Federal Circuit Review - Issue 270

Troutman Pepper

270-1. Federal Circuit Affirms Two PTAB Decisions Finding Illuminated Shoe Patents Obvious

The Federal Circuit recently affirmed two decisions by the U.S. Patent and Trademark Office Patent Trial and Appeal Board (the PTAB) finding two patents for an illuminated shoe owned by Shoes by Firebug LLC (Firebug) obvious in light of the prior art. See Shoes by Firebug LLC v. Stride Rite Children’s Group, Nos. 2019-1622, 2019-1623, 2020 U.S. App. LEXIS 19746 (Fed. Cir. June 25, 2020) (Before Lourie, Moore, and O’Malley, Circuit Judges) (Opinion for the Court, Lourie, Circuit Judge).

Firebug is the owner of U.S. Patent 8,992,038 (the ’038 patent) and U.S. Patent 9,301,574 (the ’574 patent) (collectively, the Firebug patents) which are both directed to an improved structure for internally illuminated footwear. Firebug asserted the Firebug patents against Stride Rite Children’s Group, LLC (Stride Rite), Firebug’s competitor, in the U.S. District Court for the Eastern District of Texas. In response, Stride Rite filed two petitions for inter partes review of Claims 1–10 the ’038 patent and Claims 1–10 of the ’574 patent. The PTAB found all of the claims at issue to be invalid as obvious in light of the prior art.

The case arrived at the Federal Circuit by way of appeal from Firebug, who argued that the two final written decisions of the PTAB had been made in error. Specifically, Firebug argued that the Board had (1) erred in determining that preambles of the independent claims do not limit the claims, and (2) erred in determining that the challenged claims would have been obvious in light of the prior art and Firebug’s evidence of secondary considerations of nonobviousness.

Firebug first argued that the preambles to the independent claims limited the claims to illuminated shoes having a textile outer layer which is not taught by the prior art. Upon review, the court agreed with Firebug that the preamble of the independent claim found in the ’574 patent limits the claim because the preamble was essential to understanding the structural limitations of the illumination system. On the other hand, the court agreed with the PTAB that the preamble of the independent claim found in the ’038 patent does not limit the claim because the body of the claim recites a structurally complete article. Therefore, the PTAB erred in regard to the ’574 patent but not to the ’038 patent. Despite the PTAB’s error, the court found the references of record nevertheless disclose the limitations of the claims and the Firebug patents were invalid as obvious. Therefore, the PTAB’s error was harmless.

The court next considered whether the PTAB erred in its finding that the Firebug patents were obvious in light of the prior art and Firebug’s evidence of secondary considerations. Upon review, the court found the combination of art discloses the limitations of the Firebug patents and the PTAB’s finding was supported by substantial evidence. The court also found that the PTAB had properly concluded that Firebug’s secondary considerations evidence was entitled to little weight. This conclusion was due in part to the fact that Firebug’s secondary considerations evidence included a license deal that involved several other patents not at issue in this case. Therefore, the evidence did not establish a nexus between the commercial success of Firebug’s products and the claims of the Firebug patents.

The preamble of a claim is not limiting when the claim recites a structurally complete invention in the body of the claim and uses the preamble only to state a purpose or intended use of the invention.

270-2. Federal Circuit Affirms PTAB’s Finding of Non-Obviousness of Nike Patent Challenged by Adidas

The Federal Circuit recently affirmed the PTAB’s finding that Adidas failed to prove obviousness of certain patent claims assigned to Nike. See Adidas AG v. Nike, Inc., No. 2019-1787, 2020 U.S. App. LEXIS 19745 (Fed. Cir. June 25, 2020) (Before Moore, Taranto, and Chen, Circuit Judges) (Opinion for the Court, Moore, Circuit Judge).

Nike owns U.S. Patent Nos. 7,814,598 and 8,266,749 (the ’598 patent” and “the ’749 patent, respectively), which include a common specification and are directed to methods of manufacturing an article of footwear with a textile upper (Flyknit). Adidas filed for inter partes review of claims 1–13 of the ’598 patent and 1–9, 11–19, and 21 of the ’749 patent. The PTAB held that Adidas did not demonstrate that the claims challenged are unpatentable as obvious, and Adidas appealed to the Federal Circuit.

First, the Federal Circuit determined that Adidas had standing to bring the appeal. Nike contended that Adidas lacked standing to bring the appeal because Nike had not sued or threatened to sue Adidas for infringement of either the ’598 patent or the ’749 patent. The Federal Circuit emphasized that “a specific threat of infringement litigation by the patentee” is not a direct requirement to establish the requisite injury to appeal from a final written decision of inter partes review. Instead, the court reasoned, it is sufficient for the appellant to engage in activities that would give rise to a possible infringement suit. Here, Adidas and Nike are direct competitors, and Adidas manufactures and markets a “Primeknit” product in competition with the “Flyknit” technology. Although Nike had not yet accused Adidas of infringing either the ’598 or the ’749 patents, Nike asserted the ’749 patent against a third-party product similar to Primeknit, accused Adidas of infringing Nike’s German “Flyknit” patent in 2012, and expressed Nike’s intent to protect its rights in the Flyknit technology from any further acts of infringement.

Next, the Federal Circuit reviewed the PTAB’s obviousness determinations. The claims of both patents relate to a method of “mechanically-manipulating a yarn with a circular knitting machine . . . to form a cylindrical textile structure.” Claim 1 of the ’598 patent, reproduced below, is illustrative of the invention:

1. A method manufacturing an article of footwear, the method comprising steps of:

mechanically-manipulating a yarn with a circular knitting machine to form a cylindrical textile structure;

removing at least one textile element from the textile structure;

incorporating the textile element into an upper of the article of footwear.

Adidas challenged the claims as obvious under two alternative grounds. Analyzing each ground in turn, the Federal Circuit found that a person of ordinary skill in the art would not have been motivated to combine the references asserted by Adidas. With respect to the first ground, the Federal Circuit explained that a person of ordinary skill in the art would not combine the references because of fundamental differences in the seaming techniques taught by the references. The primary reference taught pre-seamed garments, while the secondary reference taught seaming the textile element after it had been cut from the textile structure. With respect to the second ground, the Federal Circuit made a similar finding, reasoning that the primary reference would be rendered inoperable by integrating the teachings of the secondary references because of the difference in seaming techniques disclosed in the combined references.

Fundamental differences between asserted references in an obviousness inquiry may indicate that a skilled artison woud not be motivated to combine the asserted references.

270-3. Federal Circuit Affirms PTAB’s Use of Common Sense to Supply Missing Claim Limitation to Determine Obviousness

The Federal Circuit recently issued a ruling affirming the final written decision of the PTAB finding that several claims of B/E Aerospace Inc.’s (B/E) patent were obvious. See B/E Aero., Inc. v. C&D Zodiac, Inc., No. 2019-1935, 2019-1936, 2020 U.S. App. LEXIS 16886 (Fed. Cir. June 26, 2020) (Before Lourie, Reyna, and Hughes Circuit Judges) (Opinion for the Court, Reyna, Circuit Judge).

B/E is the owner of several patents, including U.S. Patent No. 9,073,641 and U.S. Patent No. 9,440,742 directed to space-saving technologies for aircraft enclosures. Both patents include a short written description that discloses a technology related to an enclosure having contoured walls that “reduce or eliminate the gaps and volumes of space required between lavatory enclosures and adjacent structures.” In particular, representative Claim 1 recites:

a forward wall portion . . . include[ing] a first recess configured to receive at least a portion of the upwardly and aftwardly inclined back seat of the passenger seat therein, and further includes a second recess configured to receive at least a portion of the aft-extending seat support therein when at least a portion of the upwardly and aftwardly inclined seat back of the passenger seat is received within the first recess.

Zodiac petitioned for inter partes review (IPR) of B/E’s patents, alleging the challenged claims were obvious over “Admitted Prior Art” and U.S. Patent No. 3,738,497 (Betts). Zodiac asserted the “Admitted Prior Art” was Figure 1 of B/E’s patents that illustrates a “flat, forward facing lavatory wall immediately behind a passenger seat that has a rear seat leg extending toward the back of the plane.” Unlike the flat, forward facing wall disclosed in the Admitted Prior Art, Betts discloses a contoured forward-facing wall to receive a tilted backrest.

During the inter partes review proceeding, the PTAB found that Zodiac sufficiently proved the challenged claims of B/E’s patents were obvious over the Admitted Prior Art and Betts. In particular, the PTAB held that the contoured wall in Betts satisfied the “first recess” limitation in Claim 1. With regards to the “second recess” limitation, the PTAB concluded that a person having ordinary skill the art would have been motivated to modify the flat forward-facing wall in the Admitted Prior Art with Betts to achieve the claimed invention because skilled artisans would want to maximize the interior space of an aircraft. The PTAB came to this conclusion using two separate lines of reasoning. The PTAB first explained that under the traditional obviousness framework, the second recess is simply “an obvious solution to a known problem.” In particular, the PTAB relied on Zodiac’s expert testimony indicating that the addition of the second recess “is nothing more than the application of known technology for its intended purpose” and that the “result of such modification is predictable, allowing the seat to be positioned further aft in an aircraft.” Second, the PTAB determined the challenged claims were obvious because “it would have been a matter of common sense” to add a second recess in the Admitted Prior Art/Betts combination to achieve the claimed invention.

Additionally, during the PTAB proceeding, Zodiac included three design drawings that illustrated enclosures having a second recess to receive a seat support. Zodiac asserted that these design drawings indicate lower, second recesses were known in the art. Subsequently, B/E moved to exclude the design drawings arguing that the design drawings were not patents or printed publications as required under 35 U.S.C. § 311(b). The PTAB ultimately denied Zodiac’s motion and used the drawings only to show the knowledge of those skilled in the art.

B/E appealed the PTAB’s conclusion that the challenged claims of B/E’s patents were obvious,. B/E asserted two issues: (1) the PTAB erred in finding the challenged claims to be obvious, and (2) the PTAB erred in using the design drawings because the design drawings were not “patents or printed publications” under § 311(b).

The Federal Circuit ultimately agreed with the PTAB’s conclusion that the challenged claims of B/E’s patent are obvious. The parties did not dispute that Betts discloses the “first recess” claim limitation. With regards to the “second recess,” the Federal Circuit concluded that the PTAB properly found the challenged claims obvious using both approaches. First, the Federal Circuit affirmed the PTAB’s traditional obviousness analysis, concluding that it would have been obvious to modify the Admitted Prior Art and Betts combination to include the “second recess.” The Federal Circuit explained that the “second recess” is simply a variation of the “first recess,” and a skilled artisan would have recognized the benefit of adding the “second recess” to the “first recess” in order to save space within an aircraft. The Federal Circuit further noted that Zodiac’s expert testimony confirmed the PTAB’s conclusion.

Second, the Federal Circuit concluded the PTAB properly deemed the challenged claims obvious because it was a matter of common sense to use a “second recess” with the Admitted Prior Art/Betts combination. The Federal Circuit explained that in KSR, the Court recognized that common sense can “serve a critical role in determining obviousness.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007). Further, in a case after KSR, the Federal Circuit applied KSR’s precedent, noting “[c]ommon sense has long been recognized to inform the analysis of obviousness if explained with sufficient reasoning. Perfect Web Techs, Inc. v. InfoUSA, Inc., 587 F.3d 1324, 1328 (Fed. Cir. 2009). Here, the Federal Circuit explained that the PTAB’s application of common sense was based on sufficient analysis including Zodiac’s expert testimony, and that the PTAB even devoted eight pages of reasoning explaining how the “second recess” was obvious in light of the Admitted Prior Art/Betts combination and common sense. Further, the Federal Circuit noted that, like the claim language involved in Perfect Web, here, the “second recess” is merely a repetition of the “first recess.” Because the same logic of using a “first recess” to receive a seat when reclined applies with the same weight as using a second recess to receive the aft extending seat support, it was proper for the PTAB to use common sense to provide a missing claim limitation, the “second recess.” Accordingly, the Federal Circuit affirmed the finding that the challenged claims of B/E’s patents were obvious under both approaches used by the PTAB.

Moreover, the Federal Circuit ultimately concluded that the PTAB did not violate 35 U.S.C. § 311(b) by relying on the design drawings presented by Zodiac. Under 35 U.S.C. § 311(b) in an IPR proceeding, claims may be cancelled as unpatentable only using prior art consisting of “patents or printed publications.” The Federal Circuit explained that the PTAB did not use the design drawings to find the challenged claims obvious. Instead, when finding the challenged claims obvious under the traditional analysis, the PTAB relied on expert testimony. Similarly, when finding the challenged claims obvious using the common-sense approach, the Board based on “the rationale and related analysis provided by [Zodiac’s] expert that [the Federal Circuit] credited and found convincing” before addressing the design drawings. Because the PTAB did not rely on the design drawings when determining if the challenged claims were obvious, the Federal Circuit did not determine if the PTAB violated § 311(b).

After KSR, courts can consider common sense, common wisdom, and common knowledge in analyzing obviousness. When the prior art presented in an obviousness analysis is missing a claim limitation, common sense can be applied in order to find the challenged claims obvious. Common sense can be used when accompanied by reasoned analysis and evidentiary support.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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