Posts Tagged: "nonobviousness"

Imagine, as a patentee, that you assert your broadly claimed patent(s) against an alleged infringer, and your opponent takes you to the Patent Trial and Appeal Board (PTAB) via an inter partes review (IPR) petition, where they present sufficient evidence of obviousness such that you have to resort to (gulp) secondary considerations. While no dream situation for patentees, it is important to understand the patent owner’s evidentiary burden when confronting obviousness challenges using secondary considerations, such as commercial success, long-felt but unsolved needs, failure of others and unexpected results. Here are three recent Federal Circuit decisions that are informative with respect to successfully (or unsuccessfully) utilizing evidence of commercial success in countering an obviousness attack.

On February 4, 2022, The U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed two decisions of the Patent Trial and Appeal Board (PTAB) on related inter partes reviews (IPRs) brought by Quanergy against Velodyne, explaining that the Board’s decision to uphold the validity of the disputed claims was correct considering the objective evidence provided by Velodyne. Quanergy challenged multiple claims of U.S. Patent No. 7,969,558, covering a lidar-based 3-D point cloud measuring system best known for helping autonomous cars sense their surroundings. In its decisions, the PTAB held that several claims of the ’558 patent are not unpatentable as obvious.

On December 23, the United States Court of Appeals for the Federal Circuit (CAFC) vacated a decision of the USPTO’s Patent Trial and Appeals Board (PTAB), holding that the PTAB’s conclusion that Raytheon Technology Corp.’s (Raytheon’s) patent was non-obvious lacked substantial evidence. See General Electric Company v. Raytheon Technologies Corporation. The CAFC also found that General Electric Company (GE) had alleged sufficient facts to establish that it was engaging in activity that created a substantial risk of future infringement, and therefore had standing to bring the appeal.

Everybody in the patent world is talking about the latest atrocity from the Federal Circuit known as the American Axle decision, but few actually appreciate the true level of absurdity. Yes, 35 U.S.C. § 101 swallowed §§ 112(a), 112(f), 102, and 103 in a single decision (a new feat of judicial acrobatics), and Judges Taranto and Dyk displayed their technical ignorance. For example, in citing the Flook decision Judges Dyk and Taranto assert that Flook’s mathematical formula (known to a million-plus engineers as the steepest-descent algorithm) is a “natural law.” American Axle, slip op. at p. 19. Seriously? Are Federal Circuit judges so technically ignorant that the entirety of the country is doomed to believe such an idiotic fantasy that a particular adaptive mathematical algorithm associated with no natural law must be a natural law? 

Recently, the United States Court of Appeals for the Federal Circuit (“the Federal Circuit”) issued its opinion in Solutran, Inc. v. Elavon, Inc., 2019-1345, 2019-1460 (Fed. Cir., July 30, 2019) in which the Court held claims 1-5 of Solutran’s U.S. Patent No. 8,311,945 invalid under 35 U.S.C. § 101 for failing to recite patent eligible subject matter. In reversing the District Court, the Federal Circuit found that the claims of the patent recited an abstract idea (electronically processing paper checks) and that the claims failed to transform that abstract idea into patent-eligible subject matter. More importantly, the Federal Circuit dismissed Solutran’s argument that the claims were patent eligible simply because they were novel and non-obvious, noting that: “We have previously explained that merely reciting an abstract idea by itself in a claim—even if the idea is novel and non-obvious—is not enough to save it from ineligibility.” The Solutran decision is not the first time the Federal Circuit has held that novelty/non-obviousness does not bear on the question of patent eligibility.

The U.S. Court of Appeals for the Federal Circuit (CAFC) decided an appeal by Henny Penny Corporation (HPC) on September 12 involving HPC’s inter partes review (IPR) petition of U.S. Patent 8,497,691 (the ‘691 patent) at the U.S. Patent and Trademark Office’s (USPTO’s) Patent Trial and Appeal Board (PTAB). The PTAB held that claims 1-3, 5-12, 17-21, and 23 of the ‘691 patent were patentable as nonobvious. The CAFC affirmed this finding. HPC, a competitor of Frymaster, petitioned for IPR of the ‘691 patent and the PTAB held that the claims were patentable and were not obvious. In its appeal, HPC argued that the PTAB abused its discretion in disregarding certain HPC arguments about how to incorporate a TPM sensor into a deep fryer. It also argued that the PTAB erred in concluding that the deep fryer system claimed in the ‘691 patent was not obvious. The CAFC reviewed the appeal in line with Consol. Edison Co. v. NLRB, which states that a finding is supported by substantial evidence if a reasonable mind might accept the evidence as adequate to support the finding. In considering the PTAB’s decision to disregard certain HPC arguments as improper, the CAFC considered whether the decision was 1) clearly unreasonable, arbitrary, or fanciful; 2) based on an erroneous conclusion of law; 3) rested on clearly erroneous fact finding; or 4) involved a record that contains no evidence on which the board could rationally base its decision.

The case of Celgene Corp. v. Peter, Nos. 2018-1167 et al. (Fed. Cir. July 30, 2019) has drawn attention for its decision that inter partes review (IPR) may be applied to invalidate pre-AIA patents without running afoul of the Fifth Amendment’s prohibition of taking property without just compensation. Matthew Rizzolo and Kathryn Thornton, among others, have addressed the constitutional aspects of the decision. I will address the lesser issues decided by the Federal Circuit panel before it could reach those constitutional aspects. In particular, the Federal Circuit panel upheld the Patent Trial and Appeal Board’s (PTAB’s) conclusion that the claims in question were obvious. And, perhaps focusing upon the sparkling constitutional issue, the panel first had to address the mundane issues of obviousness; and in disposing of the obviousness issues, the panel set forth an analysis that is unclear at best and is in its present form arguably inconsistent with precedent and public policy.

Have you ever worked with a lay inventor who had a hard time dealing with obviousness under U.S. patent law? Many patent lawyers have. It is one of the greatest ironies in patent law: obviousness is not obvious. Lay people struggle with the concept of patent-related obviousness all the time. It is easy to understand their confusion. As lay people see it, an inventor can create and claim something that has never before been patented by anyone, has never been sold by anyone, has never been built by anyone, and has never even been publicly described by anyone; and can nevertheless be denied a patent “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.” (This is a quotation from the post-AIA statute, 35 USC § 103(a), though language in the pre-AIA statute 35 USC § 103 is similar, obviously.)

The Federal Circuit panel of Circuit Judges Timothy Dyk, Evan Wallach and Richard Taranto determined that the PTAB’s decision to uphold patent claims challenged by WhatsApp as nonobvious wasn’t supported by substantial evidence and that the PTAB didn’t properly consider expert testimony provided by WhatsApp… Here the prior art references that supplied all of the claim limitations and the Federal Circuit found that testimony from expert witnesses on both sides supported the idea that video and multimedia content was better at conveying more powerful messages than text or still photos.

The Federal Circuit recently issued a non-precedential decision in LiquidPower Specialty Products v. Baker Hughes, vacating and remanding a final written decision from the Patent Trial and Appeal Board (PTAB), which had invalidated claims of a LiquidPower patent in an inter partes review (IPR) proceeding. In a nutshell, the Federal Circuit found there to be substantial evidence supporting PTAB determinations relating to specifically what the prior art taught, and what the prior art motivated those of skill in the art to do vis-a-vis motivation to combine. However, the panel, made up of Chief Judge Sharon Prost and Circuit Judges Todd Hughes and Kimberly Moore, determined that substantial evidence did not support the PTAB’s finding that the patent owner failed to establish a nexus between the claimed invention and objective evidence of nonobviousness, or secondary considerations as they are sometimes called.  The case is now remanded to the PTAB for proper consideration of the objective evidence of nonobviousness presented by the patent owner. 

Since Merck & Co. v. Teva Pharmaceuticals, blocking patent arguments have arisen in the Federal Circuit primarily in the pharmaceutical patent context, and until now have largely been limited to undermining evidence of commercial success. But just like gremlins fed after midnight, this doctrine inevitably spawned unwanted offspring that are now wreaking havoc… Assuming that no one would ever develop a product that might infringe a patent is inconsistent with numerous Federal Circuit realities. It’s right up there with the Tooth Fairy (sorry, kids).

The Federal Circuit reversed the District of Delaware’s decision to invalidate Orexo’s opioid treatment patent as obvious because obviousness was not proved by clear and convincing evidence. Specifically, the Court pointed to the absence of a teaching in the prior art that citric acid could serve as a carrier particle for the drug agonist.  The Court also noted that the lower court improperly discounted evidence of objective indicia of nonobviousness.

MPEP 2141 actually cites to Arendi, but then quotes the case entirely out of context. This is a worrisome problem that can be found in many parts of the MPEP, which makes the MPEP a useful reference tool to find relevant cases, but as useful as an opponent’s brief when it comes to accurately characterizing the holdings of decisions. For example, MPEP 2141 actually cites Arendi for the proposition that common sense can be used to supply a missing limitation from the prior art in an obviousness rejection. That, however, is the exact opposite proposition for which the case actually stands.

Collateral estoppel is not limited to identical patent claims or claims within a single patent and may preclude a contradictory construction of a claim term already construed in an inter pates review of a related patent, particularly when both patents provide identical lexicography for the disputed term.