Federal Circuit Rules That Physical Combinability Does Not Drive an Obviousness Inquiry

Authored by Rose Cordero Prey, Zaed M. Billah, and Ian A. Moore

In re Gorelik, No. 2016-1432 (Fed. Cir. June 14, 2016) (non-precedential). On appeal from P.T.A.B. Before Prost, Bryson, and Stoll, per curiam.

Procedural Posture: Appellant patentee appealed P.T.A.B.’s decision affirming patent examiner’s rejection of certain patent claims as obvious. CAFC affirmed.

  • Claim Construction: CAFC affirmed the Board’s construction that, under the “broadest reasonable interpretation” standard, the term “hollow cylindrical” is not limited to cylinders with flat ends but includes cylinders with conical ends.
  • Obviousness: Patentee failed to submit any evidence supporting its contention that the Board’s combination of references would result in an impractically large device. CAFC further noted that an obviousness determination is not based on whether references could be physically combined, but whether the claimed invention is rendered obvious by the teachings of the prior art as a whole. CAFC found that the Board’s decision was supported by substantial evidence.

Federal Circuit Disagrees with P.T.A.B.’s Reading of the Prior Art and Reverses Patentability Determinations to Knock out Claims of Computerized Research Patents

Authored by Rose Cordero Prey, Chris Coulson, and Jessica Cohen-Nowak

Software Rights Archive, LLC v. Facebook, Inc., No. 2015-1649, -1650, -1651 (Fed. Cir. Sept. 9, 2016) (non-precedential).  On appeal from P.T.A.B.  Before Newman, Mayer and Chen, per curiam.

Procedural Posture:  Patent Owner appealed the Board’s decision in an inter partes review finding certain claims of two patents related to computerized research on a database unpatentable over the prior art.  Petitioners Facebook Inc., LinkedIn Corp. and Twitter Inc. cross-appealed the Board’s decision confirming the patentability of other claims.  CAFC affirmed in part and reversed in part.

  • Prior Art, Obviousness: The CAFC affirmed the Board’s determination that claims 18 and 45 of the ’494 patent, and claims at issue depending therefrom, and claims 12 and 22 of the ’571 patent are unpatentable on the ground of obviousness because there was ample support for the Board’s decision. With respect to claim 18 of the ’494 patent, the CAFC found that “it would have been obvious to modify the databases of the prior art to contain full text documents” because this was explicitly suggested by one of the references, which stated storing the full text of documents was both beneficial and straightforward.  With respect to claim 45 of the ’494 patent and claims 12 and 22 of the ’571 patent, the CAFC found that when combined, the prior art teaches the application of citation analysis in hypertext systems, and a skilled artisan would have combined the teachings of the prior art because they were publications by the same author and the latter a follow-on work to his earlier publications.  The CAFC rejected Software Rights’ argument to distinguish its invention that used URLs from the teaching of the prior art that described the use of document identifiers.  The CAFC noted that applying well-known methods via the Internet alone is insufficient to render the claims non-obvious.
  • Prior Art, Teaching Away: The CAFC found that substantial evidence supports the Board’s determination that the Fox Papers do not teach away from using indirect relationships (i.e., “cc” and “bc”) to improve search and retrieval. Even though the references disclosed that certain indirect citation relationship combinations perform worse than others under differing conditions and with certain data sets, they “unequivocally” taught improved search results using indirect citation relationships.  The CAFC further rejected the argument that the Board did not give proper weight to indicia of non-obviousness, explaining that commercial success is relevant to a query of obviousness only if there is a nexus between the sales and the merits of the claimed invention, and Software Rights failed to provide evidence of such a nexus.
  • Prior Art, Patentability: The CAFC found the Board erred when it confirmed the patentability of claims 1, 5, 15 and 16 of the ’494 patent and claim 21 of the ’571 patent. The Board incorrectly determined that the prior art does not teach “deriving actual cluster links from the set of candidate cluster links” limitations because the Board failed to fully consider the prior art’s procedure for splitting overly large clusters.  The CAFC found that the process of deriving the subset of clusters in the prior art is exactly the same as the preferred embodiment of ’494 patent.  Specifically, the prior art discloses deriving clusters through (1) the creation of a “similarity matrix” representing the calculated similarity between individual pairs of documents in a cluster; (2) the identification of “highly correlated pairs” of documents within the cluster based on the calculated similarity values found in the similarity matrix; and (3) the formation of new, smaller clusters containing those “highly correlated pairs” of documents.  Further, the CAFC found that the Board erred when it determined that the prior art does not include the step of deriving a subset of actual cluster links from the set of candidate cluster links because the prior art specifically states that its algorithm will continually split and reform clusters so that each new, smaller cluster contains a derived set of actual cluster links.  In addition, the CAFC found that the Board also erred when it determined that claim 21 of the ’571 is patentable, explaining that the prior art references taught clustering based on indirect citation relationships even though they disclosed clusters containing some documents that did not have indirect relationships.

Chen, dissenting-in-part:  The Board’s findings with respect to the patentability of claims 1, 5, 15 and 16 of the ’494 patent and claim 21 of the ’571 patent were supported by substantial evidence.  The prior art does not teach “deriving actual cluster links from the candidate cluster links.”  The majority equated the new, smaller clusters that are formed through the calculations made from the similarity matrix with the “actual cluster links” described in the claims and contends that they are derived from “candidate cluster links” in the form of the calculated similarity values.  Instead, the dissent agreed with the Board that “actual cluster links” means a subset of candidate links that meet certain criteria, and this requires that some cluster links are deleted in the process of elimination.  However, under the prior art’s system of derivation the only cluster links that are actually deleted are those that overlap, and no candidate cluster links are deleted at all.  The dissent further criticized the majority’s determination of obviousness as conflating the process of creating a database with the process of searching a database in order to equate the processes in the prior art and disputed claims.

Federal Circuit Finds Failure to Submit Evidence by Deadline Was Not Excusable Neglect in Affirming Dismissal of Trademark Cancellation Petition

Authored by Rose Cordero Prey, Chris Coulson, and Jessica Cohen-Nowak

Westlake v. Barrera, No. 2016-1189 (Fed. Circ. Sept. 8, 2016) (non-precedential).  On appeal from T.T.A.B.  Before Prost, Newman and Taranto, per curiam.

Procedural Posture:  Mr. Steven Westlake filed a petition seeking to cancel Mr. Edgar Barrera’s trademark registration.  The Trademark Trial and Appeal Board (T.T.A.B.) found that Mr. Westlake failed to submit supporting evidence within the time allowed, which was not excusable neglect, and dismissed the cancellation petition.  The CAFC affirmed.

  • Trademark Cancellation Proceedings, Non-Excusable Neglect: The CAFC’s review of the Board’s determination of non-excusable neglect is under the abuse of discretion deferential standard. The Board applied the Pioneer factors to determine whether there was excusable neglect, considering “all relevant circumstances” including the danger of prejudice to the nonmovant, the length of the delay and its potential impact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith.”  The CAFC found that the Board did not commit reversible error in adopting the Pioneer factors or abuse its discretion in determining that Mr. Westlake did not show good cause for his failure to submit evidence by the due date.  The CAFC agreed with the Board’s conclusion that Mr. Westlake’s failure to take testimony or submit evidence caused a substantial delay, that Mr. Westlake was unable to present a reasonable excuse for his neglect to diligently prosecute the case, and the reason for the delay should be found to be within Mr. Westlake’s control.

Federal Circuit Affirms Estoppel as to Issued Claims Based on Rejection of Other Pending Claims That Were Later Cancelled During Prosecution

Authored by Rose Cordero Prey, Chris Coulson, and Jessica Cohen-Nowak

UCB, Inc. v. Yeda Research and Dev. Co., No. 2015-1957 (Fed. Cir. Sept. 8, 2016) (precedential).  On appeal from E.D. Va.  Before Newman, Lourie and Chen.

Procedural Posture:  UCB filed a declaratory judgment action against Yeda for non-infringement of its Cimzia® brand antibody and invalidity of Yeda’s ’923 patent.  Yeda counterclaimed for infringement.  The district court granted summary judgment of non-infringement.  CAFC affirmed.

  • Claim Construction, Prosecution History Estoppel: The ’923 patent is directed to a monoclonal antibody that binds a defined human cytotoxin.  The District Court rejected Yeda’s claim construction that would allow the ’923 patent to cover both human and chimeric (mouse) antibodies.  During prosecution of the ’923 patent, Yeda submitted claims specific to “rat, hamster and human antibodies and chimeras thereof” as well as claims specifically encompassing “chimeras of” mouse monoclonal antibodies and “nonmurine” monoclonal antibodies.  These claims were rejected by the Examiner on the basis that they constituted new matter, and Yeda cancelled them.  Yeda’s claims that were allowed did not mention chimeric antibodies and were not amended during prosecution in that respect.  Both the District Court and the CAFC found that, although issued claim 1 was not specifically rejected for new matter, Yeda is estopped from obtaining a claim construction that recovers claim scope that was withdrawn in order to obtain issuance of the patent.  Therefore, the claims of the ’923 patent were properly construed as excluding chimeric and humanized antibodies.

Federal Circuit Applies Totality of the Circumstances Test to Determine Whether There Was a Real and Immediate Threat That the Patent Holder Intended to Enforce Its Patent Rights to Establish a Case or Controversy for Declaratory Judgment Jurisdiction

Authored by Rose Cordero Prey, Chris Coulson, and Jessica Cohen-Nowak

Asia Vital Components Co. v. Asetek Danmark A/S, No. 2015-1597 (Fed. Cir. Sept. 8, 2016) (precedential).  On appeal from E.D. Va. Before Prost, Linn and Taranto.

Procedural Posture:  Accused infringer sought declaratory judgment that asserted patents were not valid and infringed.  The district court dismissed the suit for lack of controversy and subject matter jurisdiction.  CAFC reversed and remanded.

  • Declaratory Judgment Jurisdiction: The district court found that the complaint did not plead sufficient facts to demonstrate a substantial controversy between the parties for a declaratory judgment action because the Defendant-Patent Owner Asetek was not aware of the products at issue until the filing of the lawsuit.  Asetek initially wrote to Plaintiff Asia Vital Components Co. (“AVC”) alleging infringement of a product called Liqmax120s, which actually was sold by another company unrelated to AVC.  In later communications, Asetek explained its “distrust” with AVC, stated that it would not license its patents to AVC, made several references to AVC’s other cooling products as infringing, stated that it would not hesitate to enforce its domestic and international patent rights, and referenced its infringement case against two of AVC’s competitors on similar products.  The CAFC relied on the Supreme Court’s decision in MedImmune, Inc. v. Genentech, Inc., that provides the test for whether an “actual controversy” exists—“whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.  MedImmune, Inc. v. Genentech, Inc 549 U.S. 118, 127 (2007).  Although the MedImmune test relaxed the previous standard under the test of” reasonable apprehension of imminent suit,” it did not alter the “bedrock” objective rule that an actual case or controversy must be based on the “real and immediate” injury or threat of future injury that is caused by the defendants, which cannot be met by a plaintiff’s purely subjective fear of future harm.  With respect to potential patent claims this means that a case and controversy will not exist simply because a party learns of the existence of a patent and perceives a likelihood of litigation but instead, based on the total circumstances, there must be “conduct that can be reasonably inferred as demonstrating intent to enforce a patent.”  Hewlett-Packard Co. v. Acceleron LLC, 587 F.3d 1358, 1363 (Fed. Cir. 2009).  Here, the CAFC found that although the initial demand letter identified the wrong products, Asetek’s conduct thereafter, including its aggressive correspondence with AVC and Asetek’s threats to AVC’s customers that they may be liable for patent infringement can be reasonably inferred as demonstrating Asetek’s intent to enforce its patent rights.  Further, the CAFC found that the threat of suit was real and immediate because AVC had manufactured prototypes for the products at issue, intended to market and sell the products in the U.S., had customers lined up to purchase the products, and those products would compete against Asetek’s products.