Category Archives: Obviousness

Federal Circuit Affirms Board on Claim Construction, No Anticipation, and Nonobviousness

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In HTC Corp. v. Cellular Communications Equipment, LLC [2016-1880] (December 18, 2017), the Federal Circuit affirmed the PTAB’s Final Written Decision, finding no error in the Board’s claim construction, and that substantial evidence supported the Board’s determination that the challenged claims were not invalid.

The IPR involved U.S. Patent No. 7,941,174, which is directed to
methods and apparatuses for a radio communications system where a subscriber station, i.e., a mobile device, is assigned a plurality of codes for transmitting messages.

The Board did not expressly construe the term “message,” nor did HTC did not seek construction of the term.  However, the Federal Circuit found that Board findings establishing the scope of the patented subject matter may fall within the ambit of claim construction, reviewable on appeal.  However the Federal Circuit found HTC’s arguments unpersuasive and inconsistent.

On the asserted anticipation grounds, the Federal Circuit found that substantial evidence supported the Board’s conclusion, and rejected arguments presented by HTC for the first time on appeal.  On the asserted obviousness grounds, the Federal Circuit agreed with the Board’s reading of the prior art, and found that HTC did not point to any evidence in the record that would undermine the Board’s findings on the scope and content of the prior art.

 

Patent Owner Has Burden to Prove Marking Once Infringer Identifies Unmarked Products

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In Arctic Cat Inc. v. Bombardier Recreational Products Inc., [2017-1475] (December 8, 2017), the Federal Circuit affirme the district court’s denial
of judgment as a matter of law as to obviousness, the
jury’s royalty rate, willfulness, treble damages, and award of an ongoing
royalty to Arctic Cat, but vacated the court’s denial of judgment as a matter of law as to marking and remand for further consideration limited to that issue.

The case involved U.S. Patent Nos. 6,568,969 and 6,793,545 directed to thrust steering systems for personal watercraft.  At trial, the jury found both patents not invalid, awarded a royalty for past infringement of $102.54 per unit, and based upon the jury’s finding of willful infringement, the district court trebled damages.  The district court also awarded an ongoing royalty of $205.08 per unit.

On the obviousness finding the Federal Circuit said that it presumes the jury found that an ordinarily skilled artisan would not have been motivated to combine the prior art as appellant proposed, and that if
such a fact finding is supported by substantial evidence, it cannot not reverse it. The Federal Circuit noted that appellant devoted much of its argument to re-litigating its case and its evidence rather than addressing the evidence that could have supported the jury’s finding of no motivation to combine. The Federal Circuit said that it does not reweigh the evidence and reach its own factual determination regarding motivation. The question on appeal is only whether substantial
evidence supports the jury’s presumed finding, and the Federal Circuit found substantial evidence did support the finding.

As to objective indicia of non-obviousness, the patent owner argued the claimed invention received industry praise and satisfied a long-felt need. The Federal Circuit again presumed the jury found in favor of patentee, and the Federal Circuit cannot reverse these presumed findings if they are supported by substantial evidence, which the Federal Circuit found they were.

As to the marking issue,  the Federal Circuit said that the patent owner patentee bears the burden of pleading and proving it complied with § 287(a)’s marking requirement, because if a patentee who makes, sells, offers for sale, or imports the patented articles has not given notice of its right”by marking the articles pursuant to the marking statute, it is not entitled to damages before the date of actual notice.  A patentee’s licensees must also comply with §287, because the statute extends to persons making or selling any patented article for or under the patentee.  The Federal Circuit add that recognizing that it may be difficult for a patentee to ensure his licensees’ compliance with the
marking provisions, its has held that where third parties are involved, courts may consider whether the patentee made reasonable efforts to ensure compliance with the marking requirements.

In the present case, the patent owner Arctic Cat licensed patents to Honda, and the agreement specifically stated Honda “shall have no obligation or requirement to mark” its licensed products.  However, While Honda sold products in the U.S. without marking them, Arctic Cat contended they were not covered by the patent and thus should not have been marked.

Arctic Cat and Bombardier disputed whether the products Honda sold were patented articles that were required to be marked, as well as who had the burden of proof.  There was a split in the Circuits on the burden of proof, which the Federal Circuit resolved by holding that an alleged infringer who challenges the patentee’s compliance with § 287 bears an initial burden of production to articulate the products it believes are unmarked “patented articles” subject to § 287. The Federal Circuit said that this was a low bar, and that the alleged infringer need only put the
patentee on notice that it or its authorized licensees sold specific unmarked products which the alleged infringer believes practice the patent. The Federal Circuit said that the alleged infringer’s burden is a burden of production, not one of persuasion or proof.  The Federal Circuit said that  once the alleged infringer meets its burden of production, however, the patentee bears the burden to prove the products identified do not practice the patented invention.

The Federal Circuit declined to determine the minimum showing
needed to meet the initial burden of production, but found that it was satisfied.  The Federal Circuit did say that alleged infringer need not produce claim charts to meet its initial burden of identifying products, because it is the patentee who bears the burden of proving that it satisfied the marking requirements and thus the patentee who would have to prove that the unmarked products identified by the infringer do not fall within the patent claims. The Federal Circuit concluded that the district court erred in placing this burden upon BRP and vacated and remanded on the issue of marking.

On the pre-judgment and post-judgment royalty rates, the Federal Circuit found no error, noting that a difference in the rates may be justified by the change in the parties’ legal relationship and other factors.  Finally the Federal Circuit affirmed the district court on the issue of willfulness and enhanced damages.

 

 

Obviousness v. Anticipation: That Which Doesn’t Disclose Still Could Teach

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In CRFD Research, Inc., v. Matal, [2016-2198] (December 5, 2017), the Federal Circuit affirmed two Final Written Decisions invaliding claims of U.S. Patent No. 7,191,233 on user-directed transfer of an on-going software-based session from one device to another device, and reversed one Final Written Decision that the claims were not obvious.

What is interesting about this case beyond the fact that a patent owner should have to simultaneously defend three IPR attacks on its patent, the loss of any one of which would be fatal, is the Federal Circuit’s reversal of the Board’s determination that Hulu had not shown the challenged claims to have been obvious.  The Federal Circuit said “the Board erred, both in how it performed its obviousness analysis and in the merits of its determination of nonobviousness.”

The Board concluded that the Bates reference did not anticipate certain challenged claims because it did not meet the claim requirement of “transmission of session history after discontinuation.”  Hulu complained, and the Federal Circuit agreed that the Board improperly
relied on its finding that Bates did not anticipate various asserted claims to support its finding of nonobviousness without considering whether Bates suggests transmission of session history after
discontinuation.  The Federal Circuit said that “Even if a reference’s
teachings are insufficient to find anticipation, that same reference’s teachings may be used to find obviousness.”

Hulu further argued that it would have been obvious, based on Bates, to
transmit session history after session discontinuation.  Hulu argued the obviousness of the claims based upon Bates, but the Board declined to institute on grounds of redundancy.  The Federal Circuit noted that Hulu expressly incorporated this argument as part of other grounds of unpatentability on which the Board instituted trial.  The Federal Circuit found that:

To bar Hulu from pressing an argument it raised in a ground the Board found “redundant” and that it expressly incorporated into other proposed grounds of unpatentability on which the Board instituted would not only unfairly prejudice Hulu, but would also raise questions about the propriety of the Board’s redundancy  decision.

Of course, even if it does “raise questions about the propriety of the Board’s redundancy decision,” that should not be a concern of the Federal Circuit because according to Cuozzo institution decisions are not reviewable.  The Federal Circuit went on to find that Bates did in fact sufficiently teach what it did not exprsessly disclose, and reversed the Board’s determination that the claims were not shown to be obvious.

This case illustrates that some of the mischief that arises from a Board’s finding of redundancy.  The petitioner is allowed to use the arguments in the non-instituted redundant ground to support its position in the instituted grounds — at least if they are sufficiently “incorporated.”  Another problem with redundancy is that the estoppel effect is unclear.  The Federal Circuit has indicated that estoppel does not apply to grounds that are not instituted.  HP Inc. v. MPHJ Tech. Inv., LLC, 817 F.3d 1339, 1347-48 (Fed. Cir. 2016).  If this interpretation applies to grounds denied for redundancy, it means that a patent owner could prevail in the IPR, and later face a challenge based upon the redundant ground — one found by the Board to indistinguishable from the ground on which the patent owner prevailed.

Amendment of Claims in Parent Application Do Not Apply to Continuation Claims that do not have the Amended Language

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In Sanofi v Watson Laboratories, Inc., [2016-2722, 2016-2726](November 9, 2017), the Federal Circuit affirmed the district court’s final judgment rejecting the obviousness challenge to claims 1–6, 8–13, and 16 of the U.S. Patent No. 8,410,167; finding inducement of infringement, by both
defendants, of all of those claims except claim 5; and finding infringement by both defendants of claims 1–3, 5-9, and 12–15 of U.S. Patent No. 8,318,800, and by Watson of claims 10 and 11 as well.

On appeal, Watson and Sandoz challenge the district court’s inducement
finding as to the ’167 patent, the district court’s rejection of their obviousness challenge to that patent, and the district court’s rejection of their prosecution disclaimer argument for limiting the scope of the ’800
patent claims.

On the inducement issues, the Federal Circuit said that it reviews the district court’s finding of inducement based on encouragement and inferred intent for clear error, which the Federal Circuit found was absent.  The Federal Circuit noted that the label directed medical providers to information identifying the desired benefit for only patients with the patent-claimed risk factors.  The Federal Circuit rejected Watson and Sandoz argument that substantial noninfringing uses not forbidden by the
proposed labels prevented a finding of intent to encourage an infringing use.  The Federal Circuit found no legal or logical basis for the suggested limitation on inducement.

On the obviousness issue, Watson and Sandoz only challenged the district court’s finding of no expectation of success.  The Federal Circuit said that although the evidence might well have supported the opposite finding, it could not conclude that the district court clearly erred in its finding.

On the infringement issue, the Federal Circuit rejected the argument that Watson and Sandoz  that the district court erred by failing to limit
the claims of the ’800 patent to exclude polysorbate surfactants.  While while prosecuting the parent application, which issued as U.S. Patent No. 7,323,493, Sanofi amended the sole independent claims
(hence all claims)f so as expressly to exclude pharmaceutical
compositions with a “polysorbate surfactant.”  Based on that amendment,
Watson and Sandoz contend that Sanofi made a “prosecution
disclaimer” that also limits the scope of the claims of the ’800 patent, despite the absence of any limiting language in the ’800 patent’s claims.

The Federal Circuit said that a prosecution disclaimer occurs when a patentee, either through argument or amendment, surrenders claim
scope during the course of prosecution.  But when the purported
disclaimers are directed to specific claim terms that have been omitted or materially altered in subsequent applications (rather than to the invention itself), those disclaimers do not apply.  The general ruling being that a prosecution disclaimer will only apply to a subsequent patent if that patent contains the same claim limitation as its predecessor.

The Federal Circuit observed that in prosecuting the application
that issued as the ’493 patent, was to write an express limitation into the claims: “provided that the pharmaceutical composition does not contain a polysorbate surfactant.” This language does not appear in the ’800 patent claims at issue, and Sanofi did not argue during prosecution that the unamended claim language of the ’493 patent, or the disclosed invention generally, excluded polysorbate surfactants.  The Federal Circuit said that the prosecution followed a familiar pattern:

an applicant adopts an explicit claim-narrowing limitation to achieve immediate issuance of a patent containing the narrowed claims and postpones to the prosecution of a continuation application further arguments
about claims that lack the narrowing limitation.

The Federal Circuit said that without more than exists here, that process does not imply a disclaimer as to claims, when later issued in the continuation, that lack the first patent’s express narrowing
limitation.  The Federal Circuit affirmed the district court’s ruling that the
scope of the claims of the ’800 patent should not be limited so as to exclude polysorbate surfactants.

Expert Testimony on Lack of Motivation Won the Battle, but Lost the War

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In BayerPharma AG v. Watson Laboratories, Inc., [2016-2169] (November 1, 2017), the Federal Circuit reversed the district court’s holding that claims 9 and 11 of U.S. Patent No. 8,613,950 would not have been obvious.

The district court rejected each of Watson’s arguments. It found a person of ordinary skill in the art would not have been motivated to
create an ODT formulation of vardenafil and would not have used mannitol and sorbitol as excipients. It found the prior art taught away from formulating vardenafil ODT as immediate-release. The district court also addressed Bayer’s objective evidence of nonobviousness and
found it supported its conclusion that Watson failed to prove by clear and convincing evidence that claims 9 and 11 would have been obvious.

The district court determined that Watson failed to meet its burden of proving by clear and convincing evidence that there would have been a motivation to formulate vardenafil as an ODT formulation largely on the court’s finding the testimony of Bayer’s expert, Dr. Wicks, more persuasive than the testimony of Watson’s expert, Dr. Jacobs.  The Federal Circuit said that the clear error in the district court fact finding that there was no motivation to formulate ED drugs in ODTs, is that it concluded that the record did not contain an indication that ED drugs would be good candidates for ODT formulations.  The Federal Circuit noted that the district court’s opinion did not discuss any of the references that Watson cited to show that ED drugs would be good candidates for ODT formulations.

It is well within the district court’s discretion to credit one expert’s competing testimony over another. The Federal Circuit said it must give due regard to the trial court’s opportunity to judge the witnesses’ credibility.  However, a district court cannot, through a credibility determination, ignore the wealth of evidence, especially as in this case where the expert did not even address it.

The Federal Circuit also faulted the district court’s focus on the fact that  no ODT ED drug had gained FDA approval as of ’950 patent’s priority date.  The Federal Circuit said that  the motivation to combine inquiry is not limited to what products are forthcoming or currently available on the market.  The Federal Circuit said that any motivation, “whether articulated in the references themselves or supported by evidence of the knowledge of a skilled artisan, is sufficient.

The Federal Circuit was left with the definite and firm conviction that the district court clearly erred when it found there would not have been a motivation to formulate vardenafil ODT.

The district court also found a person of ordinary skill in the art would not have been motivated to use mannitol and sorbitol in an ODT formulation, again finding Dr. Wicks’ testimony on this limitation more credible than Dr. Jacobs’.  The Federal Circuit did not question the district court’s credibility determinations. However, the district court’s analysis for the sorbitol and mannitol limitation focused on the  commercial availability of products while failing to address relevant prior art. Upon consideration of the entire record and under a proper analysis, we conclude that the district court clearly erred in finding a person of ordinary skill in the art would not have been motivated to formulate an  ODT with sorbitol and mannitol.

Finally, the Federal Circuit rejected the district court’s determination that vardenafil’s expected bitter taste taught away from an oral formulation.  The Federal Circuit noted that a reference teaches away when it suggests that the line of development flowing from the reference’s disclosure is unlikely to be productive of the result sought by the applicant.  The Federal Circuit said that the district court did not find that a person of ordinary skill in the art would have believed vardenafil’s expected bitter taste and increased bioavailability would have
likely rendered an immediate-release formulation unproductive, but instead focused on whether a person of ordinary skill in the art would have pursued other alternatives.  The Federal Circuit said that the teaching away inquiry does not focus on whether a person of ordinary
skill in the art would have merely favored one disclosed option over another disclosed option.  In assessing whether prior art teaches away, that better alternatives exist in the prior art does not mean that an inferior combination is inapt for obviousness purposes.

Weighing all four Graham factors, the Federal Circuit concluded that
claims 9 and 11 of the ’950 patent would have been obvious. The repeated suggestion in the prior art to make an ODT formulation of an ED drug and the suggestion to use the combination of sorbitol and mannitol as excipients were strong evidence of a motivation to make the claimed combination.

Objective Indicia Not Enough to Overcome Weight of Evidence of Obviousness

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In Merck Sharp & Dohme Corp. v. Hospira, Inc., [2017-1115] (October 26, 2017), the Federal Circuit affirmed the district court’s determination at a bench trial, that claims 21-34 of U.S. Patent 6,486,150, on a method for preparing the antibiotic ertapenem were invalid for obviousness.

The district court reviewed Merck’s objective evidence and concluded that commercial success and copying by others were shown, but that the objective evidence could not overcome the “strong prima facie case of obviousness” established by Hospira. The district court found that, while there was commercial success tied to the asserted claims, the evidence was weakened” by the “blocking effect” of U.S. Patent 5,478,820 on ertapenem, which was a disincentive to others to develop new ertapenem formulations.

The Federal Circuit agreed with Hospira that the district court did not
err in finding that the claimed process would have been obvious at the time the invention was made.  While Merck argued that the specific order and detail of the claimed steps constitute a novel solution to minimizing degradation by hydrolysis and minimizing dimerization, Merck’s problem was that the purported “solution” constituted nothing more than conventional manufacturing steps that implement principles disclosed in the prior art.  The Federal Circuit said that it was reasonable for the district court to deduce from the evidence that the order and detail of the steps, if not already known, would have been discovered by routine experimentation while implementing known
principles. The Federal Circuit found that the district court’s analysis thus involved no legal error.

Regarding Merck’s objective evidence of non-obviousness, the Federal Circuit agreed with Merck that Merck’s evidence of commercial success should not have been discounted simply because of the existence of
another patent of which Merck was the exclusive licensee.  The Federal Circuit said that:

developers of new compounds often obtain a package of patents protecting the product, including compound, formulation, use, and process patents. Often such patents result from Patent Office restriction requirements  relating to the technicalities of patent classifications and rulings that various aspects of claiming an invention cannot be claimed in the same patent. Or they may result from continuing improvements in a product or process. Thus, multiple patents do not necessarily detract from evidence of commercial success of a product or process, which speaks to the merits of the invention, not to how many patents are owned by a patentee. Commercial success is thus a fact-specific inquiry that may be relevant to an inference of nonobviousness, even given the existence of other relevant patents.

Nonetheless, the Federal Circuit did not discern error in the district
court’s determination that Merck’s evidence of commercial success could not overcome the weight of the evidence that the claimed process was substantially described in the prior art and required only improvement by the use of established variations. Thus, even giving the evidence of commercial success its full and proper weight, the court did not err in concluding that the claims would have been obvious at the time the invention.

The Federal Circuit also agreed that the evidence of Hospira’s copying could not overcome the weight of the competing evidence of obviousness.

 

Ungrammatical Language Not Ambiguous in View of Specification as a Whole

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In Organik Kimya AS v. Rohm and Haas Co., [2015-1983, 2015-2001] (October 11, 2017), the Federal Circuit  affirmed the PTAB decisions in IPR2014-00185 and IPR2014-00350, sustaining the patentability of the challenged claims of U.S Patent Nos. 6,020,435 and 6,252,004, respectively.

The patents are directed to processes for preparing certain emulsion polymers having improved opacity.  In the claimed processes a base swelling agent and excess monomer are introduced into an aqueous emulsion of the polymer, under conditions in which there is no
substantial polymerization.  At issue was was the meaning of “swelling agent” which the PTAB construed as not merely as being capable of permeating a shell and swelling the core of a multistage emulsion
polymer in the abstract, but specifically under the conditions of the specific process for which the agent is to be used.  Organik argued that this improperly limited the term “swelling agent” in a manner that inappropriately distinguished the prior art.

Organik argued that the specification was ambiguous in describing the swelling agent:

Suitable swelling agents include, are those which, in the presence of the multistage emulsion polymer and monomer, are capable of permeating the shell and swelling the core. Swelling agents may be aqueous or gaseous, volatile or fixed bases or combinations thereof.

and that the PTAB improperly adopted the narrower construction.  The Federal Circuit noted that the Board did not find the language ambiguous, and agreed with the Board.  Even under the broadest reasonable interpretation, the Board’s construction cannot be divorced from the specification and the record evidence, and must be consistent with the one
that those skilled in the art would reach.

The Board found that the prior art asserted by Organik lacked the swelling agent as that term was used in the claims.  Organik argued the one example in a reference, inherently showed a swelling agent, but Rohm and Haas provided experimental evidence through expert testimony  that it did not.  While Organik contested this evidence, the Board noted that Organik neither provided its own evidence, or showed how different experiments would have yielded different data.

The Federal Circuit found that Board concluded that neither Toda nor Touda discloses or suggests a “swelling agent” as required by the
’435 and ’004 Patents, and that the Board’s decisions are in accordance
with law and supported by substantial evidence in the record, and are affirmed.

Broadest Reasonable Construction is Not One Not Precluded by the Specification, but is One Consistent with the Specification

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In re: Smith International, Inc., [2016-2303] (September 26, 2017), the Federal Circuit reversed the PTAB’s affirmance of the Examiner’s rejections of claims in an ex parte reexamination of U.S. Patent 6,732,817 directed to a downhole drilling tool for oil and gas operations.

The Board affirmed the examiner’s interpretation of the term “body” as a broad term that may encompass other components such as “mandrel” and “cam sleeve,” reasoning that only the term “body” is recited in the
claims without further limiting features and that the specification neither defines the term “body” nor prohibits the examiner’s broad reading of it.  The Federal Circuit concluded that the Board’s construction of “body”
was unreasonably broad. Even when giving claim terms their broadest reasonable interpretation, the Board cannot construe the claims “so broadly that its constructions are unreasonable under general claim construction principles.”

The Federal Circuit noted that some of the claims at issue recite a
broad term “body” without further elaboration on what the term “body” encompasses. However the Federal Circuit noted that the remainder of the specification does not use the term as a generic body. There is no dispute that the patent specification consistently describes and refers to the body as a component distinct from others, such as the mandrel, piston, and drive ring.

On this record, the Board concluded that the Examiner’s broad construction was not precluded.  However the Federal Circuit  found that the correct inquiry in giving a claim term its broadest reasonable interpretation in light of the specification is not whether the specification proscribes or precludes some broad reading of the claim term adopted by the Examiner.  Nor is it simply an interpretation that is not inconsistent
with the specification. It is an interpretation that corresponds with what and how the inventor describes his invention in the specification, i.e., an interpretation that is “consistent with the specification.”

The Federal Circuit held that giving the term “body” such a strained breadth in the face of the otherwise different description in the specification was unreasonable.  With the correct construction, the Federal Circuit reversed the rejection of the claims.

Objective Indicia Were Properly Considered and Did Not Save Cookie Package Patent from Summary Judgment of Obviousness

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In Intercontinental Great Brands LLC v. Kellogg North American Co., [2015-2082, 2015-2084] (September 7, 2017), the Federal Circuit affirmed summary judgment that Kraft’s U.S. Patent No. 6,918,532 was invalid for obviousness, but was not unenforceable for inequitable conduct.

The district court found that the absence of a “convenient opening and reclosing arrangement” was a “known problem” for cookie packaging and that the prior art resealable, tray-included packaging for foods offered a skilled artisan a solution to the problem simply by replacing the existing “tray” with a “frame” i.e., a tray with higher sides.  The court considered the simple and clear teachings of the art, the importance of common
sense and ordinary creativity, and the conclusory character of Kraft’s expert’s assertions of nonobviousness.  the court concluded that Kraft’s evidence of objective indicia, though substantial, was not entitled to much weight in the ultimate legal assessment of obviousness.  On the issue of inequitable conduct, the court found that Kellogg had not presented evidence that could meet the standard for intent to deceive established in Therasense,

The Federal Circuit said that Kraft’s arguments that the district court treated the objective indicia as an “afterthought,” “writing off the patent before turning to objective indicia,” and “repeatedly not[ing] its finding of obviousness before considering the objective indicia,” mischaracterized the district court’s reasoning, finding that the district court drew its conclusion of obviousness only after, not before, considering the objective indicia.

The Federal Circuit held that the district court did not draw an ultimate conclusion of obviousness before considering the objective indicia, the . The contrary is not shown by the court’s “not uncommon” choice of words when conducting the ultimate weighing, namely, that the objective indicia “do not overcome Kellogg’s extremely strong prima facie showing.”

The Federal Circuit rejected Kraft’s argument that objective indicia must be considered before drawing a conclusion about whether a person of ordinary skill had motivation to combine the prior art, finding that the staged consideration undertaken by the district court, and reflected in its cases, makes sense within the motivation-to-combine framework.

The Federal Circuit also rejected Kraft’s argument that the district court failed to provide “explicit and clear reasoning providing some rational
underpinning” for its invocation of common sense in its motivation-to-combine analysis.  The Federal Circuit said that the court relied on the record demonstrating the “known problem” of an insufficiently “convenient opening and reclosing arrangement” for cookie packaging and the suggestion in the prior art that it was useful for a variety of items.

The Federal Circuit also found that that the “enhanced burden” when the prior art relied upon for invalidation was previously considered by the USPTO “provides no basis for a different result.”  First the Federal Circuit noted that there is no specific PTO determination of nonobviousness based on the particular prior art now at issue. Second, the Federal Circuit found the showing of obviousness to be sufficiently strong that no PTO contrary determination could alter the conclusion about summary
judgment.

On the cross-appeal of the finding of no inequitable conduct, the Federal Circuit no reversible error in the district court’s conclusion that Kellogg’s evidence was insufficient to permit a finding of the intent required for inequitable conduct based on Kraft’s reexamination arguments.  Kellogg alleged that an item in the prior art considered by the Board during reexamination contained a misprint, and that Kraft committed inequitable conduct by not so informing the Board. This sentence containing the misprint was material, because it resulted in the Board’s reversing the reexamination Examiner.  However, the Federal Circuit said that Kellogg also had to prove that  Kraft, in what it did not say about the sentence
that was the focus of the Board’s attention, had a “specific intent to mislead or deceive the PTO.”

The Federal Circuit said that the intent requirement is demanding, and citing Therasense said that the evidence must be “sufficient to require a finding of deceitful intent in the light of all the circumstances”; deceptive intent “must be the single most reasonable inference able to be drawn from the evidence”; and “when there are multiple reasonable inferences that may be drawn, intent to deceive cannot be found.”

The Board noted that there was no evidence of whether or not Kraft actually believed it was a misprint, just Kellogg’s argument of what Kraft had to have believed.  The Federal Circuit said that without more evidence of Kraft’s belief, one reasonable inference on the record—especially given Kellogg’s burden of persuasion—is that Kraft did not
believe that there was a misprint.

The district court’s obviousness analysis, approved by the Federal Circuit, relied upon the identification of the problem to be solved in the Background.  Prosecutors need to be careful in drafting the background section, so that it does not make the invention seem like the logical (and thus obvious) solution to the problem that perhaps only the inventor had the insight to identify in advance.

 

Not Every Instance of an Agency Reaching Inconsistent Outcomes in Similar, Related Cases will Necessarily be Erroneous

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In Vicor Corp. v. Synqor, Inc., [2016-2283] (August 30, 2017) the Federal Circuit affirmed in part, vacated in part, and remanded the Board’s decisions in two reexaminations, one in which the Board found that certain claims of U.S. Patent No. 8,023,290 are patentable; and one in which the Board found certain claims of U.S. Patent No. 7,272,021 unpatentable as anticipated or obvious.

The Federal Circuit found that despite sharing a common panel and having opinions issued on the same date, the decisions in the respective reexaminations contain inconsistent findings on identical issues and on essentially the same record. With respect to the ‘290 patent reexamination, the Federal Circuit said that the
Board improperly analyzed the obviousness arguments under only one of the four Graham factors when it looked exclusively at the objective evidence, without considering the remaining factors and the relative strength of the factors. The Federal Circuit further said that the Board reached inconsistent conclusions as to the evidentiary weight to be given to the secondary considerations evidence presented in the respective reexaminations of the ’290 and ’021 patents, without any explanation to justify such inconsistency.

The Federal Circuit said that the Board’s legal error with respect to the ‘290 patent is underscored by its opinion issued on the same day in the related reexamination of the ’021 patent, where the Board applied all four Graham factors in the ’021’s reexamination and stated that “[t]he Federal Circuit has determined that only after considering the four Graham criteria together can the decision maker make the legal determination of whether the invention is nonobvious.”

The Federal Circuit said that in the ’290’s reexamination, the Board found the objective
evidence to be so persuasive that it approved of the examiner’s decision to withdraw rejections without analyzing the remaining Graham factors and without considering
Federal Circuit decisions on related claims.  In the ’021’s reexamination, however, the Board determined that the objective evidence principally related to features of the
claims that were found to be anticipated in other cases and, therefore, found that there was no nexus between the objective evidence and the claims of the ’021 patent. The Federal Circuit concluded that Board’s decisions do not evince any explanation or justification for these inconsistent findings, given the similarity between the claims at issue in the respective reexaminations.

The Federal Circuit said that not every instance of an agency reaching inconsistent outcomes in similar, related cases will necessarily be erroneous, but concluded that the inconsistent application of the Graham factors in two cases reaching different results, required that the cases be vacated and remanded,