Secondary considerations based on objective evidence of non-obviousness, if present, must be considered in an obvious determination. Graham v. John Deere Co., 383 U.S. 1, 17–18 (1966). Secondary considerations may include any of the following: long-felt but unsolved needs, failure of others, unexpected results, commercial success, copying, licensing, and praise. See Graham, 383 U.S. at 17; Leapfrog Enters., Inc. v. Fisher-Price, Inc., 485 F.3d 1157, 1162 (Fed. Cir. 2007). In the following cases, the Board addressed arguments related to secondary considerations of non-obviousness.
Qulatrics, LLC v. OpinionLab, Inc., IPR2014-00356, Paper 51 (PTAB July 30, 2015). The Board was not persuaded by patent owner’s evidence of secondary considerations of nonobviousness related to alleged commercial success, industry praise and copying. The Board indicated that patent owner’s alleged commercial success was not coextensive the claimed invention. Patent owner’s product is marked with the challenged patent. That patent marking, however, is only an assertion by patent owner that some feature of the marketed product embodies some claim of the challenged patent. Such a bare assertion does not constitute sufficient proof that the product is coextensive with the claimed invention. This is particularly so when the patent is marked with approximately twenty patents, which suggests that the product may include features outside the scope of the invention claimed in the patent. Further, patent owner did not show that the alleged commercial success or industry praise were the result of the unique characteristics of the claimed invention. With respect to copying, patent owner alleged that petitioner’s product reads on the claims of the patent. Copying, however, requires evidence of efforts to replicate a specific product. Allegations of infringement do not suffice as evidence of actual efforts undertaken by petitioner to copy a product embodying the claimed invention.
Endo Pharmaceuticals, Inc. v. Depomed, Inc., IPR2014-00652, Paper 68 (PTAB Sept. 16, 2015). The Board was not persuaded by patent owner’s evidence of secondary considerations related to commercial success, licensing and long-felt but unsolved need. With regard to commercial success, patent owner produced sales data of its marketed drug. The Board noted, however, that patent owner merely cited its expert who referred to claim charts comparing its drug to the claims. The Board indicated that “merely citing to a claim chart as support—without any explanation in the Patent Owner Response—is insufficient to demonstrate a nexus and violates our rule against incorporation by reference.” With regard to licensing, the Board indicated that patent owner’s evidence did not demonstrate that licensee took the licenses because of the merits of the claimed invention. Similarly, the Board indicated that patent owner’s evidence with respect to long-felt need and undue experimentation lacked the required nexus with the claimed invention.
SK Innovation Co., Ltd. v. Celgard, LLC, IPR2014-00680, Paper 57 (PTAB Sept. 25, 2015). The Board held that, although petitioner bears the ultimate burden of persuasion under 35 U.S.C. § 316(e), patent owner must establish a nexus between the objective evidence of nonobviousness and the claimed subject matter. Objective indicia of nonobviousness must be tied to the novel elements of the claim at issue, and must be reasonably commensurate with the scope of the claims. Copying requires evidence of efforts to replicate a specific product, not whether a competing product arguably falls within the scope of the patent. The Board determined that patent owner’s evidence of secondary considerations, including a grant of a preliminary injunction in the related district court proceeding, did not satisfy the nexus requirement because the evidence pertained to claims not at issue in the proceeding as well as other factors outside the scope of the claims at issue.
Seagate Tech. (US) Holdings, Inc. v. Enova Technology Corp., IPR2014-01178, Paper 49 (PTAB Dec. 18, 2015). The Board was not persuaded by patent owner’s evidence of secondary considerations because patent owner did not establish a sufficient nexus between patent owner’s products and the challenged claims. On commercial success, patent owner did not provide sufficient proof of a relationship between alleged sales and the unique characteristics of the invention embodied in the challenged claims. To show how commercial success supports nonobviousness, patent owner must prove that sales were a direct result of the unique characteristics of the invention, and not a result of economic and commercial factors unrelated to the quality of the patented subject matter. If the commercial success is due to an unclaimed feature of the device, or if the feature that creates the commercial success was known in the prior art, the success is not pertinent. It must be determined whether the commercial success of the embodying product resulted from the merits of the claimed invention as opposed to the prior art or other extrinsic factors.
ABS Global, Inc. and Genus PLC v. XY, LLC, IPR2014-01161, Paper 26 (PTAB Jan. 11, 2016). The Board rejected patent owner’s evidence of secondary considerations of nonobviousness including commercial success and long-felt need. The Board determined that the alleged commercial success and long-felt were attributed to a patent not at issue in the IPR. The evidence of secondary considerations did not outweigh the strong showing of obviousness.
HTC Corp. and HTC America, Inc. v. Advanced Audio Devices, LLC, IPR2014-01157, Paper 41 (Jan. 22, 2016). The Board rejected patent owner’s evidence of secondary considerations of nonobviousness. In cases where the proffered evidence of commercial success is licenses, rather than sales of products embodying the invention, there is a danger that the licenses may have been taken only because they were cheaper than defending an infringement suit. The Board indicated that they could not determine whether the licenses reflect the commercial value of the claimed invention, or whether they were taken merely to avoid the cost of litigation, either pending or threatened. Absent a persuasive showing of nexus to the merits of the claimed invention, patent owner’s licensing evidence does not establish commercial success.
Oracle Corp. v. Crossroads Systems, Inc., IPR2014-01207, Paper 78 (PTAB Jan. 29, 2016). The Board held that to establish a proper nexus between a claimed invention and the commercial success of a product, patent owner must offer proof that sales of the allegedly successful product were a direct result of the unique characteristics of the claimed invention, as opposed to other economic and commercial factors unrelated to the quality of the patented subject matter. The Board determined that patent owner did not establish a nexus between its commercial product and the features of the claims. Patent owner’s products include many features besides those which are alleged to be nonobvious, and patent owner has not shown that sales of its products resulted from the novel, nonobvious features of the claimed invention rather than other features. An important component of the commercial success inquiry is determining market share associated with the alleged success, relative to all competing products.
Chums, Inc. v. Cablz, Inc., IPR2014-01240, Paper 43 (PTAB Feb. 8, 2016). The Board rejected patent owner’s evidence of secondary considerations of nonobviousness related to copying, commercial success and industry recognition. On copying, the Board noted that petitioner’s product uses a different configuration than that of patent owner’s product, and petitioner obtained a patent for its product. Further, the Board indicated that petitioner could not have copied the “patented product” because the patent issued after petitioner’s product was first sold. Petitioner could also not copy a feature that was known in the art. On commercial success, the Board found that the alleged success and industry recognition of patent owner’s product is not pertinent to the issue of nonobviousness, because the feature which contributed to the alleged success and recognition was known in the art.
Hamilton Beach Brands, Inc. v. Courtesy Prods., LLC, IPR2014-01257, Paper 49 (PTAB Feb. 24, 2016). The Board rejected patent owner’s evidence of secondary considerations of nonobviousness. Even though patent owner’s evidence establishes a nexus between its commercial success and the product embodying the challenged claims, patent owner has failed to establish that the commercial success is due to the merits of the claimed invention beyond what was readily available in the prior art. The full record at trial establishes that the features of the challenged claims were taught in the prior art.
Saint-Gobain Abrasives, Inc. v. 3M Innovative Properties Co., IPR2014-01281, Paper 27 (PTAB Feb. 23, 2016). The Board rejected patent owner’s evidence of secondary considerations of nonobviousness related to commercial success and industry acclaim. The Board determined that patent owner did not demonstrate a sufficient nexus between the claimed invention and patent owner’s products because the allegedly unique feature was known in the prior art. If commercial success is due to an element in the prior art, no nexus exists. Further, patent owner did not demonstrate that sales or acclaimed benefits were a direct result of the unique characteristics of the claimed invention.
Owens Corning v. CertainTeed Corp., IPR2014-01397, Paper 37 (PTAB Mar. 8, 2016). The Board was not persuaded by patent owner’s evidence of secondary considerations of nonobviousness relating to alleged commercial success. To establish a proper nexus between a claimed invention and the commercial success of a product, patent owner must offer proof that the sales of the allegedly successful product were a direct result of the unique characteristics of the claimed invention—as opposed to other economic and commercial factors unrelated to the quality of the patented subject matter. The Board determined that the evidence provided by patent owner did not show commercial success that can be attributed to the claimed subject matter. The Board indicated that the evidence provided by patent owner did not show that any commercial success attributable to the product resulted from novel, non-obvious features of the claimed invention, rather than other features. Because any commercial success may be attributable, at least in part, to unclaimed features or features known in the prior art, patent owner has not established a nexus between any commercial success and the claimed invention.
Coalition for Affordable Drugs V LLC v. Hoffman-LaRoche Inc., IPR2015-01792, Paper 14 (PTAB Mar. 11, 2016). The Board denied institution, in part, because petitioner did not sufficiently address secondary considerations evidence submitted during prosecution. Evidence of unexpected results was apparently relied upon by the Examiner in allowing the claims at issue. Petitioner alleged that the evidence was not commensurate in scope with the claims, but the Board disagreed. The Board indicated that petitioner should have addressed the evidence of unexpected results in the petition as part of petitioner’s showing of a reasonable likelihood of success on the merits.
Cisco Systems, Inc. v. Crossroads Systems, Inc., IPR2014-01463, Paper 49 (PTAB Mar. 16, 2016). The Board was not persuaded by patent owner’s evidence of secondary considerations of nonobviousness related to long-felt need, commercial success and licensing. Patent owner’s evidence of long-felt need includes testimony and selected quotes from an article by an expert used by petitioner in a co-pending lawsuit, directed to whether the term “storage router” was used in the art in the late 1990s. This evidence is not sufficient to establish a long-felt need. It does not address what the needs or problems of the art were at that time. With regard to the commercial success inquiry, it is important to determine the market share associated with the alleged success, relative to all competing products. Even sales volume, if provided without market share information, is only weak evidence, if any, of commercial success. The fact that patent owner sold a certain number of these devices and that they made up a certain share of its own sales is insufficient to establish commercial success without some context about the larger market. With regard to licensing evidence, it is unknown how much of the decision to take a license stems from a business cost-benefit analysis with regard to defending an infringement suit or from another business reason, rather than from acknowledged merits of the claimed invention. Patent owner did not provide any information about how many entities refused to take a license, or why they refused.
Amazon.com, Inc. v. Personalized Media Communications, LLC, IPR2014-01531, Paper 55 (PTAB Apr. 1, 2016). The Board was not persuaded by patent owner’s evidence of secondary considerations related to licenses, long-felt need and praise. With regard to long-felt need, the Board indicated that patent owner did not provide evidence that demonstrates both that a demand existed for the claimed invention, and that others tried but failed to satisfy that demand. With regard to licenses and praise, the Board indicated that patent owner’s evidence did not have a sufficient nexus to the merits of the claimed invention. Patent owner presented evidence related to the entire family of patents, not to the features of the claims at issue.
Telebrands Corp. v. Tinnus Enterprises, LLC, PGR2015-00018, Paper 31 (PTAB Apr. 4, 2016). The Board partly granted patent owner’s motion for additional discovery related to secondary considerations of non-obviousness. It is undisputed, for purposes of patent owner’s motion, that emails dated prior to issuance of the challenged patent, between petitioner and a designer or manufacturer of petitioner’s product, contained references to patent owner’s product. Those emails, when viewed in light of the evidence tending to show that petitioner’s product is a virtually-identical replica of patent owner’s product, are sufficient evidence of copying at this stage of the proceeding [prior to the patent owner response after institution] to justify patent owner’s request for discovery of the specified documents produced in the related district court litigation, as well as any other documents that contain communications, between petitioner and a designer or manufacturer of petitioner’s product, mentioning patent owner’s product. The Board determined that, at this stage of the proceeding, patent owner’s allegations of commercial success are sufficient to justify the request for “documents sufficient to show” the gross revenue derived from sales of petitioner’s product.
Tiffany and Co. v. Lazare Kaplan Int’l, Inc., IPR2015-00024, Paper 34 (PTAB Apr. 13, 2016). The Board was not persuaded by patent owner’s evidence of secondary considerations related to alleged commercial success and copying. As evidence of commercial success, patent owner relied on a license agreement between patent owner and a third party. Patent owner argued that the third party’s use of the licensed technology “skyrocketed” due to being able to use aspects of the patented system. The Board determined that patent owner had not demonstrated a nexus with the claimed invention, because patent owner did not demonstrate that the license was due to the claimed features which patent owner argued as being patentable over the prior art. If commercial success is due to features which are known in the prior art, there is no nexus between the claimed invention and the commercial success. With regard to copying, patent owner argued that it sued a third party for infringement. The Board was not persuaded by this evidence. Not every competing product that arguably falls within the scope of a patent is evidence of copying; otherwise, every infringement suit would automatically confirm the nonobviousness of the patent. The Board indicated that patent owner failed to provide credible evidence on copying of a specific product.
Masterimage 3D, Inc. v. RealD Inc., IPR2015-00040, Paper 85 (PTAB Apr. 14, 2016). The Board was not persuaded by patent owner’s secondary considerations evidence related to commercial success, copying and industry praise. Patent owner does not represent that its commercial product embodying the claimed invention is its only product. Therefore, the market share in total box office receipts is not sufficiently tied to the commercial product. Patent owner does not represent that its share of the total receipts is derived solely from use of the commercial product. Consequently, from the evidence provided, the Board could not determine what portion of that estimated market share is derived from the product that embodies the claimed invention. With respect to copying, patent owner did not provide sufficient evidence of petitioner’s product to show that petitioner attempted to replicate patent owner’s product. The Board indicated that the industry praise is not meaningful without additional details about who praised the product, in what setting, why, and what exactly is the structure of the product. It is widespread recognition in the field that constitutes meaningful evidence of nonobviousness, not just isolated praises that are not industry-wide. Patent owner did not identify and explain such widespread peer recognition in the art.
Product Miniature, Inc. v. PO Displays USA, LLC, IPR2015-00266, Paper 43 (PTAB Apr. 13, 2016). The Board rejected patent owner’s evidence of secondary considerations of nonobviousness directed to commercial success, copying, licenses, and long-felt need. The Board determined that patent owner’s declarants, while asserting that its product embodies the challenged claims, did not provide an adequate explanation as to whether the claims are embodied in the product or which of the claimed features is the cause of the alleged commercial success. The Board indicated that patent owner did not establish the required nexus between any alleged copying or alleged licensing and the merits of the claimed invention. Further, patent owner’s evidence did not sufficiently demonstrate that a demand existed and that others tried and failed. Patent owner also did not establish the required nexus between any long-felt need and the merits of the claimed invention.
Asustek Computer Inc. v. Exotablet, Ltd., IPR2015-00046, Paper 26 (PTAB Apr. 18, 2016). The Board rejected patent owner’s evidence of secondary considerations of nonobviousness related to alleged copying. The sole support patent owner cites for copying is a district court’s finding that patent owner was likely to succeed on the merits of its claim that petitioner infringed claim 1, and the purported admission by petitioner’s expert that petitioner’s product meets the element of claim 7. However, the cited subject matter from the district court is silent on claim 7, and the question of infringement is entirely different from that of copying. Patent owner has offered no evidence to support its argument of copying as objective indicia of nonobviousness.
Zhongshan Broad Ocean Motor Co., Ltd. v. Nidec Motor Corp., IPR2014-01121, Paper 86 (PTAB May 9, 2016). The Board rejected patent owner’s argument of secondary considerations of nonobviousness related to alleged commercial success. The Board indicated that patent owner did not provide testimony or documentation establishing a connection between the allegedly patentable feature the increase in sales for its new product. For this reason alone, patent owner failed to establish the necessary nexus between the merits of the claimed invention and patent owner’s evidence of secondary considerations. The Board also noted that other features of patent owner’s products may have contributed to the commercial success of its products and therefore patent owner did not establish the requisite nexus.
Petroleum Geo-Services Inc. v. WesternGeco LLC, IPR2014-01478, Paper 72 (PTAB July 11, 2016). The Board rejected patent owner’s argument of secondary considerations of nonobviousness related to alleged commercial success and industry praise. With regard to commercial success, the Board determined that patent owner’s evidence was not sufficiently linked to the claims at issue. The Board indicated that any commercial success was attributable to features that the challenged claims were not limited to and that were already known in the art. Patent owner did not demonstrate that sales were a direct result of the unique characteristics of the invention, and not a result of economic and commercial factors unrelated to the quality of the patented subject matter. The Board also indicated that patent owner’s evidence of volume of sales was insufficient without accompanying market share data. Absolute sale numbers without market share data do not establish commercial success. With regard to industry praise, the Board indicated that patent owner’s evidence related to features not required in the claims.
Innopharma Licensing, Inc. v. Senju Pharmaceutical Co., Ltd., IPR2015-00902, Paper 90 (PTAB July 28, 2016). The Board was persuaded by patent owner’s evidence of secondary considerations of nonobviousness related to unexpected results, commercial success and industry acclaim. The Board determined that the secondary considerations evidence weighed in favor of the claims being nonobvious, particularly in view of the unexpected results which showed a surprising stabilizing effect that is not suggested by the prior art. Patent owner’s evidence showed that the compound was 44% more stable when using a claimed component than was disclosed by one of the asserted references. A commercial product that embodies the claimed invention gives rise to a presumption that the commercial success of that product is due to the claimed invention, absent persuasive evidence to the contrary.
Leapfrog Prod. Dev., LLC v. Lifefactory, Inc., IPR2015-00614, Paper 31 (PTAB Aug. 17, 2016). The Board was persuaded by patent owner’s secondary considerations evidence for claim 20 of the patent related to commercial success and industry praise. “There is a presumption of nexus for objective considerations when the patentee shows that the asserted objective evidence is tied to a specific product and that product ‘is the invention disclosed and claimed in the patent.’” WBIP, LLC v. Kohler Co., Nos. 2015-1038, 2015-1044, at 7 (Fed. Cir. July 19, 2016) (quoting Rambus, Inc. v. Rea, 731, F.3d 1248, 1258)). The Board determined that, under WBIP, patent owner demonstrated a presumption of nexus between the evidence of objective indicia and claim 20. The Board concluded that petitioner did not rebut this presumption by presenting evidence that shows the success and praise of the product were due to factors other than the patented invention. Petitioner argued that patent owner’s evidence of praise was hearsay. Petitioner waived its objection to patent owner’s evidence of praise by not filing a motion to exclude that evidence.