CAFC Affirms One PTAB Ruling, Reverses Another in WeatherTech Vehicle Tray Patent Dispute

In a precedential opinion issued Tuesday, the U.S. Court of Appeals for the Federal Circuit (CAFC) reversed a Patent Trial and Appeal Board (PTAB) judgment that affirmed patent claims in part due to the commercial success of MacNeil IP’s WeatherTech vehicle floor tray. The CAFC also affirmed a PTAB ruling that invalidated three claims of one of MacNeil’s patents in its battle with Yita LLC, a Seattle-based auto parts company.

In 2020, Yita petitioned the PTAB to invalidate two MacNeil patents related to vehicle floor trays, U.S. Patents, Nos. 8,382,186 and 8,833,834. The auto parts company claimed that MacNeil’s patents should be invalidated on obviousness grounds.

With the exception of three claims in the ‘834 patent, the PTAB ruled in favor of MacNeil and rejected Yita’s challenges to 12 claims. While the Board found that an artisan would have the motivation to successfully combine the teachings of prior art references to arrive at all 7 challenged claims of the ‘186 patent, it found MacNeil’s evidence, “compelling and indicative of non-obviousness.”

The CAFC reversed the PTAB’s ruling related to the ‘186 patent,. While the appeals court disagreed with how the Board arrived at its ruling on the ‘186 patent, the court affirmed the PTAB’s judgment in the ‘834 patent IPR proceeding.

“Because the Board determined that a relevant artisan would have been motivated to combine the teachings of Rabbe, Yung, and Gruenwald to arrive at claims 1–7 of the ’186 patent with a reasonable expectation of success, the Board’s judgment that those claims are not unpatentable for obviousness must be reversed,” concluded the appeals court.

Secondary-Consideration Evidence

The PTAB identified three secondary considerations relevant to the two IPR proceedings: commercial success, long-felt but unresolved need, and industry praise. The CAFC characterized the Board’s ruling that rejected Yita’s unpatentability claims as “solely because it found MacNeil’s secondary-consideration evidence compelling.”

But, the CAFC disagreed and wrote, “the Board’s finding…rests on legal errors, and once those errors are corrected, the finding is not supported by substantial evidence.” The appeals court identified two “legally incorrect” reasons offered by the Board that it used to reach its determination.

The Board’s first reason was that a disclosure did not establish that close conformance was “well-known.” However, the CAFC cited relevant case law that states the barrier hear only needs to be considered “known” not “well-known.”

Secondly, the CAFC ruled that the PTAB incorrectly applied a previous CAFC ruling, WBIP, LLC v. Kohler Co. The PTAB came to its determination of nonobviousness by interpreting precedent as allowing a “claimed combination as whole [to serve] as a nexus for objective evidence.” However, the CAFC explained that, later in that ruling, it determined that the secondary-consideration evidence can be linked to an individual element in the claim construction.

The appeals court wrote, “the Board’s own findings, in light of the proper application of our precedent, compel the conclusion that MacNeil’s secondary-consideration evidence is of no relevance to the obviousness inquiry in this case.”

Agreement with PTAB

In the IPR proceeding related to the ‘834 patent, the CAFC agreed with the Board’s ruling and rejected Yita’s arguments.

The auto parts company petitioned the court and argued that the Board abused its discretion when it declined to hear an argument because it was presented too late, in a footnote in a reply brief. The CAFC disagreed and found no abuse of discretion because it has repeatedly ruled that the PTAB is within its discretion to decline to consider new theories of unpatentability when they are presented for the first time in a reply.

While the CAFC did not agree with Yita’s arguments on appeal related to the ‘834 patent, the IPR proceeding still had relevance to the CAFC’s other ruling.

As previously stated, the PTAB agreed with Yita’s challenge of three claims in the ‘834 patent and ruled that they were unpatentable. MacNeil has thus far not appealed the PTAB’s invalidation of these three claims.

Additionally, MacNeil did not dispute Yita’s argument before the CAFC that MacNeil’s secondary-consideration evidence for those three claims was identical to the evidence presented in the ‘186 patent IPR proceeding.  The PTAB found the secondary-consideration evidence unconvincing for the three claims in the ‘834 patent, yet determined the identical evidence was compelling and showed nonobviousness for the seven claims in the ‘186 patent.

Ultimately, this bolstered Yita’s argument and helped it reverse the PTAB ruling on the ‘186 patent.