Senju Pharmaceutical Co., Ltd., et al. v. Akorn, Inc., No. 18-1418 (Supreme Court 2019) with the following two questions:

  1. Whether 35 U.S.C. § 144’s directive that the Federal Circuit “shall issue … its mandate and opinion” in all appeals from the Patent and Trademark Office precludes the Federal Circuit from resolving such appeals through a Rule 36 judgment of affirmance without opinion.
  2. Whether, under this Court’s decisions in Graham v. John Deere Co., 383 U.S. 1 (1966), and KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007), the Patent Trial and Appeal Board must consider all relevant evidence, including any objective indicia of non-obviousness, when assessing whether a patent is invalid under 35 U.S.C. § 103.

[Read the Petition].

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Senju’s U.S. Patent 6,114,319 claims an emulsified difluprednate (DUREZOL) used in a eye dropper to treat inflammatory eye disorders.  The claimed composition includes castor oil, and polyoxyethylene (20) sorbitan monooleat.

DUREZOL (difluprednate ophthalmic emulsion) Structural Formula Illustration

At the time of the invention (2000), difluprednate was known for the treatment of eye ailments; and the prior art also taught how to formulate steroids in emulsions in ways recited by the patent document.  However, Senju argued against any motivation to combine the prior art by migrating known steroidal suspensions into an emulsion. In addition, Senju presented objective evidence of non-obviousness: including unexpected results and industry praise.  Senju also asked the court to draw an inference from the fact that no other steroid emulsion has been approved by the FDA:

If [Akorn’s] argument that the teachings of Ding made emulsions an obvious choice were correct (which it is not), then one would expect to see several other FDA-approved emulsions after Ding was published—but we do not. . . .

[I]f a steroid eye drop emulsion were obvious in light of the prior art, then some industry player—including the assignees of the scientists whose inventions supposedly rendered petitioners’ invention obvious—would have chosen that formulation. The fact that none did is strong objective evidence of non-obviousness.

These secondary consideration arguments were ignored by the PTAB (although others were considered).  On appeal, the Federal Circuit affirmed without opinion and denied Senju’s petition for rehearing en banc.

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Although Motivated to Try; No Reasonable Expectation of Success

Patent,

by Dennis Crouch

Novartis Pharm. v. West-Ward Pharm. (Fed. Cir. 2019)

West-Ward (now known as Hikma) is seeking to make and sell a generic version of the Novartis chemotherapy drug everolimus (Afinitor).  After filing its Abbreviated New Drug Application (ANDA), Novartis sued, alleging infringement of its U.S. Patent 8,410,131.

Following a bench trial, the district court sided with the patentee – finding the claims enforceable – not obvious. Novartis Pharm. Corp. v. West-Ward Pharm. Int’l Ltd., 287 F. Supp. 3d 505 (D. Del. 2017).  On appeal, the Federal Circuit has affirmed.

The claims at issue are method-of-treatment claims with one step — “administering … a therapeutically effective amount” of everolimus.  The preamble of claim 1 indicates that the treatment is for “inhibiting growth of solid excretory system tumors.”  Dependent claims 2 and 3 add limitations that the treatment is for a kidney tumor or “advanced solid excretory tumor.”

At the time of the patent filing, the compound (everolimus) was already known as an mTOR inhibitor; and mTOR inhibiors were known to inhibit tumor growth. Everolimus a derivative of rapamycin and structurally similar to temsirolimus — both of which were already identified as chemotherapy treatments for similar cancer types.

The district court took this evidence and agreed that a person of skill in the art would have been motivated to pursue everolimus as a potential treatment for advanced solid tumors. However, the court’s opinion then seemed to contradict itself by saying that there was no motivation to combine the prior art.   The district court also found that everolimus was one of many different research paths and that the prior art was not sufficient to create “a reasonable expectation of success in using everolimus” to treat advanced kidney tumors.

On appeal, the Federal Circuit rejected the district court’s confusing motivation-to-combine analysis, but agreed ultimately that the claims were not proven invalid (with clear and convincing evidence).  In particular, the appellate panel agreed with the lack of reasonable expectation of success.

Truthfully, this doctrine confuses me.  The claims simply call for administering an effective amount of everolimus to treat a solid tumor; and the courts held that a person of skill in the art would have been motivated to pursue administration of everolimus as a potential treatment. In addition to this motivation, the courts also require clear and convincing evidence of a “reasonable expectation of success.”  You might divide these into “a reason to try” and “reason to believe that the attempt would be successful.”

A party seeking to invalidate a patent based on obviousness must prove “by clear and convincing evidence that a skilled artisan would have been motivated to combine the teachings of the prior art references to achieve the claimed invention, and that the skilled artisan would have had a reasonable expectation of success in doing so.” Procter & Gamble Co. v. Teva Pharm. USA, Inc., 566 F.3d 989 (Fed. Cir. 2009) (quoting Pfizer, Inc. v. Apotex, Inc., 480
F.3d 1348 (Fed. Cir. 2007)).

Another way to think about the doctrine here is that a creation that is “obvious to try” would still be patentable if the attempt was unlikely to succeed.  This situation comes up most often in situations involving many different potential solutions and it would be “obvious” to try each one until the solution is found.

Motivation to Combine: Regarding motivation to combine, the Federal Circuit particularly held that the district court had improperly required the patentee to prove that PHOSITA “would have selected everolimus over other prior art treatment methods.”  That heightened standard does not comport with the law and thus is not required.

I’ll note here that the district court’s approach was appropriate in the setup involving modification of a lead compound.  Precedent asks for an indication that the lead compound would have been selected over other potential lead compounds.  Here, however, the compound was already known and the only “new” element is giving an effective amount to a patient for the purpose of treating a particular illness.

The district court … appeared to apply or conflate the standard for these types of cases by requiring clear and convincing evidence that a person of ordinary skill “would have been motivated to select everolimus.” To the extent the district court required a showing that a person of ordinary skill would have selected everolimus over other prior art compounds, it erred. The proper inquiry is whether a person of ordinary skill would have been motivated to modify the prior art disclosing use of temsirolimus to treat advanced RCC with the prior art disclosing everolimus. This question was answered affirmatively when the district court found that a person of ordinary skill “would have been motivated to pursue everolimus as one of several potential treatment options for advanced solid tumors, including advanced RCC.”

Reasonable Expectation of Success: Despite a motivation to pursue treatment, the district and appellate court found that the claimed treatment would not have been obvious because the prior art did not show a sufficiently high “expectation of success.”

Note here that the requirement is an “expectation” of success — would PHOSITA have expected that the drug would work?  In this case, at the time of the invention, there was no clinical data on everolimus (as an anti cancer agent) and no completed trials for the other similar compounds (only phase I safety-focused data).  And, the district court noted that there had been many many past attempts to find a compound that works — most of them starting with some promise.   On appeal, the Federal Circuit found that the rebuttal evidence and arguments made by the patentee were sufficient to defeat an obviousness finding — giving deference to the district court factual findings.

The district court reviewed the [presented] evidence, determined that the molecular biology of advanced RCC was not fully understood, recognized the limitations in the temsirolimus phase I data, and found that such data did not provide a person of ordinary skill with a reasonable expectation of success. We hold that the district court did not err in its determination and affirm its conclusion that claims 1–3 of the ’131 patent would not have been obvious in view of the asserted prior art.

Non-Obviousness affirmed.

102(f), Where have you Gone?

Patent

Endo v. Actavis (Fed. Cir. 2019)

Obviousness is a tough issue to appeal because its flexible fact-heavy analysis lends itself to giving deference to the fact-finder.  This is a case-in-point.

Endo is the exclusive licensee of Mallinckrodt’s U.S. Patent 8,871,779 covering a form of the opioid oxymorphone.  Claim 1 is directed to a highly pure form of “oxymorphone” with “less than 0.001% of 14-hydroxymorphinone.”

Actavis argued that the claims were invalid as obvious.  However, following a bench trial the Delaware district court sided with the patentee — holding that the claims had not been proven invalid with clear and convincing evidence.

The district court did make a major legal mistake — holding that confidential communications between the FDA and oxymorphone producers (including the patentee) were not prior art.  In the communications, the FDA “mandated that opioid
manufacturers reduce ABUK impurities in oxycodone and oxymorphone to below 0.001%” — the exact result claimed by Mallinckrodt. On appeal, the Federal Circuit found the communications prior art under pre-AIA § 102(f) (“A person shall be entitled to a patent unless (f) he did not himself invent the subject matter sought to be patented.”).  Note that 102(f) was eliminated by the AIA and so this type of confidential communication will likely not be counted as prior art in future cases.

On appeal, the Federal Circuit held that the FDA communication – despite being prior art – did not show that the claims were obvious. Although the communications expressly set out the low-impurity goal and was the motivational force for the research, it did not set out the solution created by the patentee.

The majority opinion was penned by Judge Wallach and joined by Judge Clevenger.  Judge Stoll wrote in dissent — arguing that the error was not harmless.  In particular, the FDA mandate actually expressly discloses every limitation found in claim 1, “yet, the district court determined that this mandate did not disclose ‘anything substantive relevant to obviousness.'”

While we owe deference to a district court’s factual findings, such deference is not due where the trial court applies the incorrect standard to arrive at those findings. I would vacate the district court’s decision and remand for a proper analysis under the correct legal standards.

According to the dissent, the FDA statement would have provided substantial motivation to combine prior art references that worked toward the proffered solution.

= = = = =

102(f) what have we lost: Inventor is given secret information that leads to creation of the invention.  That information is a 102(f) reference under pre-AIA law and can also be used to as part of an obviousness argument. Post-AIA, the provision was wholly eliminated except that the law still supports a narrow action for complete derivation.

Inventor’s Problem-Identification Carries No Patentable Weight (When Alternative Motivation Exists)

Patent

by Dennis Crouch

In re Conrad (Fed. Cir. 2019)

The decision here offers a reminder of the objective nature of the obviousness analysis.

Conrad’s invention is a urine-deflector — especially useful when toilet-training low-accuracy children. The main idea is to block the opening between the toilet seat and the toilet bowl with a bendable deflector that “lacks a folding seam” — a design element added to avoid incidental urine collection and resulting malodor. The product is sold as the P-Flector.

 

Prior art urine-deflectors included a shelf that allowed urine to collect.  Conrad identified that problem and then solved-it by creating his no-seam version.

The PTO basically ignored Conrad’s own problem-solution story and instead simply followed it standard approach: look for similar prior art and ask whether there was any motivation to combine those references to form the claimed invention.  On appeal, Conrad argued that the court should have given some weight to the fact that Conrad identified a particular problem and solved that problem.

In its non-precedential decision, the Federal Circuit has sided with the USPTO – confirming that the claim is obvious — and holding that the inventor’s identification of the problem need not be considered in the obviousness analysis.  And that the identified references could be combined to improve structural integrity — even without ever recognizing the odor-solution.

The Supreme Court and this court … have repeatedly held that the motivation that a person of ordinary skill in the art would have had to combine prior art references need not be the same motivation that inspired the patent owner. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 420 (2007) (“[A]ny need or problem known in the field of endeavor at the time of invention and addressed by the patent can provide a reason for combining the elements in the manner claimed.”); In re Kahn, 441 F.3d 977, 989 (Fed. Cir. 2006) (“[T]he skilled artisan need not be motivated to combine [a prior art reference] for the same reason contemplated by the [inventor]”); In re Beattie, 974 F.2d 1309, 1312 (Fed. Cir. 1992) (“As long as some motivation or suggestion to combine the references is provided by the prior art taken as a whole, the law does not required that the references be combined for the reasons contemplated by the inventor.”); In re Kronig, 539 F.2d 1300, 1304 (CCPA 1976). “[T]he problem motivating the patentee may be only one of many addressed by the patent’s subject matter.” KSR, 550 U.S. at 420.

The patentee cited two leading problem/solution cases: Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45 (1923) and In re Sponnoble, 405 F.2d 578 (C.C.P.A. 1969).  In distinguishing those cases, the court explained:

Eibel Process and Sponnoble both stand for the proposition that the discovery of an unknown problem can result in a patentable invention, even if the solution would have been obvious once the problem is identified.  They did
not address whether the Board must consider the discovery of an unknown problem when there exists an independent motivation to combine prior art references. Instead, those cases found that the inventor’s discovery of and solution to an unknown problem weighed in favor of non-obviousness because the proffered reason to modify the prior art did not present a specific, alternate basis that was unrelated to the rationale behind the inventor’s reasons for making the invention. Here, the examiner and the Board determined that a person of ordinary skill in the art would combine the ’009 publication with Raviendran for a reason independent from solving the problem identified by Conrad—to improve structural integrity by removing the folding seam. And this motivation to combine was not challenged by the patentee before the Board.

Affirmed.

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The problem/solution approach to obviousness could be interesting to consider in parallel to eligibility analysis — noting that the non-obvious problem identification can – at times – lend patentable weight.

Obviousness without a Motivation to Combine

Patent,

by Dennis Crouch

Realtime Data, LLC v. Iancu (Fed. Cir. 2019)

Interesting obviousness case here regarding motivation-to-combine.

The PTAB’s obviousness finding is based upon two prior art references. However, the references are not being combined so-to-speak. Rather, the Board found that the first reference (O’Brien) teaches all limitations of the lossless encoding scheme in Realtime’s claim 1.  The second reference (Nelson) was used essentially to show that the “string encoding” described in O’Brien was the same as the “dictionary-based encoding” in Realtime’s claims.

 

On appeal, Realtime argued a lack of “motivation to combine” the references — based upon longstanding precedent that a “factfinder must further consider the factual questions of whether a person of ordinary skill in the art would be motivated to combine those references.” Dome Patent L.P. v. Lee, 799 F.3d 1372 (Fed. Cir. 2015).

Here, however, the Federal Circuit ruled that motivation-to-combine was not necessary since the obviousness finding did not combine two different disclosures. Rather, the Board used the second reference to help explain the first reference.

We conclude that, in this case, the Board was not required to make any finding regarding a motivation to combine given its reliance on O’Brien alone. . . . HP relied on Nelson merely to explain that O’Brien’s encoder is a type of dictionary encoder. . . . Under these circumstances, the Board was free to come to the very conclusion it reached: that O’Brien alone disclosed every element of claims 1–4, 8, and 28. And because the Board did not rely on Nelson for the disclosure of a particular element or teaching, the Board had no obligation to find a motivation to combine O’Brien and Nelson.

The CAFC noted that an anticipation determination rather than obviousness may have been more appropriate since O’Brien taught all of the elements of Realtime’s claim.  However, the court concluded that obviousness still worked — since  “a disclosure that anticipates under § 102 also renders the claim invalid under § 103, for ‘anticipation is the epitome of obviousness.’” Connell v. Sears, Roebuck & Co., 722 F.2d 1542 (Fed. Cir. 1983) (quoting In re Fracalossi, 681 F.2d 792, (CCPA 1982)).

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Patent at issue: U.S. Patent No. 6,597,812, covering lossless data compression and decompression. Realtime sued HP and others back in 2015 and that led to the responsive IPR filing that is the subject of this appeal.

 

 

 

 

The Role of Objective Indicia in Non-Obviousness Doctrine

Patent,

The following is a guest post by Lauren Vincent who is currently a 3L at the University of Missouri School of Law.  Vincent is the Editor-in-Chief of the Missouri Law Review. – DC

ZUP, LLC v. Nash Mfg., Inc., 896 F.3d 1365 (Fed. Cir. 2018)

Facts and Holding

ZUP, LLC v. Nash Manufacturing, Inc. involves two competitor businesses in the water recreational device industry. ZUP, LLC (“ZUP”) brought its wakeboarding invention, the “ZUP Board,” to market in 2012. ZUP’s U.S. Patent No. 8,292,681 covers the board itself and a method of riding the board in which a rider simultaneously uses side-by-side handles and side-by-side foot bindings to help maneuver between various riding positions. This transition is shown in the figures below.


In 2014, Nash Manufacturing, Inc. (“Nash”) brought its wakeboarding invention, the “Versa Board,” to market. The Versa Board had several holes on the top surface of the board that allowed users to attach handles or foot bindings in various configurations, but Nash warned its users against having the handles attached to the board while standing. If a user theoretically ignored Nash’s warnings, the user could attach the handles and foot bindings in a configuration that paralleled the method of riding that ZUP described in the ZUP Board patent.

ZUP filed an infringement claim against Nash. Nash counterclaimed, seeking a declaration of non-infringement and invalidity on obviousness grounds. ZUP presented evidence of secondary considerations to the district court. However the district court found the claims obvious in light of a combination of six prior patents involving water recreational boards. Images of some of the prior art patents are shown below.


The Majority

In a split decision, the Federal Circuit affirmed the district court’s holding that the ZUP Board patent claims were invalid as obvious under § 103(a) because a person of ordinary skill in the art would have had a motivation to combine the prior art references in the method it claimed and further held that the district court properly evaluated ZUP’s evidence of secondary considerations. See KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007) and Graham v. John Deere Co., 383 U.S. 1 (1966).

The Federal Circuit agreed with the district court’s conclusion that the ZUP Board patent merely identified known elements from prior patents (food bindings, handles etc.) and combined them. Further, the Federal Circuit agreed with the district court that ZUP’s purpose in so combining (helping riders maneuver between positions by focusing on rider stability) had been a longstanding goal of the prior patents – a goal predictably shared by many inventors in the industry. The Federal Circuit further concluded that because ZUP presented only minimal evidence of secondary considerations, ZUP did not “overcome” the strong showing of obviousness established by application of the other three Graham factors to the facts of the case. Chief Judge Prost authored the majority opinion that was joined by Judge Lourie.

The Dissent

Writing in dissent, Judge Newman argued that the obviousness determination was improper because the prior patents never suggested the specific wakeboard modifications claimed by ZUP. Judge Newman further maintained that the majority effectively treated the fourth Graham factor – secondary considerations — as one that should only be considered in rebuttal. By requiring that the fourth factor “overcome” the others, Judge Newman contended that the majority engaged in improper judicial hindsight.

 

Prosecution Histories as Prior Art

Patent

Perhaps the most debated issue in obviousness disputes is the question of whether a person of ordinary skill in the art would have been motivated to combine prior art references in order to form the invention as claimed. In KSR, the Supreme Court made the process a little bit easier for patent examiners by permitting a common sense analysis. Still, 10 years later, the issue arises on a daily basis for patent attorneys and in the vast majority of obviousness challenges to issued patents.

I have long felt that prosecution history files may serve as key evidence in justifying the motivation to combine. As an example, consider a patent prosecution file history from several years ago that that includes an office action rejection based upon the patent examiners conclusion the two prior art references should be combined. Regardless of whether the examiners assertions were correct at the time, that document seems to be pretty good evidence someone actually considered combining references together.  In general, a prior art statement that expressly suggests and provides reasons for combining Reference A with Reference B is really good evidence for combining the two.

There are several difficulties with my “patent prosecution as prior art” theory.  A first problem is that, although patent prosecution files are open to the public once a patent issues or the application publishes, the prosecution history files are not well indexed or searchable in any meaningful way. As far as I know, there is no publicly accessible database of prosecution history files that is either indexed or searchable.  That problem is becoming a historic problem.

Beginning this week, the USPTO has transitioned its Private Pair system to include text versions of its office action rejections as well as notices of allowances (actual XML and DOCX versions).  It is a straightforward step to move these documents into a searchable database available for public consumption.

I’ll note here that the XML/DOCX files are quite nice and, although not well tagged, will make it easy for patent attorneys to cut & paste from the OA in their responses or client emails. The system also includes a new mechanism for submitting documents to the PTO.

Federal Circuit: Even the Best Secondary Indicia Cannot Overcome this Prima Facie case of Obviousness

Patent,

In a split opinion, the Federal Circuit has affirmed summary judgment of obviousness in Intercontinenntal Great Brands (Kraft) v. Kellogg (Fed. Cir. 2017). Writing in dissent, Judge Reyna argued that the majority improperly applied a shortcut “prima facie obviousness test” without allowing for a full consideration of the patentee’s objective indicia of non-obviousness that the district court found both substantial and compelling.

The majority opinion, authored by Judge Taranto and joined by Chief Judge Prost begins with a discussion of the resealable cookie package covered by Kraft’s U.S. Patent No. 6,918,532.  Essentially, we have a wet-wipes package for cookies.

US06918532-20050719-D00001

One difference from wet-wipes is that the cookies need a frame to avoid crushing.  The defendants here relied upon a prior art reference showing a rigid re-sealable sushi container (image below).  The container has a tray, and the claimed frame is essentially a tray with higher sides.  When combined with known cookie packaging frames — the district court found that “the only reasonable inference on the record was that a relevant skilled artisan would have been motivated to combine those prior-art references.”

PriorArtCookieBox

In particular, the court noted that the difficulty with opening and closing cookies was well known, and the tray in the Machine Update prior art could simply be replaced with a more complete frame (i.e., a tray with higher sides) to protect the cookies.

In reviewing the lower court decision, the majority wrote:

[T]he court considered the simple and clear teachings of the art, the importance of common sense and ordinary creativity, and the conclusory character of Kraft’s expert’s assertions of nonobviousness.

Despite my love of cookies, I have to admit that I have never purchased one of these re-sealable containers as my preference is to complete a package within a single sitting.  However, the product packaging has apparently met with some amount of commercial success.

Regarding objective indicia of non-obviousness, the district court found it to be highly “substantial” and “compelling” with great commercial success tied to the packaging, industry praise, and copying by the defendant here.  On balance, however, the district court found (on summary judgment) the evidence was insufficient to raise a jury question.

Quite simply, according to the district court, there are some prima facie obviousness cases so strong that they are impossible to overcome even with the best possible secondary indicia of nonobviousness.   On appeal, the majority affirmed this reasoning with a quote from the Supreme Court’s KSR analysis:

Where, as here, the content of the prior art, the scope of the patent claim, and the level of ordinary skill in the art are not in material dispute, and the obviousness of the claim is apparent in light of these factors, summary judgment is appropriate.

KSR v. Teleflex (2007) (note that KSR elsewhere notes the weak objective indicia in that particular dispute).

To be fair, the majority is clear that the ultimate conclusion of obviousness still requires consideration of the objective indicia (even if they could not make a difference).  However, the majority finds that conclusions regarding the evidence – such as a motivation to combine references — may be drawn without consideration of the objective indicia.

Judge Reyna’s dissent goes the other way:

I would find that the district court improperly found a prima facie case of obviousness before considering Kraft’s evidence of objective indicia of nonobviousness. . . . I am left to wonder how “substantial” and “compelling” evidence of objective indicia cannot overcome a prima facie showing. If such significant evidence does not make a difference in this case, it is hard to imagine a situation in which it would.

For many, the problem with Reyna’s dissent is quite simply that it will make summary judgment more difficult — and the conventional wisdom is that winning an obviousness case is extremely difficult before a jury.

The majority-dissent also battle over the ‘correct’ order of consideration of the questions of operation. I’ll save that issue for a separate post.