The Federal Circuit recently clarified the suitability of certain types of evidence in analyses of patentability under section 103. Nike, Inc. v. Adidas AG, No. 2014-1719 (Fed. Cir. February 11, 2016) (opinion by Judge Chen, joined by Judges Mayer and Stoll). One question was: must evidence of secondary considerations be considered by the United States Patent and Trademark Office (“USPTO”)? Another question was: can the age of cited references can be independent evidence of a lack of motivation to combine references?
Quick answers: yes and no, respectively.
The case arose from an inter partes review (“IPR”) petition filed by Adidas challenging claims of a Nike patent (US 7347011) relating to (of course) footwear. In the proceedings in the USPTO, Nike requested both cancellation of claims 1-46 and acceptance of proposed new claims 47-50. The USPTO Patent Trial and Appeal Board (“PTAB”) canceled claims 1-46, but denied Nike’s motion to substitute claims 47-50. The PTAB denied entry of the claims on the basis that Nike had not established that the substitute claims were patentable over the cited prior art patents, Nishida (US 5345638, issued September 13, 1994), Schuessler I (US 2178941, issued November 7, 1939), and Schuessler II (US 2150730, issued March 14, 1939).
Nike appealed the denial of the motion to add the new claims.
Nike argued that the PTAB did not address Nike’s secondary consideration argument and evidence of the same. Secondary consideration factors established by Graham v. John Deere Co., 383 U.S. 1 (1966) include: commercial success; long felt but unsolved needs; and failure of others. The secondary consideration identified by Nike, and addressed by the claimed invention, was a long felt need: the elimination of a cutting step and the associated elimination of the scrap or waste that would be otherwise be produced by the cutting step. Evidence included expert testimony in support of the same.
In its decision, the Federal Circuit unambiguously called the PTAB to task, stating that when evidence of secondary consideration factors is presented, such evidence must be explicitly acknowledged and evaluated by the USPTO. Nike argued that it was improper to use Schuessler I and II to show the “flat knit edges free of surrounding textile structure” in combination with Nishida to show the other limitations of the subject claim. More specifically, Nike argued that the PTAB improperly ignored Nike’s argument that there was a long felt need to eliminate certain cutting steps and eliminate the waste associated with such cutting, a need not addressed by the references. The Federal Circuit said that such secondary considerations need to be expressly considered: “In fact, we have expressly stated that ‘when secondary considerations are present . . . it is error not to consider them.’” In re Kao, 639 F.3d 1057, 1067 (Fed. Cir. 2011).” The Federal Circuit remanded the reevaluation of the propriety of combining the references to the PTAB.
The relief provide by the Federal Circuit on secondary consideration was somewhat tempered by the Federal Circuit pointing out, responsive to an allegation by Adidas of lack of nexus between the claims and the secondary consideration, that there must be such a nexus.
Looking to the Federal Circuit decision in Leo Pharmaceuticals Products, Ltd. v. Rea (Fed. Cir. August 12, 2013)(opinion by Judge Rader, joined by Judges O’Malley and Reyna) (“Leo Pharmaceuticals”), Nike argued that the age of the cited references and the passage of time between their public availability and the inventions recited in the proposed substitute claims should have precluded the PTAB from finding a reason to combine the references.
Nike may have relied on the following quote from the Federal Circuit’s Leo Pharmaceuticals decision (p. 21 of 22): “The length of the intervening time between the publication dates of the prior art and the claimed invention can also qualify as an objective indicator of nonobviousness.” Unfortunately for Nike, the Federal Circuit indicated that that statement needed to be considered in its context. The Federal Circuit clarified its position, stating that the length of intervening time was not independent evidence of no motivation to combine, but merely provided some evidence of secondary considerations, such as the failure of skilled artisans to identify or address the problem.
The Federal Circuit also distinguished the Nike v. Adidas case from the Leo Pharmaceuticals case on the respective facts of the cases. In Leo Pharmaceuticals, the problem addressed by the claimed invention was not known or understood in the prior art. Thus, the benefits of making the combination of references cited by the PTAB (in Leo Pharmaceuticals) was unknown. With no recognition of the problem, and no recognition of the benefit of combining the references, there was no apparent motivation to combine the references. In contrast, in Nike v. Adidas, it was understood that there was a desire to reduce waste, thus providing the motivation to combine the cited references. The length of time between the references and between the references and the invention in the proposed claims was not indicative of any lack of motivation to combine. The Federal Circuit quoted a case from 2004 reinforcing its position: “Absent a showing of long-felt need or the failure of others, the mere passage of time without the claimed invention is not evidence of nonobviousness.” Iron Grip Barbell Co. v. USA Sports, Inc. (Fed. Cir. December 14,2004)(opinion by Judge Dyk, joined by Judges Newman and Archer).
The obligation of the USPTO to acknowledge and address evidence of secondary considerations has been restated by the Federal Circuit. And while the use of intervening time has been rejected as independent evidence of nonobviousness, it does remain available for use as evidence in support of secondary considerations.