Volvo Penta of the Americas, LLC v. Brunswick Corp., No. 2022-1765 (Fed. Cir. (PTAB) Aug. 24, 2023). Opinion by Lourie, joined by Moore and Cunningham.

Brunswick filed an IPR petition challenging the claims of a patent assigned to Volvo Penta directed to a tractor-type stern drive for a boat. Brunswick argued that the claims were anticipated or would have been obvious based on several prior art references. Volvo Penta did not dispute that the references in combination failed to disclose all the claim limitations. Rather, Volvo Penta argued that a person of ordinary skill in the art would not have been motivated to combine the references with a reasonable expectation of success and that objective indicia of nonobviousness supported nonobviousness. Volve Penta offered evidence of six objective indicia: copying, industry praise, commercial success, skepticism, failure of others, and long-felt but unsolved need.

The Patent Trial and Appeal Board ruled that all claims would have been obvious, and the Board found a motivation to combine the cited references. Addressing Volvo Penta’s objective-indicia evidence, the Board found that Volvo Penta was not entitled to a presumption of nexus and had failed to establish a nexus. The Board afforded “some weight” to the evidence of copying, industry praise, and commercial success, and assigned “very little weight” to the evidence of skepticism, failure of others, and long-felt but unsolved need. Altogether, the Board found that the objective-indicia evidence weighed “somewhat in favor of nonobviousness,” but concluded that Brunswick’s “strong evidence of obviousness” outweighed the evidence of nonobviousness. Volvo Penta appealed.

The Federal Circuit vacated and reversed. First, the court ruled that substantial evidence supported the Board’s finding of a motivation to combine. Although the Board erred by relying on the testimony of an individual who was not a person of ordinary skill in the art, the Board had also relied on other evidence, and that other evidence sufficiently supported the finding of a motivation to combine.

Next, the Federal Circuit addressed the Board’s finding that Volvo Penta was not entitled to a presumption of nexus and had not demonstrated a nexus. Regarding the presumption, the court ruled that Volvo Penta had provided only a “single, conclusory sentence and one-paragraph citation,” which was “insufficient to show a presumption of nexus.”

Regarding the Board’s finding that Volvo Penta failed to prove a nexus independent of a presumption, the Federal Circuit ruled that substantial evidence did not support the finding. According to the court, the Board’s finding “ignores the crux of Volvo Penta’s argument and its evidence cited in support.” Volvo Penta had “expressly argued that the steerable tractor-type drive as recited in each of the challenged claims was shown to drive the success of [Volvo Penta’s] Forward Drive” product. And the cited evidence demonstrated the connection between the claim elements and the objective evidence of nonobviousness, thus establishing a nexus.

Lastly, the Federal Circuit addressed the Board’s treatment of Volvo Penta’s objective evidence of nonobviousness. The court held that the Board’s analysis “was overly vague and ambiguous.” For instance, Volvo Penta had provided evidence of copying, and the Board agreed that there was copying, but the Board nonetheless afforded the factor only “some weight.” Similarly, regarding Volvo Penta’s evidence of commercial success and the Board’s associated findings that boat manufacturers strongly desired Volvo Penta’s Forward Drive product, the Board again afforded the factor only “some weight.”

The Federal Circuit ruled that the Board likewise erred in its treatment of the other evidence of objective indicia. Moreover, the Board failed to discuss the summation of the factors “other than to say, without explanation, that they collectively weigh somewhat in favor of nonobviousness.” The Federal Circuit ruled that the Board’s “vague and ambiguous” approach “is not sufficient to sustain [the Board’s] determination.” Thus, the Federal Circuit vacated the Board’s decision and remanded.

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