Apr
30

New Guidance by the Patent Trial & Appeal Board on Overcoming Obviousness Rejections: Part I – Lectrosonics, Inc. v. Zaxcom, Inc.

Patent Law Alert from the Law Offices of Troy & Schwartz, LLC

April 30, 2020

New Guidance by the Patent Trial & Appeal Board on Overcoming Obviousness Rejections:  Part I  – Lectrosonics, Inc. v. Zaxcom, Inc

One way for the patent applicant to try and overcome an obvious rejection is to prove nonobviousness through secondary considerations (also known as “objective indicia of nonobviousness”). Yet, proving nonobviousness through secondary considerations to the satisfaction of the Patent Trial & Appeal Board (“Board”) has always been challenging even before Supreme Court’s KSR decision.  On April 14, 2020, the Board issued guidance in arguing secondary considerations by designating its most recent decision as precedential (Lectrosonics, Inc. v. Zaxcom, Inc., Case IPR 2018-00129 (P.T.A.B. Jan. 24, 2020)) and two earlier decisions as informative (Ex parte Thompson, Appeal 2011-011620 (P.T.A.B. March 21, 2014) and Ex parte Whirlpool Corp., Appeal 2013-008232 (P.T.A.B. Oct. 30, 2013)).

This blog discusses the precedential decision in Lectrosonics, Inc. v. Zaxcom, Inc., Case IPR 2018-00129 (P.T.A.B. Jan. 24, 2020). Given the importance of this topic, the two other decisions will be summarized in a forthcoming blog. The three decisions address nonobviousness issues in three different proceedings before the Board: an applicant’s exparte appeal, an AIA trial, and a reexamination proceeding.

Secondary considerations involve evidence “outside” the four corners of the application with a caveat: the applicant must demonstrate a nexus between the proffered evidence and the claimed invention.  If established, the Board will consider the strength of the objective-indicia evidence itself.

The Board’s Discussion of the Threshold for Establishing “Nexus”

Secondary considerations are generally related to the invention’s commercialized product. For objective indicia of nonobviousness to be accorded substantial weight, its proponent (the applicant or patent owner) must establish a nexus between the evidence and the merits of the claimed invention.  This means that the proponent must show that the asserted objective evidence is actually tied to a specific product and that product indeed “embodies the claimed features and is coextensive with them.”

Courts have considered the following secondary considerations in determining obviousness; (1) the invention’s commercial success, (2) long felt but unresolved needs, (3) the failure of others, (4) skepticism by experts, (5) praise by others, (6) teaching away by others, (7) recognition of a problem, (8) copying of the invention by competitors, and (9) other relevant factors.

The product for which objective evidence is presented must be claimed in its entirety within the patent or application.  CAFC precedent, which the Board must follow, requires that a nexus between the invention and evidence of secondary considerations is only presumed “when the product is the invention as fully disclosed and claimed – that the product embodies the claimed features and is coextensive with them.”  See Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366 (Fed. Cir.  2019). 

Nevertheless, all is not lost if an “automatic” nexus presumption is deemed inappropriate.  The patent owner is still afforded an opportunity to prove nexus by showing that the proffered evidence of secondary considerations is the “direct result of the unique characteristics of the claimed invention.”   The ultimate decision depends on the fact finder who “must weigh the secondary considerations evidence presented in the context of whether the claimed invention as a whole would have been obvious….”

Secondary Considerations as to the Original Claims

The Board considered the nexus requirements twice  – first with respect to the patent’s original claims and again with the patent owner’s proposed substitute claims as discussed below.  Relying on Fox, the Lectrosonics Board found that the patent owner had not demonstrated a nexus between the evidence presented and the merits of the invention as originally claimed because the evidence presented was directed to an unclaimed feature of the invention.  Secondary evidence is inapplicable if it does not apply to the patent’s actual claims.

Secondary Considerations as to the Substitute Claims

The patent owner filed a contingent motion to amend the patent to replace the six problematic patent claims with six substitute claims; the written description had disclosed features that had not been claimed and the patent owner now sought to claim these features.    The Board first held that the Motion to Amend complied with the statutory and regulatory requirements for amending found in a previous precedential order for assessing the merits of a Contingent Motion to Amend in Feb. 2019.

The Board then considered whether the proposed substitute claims were obvious, finding that the Petitioner’s (the party seeking claims invalidation of the patent) proposed prior-art combination (the combining of references in an obviousness rejection) “at best only weigh slightly weigh in favor of a conclusion of obviousness.”

The Board then turned to the patent owner’s secondary consideration case but now focusing on the substitute claims.  Had the inquiry only involved the original claims, the patent owner would have been out of luck.  The Board found, however, that the substitute claims shared a nexus with the patent owner’s proffered secondary consideration evidence: the affidavit of two declarants tying long-felt need directly to the newly added claim limitations and an industry award.

After finding a nexus, the Board then considered the secondary consideration evidence itself.  As to long-felt need as a secondary consideration, the Board was convinced that the two declarations demonstrated “a persistent need, recognized by those of ordinary skill in the art.”

Next, the Board considered the evidence of industry praise, citing the testimony of one of the patent owner’s declarants who stated that he “can’t emphasize enough the revolution these recording radios brought on.” The Board recognized that the award also “specifically praises features of the proposed substitute claims including the digital recording of microphone signals in the wireless transmitter.” Although some of the industry praise the patent owner supplied was “directed to features not explicitly recited by [the proposed substitute claims],” the patent owner’s evidence of industry praise ultimately weighed in favor of nonobviousness.

Lastly, the Board considered the evidence of the failure of others. Here, the Board determined that the patent owner’s testimony submitted in support of this factor was “conclusory and without adequate [evidentiary] support for the proposition that others failed.” This factor thus weighed in favor of the Petitioner’s obviousness arguments.

The Board ultimately concluded that, although the failure of others weighed in favor of the Petitioner because of lack of evidentiary support favoring the patent owner, the long-felt need and industry praise weighed heavily in favor of nonobviousness.  The Board concluded that the substitute claims were nonobvious, thereby saving the day for the patent owner.

Take Home Points

It has been historically very difficult to win on a secondary consideration argument before the Board and appellate courts. The following lessons can be drawn from the Lectrosonics decision:

  • In presenting an objective-indicia case, practitioners during patent prosecution or the patent owner in a post-patent proceeding must present solid evidentiary support (e.g., long-felt need, failure of others, industry praise, copying, etc.).
  • Conclusory statements are not evidence. Additionally, the nexus between that evidence and the claimed invention must be proven in those cases where the Board or a court determines that the patent applicant or patent owner are not entitled to a nexus presumption.  Such a nexus will be found lacking if the evidence does not relate to the patent’s claims.   Here, the patent owner’s win is because the Board agreed that the patent could be amended to include substitute claims after finding that the original claims had no nexus with the proffered objective evidence.
  • The Lectrosonics decision is also a good reminder for practitioners to claim everything the applicant is entitled to claim based on the written disclosure to help ensure that the required nexus between the claims and secondary considerations will be found in any “obviousness” contest. Here the patent owner won because the Board first granted its contingent motion to amend the claims to include substitute claims which then were found to be “covered” by objective secondary consideration evidence.  If a patent owner plans to file such a motion during a patent claim contest, it would be well advised to review the Board’s requirements for granting this type of motion as set forth in the decision available here. The outcome would have been far different absent the Board’s approval of the motion to amend.

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THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.