PTAB Addresses Nexus Between Evidence and Claims in Precedential Decision

The U.S. Patent and Trademark Office (USPTO) Patent Trial and Appeal Board (PTAB) designated a January 2020 decision, Lectrosonics, Inc. v. Zaxcom, as precedential on April 14. Lectrosonics filed a petition requesting an inter partes review (IPR) of claims 7, 8, 11, 12, 14, and 15 of U.S. Patent No. 7,929,902 (the ‘902 patent), which was directed to a system and method “for recording and processing audio having one or more tracks received from one or more wireless devices operating in either an asynchronous or synchronous mode.” In the Final Written Decision, the PTAB determined that Lectrosonics met its burden of showing, by a preponderance of the evidence, that claims 7, 8, 11, 12, 14, and 15 of the ’902 patent were unpatentable, but that it had not met its burden of showing, by a preponderance of the evidence, that proposed substitute claims 21–26 were unpatentable.

Claim Construction and Prior Art

Initially, the PTAB addressed Lectrosonics’ challenge to claims 7, 8, 11, 12, 14, and 15 of the ’902 patent, with particular emphasis on independent claims 7 and 12. Since the petition was filed prior to the recent changes to the claim construction standard for interpreting claims before the PTAB, the claims were interpreted using the broadest reasonable construction in light of the specification. Thus, the claim terms were “given their ordinary and customary meaning, as would have been understood by one of ordinary skill in the art in the context of the entire disclosure.” One of the claim terms at issue recited “local audio data . . . is combined with said remote audio data” (the “combined” limitation). The Patent Owner asserted that claim should be interpreted to require “the local audio data and the remotely recorded audio data to originate from the same audio.” The PTAB disagreed, reasoning that the claim does not require the “local audio data” and “remotely recorded audio data” to be derived from the same source. The PTAB agreed with the Petitioner’s claim construction of other claim terms including “wearable” (i.e. suitable and in a condition to be worn) and “master timecode generator” (i.e. a producer of a plurality of master timecodes controlling other time code generators).

The PTAB then turned to an obviousness analysis of independent claim 7, which Lectrosonics asserted was unpatentable under 35 U.S.C. § 103 as obvious over Strub in combination with Nagai or Gleissner, and Woo. The PTAB thoroughly reviewed Lectrosonics’ and Zaxcom’s arguments, agreeing with Lectrosonics on each point. For example, the PTAB determined that the Petitioner set forth sufficient rationale to combine the references in the manner asserted, specifically with respect to the combination of Strub and Woo.

Secondary Considerations of Nonobviousness

The PTAB then addressed Zaxcom’s assertions that “the nonobviousness of the claims is supported by objective indicia of nonobviousness including long-felt need, failure of others, and industry praise of the patented invention.” The PTAB stated that a nexus between the evidence and the merits of the claimed invention must be established in order for objective indicia of nonobviousness to be given substantial weight. Citing Fox Factory, Inc. V. SRAM, LLC, the PTAB noted that a patentee is entitled to a presumption of nexus “when the patentee shows that the asserted objective evidence is tied to a specific product and that product ‘embodies the claimed features, and is coextensive with them.’” In the present case, the PTAB concluded that a presumption of nexus was inappropriate because the Patent Owner did not “provide an analysis demonstrating that its products are coextensive (or nearly coextensive) with the challenged claims.”

Again citing Fox Factory, the PTAB explained that a finding that a presumption of nexus is inappropriate does not end the inquiry into secondary considerations; rather the patent owner still has an opportunity to “prove nexus by showing that the evidence of secondary considerations is the ‘direct result of the unique characteristics of the claimed invention.’” The PTAB considered Zaxcom’s objective evidence of nonobviousness including expert declarations, user manuals for Zaxcom’s products, and evidence of awards received for Zaxcom’s products and product manuals. However, the PTAB concluded that Zaxcom did not demonstrate that a nexus exists between the evidence presented and the claimed invention. According to the PTAB, the evidence was directed to a non-claimed feature of “repairing dropouts by replacing data”, rather than “locally recording and timestamping audio data” as recited in the claims. Thus, in considering “the Graham factors, including the scope and content of the prior art, the differences between the prior art and the challenged claims, and the objective evidence of nonobviousness,” the PTAB determined that independent claim 7 of the ’902 patent was unpatentable under 35 U.S.C. § 103(a) as obvious over Strub in combination with Nagai or Gleissner, and Woo.

Anticipation Analysis

The PTAB also agreed with Lectrosonics that independent claim 12 was unpatentable under 35 U.S.C. § 102(e) as anticipated by Strub. The PTAB considered both parties’ arguments, including Zaxcom’s argument that Strub failed to disclose “that the local audio data and remotely recorded audio data be the same data.” Noting that Zaxcom’s argument relied on an improper claim construction, the PTAB agreed with Lectrosonics that Strub disclosed the disputed element. Therefore, the PTAB determined that Lectrosonics “demonstrated by a preponderance of the evidence that claim 12 of the ’902 patent is unpatentable under 35 U.S.C. § 102(e) as anticipated by Strub.”

Motion to Amend and Proposed Substitute Claims

Zaxcom filed a Motion to Amend and proposed substitute claims 21–26. The PTAB found that the Motion to Amend met the procedural requirements, as the number of substitute claims was reasonable, the proposed claims responded to a ground of unpatentability involved in the trial, and the proposed amendment narrowed the scope of the claims. The PTAB reviewed, agreed with, and adopted Zaxcom’s claim construction for several claim terms, such as “replacing” and “transmitting.”  The PTAB also agreed with Zaxcom that the substitute claims were clear and in compliance with 35 U.S.C. § 112.

Obviousness of Proposed Substitute Claims

The PTAB then considered whether the substitute claims were unpatentable under 35 U.S.C. § 103(a) as obvious over Strub in combination with Nagai or Gleissner, Woo, and Wood. Following a review of the arguments presented, the PTAB noted that the asserted prior art was reasonably pertinent to the problem faced by the inventors of the ‘902 patent. The PTAB also pointed out some differences between the prior art and the proposed substitute claims such as “although Strub recognizes that recordings may be deficient, Strub does not specifically contemplate deficiencies resulting from dropouts in transmission of local audio to a remote recorder or receiver”, as in the proposed claims.  Further, the PTAB noted that Wood focuses on repairing dropouts in a TV broadcast signal, rather than in post-processing of a recording. The PTAB reasoned that “the evidence that a person with ordinary skill in the art would have looked to combine a small, wearable device for recording the audio of an event, as taught in Strub, with a method for repairing a TV broadcast signal, as taught in Wood, does not support a strong showing of obviousness.” Thus, the PTAB concluded that the arguments and evidence of record “at best only slightly weigh in favor of a conclusion of obviousness.”

Secondary Considerations of Nonobviousness of Proposed Substitute Claims

The PTAB first addressed the issue of nexus anew because the substitute claims were construed as being “directed to repairing dropouts by receiving local audio data and replacing remotely recorded audio data with the received local audio data”, which was different from the claims previously analyzed. The PTAB noted that a presumption of nexus was inappropriate because the Patent Owner did not provide an analysis demonstrating that its products and the challenged claims were coextensive or nearly coextensive.

Although the PTAB determined there was “no presumption of nexus”, it found that Zaxcom successfully established a nexus between the evidence of secondary considerations and the substitute claims. Zaxcom did not submit additional analysis with its Motion to Amend; however, the arguments and evidence submitted in the Response were directed to the subject matter added to the substitute claims. For example, the PTAB noted that Zaxcom’s Emmy Award praised the “replacing” feature of the substitute claims. Thus, the PTAB determined that the “Patent Owner has established a nexus between the evidence of industry praise and long-felt need and the ‘replacing’ limitation of the proposed substitute claims.”

The PTAB considered the Graham factors in determining whether the objective indicia weighed in favor of nonobviousness. With respect to long felt need, the PTAB determined that the evidence weighed in favor of nonobviousness based on Zaxcom’s expert testimony that there was a long felt need for a “wireless, wearable, transmitting and recording device that could reliably capture sound data from actors recording a movie or television show”, despite a lack of evidence demonstrating that “the need was long felt based on the date when the problem to be solved was identified and efforts were made to solve the problem.” Noting that Zaxcom relied upon expert declarations and awards as evidence of the “industry praise” factor, the PTAB reasoned that the evidence related to the “replacing” limitation that addresses dropouts and weighed in favor of nonobviousness. The PTAB found Zaxcom’s expert testimony regarding “failure of others” did not support a conclusion of nonobviousness because it was conclusory and without adequate support. The PTAB concluded that while the proposed combination of the teachings of the references presented a weak case of obviousness, the objective indicia of nonobviousness weighed heavily in favor of nonobviousness. Thus, the PTAB granted the Patent Owner’s Motion to Amend to replace claims 7, 8, 11, 12, 14, and 15 with the proposed substitute claims.