Federal Circuit Reminds PTAB That it Doesn’t Decide Petitions for Certificate of Correction

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In Honeywell International Inc. v. Arkema Inc., [2018-1151, 2018-1153](October 1, 2019), the Federal Circuit vacated and remanded the Board’s denial of authorization to file a motion for leave to Petition for a Certificate of Correction to correct a mistake in the chain of priority.

During prosecution of the patent, Honeywell replaced all of the pending claims in a preliminary amendment to pursue different subject matter, but inadvertently failed to make corresponding amendments to the list of priority applications. As a result of this error, the patent’s priority claims are invalid, and Arkema asserted that the patent was invalid over prior art, including work by Honeywell’s own inventors, and further that the patent was subject to Post Grant Review (which only applies to post-AIA patents).

Honeywell did not immediately realize its priority change mistake, and filed a preliminary response that the patent was not subject to PGR proceedings, arguing that the patent was entitled to priority of at least as early as 2004. The PTAB instituted two Post Grant Reviews, and while preparing its Patent Owner Response, Honeywell discovered the error in its priority claim, and requested permission to file a motion for leave to request a Certificate of Correction from the Director of the PTO (“Director”) that would amend the priority chain, explaining that its proposed correction would include additional Honeywell patent applications in the priority chain that would provide written description support for the subject matter eventually claimed.

The Board denied Honeywell’s request because there was a failure to show that the requirements of 35 USC §255 had been met, and the error was not a typographical or clerical error. The proceedings continued, with the Board issuing a combined Written Decision finding claims 1-20 were invalid.

Under the Administrative Procedure Act, the courts hold unlawful and set aside agency action, findings, and conclusions that it finds are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. § 706(2)(A). An abuse of discretion occurs when a decision: (1) is clearly unreasonable, arbitrary, or fanciful; (2) is based on an erroneous conclusion of law; (3) rests on clearly erroneous fact findings; or (4) involves a record that contains no evidence on which the Board could rationally base its decision.

The Federal Circuit found that the Board abused its discretion by assuming the authority that 35 U.S.C. § 255 expressly delegates to the Director: to determine when a Certificate of Correction is appropriate. Section 255 does not grant the Board authority to determine whether a mistake in an issued patent is of “minor character” or “occurred in good faith.” 35 U.S.C. § 255. That authority is expressly granted to the Director. The Director has not delegated its Section 255 authority to the Board, but has instead promulgated procedures by which patentees may seek the Board’s leave to petition the Director for a Certificate of Correction.

The Federal Circuit noted that a patent owner subject to a post-issuance review proceeding must take three steps in order to file a petition for a Certificate of Correction: (1) seek authorization from the Board to file a motion, 37 C.F.R. § 42.20(b); (2) if authorization is granted, file a motion with the Board, asking the Board to cede its exclusive jurisdiction so that the patentee can seek a Certificate of Correction from the Director, 37 C.F.R. § 1.323; MPEP § 1485; and (3) if the motion is granted, petition the Director for a Certificate of Correction under 35 U.S.C. § 255.

The Federal Circuit noted that the Board did not review Honeywell’s motion for leave to seek a Certificate of Correction from the Director to determine if Honeywell had demonstrated a “sufficient basis” that the mistake “may” be correctable. Instead, the Board prohibited Honeywell from even filing a motion for leave. The Board refused to authorize Honeywell to file a motion for leave because there has been a failure to show that the requirements of 255 have been met. By requiring that Honeywell show that the requirements of 255 have been met before authorizing Honeywell to file a motion for leave to seek a Certificate of Correction from the Director, the Board abused its discretion. The Board further abused its discretion by assuming the authority that § 255 delegates to the Director and deciding the merits of Honeywell’s petition for a Certificate of Correction.

The Federal Circuit vacated the Final Written Decisions, and remanded, directing the Board to authorize Honeywell to file a motion seeking leave to petition the Director for a Certificate of Correction, and review Honeywell’s motion for leave in accordance with 37 C.F.R. § 1.323 and MPEP § 1485, including to evaluate whether prejudice to Arkema requires accommodation.

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Campbell’s Primary Reference in Design Patent Challenge was Mmm Mmm Good

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In Campbell Soup Company v. Gamon Plus, Inc., [2018-2029, 2018-2030] (September 26, 2019) the Federal Circuit affirmed in part, vacated in part, and remanded, Board determinations that U.S. Patent Nos. D612,646 and D621,645 were nonobvious from the cited prior art.

The ‘645 and ‘646 patents are directed to ornamental design for a gravity feed dispenser display.

The Figures from U.S. Patent Nos. D612646 and D621645

The figures are identical except that the edges at the top and bottom of the cylindrical object lying on its side and the stops at the bottom of the dispenser are shown in broken lines in the ‘645 patent, and there is a small circle shown in broken lines near the middle of the label area.

Campbells filed IPR against both designs, arguing that the designs were obvious in view of (1) Linz in view of Samways, (2) Samways, or (3) Samways in view of Linz.

Linz (left) and Samways (right)

The Board held that Campbells did not establish unpatentability by a preponderance of the evidence because it found that neither Linz nor Samways was similar enough to the claimed designs to constitute a proper primary reference.

In the design patent context, the ultimate inquiry under section 103 is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved. To determine whether one of ordinary skill would have combined teachings of the prior art to create the same overall visual appearance as the claimed design, the fact finder must first find a single reference, a something in existence, the design characteristics of which are basically the same as the claimed design. To identify a primary reference, one must: (1) discern the correct visual impression created by the patented design as a whole; and (2) determine whether there is a single reference that creates “basically the same” visual impression. If a primary reference exists, related secondary references may be used to modify it.

The Board found that Linz was not a proper primary reference because it does not disclose any object, including the size, shape, and placement of the object in its display area and fails to disclose a cylindrical object below the label area in a similar spatial relationship to the claimed design. The Federal Circuit reversed for lack of substantial evidence support. Accepting the Board’s description of the claimed designs as correct, the Federal Circuit found that the ever-so-slight differences in design, in light of the overall similarities, do not properly lead to the result that Linz is not “a single reference that creates ‘basically the same’ visual impression” as the claimed designs.

The Board also found that Samways was not a proper primary reference. The Board found that significant modifications would first need to be made to Samways’ design, such as combining two distinct embodiments of the utility patent, which was “not a design in existence.” The Board found that considering the designs as a whole, the design characteristics of Samways are not basically the same as the claimed design. The Federal Circuit agreed, saying accepting the Board’s description of the claimed designs as correct, substantial evidence supports the Board’s finding that Samways is not a proper primary reference. The Federal Circuit noted numerous differences, and concluded that given these differences, substantial evidence supports the Board’s finding that Samways does not create basically the same visual impression as the claimed designs.

The Federal Circuit remanded the case to the Board to consider obviousness with Linz as a primary reference.

Board Misread and Mischaracterized Features of the Claims, and Thus Failed to Appreciate that the Claims Provide a Technical Solution to a Technical Problem

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In Sipco, LLC v. Emerson Electric Co., [2018-1635] (September 25, 2019), the Federal Circuit reversed the PTAB’s construction of “low power transceiver” and its finding that U.S. Patent No. 8,908,842 does not satisfy the second part of §42.301(b) defining “technological invention.” § 42.301(b). Because the Board did not address the applicability of the first part of § 42.301(b), the Federal Circuit vacated and remanded.

The Board found that the term “low-power” as used in the claims did not necessarily require that the device transmit and receive signals only within a “limited transmission range.” The Federal Circuit reversed, construing “low-power” to mean “a device that transmits and receives signals at a power level corresponding to limited transmission range.”

The Federal Circuit found that the Board’s conclusion that the claims recite an apparatus “for performing data processing or other operations used in the practice, administration, or management of a financial product or service” under AIA § 18(d)(1) was not arbitrary and capricious. The definition of a covered business method patent is not limited to products and services of only the financial industry, or to patents owned by or directly affecting the activities of financial institutions such as banks and brokerage houses. § 18(d)(1) on its face covers a wide range of finance-related activities.

While SIPCO argued before the Board and on appeal that because it disclaimed claims 3 and 4, the Board should not have relied on them in analyzing whether the ’842 patent is CBM eligible. However, SIPCO ultimately conceded at oral argument that a patent may be CBM eligible based on a single claim and that the Board could have properly relied on claims 3 or 4.

The Federal Circuit then turned to the Board’s decision as to whether the ’842 patent qualifies as a “technological invention” under § 18(d)(1). Section 18(d)(1) excludes “patents for technological inventions” from CBM review. However, Congress did not define technological invention, instead leaving it to the USPTO to issue regulations for determining whether a patent is for a technological invention. 37 C.F.R. § 42.301:

In determining whether a patent is for a technological invention solely for purposes of the Transitional Program for Covered Business Methods (section 42.301(a)), the following will be considered on a case-by-case basis: [1] whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and [2] solves a technical problem using a technical solution.

If each part of this definition is satisfied, then the patent is not eligible for CBM review.

The Federal Circuit held that the Board misread and mischaracterized the features of claim 1 in its analysis of dependent claims 3 and 4, it did not appreciate that the claims provide a technical solution to a technical problem, under part 2 of 37 C.F.R. § 42.301. The Federal Circuit said that the question of whether a patent is for a “technological invention” is fact-specific and must be considered on a case-by-case basis. The Federal Circuit said that the problem solved by the claims is technical in nature. The Board limited its characterization of the “problem” being solved to an example problem provided in the background that is resolved by the claims—automating machine service requests. But it is clear from both the claims and the specification that the claimed invention implements a communication system that connects an unconnected, remote device with a central station.

The Federal Circuit identified the technical problem solved by the claims as: how to extend the reach of an existing communication system from a central location to a remote, unconnected device while protecting against unwanted interference with the transmitted signals. The Federal Circuit found that the claims solved this problem with a technical solution. Because SIPCO’s claims combine certain communication elements in a particular way to address a specific technical problem with a specific technical solution, the Federal Circuit reversed the Board’s finding that the patent does not satisfy the second part of its “technological invention” regulation.

The Federal Circuit found that the Board did not analyze whether the ’842 patent satisfied the first part of § 42.301(b) because it found that the patent did not satisfy the second part. Rather than address this issue in the first instance on appeal, the Federal Circuit remanded the case for the Board to address the first part of § 42.301(b) under the proper claim construction.

Judge Reyna dissented because the majority’s opinion was contrary to basic tenants of claim construction set forth in Phillips, and the deference owed to underlying factual findings under Teva. Judge Reyna said that the majority reached its own construction by improperly reading a functional limitation into the claim from a preferred embodiment. Further, the Board’s construction rests on factual findings that are supported by substantial evidence, including expert testimony on the meaning of the claim term “low-power transceiver” to a person of ordinary skill in the art.

Federal Circuit Holds that a Basket is Not a Chair

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In Curver Luxembourg, SARL v. Home Expressions Inc., [2018-2214] (September 12, 2019), the Federal Circuit affirmed the dismissal of an action alleging Home Expressions baskets infringed U.S. Patent No. D677946 on a Pattern For a Chair.

The application that resulted in the ‘946 patent was filed as a “design for a Furniture Part,” although none of the drawings illustrate a chair, any furniture, or any furniture part. The USPTO objected to the title because PTO regulations require that the title designate a “particular article,” and the use of “Part” was too vague to constitute an article of manufacture. The Examiner suggested that the title be amended to “Pattern for a Chair,” and the applicant complied.

U.S. Patent No. D677946, Fig. 1

The district court construed the scope of the ’946 patent to be limited to the design pattern illustrated in the patent figures as applied to a chair, explaining that “[t]he scope of a design patent is limited to the ‘article of manufacture’—i.e., the product—listed in the patent,” and granted Home expressions motion to dismiss.

The Federal Circuit noted that Curver’s appeal was essentially a request for a patent on a surface ornamentation per se. The Federal Circuit said that Curved acknowledged that the law has never sanctioned granting a design patent for a surface ornamentation in the abstract such that the patent’s scope encompasses every possible article of manufacture to which the surface ornamentation is applied, and the Federal Circuit declined to construe the scope of a design patent so broadly merely because the referenced article of manufacture appears only in the claim language, rather than the figures.

The Federal Circuit, pointing out that it was a case of first impression, addressed the question whether claim language specifying an article of manufacture can limit the scope of a design patent, even if that article of manufacture is not actually illustrated in the Figures. Given that long-standing precedent, unchallenged regulation, and agency practice all consistently support the view that design patents are granted only for a design applied to an article of manufacture, and not a design per se, the Federal Circuit held that claim language can limit the scope of a design patent where the claim language supplies the only instance of an article of manufacture that appears nowhere in the figures.

Objective Indicia Supported PTAB’s Finding of Non-Obviousness

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In Henny Penny Corporation v. Frymaster LLC, [2018-1596] (September 12, 2019), the Federal Circuit affirmed the PTAB determination that claims 1–3, 5–12, 17–21, and 23 of U.S. Patent 8,497,691 were not unpatentable as obvious.

The ‘691 Patent relates to deep fryers, and in particular to TPM sensors that detect accumulating impurities in the cooking oil, and alert the operator when to change oil.

Henny Penny originally argued the claims were the obvious result of replacing the Kauffman analyzer with the Iwaguchi sensor. However, Henny Penny changed its position arguing that Kauffman’s analyzer could simply be modified. The Board refused to consider this impermissible new theory of unpatentability raised for the first time on reply.

As to Henny Penny’s original argument the Board found that the disadvantages from the proposed modification out-weighed the uncertain benefits of the modification. The Board further found that evidence of secondary considerations supported nonobviousness. Frymaster sub-mitted evidence that it marketed a product called the “Oil Quality Sensor” (“OQS”) that won praise from two industry organizations and one customer. The Board also determined that each award specifically praised the TPM sensor in the OQS. While the Board recognized that the individual claim elements were in the prior art, it found that the praise was directed to the claimed combination as a whole. Accordingly, the Board found that the two industry awards weighed in favor of patentability, as did, to a lesser extent, the customer award.

The Federal Circuit found that the Board did not abuse its discretion by holding Henny penny to the obviousness theory in its petition. Because of the expedited nature of IPR proceedings, it is of the utmost importance that petitioners in the IPR proceedings adhere to the requirement that the initial petition identify “with particularity” the ‘evidence that supports the grounds for the challenge to each claim. Accordingly, an IPR petitioner may not raise in reply an entirely new rationale for why a claim would have been obvious.

As to the original obviousness contention, the Federal Circuit noted that the benefits, both lost and gained, should be weighed against one another, and found that the Board’s analysis was consistent with these principles. As to the secondary considerations supporting non-obviousness, the Federal Circuit rejected Henny Penny’s argument that there was no nexus between the evidence and the claimed invention. The Federal Circuit agreed that the identified objective indicia must be directed to what was not known in the prior art, and what was not known in the prior art may well be the novel combination or arrangement of known individual elements.

The Federal Circuit concluded that substantial evidence supported the Board’s determination of non-obviousness.

Celebrating Labor Day in Patents

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A number of patents mention Labor Day, most of these relate to calendars or calendar-based games.

U.S. Patent No. D34888 on a Design for Medal
celebrates the laborer
U.S. Patent No. 2,284,256 covers on a Card Game features a Labor Day Card
U.S. Patent No. 3,565,437 on a Discount Store Board Game Apparatus, features a Labor Day sale card (68).

Trick Question: How Many Utility Patents has the USPTO issued?

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The as of last Tuesday, August 20, 2019, the USPTO issued U.S. Patent 10,390,470. That would seem to be the answer. A patent nerd would remember, however, that before patents were numbered about 9,957 patents — called the X patents — issued. A serious patent nerd would further know that as of August 20, 2019, for one reason or another, more than 48721 numbers did not correspond to issued patents. An uber patent nerd would know about factional patents, patents with fractional numbers issued between patents with whole numbers. There are at least four fractional patents in the era when patents were numbered.

So as of August 20, and until the next batch on August 27, the number may be 10,351,710.

Patent Eligibility Can be Determined on the Pleadings, Provide Claim Construction is Not at Issue

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In Mymail, Ltd. v. Oovoo, LLC, [2018-1758, 2018-1759] (August 16, 2019), the Federal Circuit vacated and remanded judgment on the pleadings, the district court erred by declining to resolve the parties’ claim construction dispute before adjudging patent eligibility.

The district court found U.S. Patent Nos. 8,275,863 and 9,021,070 were directed to patent ineligible subject matter under 35 U.S.C. § 101. The district court concluded that the MyMail patent claims are directed to an abstract idea because they “fall within the category of gathering and processing information” and “recite a process comprised of transmitting data, analyzing data, and generating a response to transmitted data.” At Alice step two, the district court concluded that the claims fail to provide an inventive concept sufficient to save the claims.

The Federal Circuit said that Patent eligibility may be determined on a Rule 12(c) motion, but only when there are no factual allegations that, if taken as true, prevent resolving the eligibility question as a matter of law. The Federal Circuit said that determining patent eligibility requires a full under-standing of the basic character of the claimed subject matter. As a result, if the parties raise a claim construction dispute at the Rule 12(c) stage, the district court must either adopt the non-moving party’s constructions or resolve the dispute to whatever extent is needed to conduct the § 101 analysis.

Before the district court, the parties disputed the construction of “toolbar,” a claim term present in the claims of both MyMail patents. MyMail directed the district court to a construction of “toolbar” rendered in another case involving the MyMail patents. The Federal Circuit noted that the district court never addressed the parties’ claim construction dispute. Nor did the district court construe “toolbar” or adopt MyMail’s proposed construction of “toolbar” for purposes of deciding ooVoo’s and IAC’s Rule 12(c) motions.

The Federal Circuit concluded that the district court erred by failing to address the parties’ claim construction dispute before concluding, on a Rule 12(c) motion, that the MyMail patents are directed to patent-ineligible sub-ject matter under § 101, and vacated and remanded for further proceedings consistent with this opinion.

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Liberal Application of Relation Back Doctrine Saved Infringement Claims from Being Time Barred

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In Anza Techttp://www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-1045.Opinion.8-16-2019.pdfhnology, Inc. v. Mushkin, Inc., [2019-1045](August 16, 2019), the Federal Circuit reversed in part, vacated in part, and remanded, the district court determination that Anza’s second amended complaint was time barred by 35 U.S.C. § 286’s six year statute of limitations.

The district court granted Mushkin’s motion, ruling that the new infringement claims did not relate back to the date of the original complaint. The court explained that new infringement claims relate back to the date of the original complaint when the claims involve the same parties, the same products, and similar technology—i.e., when the claims are “part and parcel” of the original complaint. The court ruled that newly asserted claims of infringement do not relate back if the new claims are not an integral part of the claims in the original complaint and if proof of the new claims will not entail the same evidence as proof of the original claims. Because Anza acknowledged that Mushkin’s allegedly in-fringing activity all took place more than six years before the filing date of the second amended complaint, the court held that the effect of ruling that the second amended com-plaint did not relate back to the filing date for the original complaint was that all the asserted claims in the second amended complaint were time-barred.

At the outset, the Federal Circuit adopted the majority rule that the application of the relation back doctrine is reviewed de novo, while any underlying facts are reviewed for clear error.

The Federal Circuit notes that the Supreme Court interprets the relation back doctrine liberally, applying if an amended pleading relates to the same general conduct, transaction and occurrence as the original pleading, and that its predecessor, the Court of Claims, embraced a liberal, notice-based interpretation of Rule 15(c). The Federal Circuit said that that pertinent considerations bearing on whether claims are logically related include the overlap of parties, products or processes, time periods, licensing and technology agreements, and product or process development and manufacture. In determining whether newly alleged claims, based on separate patents, relate back to the date of the original complaint, the Federal Circuit said it would consider the overlap of parties, the overlap in the accused products, the underlying science and technology, time periods, and any additional factors that might suggest a commonality or lack of commonality between the two sets of claims.

The Federal Circuit rejected Mushkin’s argument that the withdrawal of all claims of infringement of the ‘927 patent indicates that the claims address different bonding techniques, noting that the asserted patent all share “the same underlying technology, . . . solving the same problem by the same solution.”

The Federal Circuit said that amended claims do not have to be the same as the original claims to relate back. Rather, the claims must arise out of the same conduct, transaction, or occurrence. The Federal Circuit concluded that the products implicated by all three complaints did relate back, but that the newly added products may not, unless they are sufficiently related. The Federal Circuit reversed as to the six products implicated by the original complaint, and remanded as to the two products added by the Second Amended Complaint.

“Rigidity Should Yield to Flexible, Sensible Interpretation;” Written Description Satisfied

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In Nalpropion Pharmaceuticals, Inc. v. Actavis Laboratories FL, Inc., [2018-1221] (August 15, 2019), the Federal Circuit held that the district court did not err in finding claim 11 of the U.S. Patent 8,916,195 patent not invalid for lack of written description, but did err in finding that claim 1 of the ’111 patent and claims 26 and 31 of the U.S. Patent 7,462,626 patent would not have been obvious in view of the prior art.

The ’195 patent is also directed to methods of treating overweight or obesity, but the claims are drawn to specific dosages of sustained-release naltrexone and bupropion that achieve a specific dissolution profile. The Federal Circuit conclude that the district court did not clearly err in finding that the inventors had possession of the invention consisting of treating overweight and obesity with the stated amounts of bupropion. The district court found that irrespective of the method of measurement used, the specification shows that the inventors possessed the invention of treating overweight or obesity with naltrexone and bupropion in particular amounts and adequately described it. The Federal Circuit concluded that this finding did not present clear error.irrespective of the method of measurement used, the specification shows that the inventors possessed the invention of treating overweight or obesity with naltrexone and bupropion in particular amounts and adequately described it.

The test for sufficiency is whether the disclosure of the application relied upon reasonably conveys to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date. It is not necessary that the exact terms of a claim be used in haec verba in the specification, and equivalent language may be sufficient. The Federal Circuit noted that while as a general matter written description may not be satisfied by so-called equivalent disclosure, in the present case, buttressed by the district court’s fact-finding, and where the so-called equivalence relates only to resultant dissolution parameters rather than operative claim steps, the Federal Circuit affirmed the district court’s conclusion, noting “rigidity should yield to flexible, sensible interpretation.

The ’111 patent is directed to a composition of sustained-release bupropion and naltrexone for affecting weight loss, and the ’626 patent is drawn to a method for treating over-weight or obesity comprising. Although the district court found the claims non-obvious, in the Federal Circuit’s view, the prior art disclosed the claimed components of the composition claims and the steps of the method claims including the use claimed by the method.

Nalpropion argued that bupropion does not possess sufficient weight loss efficacy to obtain FDA approval by itself, but the Federal Circuit said that motivation to combine may be found in many different places and forms; it cannot be limited to those reasons the FDA sees fit to consider in approving drug applications. Instead, the court should consider a range of real-world facts to determine whether there was an apparent reason to combine the known elements in the fashion claimed by the patent at issue.

The Federal Circuit said that the inescapable, real-world fact here is that people of skill in the art did combine bupropion and naltrexone for reductions in weight gain and reduced cravings—goals closely relevant to weight loss. Contrary to Nalpropion’s view, persons of skill did combine the two drugs even without understanding bupropion’s mechanism of action but with an understanding that bupropion was well-tolerated and safe as an antidepressant. Thus, the Federal Circuit concluded that skilled artisans would have been motivated to combine the two drugs for weight loss with a reasonable expectation of success. The Federal Circuit examined the claims, and concluded that every limitation in the claims at issue was met by the prior art.

The Federal Circuit then examined objective indicia of nonobviousness. Nalpropion argues that many others tried and failed to find a combination effective for weight loss and that the claimed combination exhibited un-expected results, but the Federal Circuit found that a combination drug that affected weight loss—could not have been unexpected. The Federal Circuit said that the failure of others alone cannot overcome the clear record that the combination of the two drugs was known and that both drugs would have been understood to be useful for claimed purpose.

The Federal Circuit affirmed the district court’s decision on written description, but reversed the district court’s decision that the claims were not obvious.