In my view, Obviousness is the most fundamental of patent law doctrines, and certainly much of the work of patent attorneys is to convince patent examiners that the claims are not obvious.
Hoyt Fleming is a patent attorney, and former Chief Patent Counsel for Micron. He is also an inventor and builder (he has personally built three airplanes). His U.S. Patent No. RE47,474 is pretty cool: it claims a “whole-aircraft ballistic parachute, which includes a rocket, that is coupled to the fuselage of the aircraft.” In response to a deployment request, the system first “commands the autopilot to increase aircraft pitch” and then deploys the ballistic parachute.
Fleming sent a copy of his pending patent application to Cirrus who apparently then released a new aircraft embodying his patented design. Fleming began negotiations on a license, but Cirrus filed a declaratory judgment action for non-infringement and also filed two IPR petitions. This is an appeal from the first IPR — finding the challenged claims unpatentable as obvious.
On appeal, the Federal Circuit has affirmed both the obviousness determination and the Board’s denial of Fleming’s motion to amend several claims.
The Federal Circuit spells-out the crux of the obviousness case as follows:
It is well known that: aircraft autopilots are programmable; can perform flight maneuvers and deploy a parachute.
It is also well known certain maneuvers should be performed prior to deploying a whole-aircraft parachute — such as increasing altitude and stabilizing the attitude;
But, everyone agrees that the prior art does not specifically teach “commanding an autopilot to perform the claimed flight maneuvers of increasing pitch, reducing roll, or changing attitude upon receipt of a parachute deployment request.”
The Board concluded that a person of ordinary skill in the art would be motivated to reprogram the autopilot to take Fleming’s proposed actions prior to releasing the parachute in order to improve safety outcomes.
Note here that the motivation for combining here is improved safety. Fleming noted that the prior art cautioned against the use of autopilot in certain certain emergency situations because it was unsafe. The PTAB rejected that argument and the Federal Circuit affirmed on appeal: “the Board correctly explained that the obviousness inquiry does not require that the prior art combination is the “preferred, or the most desirable” configuration.” The court noted that caution against autopilot use did not necessarily extend to all aircraft — such as unmanned aircraft. “That the prior art cautioned pilots not to use an autopilot in some emergency situations on some aircraft does not mean that the skilled artisan would have been dissuaded from doing so in all emergency situations on all aircraft.” Slip Op.
Fleming also argued copying – that Cirrus had copied his invention – and that copying is a strong indicia of nonobviousness. The Board concluded that Fleming had not proven that Cirrus copied:
Fleming repeatedly provided copies of his patent application and argued that Cirrus incorporated that disclosed material into its product and also its own patent application.
However, the Board found the evidence lacking because he did not provide “any meaningful infringement analysis.” On appeal, the Federal Circuit affirmed that conclusion
This is an interesting pro-pharma obviousness decision coming out of the PTAB regarding obviousness of particular drug dosages. Here, the particular drug was known to work well, but there were concerns about drug safety. And, there were a couple of particular tests that clearly would have been obvious to try. In fact, the patentee was legally required by the FDA to conduct the tests in order to ensure drug safety. Still, the outcome of the tests were not predictable. Nobody knew whether the particular dosage being was going to turn out to be “safe.” (Here “safe” is interpreted as having “an acceptable risk-benefit profile.”) The patentee ran the tests, found the dosage to be safe, and then patented a method of administering that safe-dosage to patients. Teva challenged the patent, but the PTAB and the Federal Circuit both sided with the patentee. They held that the unpredictable outcome of the test meant that the outcome was not obvious since there was no “reasonable expectation of success.”
I expect that the Supreme Court would reject the hard line drawn in this case in the same way that it rejected the TSM requirement in KSR v. Teleflex. I.e., obviousness is a flexible, open analysis asking “is there an invention here?” Former Kennedy clerk J.C. Rozendaal handled the appeal for Teva, and so I won’t be surprised to see a petition for writ of certiorari in 2022.
The rest of the story: Corcept’s patent covers a method of treatment of some Cushing’s syndrome symptoms with the drugs mifepristone and ketoconazole (a “strong CYP3A4 inhibitor”). U.S. Patent No. 10,195,214. The basic problem is that these two drugs can interact in problematic ways, and the patent calls for a reduced dose of mifepristone when being taken alongside ketoconazole. When taken alone, mifepristone is prescribed in dosages of up to 1,200 mg per day; but when taken with ketoconazole, the patent calls for reduction of down to 600 mg per day.
The prior art all comes from earlier interaction between Corcept and the FDA. Initially, Corcept filed a New Drug Application (NDA) seeking to market mifepristone in dosages of 300, 600, 900, and 1,200 mg per day. The FDA gave its approval, but suspected interaction with ketoconazole. That suspicion led to the two key prior art references:
The Korlym Label: The FDA-approved label for Corcept’s original drug product Korlym allowed for dosage of mifepristone at 300, 600, 900, or 1,200 mg increments and also offered a warning against co-administration with a strong CYP3A. In particular it limited the “mifepristone dose to 300 mg per day when used with strong CYP3A inhibitors.” Thus, an easy reading of the label seems to be a strong suggestion that dosages of 600, 900, or 1,200 might be problematic. This label also appears to totally anticipate a dose of 300 mg when taken along with a strong CYP3A inhibitor.
The FDA Suggestion (“Lee”): The FDA also suggested the possibility of interaction between CYP3A and mifepristone and required Corcepts to study that interaction.
When I think about these two references, I see a strong suggestion of an interaction between the drugs, and also a strong motivation to look into that interaction. In fact, the first two research questions implicitly demanded by the prior art is (1) whether a 300 mg dose interacts with CYP3A and (2) whether a 600 mg dose interacts with CYP3A. Yet, while the two references expressly call for research, the references do not suggest the outcome of the 600 mg test. If anything, the original label suggested that 600 mg dose would be a problematic — since the FDA limited dosage to only 300 mg if also taking the other drug.
The PTAB followed these lines of analysis and eventually concluded that the references failed to prove obviousness. In particular, the Board hung its hat on “reasonable expectation of success” — finding that the references did not suggest that 600 mg would be a safe dosage.
On appeal, the Federal Circuit has affirmed — holding that invalidating the claim would require proof of “a reasonable expectation of success in achieving the specific invention claimed, a 600 mg dosage.”
Because there was no expectation of success for any dosage over 300 mg per day, there was no expectation of success for the specific 600 mg per day dosage.
Slip Op. Affirmed.
Note – Mifepristone is new name for the drug RU-486.
In the past 50 years, the Supreme Court has decided about 70 patent cases (depending upon how you count). One of the least cited is the 1976 case of Dann v. Johnston, 425 U.S. 219, 225 (1976). The case was set-up as a showdown on questions of patent eligibility in the “highly esoteric field of computer technology.” Id. But, in the end, the court focused on the more mundane question of obviousness — a doctrine it continued to refer to as “invention.”
Johnston was seeking to patent a “record-keeping machine system for financial accounts.” Basically, this was software installed on a bank-owned IBM 1400 that allowed its customers to categorize their income and expenses for better reporting.
The Patent Office rejected the claims, but the CCPA revived them. That 3-to-2 decision included a narrow interpretation of Gottshalk v. Benson, 409 U.S. 63 (1972), concluding that the case only applied to process or method claims.
The issue considered by the Supreme Court in Benson was a narrow one, namely, is a formula for converting binary coded decimal numerals into pure binary numerals by a series of mathematical calculations a patentable process?
In re Johnston, 502 F.2d 765 (C.C.P.A. 1974). Since Johnston was patenting a system, Benson was deemed irrelevant by the CCPA majority. Judge Rich wrote in dissent, and argued that the invention was barred under Benson. To be clear, Judge Rich was not a fan of Benson, but he took the Court’s decision as law, albeit warty. He explained:
As the author of the opinion of this court in Benson, which was wholly reversed, I have not been persuaded by anything the Supreme Court said that we made a “wrong” decision and I therefore do not agree with the Supreme Court’s decision. But that is entirely beside the point. Under our judicial system, it is the duty of a judge of a lower court to try to follow in spirit decisions of the Supreme Court— that is to say, their ‘thrust.’
Id. (Judge Rich in dissent). Still, the big question was what to take-away from Benson and Judge Rich suggested that the focus should not be limited by the Supreme Court’s wording.
I am probably as much – if not more – confused by the wording of the Benson opinion as many others. What the Court did in its decision … contains a message that is loud and clear. If those claims are not to patentable subject matter, neither, in my view, are the claims here, regardless of difference in form.
Id. Judge Markey also wrote a dissent that foreshadowed the eventual Supreme Court decision. Markey argued that Johnston’s claims were invalid based upon the prior art and that the eligibility questions should be avoided.
After losing before the CCPA, the government then petitioned for Supreme Court review in the name of Marshall Dann, who was President Nixon’s Commissioner of Patents. The petition includes three questions:
Whether the Supreme Court’s holding in Benson, that a new idea to be implemented by programming an existing computer is unpatentable when claimed as a new “process,” also applies when the programmed computer is claimed as a new “machine system.”
Whether programs for existing general purpose digital computers, however claimed, are patentable under present law.
Whether respondent’s idea of having banks provide an additional bookkeeping service by programming their computers to sort check and deposit data in accordance with category codes was in any event no more than an obvious improvement over the prior art.
Johnston’s attorney Morton Jacobs drafted the patent application and also argued the case all the way to the Supreme Court (eventually losing). The responsive brief recategorized the questions in an interesting way:
Whether in the absence of specific congressional exclusion, a special purpose computer machine can be excluded from the general class of machines constituting statutory matters under 35 U.S.C. 101 by reason of its construction with software rather than hardware for its programming elements.
Whether the Patent Office denial of patents for “software” emobidments of special-purpose computers while granting patents to “hardware” embodiments is a denial of equal protection of the patent laws.
Whether an automatic record-keeping machine for all types of small-volume users (e.g., merchants, professionals, farmers) that enables each to use an individualistic record-keeping format and bookkeeping procedure, and that employs, inter alia, a general control for directing the processing operations that are common to most users, which control interacts with and is directed by a master control located in the data files for directing the operations that very with each user, is an unobvious improvement over the prior art.
The unanimous Supreme Court decision was authored by Justice Thurgood Marshall and expressly avoided the questions of patentability of software or computer programs. Rather, the court found the claims obvious.
The opinion began with a recitation of the doctrine:
As a judicial test, “invention” – i.e., “an exercise of the inventive faculty” – has long been regarded as an absolute prerequisite to patentability. However, it was only in 1952 that Congress, in the interest of “uniformity and definiteness,” articulated the requirement in a statute, framing it as a requirement of “nonobviousness.” . . .
This Court treated the scope of § 103 in detail in Graham v. John Deere Co., 383 U.S. 1 (1966). There, we held that § 103 “was not intended by Congress to change the general level of patentable invention,” but was meant “merely as a codification of judicial precedents… with congressional directions that inquiries into the obviousness of the subject matter sought to be patented are a prerequisite to patentability.” While recognizing the inevitability of difficulty in making the determination in some cases, we also set out in Graham, the central factors relevant to any inquiry into obviousness: “the scope and content of the prior art,” the “differences between the prior art and the claims at issue,” and “the level of ordinary skill in the pertinent art.”
Dann v. Johnston, 425 U.S. 219, 226 (1976). In analyzing the claims, the court concluded that it need not find a prior art equivalent to each and every claim limitation. Rather, the focus of the test is the significance of the differences to one of skill in the art.
[I]t must be remembered that the “obviousness” test of Section 103 is not one which turns on whether an invention is equivalent to some element in the prior art but rather whether the difference between the prior art and the subject matter in question “is a difference sufficient to render the claimed subject matter unobvious to one skilled in the applicable art. . . .”
Id. (quoting Judge Markey’s dissent in Johnston). It is not entirely clear what point the court was making in noting that the referenced prior art were “closely analogous” but not “equivalent.”
[T]he mere existence of differences between the prior art and an invention does not establish the invention’s nonobviousness. The gap between the prior art and respondent’s system is simply not so great as to render the system nonobvious to one reasonably skilled in the art.
Reversed.
Of note, the court’s statement here of the foundations for obviousness from Graham did not include includes secondary indicia such as commercial success. Later in the opinion, Justice Marshall added a footnote recognizing that their potential relevance in an obviousness analysis. However, the opinion also reiterated the statement from the checkout-counter case – Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147 (1950) – that “commercial success without invention will not make patentability.” Justice Jackson’s concluding statement in that case may be equally applicable to Johnston: [The patentee had] “a good idea, but scores of progressive ideas in business are not patentable, and we conclude on the findings below that this one was not.” Id.
In the end, Dann v. Johnston is something of a dud, a sloppy reverb of Graham. The key takeaways going forward:
Obviousness does not require equivalence in the prior art.
Patentees are charged with awareness of the prior art, even in fast-moving technologies.
“[E]xercise of the inventive faculty [is] an absolute prerequisite to patentability.”
“[C]ommercial success without invention will not make patentability.”
Campbell Soup v. Gamon Plus (Fed. Cir. 2021) [OPINION]
Obviousness of a design patent is governed by 35 U.S.C. 103, just like utility patents. However, the methodology is a bit different. Importantly, the Federal Circuit suggests that the obviousness inquiry should begin with a primary reference whose whose “design characteristics … are basically the same as the claimed design” and that creates “basically the same visual impression.” That primary reference can then be combined with other references to fill in gaps that would have been obvious in order to create the “same overall visual appearance as the claimed design.” Apple v. Samsung (Fed. Cir. 2012).
Soup Dispenser Design patent case is back before the Federal Circuit.
Gamon’s design patents cover a can dispenser that might be used for cans of soda or cans of soup. U.S. Design Patent Nos. D612,646 and D621,645. In the IPR, the PTAB originally sided with the patentee–finding that the asserted prior art (Linz) could not serve as a primary reference. The basic issue was that the design patents claim a dispenser holding a can, and the key prior art (Linz) did not show the can itself. On appeal, the Federal Circuit vacated — holding instead that Linz was a proper primary reference since it is clear Linz “is made to hold cylindrical objects in its display area.” The primary reference also lacked tabbed holders found in the patents, but the appellate panel identified those as “ever-so-slight differences.”
Back on remand, the PTAB again sided with the patentee–holding that the asserted references failed to show that the claimed design would have been obvious. Now, back on appeal the Federal Circuit has reversed and finally concluded that the patented designs are obvious.
Partial designs: At first glance, these designs appear to cover a fairly complex soup can dispenser. However, the dashed lines are shown only for context. Once those broken lines are removed, all that remains is a boundary-free label area, rectangular stops, and a can. The image below compares the claimed portion of the design against the Linz prior art.
Differences here – Can vs. no can; rectangular tabs vs curved tabs, elongated display portion. Despite these differences, on remand, PTAB found that Linz had the same overall visual appearance. Still, the PTAB sided with the PTAB based upon secondary considerations — so called “objective indicia of nonobviousness.”
Gamon’s commercial success in selling its product that epitomized the patent (the iQ Maximizers)
Campbell’s praise of, and commercial success in using Gamon’s product; and
Copying of the design by a third party.
On appeal, the Federal Circuit rejected these considerations — finding a lack of nexus between the scope of the claims and the commercial success, praise, and copying.
In Graham v. Deere, the Supreme Court explained that “secondary considerations [such] as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized . . . [a]s indicia of obviousness or nonobviousness.” Still, in order to even be considered, the activity must have a close nexus by to the invention: The success was due to the invention (not just marketing); the innovative and patented aspects of the invention were copied or praised; etc.
The burden of proving nexus is generally placed on the patentee. However, nexus can be presumed when the patent is commensurate in scope with the product being sold/praised/copied. Here, the PTAB found that Gamon’s patented designs were directly incorporated into its iQ Maximizer products.
On appeal, the Federal Circuit reversed — finding that design patent only covers partial product and therefore the two are not essentially the same. Here, the product includes many unclaimed features that are only dashed lines in the patent. See Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366 (Fed. Cir. 2019). The PTAB had considered the argument, but found the unclaimed features of the product “insignificant to the ornamental design.” In particular, the dispensers are generally lined-up side-by-side and so you generally only see the front display in a store. On appeal, the Federal Circuit rejected that analysis.
The Board reasoned that “[t]he unclaimed rearward rails and side portions are not prominent ornamental features,” and those portions are, therefore, “insignificant to the ornamental design.” This circular reasoning reflects a misunderstanding of the law. In determining coextensiveness, the question is not whether unclaimed features are insignificant to a product’s ornamental design. The question is instead whether unclaimed features are “insignificant,” period. That is because the purpose of the coextensiveness requirement is to ensure that nexus is presumed only when the product “is the invention disclosed and claimed.” By limiting its analysis to ornamental significance, the Board simply did not answer the relevant question: whether the iQ Maximizer “is the invention.”
Slip. Op. The result here is that partial product claims will be hard-pressed to get a presumption of nexus.
Gamon had also attempted to prove the nexus — showing that the secondary indicia were directly related to the claimed features. On appeal though, the Federal Circuit rejected that evidence — holding that the secondary indicia is only permissible when associated with points-of-novelty within the design.
To establish nexus, Gamon needed to present evidence that the commercial success and praise of the iQ Maximizer derived from “unique characteristics” [of the patent.] It failed to do so. Instead, it presented evidence that merely ties commercial success and praise to aspects of the [product] that were already present in the prior art.
Slip Op.
The patentee had also proven copying, and the Federal Circuit simply concluded that it was not enough.
For purposes of this appeal, we assume substantial evidence supports the Board’s finding that Trinity copied the unique characteristics of the claimed designs. Even accepting the evidence of copying, we conclude that this alone does not overcome the strong evidence of obviousness that Linz provides.
Slip Op.
The opinion is interesting because it reads as if the Federal Circuit is re-weighing the evidence as it walks through. On careful analysis though, the court does not disturb any factual finding. Rather, the trick is that several aspects of the obviousness analysis are questions of law, including the ultimate conclusion. For those questions of law the court reviews the PTAB determination de novo and substitutes its opinion as authoritative.
Today’s decision by the Federal Circuit includes an example of thinly sliced bologna, with the court rejecting a PTAB IPR decision because the precise obviousness argument regarding a functional limitation was not expressly stated. The court also does another go-round with the PTAB failing to consider commercial success.
Lots of petroleum is trapped by deep rock formations that are difficult to drill-out one-by-one. Hydraulic fracturing (fracking) gets access to those stores by using high-pressure injection of a slurry of water, chemical additives and proppant (such as sand or other granular). The high-pressure water causes cracking of the rocks. Proppant residue is left behind and holds the cracks open — allowing the petro to flow out more easily.
Oren’s parent company US Silica competes with PropX for delivering proppant (sand) for fracking. As part of this competition, Oren holds several patents related to storage of proppant and sued PropX for infringement. US Patent Nos. 9,403,626; 9,511,929; and 9,296,518. PropX responded with petitions for IPR. This case involves the ‘626 patent and the PTAB’s ruling cancelling all the challenged claims as obvious. On appeal, the Federal Circuit has rejected the PTAB decision for two reasons: (1) the PTAB decision strayed too far from the grounds of unpatentability found in the petition; and (2) the PTAB improperly disregarded the commercial success of Oren’s container.
The ‘626 patent is directed to a stackable storage container for sand. Each container has a bottom hinged-hatch that allows sand to flow to the next lower container and eventually out through the bottom of the stack.
The closest identified prior publication was the now-abandoned U.S. Patent Publication No. 2008/0226434 (“Smith”, image below). During prosecution its patent, Oren had already encountered a Smith rejection, and overcame that rejection by adding a functional claim limitation that the container is designed to support “volumes” of “at least 30,000 pounds.” Smith expressly limited its double container payload to 52,500 pounds, or 26,250 pounds each. The examiner accepted this limitation as sufficient to skirt the prior art.
The IPR Grounds: The IPR petition reintroduced Smith and argued that Smith’s design could be reinforced (via Hendrick) to take advantage of the unused volume and that the the 30,000 pound limit was already met by engineering safety tolerance. The Board did not buy the safety tolerance argument since that was not mentioned in the reference, but still found that the 30,000 pound limit would be inherently met through the proposed reinforcement.
The problem: Although the IPR petition raised Smith, it did not raise this exact argument — that the proposed reinforcement would inherently satisfy the 30,000 pound requirement.
[T]he Board erred by repurposing the theory of a motivation to modify Smith to increase its capacity as a basis for finding the 30,000 pound limitation met. PropX did not assert this theory of obviousness in its petition. Nor was the theory raised by the Board’s institution decision (or at any time before the final written decision). Therefore, relying on this theory in finding claims obvious was reversible error because the petitioner bears the burden of proving obviousness and Oren had no notice or opportunity to respond.
Slip Op.
Does not sit well: The Federal Circuit’s conclusion here does not sit well with me since both the petition and the institution decision indicate that the purpose of the reinforcement was “increasing the maximum payload of Smith’s containers”; PropX provided evidence that the reinforcement would increase the payload beyond 30,000 pounds; and it was through the claimed reinforcement that Oren itself met the functional 30,000 pound limitation. It does appear true, however, that neither the petition nor institution decisions particularly stated that the increased payload would meet the claim limitation itself. This decision comes down to a choice of how thin to slice the bologna.
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“The Reason” versus “A Reason” for the Commercial Success: Oren’s “Sandbox” product has also been commercially successful (sold through another US Silica company) and Oren presented that evidence as objective evidence of nonobviousness. In this case, the product is “commensurate in scope” with the patented claims — thus creating a presumption of nexus between the claims and the commercial success. However, the Board still gave the commercial success no weight because PropX provided evidence that the success was due to a convoyed leasing program that included certain trade secrets as well as a “special forklift,” “special mats,” and “special truck,” and not the claimed features of the box.
On appeal, the Federal Circuit vacated this portion of the decision — holding that there can be a number of contributors to commercial success, and the PTAB failed to specifically consider Oren’s evidence showing that its container design was “also an important contributor to the commercial success and praise of the system.”
Obviousness is the central doctrine of patent law. It is both the most common reason for rejection and often the most complicated issue because of both factual and legal complexities. The new Chemours Co. decision provides an important addition to obviousness doctrine in two areas: (1) teaching away; and (2) commercial success. The majority sided with the patentee and reversed the IPR Board’s single-reference obviousness determination. The dissent argued that the opinion gives too much power to the teaching-away doctrine.
Chemours is a 2015 spin-off from Du Pont. Its patents at issues here relate to a polymer having a high melt flow to allow high-speed extrusion to cover electrical wires. U.S. Patent Nos. 7,122,609 and 8,076,431. The claims require a standardized melt flow rate range: 30±3 g/10 min along with other physical properties.
Daikin petitioned for inter partes review, and the PTAB agreed that the claims were invalid as obvious based upon a single prior art reference, U.S. Patent No. 6,541,588 (“Kaulbach”). Judge Dyk’s dissenting opinion in this case explains that “[t]he only material difference between [Chemours] claim 1 and Kaulbach is that Kaulbach discloses (in Sample A11) a melt flow rate of 24 g/10 min, slightly lower than 27 g/10 min, the lower bound of the 30 ± 3 g/10 min rate claimed in claim 1 of the ’609 patent.” Actually, Kaulbach goes even further and expreslly discloses a melt flow rate of “15 g/10 min or greater” and includes the example of 24 g/10 min MFR.
On its face, Kaulbach discloses a flow rate that encompasses Chemours’ claimed rate — pretty good prima facie that this element was disclosed, but the Board hung its hat on the particular example and concluded that it would have been obvious to modify Kaulbach’s 24 example so that it fit Chemours’ 27 requirement.
The problem: Kaulbach also focused on having a narrow distribution of molecule sizes within its polymer, and those skilled in the art apparently did not know how to increasing flow rate from 24 to 27 while maintaining the narrow distribution. The Board resolved this tension in favor of an obviousness finding, but you can see that the Kaulbach inventors push against broad molecular weight approach:
[The prior art] mixtures have a very broad molecular weight distribution which according to conventional wisdom, results in an improved extrudability. . . . [However, our invention] has a very narrow molecular-weight distribution. i.e., a ratio of Mw to Mn of less than about 2.
Kaulbach prior art patent.
Teaching Away: On appeal, the Federal Circuit reversed the obviousness determination and held that the Board should have taken more care in considering Kaulbach’s teaching-away from broader molecular weight distribution:
[T]he Board appears to have ignored the express disclosure in Kaulbach that teaches away from the claimed invention and relied on teachings from other references that were not concerned with the particular problems Kaulbach sought to solve. In other words, the Board did not adequately grapple with why a skilled artisan would find it obvious to increase Kaulbach’s melt flow rate to the claimed range while retaining its critical “very narrow molecular-weight distribution.”
Slip Op. You’ll note that an inventor would not need to shift far from Kaulbach’s 24 g/10 min example flow rate to get within Chemours’ claimed rate that includes about 27 g/10 min. But, to do so pushes against the fundamental inventive concept of Kaulbach of a narrow molecular distribution. The PTAB’s decision “does not explain why a POSA would be motivated to increase Kaulbach’s melt flow rate to the claimed range, when doing so would necessarily involve altering the inventive concept of a narrow molecular weight distribution polymer.” Slip Op. An important caveat here is that Chemours’ patent does not actually claim any particular molecular weight distribution, but expert testimony apparently convinced the Board that a broad molecular distribution was required.
In its decision, the majority concludes that the teaching-away negates a motivation to modify the prior art reference. One oddity of the decision is that the court also spends some time reciting precedent on pertinent prior art, but does not apply that doctrine in any meaningful way.
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The majority opinion was authored by Judge Reyna and joined by Judge Newman. Judge Dyk wrote in partial dissent. According to Judge Dyk, the majority placed too much weight on the teaching-away doctrine.
In particular, Judge Dyk reads the the prior art patent as providing an alternative narrow molecular weight distribution while also acknowledging the conventional wisdom and feasibility of having a high distribution. “This is not a teaching away from the use of a higher molecular weight distribution polymer. . . . The majority’s approach impermissibly expands the teaching away doctrine such that it encompasses a reference’s mere preference for a particular alternative. ” Slip Op. Dissent.
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Secondary Indicia of Nonobviousness: During the IPR, Chemours presented evidence of commercial success as objective indicia of nonobviousness. Generally, the commercial success of an invention can be used as circumstantial evidence to prove that the invention is non-obvious. The basic idea here is that an obvious valuable invention would already be in the market place. Since there are a number of reasons why any particular product might be successful, patent law generally requires a showing of nexus between the claimed invention and the success — that the innovation (rather than marketing or non-claimed design elements) is responsible for the commercial success.
Here, the Board found the commercial success evidence lacking and thus gave it no weight in the obviousness analysis. On appeal, the Federal Circuit found three ways that the Board’s decision failed to follow the law.
Nexus and Commercial Success: First, the Board found no nexus because commercial success could not be tied directly to inventive contribution of the Chemours patents. Here, the Board’s decision was odd. The Board essentially found that the Chemours patent had no inventive contribution (i.e., had no points of novelty) and therefore could have no nexus. On appeal, the Federal Circuit rejected that analysis as contrary to law.
The Board found no nexus between the claimed invention and the alleged commercial success because Kaulbach disclosed all features except for the claimed melt flow rate. The Board then found that other prior art of record disclosed melt flow rates of 50 g/10 min.
Contrary to the Board’s decision, the separate disclosure of individual limitations, where the invention is a unique combination of three interdependent properties, does not negate a nexus. Concluding otherwise would mean that nexus could never exist where the claimed invention is a unique combination of known elements from the prior art.
Slip op.
Market Share vs Sales Numbers: The Board also held that market share evidence (rather than merely sales numbers) is required for a showing of commercial success. The Federal Circuit disagreed. “[M]arket share data, though potentially useful, is not required to show commercial success.”
Blocking Patents: Still on Commercial Success, the Board also rejected the commercial success argument after finding that Chemours patents at issue blocked market competition — so that any commercial success would be due to the patent’s existence rather than the innovation’s marketability. On appeal, the Federal Circuit rejected this conclusion also as contrary to law, finding that the Board totally misapplied the blocking patent doctrine.
The Board erred by misapplying the “blocking patents” doctrine to the challenged patents themselves. A blocking patent is one that is in place before the claimed invention because “such a blocking patent may deter non-owners and non-licensees from investing the resources needed to make, develop, and market such a later, ‘blocked’ invention.’” However, the challenged patent, which covers the claimed invention at issue, cannot act as a blocking patent.
Slip Op. On this point, while I agree that Board’s decision did not follow traditional blocking patent doctrine its approach is interesting.
It appears that we have not yet seen the most invasive nature of contemporary patent eligibility doctrine. Case in point: Yu v. Apple Inc. (Fed. Cir. June 11, 2021) [Yu vs Apple].
Yanbin Yu and Zhongxuan Zhang are the inventors and owners of U.S. Patent No. 6,611,289 (‘Digital cameras using multiple sensors with multiple lenses’). The pair sued Apple and Samsung for patent infringement, but the district court dismissed the cases for failure-to-state-a-claim. In particular, the court found the claims directed toward an abstract idea and thus invalid under 35 U.S.C. § 101. On appeal, the Federal Circuit issued a 2-1 decision affirming with Judge Prost and Taranto in the majority and Judge Newman in dissent.
The asserted claims are directed to a digital camera having multiple analog image sensors with lenses mounted on the image sensors. The claims also include analog-to-digital circuitry to digitize images from each camera so that they can be stored in memory. The claims then require creation of a “resultant digital image” based upon images from the two different cameras. Note, the patent application was filed back in 1999; issued in 2003; and has now expired.
On appeal, the Federal Circuit affirmed that the claims at issue are merely directed to the following abstract idea:
“claim 1 is directed to the abstract idea of taking two pictures (which may be at different exposures) and using one picture to enhance the other in some way.”
The problem, according to the majority, is that claims “merely invoke generic processes and machinery.” (Quoting Smart Sys.) In some ways, the patent’s specification also suggests an abstraction — especially the following line: “there is a great need for a generic solution that makes digital cameras capable of producing high resolution images without enormously incurring the cost of photo-sensitive chips with multimillion photocells.” ‘289 Patent. But, I would suggest reading the specification for an understanding that this is a technological solution.
The appellate panel suggests that the specification probably does include a patent eligible invention in the form of “a four-lens, four-image-sensor [including] a black-and-white sensor.” But, the claims at issue do not require four sensors or the B/W sensor.
In dissent, Judge Newman explains:
This camera is a mechanical and electronic device of defined structure and mechanism; it is not an ‘abstract idea.’ . . . [C]laim 1 is for a digital camera having a designated structure and mechanism that perform specified functions; claim 1 is not for the general idea of enhancing camera images. The camera of the ’289 patent may or may not ultimately satisfy all the substantive requirements of patentability, for this is an active field of technology. However, that does not convert a mechanical/electronic device into an abstract idea.
Slip Op. Newman’s dissent also walks into the bigger picture of Section 101 jurisprudence:
In the current state of Section 101 jurisprudence, inconsistency and unpredictability of adjudication have destabilized technologic development in important fields of commerce. Although today’s Section 101 uncertainties have arisen primarily in the biological and computer-implemented technologies, all fields are affected. The case before us enlarges this instability in all fields, for the court holds that the question of whether the components of a new device are well-known and conventional affects Section 101 eligibility, without reaching the patentability criteria of novelty and nonobviousness.
The digital camera described and claimed in the ’289 patent is a mechanical/electronic device that easily fits the standard subject matter eligibility criteria. Neither the panel majority nor the district court decided patentability under Section 102 or Section 103, having eliminated the claims under Section 101. The ’289 claims warrant review under the substantive criteria of patentability—a review that they have never received.
The fresh uncertainties engendered by the majority’s revision of Section 101 are contrary to the statute and the weight of precedent, and contrary to the public’s interest in a stable and effective patent incentive.
= = = = =
1. An improved digital camera comprising:
a first and a second image sensor closely positioned with respect to a common plane, said second image sensor sensitive to a full region of visible color spectrum;
two lenses, each being mounted in front of one of said two image sensors;
said first image sensor producing a first image and said second image sensor producing a second image;
an analog-to-digital converting circuitry coupled to said first and said second image sensor and digitizing said first and said second intensity images to produce correspondingly a first digital image and a second digital image;
an image memory, coupled to said analog-to-digital converting circuitry, for storing said first digital image and said second digital image; and
a digital image processor, coupled to said image memory and receiving said first digital image and said second digital image, producing a resultant digital image from said first digital image enhanced with said second digital image.
2. The improved digital camera as recited in claim 1, wherein said first image sensor sensitive to said full region of visible color spectrum.
4. The improved digital camera as recited in claim 1, wherein said analog-to-digital converting circuitry comprises two individual analog-to-digital converters, each integrated with one of said first and second image sensors so that said first and second digital images are digitized independently and in parallel to increase signal throughput rate.
We all might be working too hard. Patent law is supposed to be easy. See Black’s Law Dictionary (11th ed. 2019) (defining “patent” to mean obvious or apparent).
WhitServe LLC v. Dropbox, Inc., 19-2334 (Fed. Cir. 2021) (nonprecedential)
The district court dismissed WhitServe’s patent infringement complaint with prejudice — finding the claims ineligible as a matter of law. On appeal, the Federal Circuit has affirmed. WhitServe is the brainchild of patent attorney and inventor Wesley Whitmyer of Whitmyer IP Group. The patent at issue here. U.S. 8,812,437.
Claim 10, the focus of the case, is directed to an internet-based data-backup system and requires expected capability of “requesting, transmitting, receiving, copying, deleting, and storing data records.” In the appeal, the Federal Circuit found that these activities are abstract ideas: “Such transmitting, saving, and storing of client records is a fundamental [and longstanding] business practice” and therefore an abstract idea. Data storage at a generalized level is the focus of claim 10 and therefore claim 10 is “directed to an abstract idea.”
Here the system disclosed in claim 10 claims the computer function of maintaining data records, including storing records at different sites for added protection. This is an abstract idea.
Slip op. In its analysis, the court considered WhitServe’s argument that its physical arrangement of the components offered a specific and technological improvement. On appeal, however, the court rejected those arguments. The basic issue was that the claims (and specification) are all discussed at a too-high of a level of generality. I see the following sentence as the key take-away line from the case:
The specification does not, however, explain the technological processes underlying the purported technological improvement.
Id. Adding the tech-features within the claim would certainly have been sufficient. Also, the court may well have accepted these same claims if the technical improvement had been simply disclosed in the specification with sufficient detail. Of course, this implies that such a sufficiently-technical solution was available to the inventor. This line also effectively eliminated the possibility of recovering the claim under Alice/Mayo Step 2.
The claims recite generic computer components performing routine conventional functions. Viewing claim 10’s elements in combination does not alter our conclusion because the claims lack a non-conventional and non-generic arrangement. Accordingly, we conclude that the ’437 patent does not disclose an inventive concept and, as a result, does not transform claim 10 into patent eligible subject matter.
Id.
As part of its argument regarding eligibility, WhitServe had presented evidence of inventiveness, including secondary indicia of non-obviousness. On appeal, the court disregarded that evidence as irrelevant.
Objecti[ve] indicia of nonobviousness are relevant in a § 103 inquiry, but not in a § 101 inquiry.
Id. Invalidity AFFIRMED.
= = = =
10. A system for onsite backup for internet-based data processing systems, comprising:
a central computer accessible by at least one client computer at a client site via the Internet for outsourced data processing;
at least one database containing a plurality of data records accessible by said central computer, the plurality of data records including internet-based data that is modifiable over the Internet from the client computer;
data processing software executing on said central computer for outsourcing data processing to the Internet from the at least one client computer, said data processing software modifying the internet-based data in the plurality of data records according to instructions received from the at least one client computer, the modifying including updating and deleting the internet-based data in the plurality of data records;
a client data request, sent from at least one client computer via the Internet to said central computer, the client data request comprising a request for a backup copy of at least one of the plurality of data records;
software executing on said central computer to receive, via the Internet from the at least one client computer, the request for a backup copy of at least one of the plurality of data records including the internet-based data in the at least one of the plurality of data records that has been modified by said data processing software;
and software executing on said central computer to transmit the backup copy of the at least one of the plurality of data record including the internet-based data in the at least one of the plurality of data records that has been modified by said data processing software to the client site for storage of the internet-based data from the at least one of the plurality of data record in a location accessible via the at least one client computer;
wherein the location is accessible by the at least one client computer without using the Internet.
Dmitry Karshtedt is an Associate Professor of Law at GW Law whose work I’ve followed for years. Below he introduces the core idea underlying his new article on nonobviousness forthcoming in the Iowa Law Review. -Jason
Nonobviousness and Time Dmitry Karshtedt
Over the years, courts and commentators have said many thoughtful things about secondary considerations evidence and its role in the law of § 103, and reasonable minds have expressed significant disagreement about the value of this evidence. Consider, for example, the Federal Circuit’s fractured en banc Apple v. Samsung decision in 2016 and the never-ending debate over whether secondary considerations are best treated as rebuttal evidence to a prima facie case of obviousness based on the prior art, or whether all obviousness evidence should be analyzed holistically and at once.
My take is different: the whole primary/secondary categorization is unhelpful, especially in litigation and during post-issuance PTAB review. Let’s take one illustration. Commercial success and the skepticism of experts are both classified as “secondary considerations,” while teaching away is usually considered to be a part of the primary inquiry. However, skepticism has much more in common with teaching away, which directly tells us that the claimed invention would have been challenging to come up with, than with commercial success, which represents a market response to the invention that may indicate nonobviousness only indirectly. So what is the point of these evidentiary silos?
My answer is that there is no point. In Nonobviousness: Before and After, forthcoming in Iowa Law Review, I examine the different types of evidence used in the obviousness analysis and conclude that the primary/secondary framework does not make sense or have a strong precedential basis. The framework comes from throwaway language in Graham v. John Deere, in which the Supreme Court was grasping for some kind of a label for non-prior art evidence in § 103 cases. It has no grounding in established pre-Graham obviousness (and “invention”) precedent—which, for example, repeatedly supported the proposition that evidence like failure of others can be highly probative of validity. And it is inconsistent with KSR v. Teleflex, which sang a veritable paean to non-prior art evidence (e.g., market pressure and design need) in rejecting the Federal Circuit’s “blinkered focus on individual documents”—as the court acknowledged in one post-KSR opinion. Yet despite its lack of a coherent normative or precedential basis, classification as primary or secondary is well-entrenched and matters a lot in practice because the label can lead to arbitrary bolstering or discounting of certain evidence. On the one hand, the “secondary” scarlet letter can lead courts to ignore good evidence like failure of others, harming the patentee’s case. On the other hand, a boost from the “primary” label can sometimes cause courts to overvalue evidence like unexpected results in favor of the patentee.
I propose a better approach to structuring § 103 analysis based on the timing of the evidence. Under my approach, the filing date provides a useful default dividing line between different kinds of obviousness evidence: rather than categorizing obviousness evidence as primary or secondary, we should instead view the evidence as ex ante or ex post. With this framing, we can see precisely why skepticism has more in common with teaching away than with commercial success: skepticism and teaching away reflect the pre-filing state of the art and thus speak directly to a PHOSITA’s lack of motivation or reasonable expectation of success to pursue the invention at issue, while commercial success is (usually) a post-filing response to the invention and thus constitutes only indirect evidence of nonobviousness. The readers of this blog are very familiar with the concept of nexus—in the sense that a proponent of objective indicia evidence must establish a link between that evidence and the technical merit of the invention as claimed. My article’s proposal extends this concept to timing in that the party relying on ex post evidence must demonstrate a connection between that evidence and the elements of motivation and reasonable expectation of success at the time of filing. With ex ante evidence, however, temporal nexus is not an issue.
In my scheme, commercial success has more in common with evidence like copying or licensing than with the skepticism of experts and failure of others, which is classic ex ante evidence. And unexpected results, which the Federal Circuit has had great trouble fitting into Graham’s silos (some cases characterize that evidence as primary while others, as secondary), are instead divided into ex ante and ex post unexpected results. As I show in the article, there is (pre-Graham) Supreme Court precedent supporting this general scheme and even some modern cases sometimes (almost) get it right. However, there is too much confusion in the case law to sustain a consistent approach, suggesting the need for an explicit adoption of the proposed ex ante/ex post framework. The tables below illustrate the key moves (indicated in italics), and the article explains why the proposed scheme will help decision-makers determine the relevance and weight of various nonobviousness evidence with greater accuracy.
Table 1. Graham’s Primary-Secondary Framework
Primary Evidence
Secondary Evidence
Content of the prior art and the differences between it and the claimed invention
Commercial success
Prior art teachings “toward” or “away” from the claimed invention
Failure of others
Comparison of the properties of the claimed invention with those of the prior art, including unexpected results (?)[1]
Long-felt need
Expert skepticism
Copying of the claimed invention, licensing, and other forms of industry acquiescence
Industry praise (or disbelief)
Simultaneous invention
Unexpected results (?)
Table 2. Proposed Time-Based Scheme
Ex ante evidence
(relating to state of the art facing a PHOSITA at time of filing)
Ex post evidence
(in reaction to or during further development of the invention)
Content of the prior art and the differences between it and the claimed invention
Commercial success
Prior art teachings “toward” or away” from the claimed invention, as well as market pressure and design need
Copying of the claimed invention, licensing, and other forms of industry acquiescence
Comparison of the properties of the prior art with those of the claimed invention, including unexpected results, if discovered before filing
Comparison of the properties of the prior art with those of the claimed invention, including unexpected results, if discovered after filing
Failure of others
Industry praise (or disbelief)
Long-felt need
Expert skepticism
Simultaneous invention
[1]. Question marks next to “unexpected results” reflect their inconsistent classification
There are lots of quantitative studies of patent litigation appellate court decisions, going all the way back to P.J. Federico’s 1956 article Adjudicated Patents in the Journal of the Patent and Trademark Office Society. One of the big limitations of these studies, though, is that there hasn’t really been any work done to examine how replicable their observations are – even for variables as seemingly simple as whether the court affirmed or reversed on a particular issue, or reached a particular outcome, such as whether a patent’s claims was obvious. New studies compare their aggregate results to previous studies, but not the actual data themselves–even when studying the same set of cases.
Our reliability assessment reveals a complex picture. Somewhat reassuringly, the results from the two studies are largely consistent for decisions from the same time period. Surprisingly, however, fewer than 2/3rds of the decisions analyzed in both studies were the same—even when limited to the identical time period and using the same criteria. Within that set of cases, however, the core data coding was largely identical, with a few notable exceptions. Specifically, we find differences in the coding for procedural postures and in some coding related to judicial reasoning.
In addition, since the period covered by those two studies ended several years ago, we also updated the dataset through the end of 2019. Here are some highlights from our findings:
The number of Federal Circuit decisions in appeals arising from the district courts that involved a § 103 issue peaked between 2010 and 2015, and in recent years has declined to half of that peak.
The percentage of Federal Circuit decisions with an outcome of “obvious” in appeals arising from the district courts remained high between 2006 and 2014, but since 2015 the number of “obvious” outcomes has fallen dramatically.
The Federal Circuit continues to affirm district courts on the issue of obviousness at a high rate (around 80% of the time since 2013), and—in contrast with the immediate post-KSR period studied Holte & Sichelman (2019) and Rantanen (2013)—since 2013, affirmances have been equally high for district court outcomes of “nonobvious.”
The number of grants of summary judgment involving § 103 that were reviewed by the Federal Circuit in its decisions has fallen substantially in recent years. Nearly all § 103 decisions arising from the district court that were reviewed by the Federal Circuit between 2016 and 2019 involved a bench or jury trial.
In the paper we talk about some possible explanations for this decline, including two obvious causes: the rise of inter partes review and patent eligible subject matter issues. You can read the full preprint on SSRN here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3818466. I’m hoping to have the data posted within the next few weeks.
Daikin Indus. v. Chemours Co. (Fed. Cir. 2021) (non-precedential)
The PTAB sided with the patent challenger Chemours — finding claims 1-5 of Daikin’s U.S. Patent No. 9,574,123 unpatentable as obvious. On appeal, the Federal Circuit has affirmed.
The patent here is covers a refrigerant mixture of three compounds that I have labeled A, B, and C.
A: hydrofluorocarbons (HFCs);
B: hydrofluoroolefins (HFOs) (such as HFO-1234yf); and
C: a chlorine-containing hydrocarbon refrigerant (such as chlorofluorocarbon (CFC)).
The HFCs and HFOs apparently have lower global environmental impact, but lack the lubricant-performance of chlorine-containing CFCs. The invention balances these factors by mixing them all together. The prior art disclosed the combination of A&B and also the combination of B&C, but did not expressly disclose the full three-way combination.
Substitution: In its discussion, the court focused on the obviousness of a substitution because the prior art spoke of two forms HFO-1234yf. One form that only contains HFOs (B only); and another form that includes small amounts of CFCs (B and C). The PTAB and FedCir agreed that, in this case it would have been obvious to start with the A&B combination and then substitute the B&C version of HFO-1234yf in place of the B only version found in the primary reference.
The US Supreme Court most recently wrote about obviousness substitutions in KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 416 (2007). There, the court explained:
[W]hen a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result. . . . [W]hen a patent simply arranges old elements with each performing the same function it had been known to perform and yields no more than one would expect from such an arrangement, the combination is obvious.”
KSR. Here, there is no question that all of the elements were known in the art, the but the patentee argued unpredictability of results especially because the proposed substitution disclosed in the prior art also included other contaminants that could impact performance.
On appeal, the Federal Circuit gave deference to the PTAB’s fact finding — and concluded that it was supported by substantial evidence. In particular, the Board had relied upon expert testimony that the result was predictable and that “trivial
increase [in the contaminants] would not have prevented a [skilled artisan] from making such a substitution.”
Obviousness affirmed.
= = = =
1. A composition comprising HFC and HFO, wherein the composition comprises:
HFC-32, HFC-125, HFC-134a, and HFC-134 as the HFC;
at least one of HFO-1234yf and HFO-1234ze as the HFO; and
at least one member selected from the group consisting of HCC-40, HCFC-22, HCFC-124, CFC-115, HCFC-1122, CFC-1113, and 3,3,3-trifluoropropyne as a third component.
I wrote earlier about the Supreme Court petition in Amarin Pharma, Inc. v. Hikma Pharmaceuticals USA Inc. (Supreme Court 2021) that focuses on secondary considerations of non-obviousness such as commercial success and long-felt un-met need. There has been a small movement over the years to refer to these as “objective indicia of nonobviousness” as opposed to secondary considerations. That movement did not arise with the Supreme Court. Rather, the Supreme Court has repeatedly referred to these as “secondary factors” or “secondary considerations” of non-obviousness. It did so in both Graham (1966) and again in KSR (2007). In KSR, the court particularly suggested that they have a role in negating obviousness — effectively as rebuttal evidence. “Teleflex has shown no secondary factors to dislodge the determination that claim 4 is obvious.” In Amarin, the patentee is arguing that commercial success and the other factors should not be relegated to rebuttal evidence but rather be used on-par with the other Graham factors.
I wanted to see what language courts have been using and so pulled up the 2,500+ Federal Court decisions since 1966 that talk about either objective indicia or secondary considerations (or both). [Search strings below]. The results. Most cases — about 2/3 — follow Graham and speak of “secondary considerations.” Another 13% are what I call “overlapping” and use forms of characterizing the analysis. Finally, 20% speak in terms of “objective indicia.” The charts below shows these results along with the time series.
* To find the cases, I used Westlaw and limited the search to only patent-cases. For “objective indicia” cases, I looked within the opinin (OP) for (“objective indicia” or “objective factors”) /s (obvious! or nonobvious!). For “secondary considerations” cases, my search string was (“secondary factors” or “secondary conditions”) /s (obvious! or nonobvious!). Note – there are some problems with attempting longitudinal studies with Westlaw for several reasons, including changes in how cases are recorded and coded within the service.
Amarin Pharma, Inc., v. Hikma Pharmaceuticals USA Inc. (Supreme Court 2021)
Obviousness is the key, the core, and the central doctrine of our US utility patent system. The Supreme Court’s doctrine in Graham v. John Deere (1966) and KSR v. Teleflex (2007) serve as the pillars along with the statutory language from the 1952 Patent Act.
A patent for a claimed invention may not be obtained … if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
35 U.S.C. § 103. Of course, in deciding Graham, the Supreme Court wrote that the new Section 103 ““was intended to codify judicial precedents” such as ” Hotchkiss v. Greenwood, 52 U.S. (11 How.) 248 (1851) and its progeny.
Objective indicia of Nonobviousness — do you call them "secondary factors?"
In a bench trial, the district court invalidated Amarin’s patent covering a drug treatment for hypertriglyceridemia — finding the claims obvious over a combination of prior art references that had been previously considered by the USPTO. On appeal, the Federal Circuit affirmed without opinion (R.36). Now, the patentee has filed a petition with the US Supreme Court asking for clarification of the Graham analysis. In particular, what is the role of the objective indicia of non-obviousness. We sometimes call these “secondary factors” — and that is the focus of the particular dispute. Does the Federal Circuit err when it (sometimes) relegates the objective indicia to a secondary status.
This Court has made clear that objective indicia must be considered along with the other factors before concluding that any invention is obvious, so that real world indicators—which are often the strongest evidence of nonobviousness—may guard against the risk that patents will incorrectly appear obvious in hindsight.
The Federal Circuit has improperly relegated objective indicia of nonobviousness to a secondary role. Under the Federal Circuit’s framework, a court first considers only the three technical Graham factors and reaches a conclusion of “prima facie” obviousness. Only then does the court consider objective indicia, merely as a basis for rebutting a conclusion already reached. The result is over-invalidation of patents through hindsight bias and the suppression of innovation.
The question presented is: Whether a court must consider objective indicia of nonobviousness together with the other factors bearing on an obviousness challenge before making any obviousness determination.
The key case in point is likely Goodyear Tire & Rubber Co. v. Ray-O-Vac Co., 321 U.S. 275 (1944). In its decision, the Supreme Court explained that the patented “leakproof dry cell for a flash light battery” was within a crowded art which suggested that invention was obvious — especially when “viewed after the event.” But, the court looked also to the long-felt unmet need before negating patentability:
During a period of half a century, in which the use of flash light batteries increased enormously, and the manufacturers of flash light cells were conscious of the defects in them, no one devised a method of curing such defects. Once the method was discovered it commended itself to the public as evidenced by marked commercial success. These factors were entitled to weight in determining whether the improvement amounted to invention and should, in a close case, tip the scales in favor of patentability. Accepting, as we do, the findings below, we hold the patent valid and infringed.
Id. Goodyear was a 5-4 decision written by Justice Owen Roberts. Justice Hugo Black dissented with a quote from a 19th Century Court decision: “a shadow of a shade of an idea.” A. Works v. Brady, 107 U.S. 192 (1883) (“It was never the object of [the patent] laws to grant a monopoly for every trifling device, every shadow of a shade of an idea, which would naturally and spontaneously occur to any skilled mechanic or operator in the ordinary progress of manufactures.”). Black wrote:
If the patentee here has ‘discovered’ anything, it is that the creamy substance in a dry cell will not leak through a steel jacket which covers and is securely fastened to the ends of the cell. For that alleged discovery this patent is today upheld. I do not deny that someone, somewhere, sometime, made the discovery that liquids would not leak through leak-proof solids. My trouble is that, despite findings to the contrary, I cannot agree that this patentee is that discoverer. My disagreement is not based solely on the narrow ground that the record shows previous patents have been issued to others who put jackets of metal and other substances around dry cells. Antiquarians tell us that the use of solid containers to hold liquids predated the dawn of written history. That the problem of the quality and strength of the walls of such containers was one to which ancient people turned their attention appears from the widespread currency at an early age of the maxim that ‘new wine should not be put in old bottles.’ It is impossible for me to believe that Congress intended to grant monopoly privileges to persons who do no more than apply knowledge which has for centuries been the universal possession of all the earth’s people—even those of the most primitive civilizations.
Goodyear, dissent by Justice Black. Justice Robert Jackson also wrote a short dissent in Goodyear arguing that the patentee had not proven sufficient nexus between the invention’s merits and the product’s commercial success. Rather, at the time there was a war going on that also drove business.
M&K Holdings, Inc. v. Samsung Electronics Co., LTD. (Fed. Cir. 2021)
M&K’s U.S. Patent No. 9,113,163 covers a “method of decoding moving picture.” There is some history between Samsung and M&K’s family of companies, whose patents also originate in Korea. This appeal stems from an IPR final written decision finding the challenged claims invalid.
Decide only the Issues Raised: The first bit here is easy but quirky. The petition challenged claim 3 of the ‘163 patent as obvious. The PTAB found the claim unpatentable as anticipated, but did not perform an obviousness analysis. On appeal, the Federal Circuit vacated — holding that the PTAB “deviated impermissibly from the invalidity theory set forth in Samsung’s petition.” For its part, Samsung argued that the anticipation holding was no-problem. Just like the vast-majority-of-cases, the anticipation here is inherent in the obviousness theory. In particular, we have the same prior art — its just that the PTAB only needed the primary reference. In its petition, Samsung suggested a second reference showing the “predetermined block” claim limitation.
On appeal, the Federal Circuit found notice lacking since Samsung’s original petition stated that the primary reference did not disclose the “predetermined block.” According to the court, if M&K had known about the anticipation argument, it might have shifted its argument about the scope of claim 3. The cynicism here is relevant – the Federal Circuit is recognizing and even encouraging parties to shift their patent claim meaning arguments depending upon the circumstances. This outcome can be linked with the court’s conclusion in Egenera, Inc. v. Cisco Systems, Inc. (Fed. Cir. 2020). In that case, the court permitted the patentee to shift its arguments regarding claim meaning and patent scope as the case moved through various tribunals.
In the end, the difference here between anticipation & obviousness was sufficient enough for the court to find an APA violation by the PTAB in finding the claim anticipated.
Printed Publication: The patentee also challenged the decision by arguing that some of the references relied upon were not actually prior art. We have three references at issue that were all uploaded to a website controlled by the Joint Collaborative Team on Video Coding (“JCT-VC”):
Bross et al., WD4: Working Draft 4 of High-Efficiency Video Coding, JCTVC-F803 (version 3) (uploaded Sept. 8, 2011).
Park et al., Modifications of Temporal MV Memory Compression and Temporal MV Predictor, JCTVC-E059 (version 4) (uploaded Mar. 19, 2011).
Zhou, Non-CEP9: Modified H Position for Memory Bandwidth Reduction in TMVP Derivation, JCTVC-G082 (version 1) (uploaded Nov. 9, 2011).
All three were uploaded to the server, and the patentee argued that a person of ordinary skill in the art could not have found Park or Zhou using reasonable diligence before the patentee’s priority date of December 13, 2011. Here, the references were each discussed at a JCT-VC development meeting of ~200 people prior to that date, and those meetings were not subject to “any expectation of confidentiality.” The documents were hosted in downloadable form, and could be searchable by title. Further, JCT-VC was a “prominent” group within those skilled in video-coding technology and those outside the group would have found the website. In reviewing the relevance of these facts, the Federal Circuit asked “whether the channel through which the references were publicized is prominent or well-known among persons of ordinary skill in the art.” These facts came together to allow the Federal Circuit to affirm the “Board’s finding that persons of ordinary skill in video-coding technology could have accessed Park and Zhou with reasonable diligence through the JCT-VC organization. None of M&K’s arguments undermine the Board’s finding that Park and Zhou were publicly accessible and its conclusion that those references constitute printed publications within the meaning of 35 U.S.C. § 102.”
Note here that this decision is in some serious tension with Samsung Elecs. Co. v. Infobridge Pte. Ltd., 929 F.3d 1363 (Fed. Cir. 2019) (Version 4 of the same working draft not prior art). That decision involved a patent from the same inventor, Soo Mi Oh.
= = =
One oddity of this case is the priority dates. The patent application at issue was actually filed in September of 2012 but claims priority back to two Korean applications filed in 2010 and early 2011 and then a PCT application filed in Korea on December 13, 2011. The PCT application includes additional matter that is found in the claims. The patentee did not attempt to prove an earlier invention date. So, the December 13, 2011 date was used as the critical-date for 102(a) prior art.
Can we eliminate the anticipation doctrine and still have a fully-operational patent system with 99.99% identical outcomes? (Add additional comment below).
Palo Alto Networks, Inc. v. Finjan, Inc. (Fed. Cir. 2020)
Note – I originally misread this decision as applying the Phillips standard for claim construction. On review, I realize that I misread the decision. The court explains:
For petitions for inter partes review filed on or after November 13, 2018, the Board applies the Phillips district court claim construction standard. 37 C.F.R. § 42.100(b) (2018); Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc); Immunex Corp. v. Sanofi-Aventis U.S. LLC, 977 F.3d 1212, 1216 & n.2 (Fed. Cir. 2020). For petitions for inter partes review filed before November 13, 2018, like Palo Alto’s, we apply the broadest reasonable interpretation claim construction standard.
So, my original opinion–that the change in claim construction made the difference–is obviously wrong.
= = = =
This appeal stems from an IPR proceedings filed by Palo Alto (PANW) against Finjan’s US. Patent No. 8,141,154. Back in 2017, the Board originally sided with Finjan and confirmed patentability of the claims (not proven unpatentable). In a 2018 appeal, however, the Federal Circuit vacated that decision under SAS. The IPR had only been partially-instituted and the Supreme Court in SAS held that partial-institution is improper. On remand, the Board expanded its institution to all challenged claims and then again sided with the patentee — finding none of the challenged claims were proven unpatentable. On appeal here, the Federal Circuit has affirmed. (more…)
The basic question in this ex parte appeal is whether the asserted references teach the layering of aerogels as required by the insulation materials claim pending before the USPTO. The pending APN 14/446,663 was filed in 2014, but claims a chain of priority stretching back to a 2005 provisional patent application. The basic idea here is that aerogel is a great insulator, but is fragile, so the claim requires fiber-reinforcement. The claim particularly requires two plys of fiber-reinforced aerogel — and that the fibers in the plys are interlaced with one-another.
Claim 1: A composite comprising
[a] at least one first ply of fiber-reinforced aerogel material adjacent to [b] at least one second ply of fiber-containing material,
wherein fibers from the at least one first ply of fiber-reinforced aerogel material are interlaced with fibers from the at least one second ply of fiber-containing material.
The examiner rejected the claim as obvious and that was affirmed by the PTAB. The Federal Circuit has now affirmed.
U.S. Patent App. No. 2002/0094426 (Stepanian) taught having the two layers of fiver-reinforced aerogel, but did not teach the interlacing of fibers.
Japanese Patent No. 2000-080549 (Sano) teaches interlacing of fibers of layers using needle-felting.
Aspen’s argument on appeal is that Stepanian does not actually teach plys as claimed but rather two masses of undifferentiated aerogel. On appeal here, Aerogel presented this as a question of law involving the definition of the term claim term “ply.” The Federal Circuit here rejected that approach — holding instead that the real question is whether the prior art discloses the plys. The difference between these two approaches is very important on appeal: Claim construction is reviewed de novo on appeal without deference to the PTO determination; Content of the prior art is reviewed for substantial evidence with major deference going to the PTO.
[W]e determine the issue to be a factual question of whether the prior art teaches an undifferentiated mass of aerogel or teaches layers of fiber-reinforced aerogel as the Board determined. We review this issue for substantial evidence.
Slip Op. Stepanian (which I have previously discussed in PatentlyO) clearly shows layers, and particularly defines Fig 3 (below) as disclosing “a 3-layer laminate.” But, the issue is that Stepanian stacks the fibers and then pours in the areogel over the layers of fibers. The PTAB made the factual conclusion that Stepanian disclosed “plys” of fiber-aerogel, even with the pour-over approach, and the appellate panel found substantial evidence for that conclusion.
Whether layers of fibrous material are filled with aerogel and then stacked or stacked and then filled with aerogel makes no difference if the result is the same as the claimed composite here.
Slip Op.
Note here, that Aerogel is also the owner of the Stepanian patent application (and issued patent). The problem though is that the Stepanian application was published back in 2002, more than 1-year before the priority date of the application at issue here.
Rejection affirmed.
If there really is a claim-construction issue here, on remand the patentee may want to amend its claims to make the proper construction exceedingly clear and then rejoin the rodeo.
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If we go back to the heart of this matter: Aergoel appealed on claim construction, the Federal Circuit says “the real issue is not claim construction but rather the content of the prior art” (paraphrase). The court then goes on to refuse to decide the claim construction issue and instead decide the case on the alternative grounds.
Truthfully, this seems wrong. The appellate court should have decided the issue raised by the appellant (claim construction) and ended the case there. I read appellant’s brief who particularly stated that no factual question is being appealed: “There is no dispute here about any relevant fact.”
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Poongs Muthukumaran, chief counsel for Aspen argued for his employer; Kakoli Caprihan argued for the PTO.
