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Obviousness Standard After the AIA: Leveraging Latest PTO and Court Guidance

Overcoming Challenges of Obviousness and Attacks on Patent Validity

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THURS DAY, NOVEMBER 14, 2013

Presenting a live 90-minute webinar with interactive Q&A

Barry J. Herman, Part ner, Womble Carlyle Sandridge & Rice, Balt imore Jon S chuchardt, Part ner, Dilworth IP , Trumbull, Conn.

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The Evolving Obviousness Standard – Strategies to Prevail at District Court and Inter Partes Review

Barry Herman November 14, 2013

New AIA Provisions took effect

• n March 16, 2013
• Change in Timing

– New § 103 – A patent may not be obtained “if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having

• rdinary skill in the art to which the claimed invention

pertains.” – The previous law was “at the time the invention was made.” – Shifts obviousness inquiry forward in time

5

New AIA Provisions took effect

• n March 16, 2013
• Change in Definition of Prior Art

– A public disclosure anywhere in the world before the effective filing date of the claimed invention – Patent filing disclosures (in U.S. or PCT application designating the U.S.) that later become public, name another inventor, and were filed before effective filing date – No more geographic limitations

6

How is KSR v. Teleflex playing out in district court decisions appealed to Federal Circuit?

• District courts are generally trying to follow KSR and raise the

patentability bar, but Fed. Cir. is often reversing or remanding

• Dissension among panelists – Celsis in Vitro v. CellzDirect (Fed.
• Cir. Jan. 2012), Gajarsa complains that the court has

“reinvigorate[d] the pre-KSR standard for obviousness.”

• Petition for cert. – Artesyn Techs. v. SynQor (Fed. Cir. Mar.

2013) – petitioner alleges that a single prior art reference discusses all of the relevant pre-existing technologies and the possibility of combining them, but court found patent nonobvious because reference did not expressly provide motivation to combine

– In October 2011, Chief Judge Rader was quoted in IP Watchdog, stating that he “would challenge anyone to demonstrate how the Supreme Court decision in KSR v. Teleflex did anything to change the law of obviousness and how the Federal Circuit addresses the issue.”

7

8

Reason to modify

• Alcon Research v. Apotex Inc. (Fed. Cir. Aug. 2012)

– District court found 8 asserted claims nonobvious – Federal Circuit reversed on 6 claims

• District court applied “overly strict reason to modify requirement”

and that the motivation need not be the same that the patentee had (citing to KSR for proposition that it is error to look “only to the problem the patentee was trying to solve”)

• Only dispute was whether formulation in prior art, which was

tested in guinea pigs, would motivate one to use in treating allergic eye disease in humans.

• “Courts do not rewrite the claims to narrow them for the patentee

to cover only the valid portion.”

– Federal Circuit upheld 2 claims

• Claims did not overlap with prior art
• “No reasonable expectation of success” for increasing highest

dosage disclosed in prior art by an order of magnitude.

9

Challenger needs to knock out EVERY claim

• Allergan v. Sandoz (Fed. Cir. May 2013)

– District court found all claims nonobvious – Federal Circuit reversed on every claim but 1

• Primary prior art reference provided express motivation
• Motivation to combine may be found in many different forms –

not limited to reasons FDA sees fit to consider in approving new drug application

• District court over-relied on recognized unpredictability in the art
• Teaching away – insufficient to overcome motivation
• Federal Circuit found 1 claim non-obvious (2-1 decision)

– Reducing the number of treatments from 3 to 2 times a day without loss of efficacy was not obvious because this was contrary to understanding in the art at the time – Dyk’s dissent – “loss of efficacy” is not a separate step, but is a result

• f the claimed method. “Newly discovered results of known

processes directed to the same purpose are not patentable.” – Allergan wins!

10

Lead Compound Cases

• Shortly after KSR, the Federal Circuit decided

Takeda v. Alphapharm (Fed. Cir. 2007) – Prior art patent described genus of millions of compounds, any one of which could have been selected as a lead compound for further investigation – Asserted basis for obviousness was not suggested to be best and actually exhibited negative properties that would have directed those of OSIA away from that compound – Not obvious

11

Lead Compound Cases

• Abilify Litigation (Otsuka v. Sandoz) Fed. Cir. May 2012
• Endorsed the framework of Takeda:

– “Our case law demonstrates that whether a new chemical compound would have been prima facie obvious over particular prior art compounds ordinarily follows a two-part inquiry. First, the court determines whether a chemist of

• rdinary skill would have selected the asserted prior art compounds as lead

compounds, or starting points, for further development efforts....The second inquiry in the analysis is whether the prior art would have supplied one of

• rdinary skill in the art with a reason or motivation to modify a lead compound

to make the claimed compound with a reasonable expectation of success.”

• Sandoz argued that this was contrary to KSR. The Court

disagreed, noting that the reason or motivation for a POSITA to modify a lead compound may come from a variety of sources, or not even be explicit in the prior art.

• Upheld district court’s finding that a POSITA would not have

selected the prior art compounds for use as lead compounds.

• Poster child for impermissible hindsight reasoning

12

Lead Compound Cases

• Crestor Litigation (Astrazeneca v. Aurobindo)
• Fed. Cir. Dec. 2012
• Ordinary chemist would not have expected the chemical structure

to have the most desirable combination of properties – Prior art would not be a good lead compound because of unexpected increased toxicity – No reasonable expectation of success – Unpredictability of statin development

• Fed. Cir. relies on KSR (be aware of hindsight analysis)
• Need a reason that would have led chemist to modify known

compound in a particular manner

• Cf. Pfizer v. Apotex (Fed. Cir. 2007) – “obviousness cannot be

avoided simply by a showing of some degree of unpredictability in the art so long as there was a reasonable probability of success.”

13

Common Sense

14

Guard against hindsight

• Plantronics v. Aliph (Fed. Cir. July 2013)

– Patent on headsets used with cell phone receivers – District court granted SJ of obviousness

• Found that common sense would motivate a skilled

artisan to combine prior art

– Fed. Cir. reversed

• Obviousness analysis is somewhat flexible (citing KSR),

but must find support in the record

• No expert testimony on motivation to combine.
• “Where, as here, the necessary reasoning is absent, we

cannot simply assume that ‘an ordinary artisan would be awakened to modify prior art in such a way as to lead to an obviousness rejection.’ It is in such circumstances, moreover, that it is especially important to guard against the dangers of hindsight bias.”

15

16

Using the words “Common Sense” is not enough

• Mintz v. Dietz & Watson (Fed. Cir. May 2012) –

structure for encasing meat products

• District court granted SJ of obviousness, but Fed. Cir. reversed

– Warns against “the forbidden use of hindsight,” the “prohibited reliance on hindsight,” and the need for “a court to walk a tightrope blindfolded (to avoid hindsight).”

• Mere recitation of the words “common sense” without any

support adds nothing to the obviousness equation

• Avoid the use of the patent itself in defining the problem

the invention solves

• Consider secondary considerations

–Cf. KSR (not cited once in the opinion): Be aware of hindsight but “[r]igid preventative rules that deny factfinders recourse to common sense, however, are neither necessary under our case law nor consistent with it.”

17

Using the words “Common Sense” is not enough

• Kinetic Concepts v. Smith & Nephew

(Fed. Cir. August 2012)

– Patents claim treatment of difficult-to-heal wounds – Jury found claims nonobvious, but district court granted JMOL – Fed. Cir. reinstated jury verdict

• Acknowledges that KSR held that there should not be a

mechanical application of the TSM test, but the panel cautioned against hindsight

• S&N offered no evidence as to why the prior art would be

combined.

• Expert testimony regarding motivation to combine is not always

required, but held that this was not the type of technology where common sense would provide the motivation.

18

19

Analogous Art

• K-Tec v. Vita-Mix (Fed. Cir. Sept. 2012)
• Questions after KSR as to whether the doctrine still applied

– K-Tec sued on patents covering blender geometry that reduced the problem of cavitation. – Vita-Mix argued that the jury should consider two non-blender designs that depict five-sided containers

• Prior art can be considered if analogous, if it is:

– 1) Same field of endeavor as claimed invention, or 2) Reasonably pertinent to particular problem to be solved

• Fed. Cir. -- non-blender designs were not analogous art

– Relied on inventor’s testimony that prior art did not address problem he set out to solve – Vita-Mix did not offer any rational underpinning for inventor to consult non-blender art to solve problems. – PTO Board’s decision in reexamination that these were analogous art was of no moment – Vita-Mix did not meet its burden.

20

Secondary Considerations Make a Comeback . . .

• Transocean v. Maersk (Fed. Cir. Nov. 2012)

– 1st appeal: Fed. Cir. found prima facie case of

• bviousness but district court failed to consider

secondary considerations – On remand

• Jury permitted to weigh strength of prima facie

case, found secondary considerations, not obvious

• District court – JMOL – obvious

– 2nd appeal: Fed. Cir. reverses

• Found ALL secondary considerations were present

– Commercial success, industry praise, unexpected results, copying, industry skepticism, licensing, long felt but unresolved need

21

Secondary Considerations Make a Comeback . . .

• Mintz v. Dietz & Watson

– Objective criteria help turn back the clock and place the claims in the context that led to their invention – In less technologically complex inventions, can be important to ward against falling into the forbidden use of hindsight.

• Kinetic Concepts v. Smith & Nephew

– Fed. Cir. reinstated jury’s finding of nonobviousness, relying heavily on secondary considerations

• Skepticism (so much so that inventors had difficulty publishing their

findings in peer-reviewed journals)

• Praise and long-felt need (experts testified that it changed the way we’ve

been treating wounds for the last twenty to thirty years)

• Commercial success ($1.4 billion in annual sales)
• Copying (S&N’s expert admitted that he authored an article explaining

how to copy the invention)

• S&N’s expert admitted he did not consider secondary considerations in

reaching his conclusions

22

. . . Or Do They?

• Alcon Research - District court properly found secondary

considerations in Alcon’s favor. For 6 claims, Fed. Cir. says “not enough” but for 2 claims, Fed. Cir. says “further supports”

• Soverain Software v. Newegg (Fed. Cir. Jan. 2013) –

Ignores extensive licensing – “Why would someone pay to license an invalid patent?” Fed. Cir. answers – “To avoid cost of litigation.”

• Novo Nordisk v. Caraco Pharm. (Fed. Cir. June 2013) –

diabetes treatment

– Novo admitted that combination of two drugs was obvious to try but argued that the synergy of the combination was unexpected – Panel found that Caraco had established that the results were expected and explainable in light of the state of the art. – Newman dissent -- eight-fold more effective than the additive properties, a treatment of choice for persons whose Type II diabetes had previously been untreatable, and is a lifesaving combination for such persons.

23

. . . Or Do They?

• Wrigley v. Cadbury Adams (Fed. Cir. June

2012): Cooling Sensation Gum Market

– District court granted SJ of obviousness, and Fed. Cir. affirmed

• Ignored unexpected results – panel said the synergistic effect of

combining coolants had already been discovered

• Ignored commercial success – found the success was based on many
• ther factors
• Ignored copying – found that Wrigley had not shown that the novel

combination was what led Cadbury to copy, and that was a “measure of the extent to which parties in the chewing gum market typically copy any development by their competitors, whether patented or not.”

– Judge Newman’s dissent

• Vast preference among gum-chewers for Wrigley product
• Cadbury suffered major losses of sales, analyzed the Wrigley product,

and then copied it.

• Cadbury advertised the benefits of the claimed invention after copying it.

24

If Patentee, What is Best Strategy to Uphold Validity of Patent?

• Lead Compound Argument (not just for

pharmaceutical cases)

• No motivation to combine (and no expert

testimony on motivation)

• Teaching away
• Secondary Considerations
• Most importantly . . . Get the right Federal

Circuit panel (or be a pharmaceutical company)

25

Mayo v. Prometheus

(US Supreme Court, March 20, 2012)

26

26

Prometheus Labs

• Plaintiff
• Licensee of patents
• Sold kits to Mayo
• Patents claim

methods of treating autoimmune diseases using thiopurine drugs

Mayo

• Diagnostic lab
• Initially purchased kits

from Prometheus

• Later stopped buying

kits and development and marketed own test kits

Mayo v. Prometheus: facts

27

Mayo v. Prometheus: patents

The claimed process consists of:

1. administering the drug 2. determining the level of metabolites produced by the drug, and 3. assessing whether to adjust the dosage of the drug in response.

28

Justice Breyer, writing for a unanimous court, found claims ineligible for patentability under 35 U.S.C. § 101:

– While the “administering,” “determining,” and “wherein” steps are not themselves natural laws, they are not sufficient to transform the nature of the claim – The claims provide “instructions” that “add nothing specific to the laws of nature other than what is well- understood, routine, conventional activity, previously engaged by those in the field.” – Contrasts claims from Diehr, which were patent eligible because they included a combination of steps that were not “in context obvious, already in use or purely conventional.” – Rejected Government’s argument that Sections 102, 103 and 112 are the more appropriate vehicles for addressing the concerns expressed with the Prometheus claims.

Prometheus ruling:

29

Prometheus discussion points:

• A viable § 101 challenge may allow a patent

challenger to avoid non-obviousness defense

– May be able to raise early in litigation, prior to extensive discovery taking place – Challenger can avoid secondary considerations of nonobviousness

• Primary impact could be confined to the biotech

industry, especially diagnostics

30

Break priority chain

• Santarus v. Par Pharma. (Fed. Cir. Sept. 2012)
• Par Pharma established that there were breaks

in chain of priority for some claims – inventor’s

• wn ‘737 patent was prior art.

– Federal Circuit held that ‘737 patent rendered all such claims invalid as obvious.

• For those claims where ‘737 patent was not prior

art:

– Held that prior art “teaches away” from conventional

• ral dosage forms, so those claims were patentable.

– Held that prior art did not teach away from claims related to buffered non-enteric coated omeprazole.

• Again, 1 set of claims survives – Victory!

31

32

Finite number of solutions

• Wrigley v. Cadbury Adams (Fed. Cir.

June 2012)

• Wrigley argued that combination of a coolant (WS-23) and

menthol resulted in “unexpected cooling, beyond what would have been predicted by one of ordinary skill in the art.”

• Fed. Cir. agreed that combination of known components

resulting in an effect greater than the predicted additive effect can support a finding of nonobviousness, but . . .

– Combination of elements were all known in the prior art – Only a finite number of predictable solutions to the problem of finding correct cooling agents for chewing gum – Combination was “the product not of innovation but of ordinary skill and common sense.”

33

34

Jury not permitted to consider

• bviousness, yet Fed. Cir. reverses
• Soverain Software v. Newegg (Fed. Cir. Jan. 2013)

– E-commerce patents purchased out of bankruptcy – District court found each claim not invalid – “I don’t think there’s sufficient testimony to present an obviousness case to the jury. I think it would be very confusing to them.” – Newegg’s expert had not presented a prima facie case of

• bviousness, and criticized Newegg for not presenting “some

articulated reasoning with some rational underpinning to support the legal conclusion of obviousness.”

• Federal Circuit follows KSR and reverses on all claims

– No rebuttal evidence to Newegg’s prima facie case that every claim element was found in prior art.

• Granted rehearing and found another claim invalid as
• bvious.

35

If Accused Infringer, How Best to Attack Patents?

• Argue invalidity under § 101 instead
• f (or in addition to) § 103
• Attack priority date
• Prior art discloses every claim

limitation, and results were expected

• Use experts to explain motivation to

combine!

36

Inter partes review

• In year 1, 87% of petitions were successful

– In many cases, granted only on a subset of petitioned claims or a subset of proposed grounds – Current trend -- More petitions are being denied (likely due to increased popularity of proceedings)

• 69% of petitions are in electrical / computer arts

– Mechanical ~ 15% – Chemical ~ 8% – Biotech / Pharma ~ 6% – Design ~ 1%

37

Reasons for denial of petitions based on obviousness assertions

• Elements missing from the prior art
• Failure to provide adequate reason to combine

– Just because references are in same field of invention is NOT enough

• Increase chances of success if:

– Identify level of skill in the art – Provide construction of claim terms (if meaning of limitation to OSITA is not evident, may have trouble demonstrating the limitation can be found in prior art)

38

Advice for filing IPR petitions

• Use expert declarations to provide:

– Level of skill in the art – Scope and content of the art – Technical understanding of patent specification – Reason to combine references

• Provide best arguments and make them simple

– Don’t use kitchen sink approach – Must expressly identify differences between a challenged claim and prior art – Key is to convince PTO to grant petition, but want them to do so on most favorable ground – Try to eliminate redundancy

• Provide claim construction positions (PTO applies

broadest reasonable interpretation)

39

Trends in IPR petitions

• ne year later
• 1st hearing held in Garmin v. Cuozzo (IPR2012-

0001)

– Patents involving speedometer with speed limit alert – Challenger proposed 43 grounds of invalidity – trial held on just 2 obviousness grounds

• In order to streamline proceedings, PTO is:

– Denying trial on a number of proposed grounds – Not allowing patent owners to easily amend claims – Severely limiting discovery

• Challengers are responding by filing multiple

petitions for same patent, with fewer proposed grounds per petition

40

Disclaimer

• These materials are public information and have been prepared

solely for educational (and entertainment) purposes to contribute to the understanding of U.S. intellectual property law. These materials reflect only the personal views of the speaker and are not individualized legal advice and do not necessarily reflect the views of Womble Carlyle or Strafford Publications. It is understood that each case is fact-specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. The presentation of these materials does not establish any form

• f attorney-client relationship with Womble Carlyle and the
• speaker. While every attempt was made to insure that these

materials are accurate, there may be errors or omissions.

41

Thank you

Barry J. Herman Womble Carlyle Sandridge & Rice, LLP 250 West Pratt Street, Suite 1300 Baltimore, MD 21201 410-545-5830 [Direct Dial] BHerman@wcsr.com http://www.wcsr.com

42

Obviousness Standard 2013 Appeals from the Board

Jonathan L. Schuchardt November 14, 2013

Disclaimer: The opinions expressed here are the author’s alone and are not necessarily shared by Dilworth IP or Strafford Publications. Any errors in the presentation are mine alone. Information contained herein is presented to inform and perhaps

• entertain. It is not intended as legal advice.
• - J.L. Schuchardt

44

The invention all admired, and each how he To be the inventor missed; so easy it seemed, Once found, which yet unfound most would have thought, Impossible!

• John Milton, Paradise Lost, VI, 478-501

45

Dennis Crouch reported that as of May 2013, “about 94% of the ex parte PTAB decisions involved obviousness rejections.” 94% x 25,000 backlogged cases => 18,800 active § 103 disagreements!

Source: Patently-O blog, July 8, 2013

The Problem is Obvious

46

Recurring Themes

• The high hurdle of winning on appeal when the

PTO/Board need show only “substantial evidence”

• Post-KSR predictability
• “Obvious to try” might be obvious
• Whittling away at “teaching away”
• Common sense
• Too little motivation required?
• Good science trumps hindsight
• Devil in the details

47

Procedural posture matters

• Keep in mind how we got to the CAFC:

– Applicant’s appeal from final rejection affirmed, then appealed to CAFC – Patentee’s reissue application found unpatentable and affirmed – Ex parte reexamination: patentee challenges

• bviousness ruling

– Ex parte reexamination: challenger contests patentability confirmation – Inter partes reexamination: loser challenges

48

High hurdle of substantial evidence

• Board’s obviousness decision reviewed de novo, but its

factual determinations need only be supported by “substantial evidence” (“SE”)

• “Less than the weight of the evidence but more than a mere

scintilla” (Consol. Edison v. NLRB, 305 U.S. at 229-230)

• “Reasonable mind might accept as adequate”
• Agency may favor one reasonable conclusion over another

from two different, inconsistent ones

49

High hurdle illustrated: In re Mouttet

• Invention: computing

device with nanoscale materials in a crossbar

• array. Thin film bridges

wire x-points; resistance in film altered by applying voltage to wires

• D1 taught computing device

with crossbar array with intersecting optical channels, not wires

• Fed. Cir., June 26, 2012

Figure 2b depicts binary values 00001001, 00000111, and 00000011, which in the base 10 number system represent the numerals 9, 7, and 3.

50

In re Mouttet

• Applicant argues different principle of operation, art

teaches away

• CAFC: “SE” supports Board decision
• Substitution of wires for optical elements does not

destroy principle of operation

• Teaching alternative designs is not “teaching away”
• D2 taught a

crossbar array with nanowires and molecular switches:

51

In re Mouttet: Take-aways

• Clear definition of how high the hurdle is for challenging Board

determinations that require only “substantial evidence”

• CAFC may give PTO fact findings great deference
• A secondary reference may be the better art; PTO’s use of

weaker reference as primary did not affect outcome

• No need for references to be “physically combinable”
• Electro-mechanical arts: high predictability hurdle
• “Teaching away” requires express teaching that the alternative

is bad and won’t work

52

“SE,” cont.: In re Droge

• Invention: recombinant DNA in a eukaryotic cell requiring

insertion of particular modified bacteriophage λ integrase that induced sequence-specific recombination

• Fed. Cir., Sept. 21, 2012

A method of sequence specific recombination of DNA in a eukaryotic cell, comprising: (a) providing said eukaryotic cell, said cell comprising a first DNA segment integrated into the genome of said cell, said first DNA segment comprising an [attB, attP, attL, or attR sequence or derivative thereof] . . . ; (b) introducing a second DNA segment into said cell . . . ; (c) further comprising providing to said cell a modified bacteriophage lambda integrase Int, wherein said modified Int is Int-h or Int-h/218, which induces sequence specific recombination through said attB and attP or attR and attL sequences.

53

In re Droge

• D1: teaches sequence-specific recombination mediated by

wild Int protein and “any” type of cell

• D2 (Droge included): same kind of sequence-specific

recomb worked with modified integrases in a prokaryotic cell

• Board: reasonable expectation of success from combined

teachings

• CAFC: “SE” supports Board conclusion. Prior art (Lange-

Gustafson article) directly contradicts assertions in Droge’s declaration: – L-G: “[I]n the absence of IHF, Int-h recombines supercoiled and non-supercoiled [DNA] identically.”

54

In re Droge: Take-aways

• CAFC did not cite KSR, relying only on the “reasonable

expectation of success” from reference combination

• “Application only” => a high burden to satisfy CAFC that both

PTO and Board conclusions were unsupported by “SE”

• Applicant’s own art is often the best available to the Examiner

(or a challenger). Must consider in advance how this art will be combined with other refs under § 103.

• Was Droge “unlucky” that Examiner found a “smoking gun”?

(I.e., what result in the absence of the L-G article?)

55

“SE,” cont.: In re Adler

• Invention: colorimetric GI imaging method using swallowed

capsule camera compares obtained image with two references: healthy tissue and blood

• Fed. Cir., July 18, 2013

the data processor causing to be displayed the images as a color video; and the data processor further, based on the comparison, causing to be displayed an indication of the position in the GI tract

• f a change in the level of red color

content, the change correlating to the presence of blood.

• 57. A method for displaying in-vivo

information, the method comprising: receiving at a data processor data generated by a swallowable in-vivo device traversing a GI tract, the data comprising a set of in-vivo images of the GI tract; the data processor comparing values of the received images to a reference value of blood and to a reference value

• f healthy tissue;

56

In re Adler

• D1: teaches using capsule to map GI tract; D2 teaches

use of colorimetric analysis of video endoscopic data

• Board: predictable variation of ref. teachings;
• Obvious to compare ref. values and look for red color from

blood as evidence of disease

• CAFC: “SE” supports Board conclusion

57

In re Adler: Take-aways

• Sensible result given the “high hurdle”
• Reasonable minds could easily conclude evidence

supported Board view

• Criteria for re-opening prosecution when Board relies on a

“new” ground of rejection:

• CAFC: Did Board make new factual findings and deny Appellant a

fair opportunity to react to the thrust of the rejection?

58

Post-KSR Predictability

• Mere optimization of a “result-effective” variable
• Design need or market pressure
• Finite number of predictable solutions
• Reasonable expectation of success

59

In re Applied Materials

• Patented invention: pads used to polish integrated circuits
• Pad grooves have claimed depth, width, pitch ranges that
• verlap with prior art
• Fed. Cir., August 29, 2012

60

In re Applied Materials

• “SE” supported Board’s obviousness conclusion

– Board decision “not a model of clarity,” but “path may reasonably be discerned”

• Finding optimal ranges from “result-effective variables” in a

known process is normally within ordinary skill

– Can have multiple REVs and still be obvious absent unexpected results

• KSR predictability factors noted. Here, “obvious to try” was

also obvious to do

• Dissent (Newman): No suggestion to use the particular

ranges claimed by patentee; court ignores evidence that customers preferred patentee’s pad

61

In re Applied Materials: Take-aways

• An imperfect decision can satisfy “SE”
• To overcome an obviousness argument based on
• ptimizing a result-effective variable, show evidence that:
• The claimed range is critical for success
• The claimed range achieves unexpected results that differ

in kind (not merely degree) from prior art

• Prior art does not recognize that the property is affected by

the variable

• Query whether PTO/Board uses “result-effective

variable” as an improper “litmus test” of obviousness

62

Common sense: Smith & Nephew v. Rea

The ‘744 Patent to Synthes S & N request for reexam granted PTO: Invalid under § 103 Bd affirms PTO for 31 claims S & N CAFC appeal Synthes appeals Bd reverses PTO for 24 claims (i.e., claims are valid)

CAFC reverses: all claims invalid § 103

• Fed. Cir., July 9, 2013

63

Smith & Nephew v. Rea

• Patented invention: plate for bone fracture repair where all

holes in plate’s head portion are conically tapered and at least partially threaded to accept threaded locking screws.

• Synthes patent distinguished compression & locking screws

– “Locking” => plate cannot move relative to bone (weight bearing)

• Haas ref taught use of conically

tapered, threaded holes

• Re-exam examiner agreed with

S&N motivation theory for combining Haas with other refs

Synthes Plate Haas’s conical, partially threaded holes

64

• Board: Prior art only says some of the holes should be threaded
• Exclusive use of conical, partially threaded holes in a plate is not

suggested

• No belief in the art that partially threaded holes could be used with

non-locking screws to provide compression

• CAFC: Reverses. Physician wanting more stabilization uses

more locking screws

• “Common sense” to adjust hole geometry to match screw design
• Other references taught non-locking screws in threaded holes
• “Substantial evidence” hurdle met by challenger S&N thanks to

Board’s “analytical errors”

• Predictable use of art elements according to established functions

Smith & Nephew v. Rea

65

S&N v. Rea: Take-aways

• The devil is in the details, but the Board got bogged down in

them

• Challengers can overcome the “SE” hurdle, particularly where

patentee’s design choices were known and results were predictable rather than surprising

• Ask what conclusion “common sense” compels
• Is the invention no more than a predictable use of prior art

elements according to their established functions?

66

Common Sense? C.W. Zumbiel v. Kappos

The ‘639 patent to GPI Inter partes reexam Examiner findings Obvious claims Valid claims GPI Bd appeal Zumbiel Bd appeal GPI CAFC x-appeal

aff

Zumbiel CAFC appeal

aff aff

CAFC affirms

Prost dissents

• Fed. Cir., December 27, 2012

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C.W. Zumbiel v. Kappos

• Invention: a two-row dispenser

carton with angled tear lines and finger flap on top for soda/beer cans

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D1: two-row carton with straight tear lines and finger holes on the side;

C.W. Zumbiel v. Kappos

D2: angled tear lines in carton for bottles

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C.W. Zumbiel v. Kappos

• Board: Insufficient motivation found in the art to modify

reference teachings by changing location of tear lines, finger flap to arrive at claimed invention (i.e., TSM test)

– Not obvious to locate finger flap on top panel of carton (claim 2) – Art used finger flap as a grip for transport, not for dispensing

• CAFC: “SE” supports Board findings
• Dissent (Prost): Failure to apply KSR led majority astray

– Use “common sense” to filter out “low quality” patents – Over-emphasis on prior art teachings insulated Board’s analysis from essential pragmatic and common sense considerations

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C.W. Zumbiel v. Kappos: Take-aways

• Evidence that the TSM test will continue to be applied

by the Board, especially with complex facts and application of multiple references

• Paralysis-by-analysis? For some panels, the balance

may tip in favor of “common sense” and resort to KSR predictability

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Common sense, part 3: Randall Mfg. v. Rea

The ‘017 patent to FG Prods. Randall reexam request granted PTO: Invalid under § 103 Randall CAFC appeal FG Prods appeals Board reverses: no motivation to combine the references

CAFC vacates & remands to Board

• Fed. Cir., October 30, 2013

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Randall Mfg. v. Rea

FG Invention: movable bulkheads for positioning cargo in a shipping container where split sections could be pulled up (garage door-like) and stowed against ceiling. PTO: On inter partes reexam challenge by Randall, examiner finds claims invalid under § 103 based on teachings of 4 combined references

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• PTO: D1, D2 ads disclose joinable half-width panels; D3:

rail/trolley assembly to suspend half panels w/ panels stored against walls; D4: lift mechanism for ceiling storage.

• Board: Skilled person would not have modified D3 to allow

for ceiling stowage of panels

• CAFC: Board’s “blinkered focus” on 4 refs was error: re-do

– Must consider knowledge, creativity, and common sense of an

• rdinarily skilled artisan

– Board ignored evidence that provides motivation to combine; all elements present in prior art documents. Easy to adjust D3’s structure to allow for ceiling storage that was “pervasive” in field – Combining familiar elements according to known methods for predictable results. Q.E.D. (or K.S.R.?)

Randall Mfg. v. Rea

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Randall v. Rea: Take-aways

• Fed. Cir. is on the lookout for Board decisions with “cited-

reference myopia”

• Must read prior art “in context” and take into account demands

known to the “design community,” background knowledge (aside from references), and inferences and creative steps that are within ordinary skill

• Score another one for “common sense”

– The “expansive and flexible approach” [of KSR] “not only permits, but requires, consideration of common knowledge and common sense.”

• KSR lives, especially in the “predictable arts”

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20:20 Hindsight? In re Suong-Hyu Hyon

• Invention: Ultra-high mol. wt. polyethylene articles used for

joint replacement solve need for low-friction, highly abrasion-resistant material for sockets

• Fed. Cir., May 24, 2012
• 40. A method for producing an ultra high

molecular weight polyethylene block, comprising: (a) crosslinking an ultra high molecular weight polyethylene block having a molecular weight not less than 5 million by irradiating the block with a high energy radiation at a level of at least 1 MR; (b) heating said crosslinked block up to a compression deformable temperature below the melting point of the UHMWPE; (c) subjecting said heated block to pressure; and then (d) cooling said block.

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In re Hyon

• Low-dose γ-radiation to mildly crosslink before molding

gives superior product

• Patented; Hyon sought to reissue
• D1: crosslink after molding articles for joints;
• D2: crosslink PE films/fibers before further processing (not

molding)

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In re Hyon

• Board: Adopts examiner view that the art provided

adequate motivation to combine D1/D2

– Reasonable expectation of success – Predictable use of X-linking prior to molding to improve properties

• CAFC affirms: Substantial evidence supports Board

decision

– No challenge to D1/D2 teachings; only issue related to motivation to combine references – References did not limit form of the final product – D1 doesn’t say you can’t crosslink before molding (!) – Pick-and-choose argument dismissed

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Must-Read Dissent (Newman):

• Majority’s “flawed” analysis used hindsight
• D1, later ref, knew of D2’s teachings about early X-

linking of films but taught instead to X-link its molded articles for joints later

• Superior properties not foreseeable
• Decision contrary to KSR, which warns to beware
• f hindsight reconstruction w/ claimed invention as

an instruction manual

In re Hyon

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In re Hyon: Take-aways

• Motivation to combine reference teachings may come from the

prior art’s teaching of improved properties applicable to the claimed invention

• A thin coating of “motivation” may satisfy “SE”
• PTO/Board reasoning here is typical of many PTO rejections

– § 103 remains an Examiner’s best (and often sole) weapon

• Use Judge Newman’s logic and language to attack/defeat

hindsight-based rejections

• Do good science to create your own luck and generate

unexpected results

• See our article for more: http://www.dilworthip.com/2012/06/

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Over the SE Hurdle: Leo Pharm. Products v. Rea

• Leo patent challenged by Galderma—inter partes

reexam

• Board finds all claims obvious; CAFC reverses, as Leo

showed Board’s conclusion not supported by SE

• Invention: psoriasis treatment combining Vitamin D, a

corticosteroid, and particular classes of non-aqueous solvents where combo has storage stability

• Problem: divergent pH requirements for Vit. D and

steroids convinced physicians to prescribe 2-drug regimen, but patient compliance was low

• Fed. Cir., August 12, 2013

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Leo Pharm. v. Rea

• Art

– D1: Steroid + claimed solvent, no Vitamin D – D2: Vitamin D + almond oil or propylene glycol (PG) – D3: Vitamin D + steroid + water and almond oil or PG

• Board:

– Obvious to combine D1 + D3 for D1’s solvent advantages or to combine D1 + D2 for Vit. D’s healing. – Prima facie case not overcome by evidence

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CAFC:

• Prior art failed to recognize issue of storage stability.
• Disadvantages of combining were recognized, resulting

in 2-drug treatment. SE hurdle met by Leo.

• Long time lapse between D1 and invention
• Analyzed examples in D1-D3: all of ref examples used

water, while claims required “nonaqueous”

• Too many choices available to be “obvious to try”
• “Surprising” results in a reference signals lack of a

motive to modify the teachings (TSM lives)

Leo Pharm. v. Rea

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Leo Pharm. v. Rea: Take-aways

• Case demonstrates what it takes to overcome a Board

decision requiring only SE to affirm => it merits study!

• Devil in the Details: Use Leo to highlight the importance
• f differences between invention examples and

reference examples

• Where cited art talks about “surprising” benefits => a

disincentive to modify its teachings

• Unrecognized problem => solution couldn’t be apparent

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Leo Pharm. v. Rea: Take-aways

• Can you show that prior art components would destroy

the desired result (e.g., water harms storage stability) or that the reference truly “teaches away” (e.g., always include vs. exclude water)?

• Look for time gaps between invention and reference

teachings

• Do many possible combinations negate “obvious to try”?

Is the examiner/challenger only “throwing metaphorical darts” and hoping for a hit?

• Another great example of hindsight

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Summary

• Convincing the Board or the CAFC that a fact finder’s

decision was not based on “substantial evidence” is a high hurdle

• Post-KSR obviousness is about predictability (or lack

thereof)

• With “common sense” as a weapon, hindsight is more

important than ever

• Demonstrate patentability with reasonable claims and

good scientific evidence vis-à-vis the prior art

• Read, re-read, and cite Leo Pharm. v. Rea

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Thanks for your attention!

Jonathan L. Schuchardt, Ph.D.

Partner

Dilworth IP Intellectual Property Law

2 Corporate Dr., Suite 206 Trumbull, CT 06611 (203) 220-8496 jschuchardt@dilworthip.com

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