Federal Circuit Clarifies Use of “Common Sense” under KSR

Federal Circuit Confirms the Need For Evidence to Support Use of Common Sense During Obviousness Determinations

In Perfect Web Techs. v. InfoUSA, Inc., 92 U.S.P.Q.2d 1849 (Fed. Cir. 2009), the Federal Circuit expounded on the use of common sense in the determination of obviousness under 35 U.S.C. § 103(a).  The Supreme Court looked favorably upon the use of a common sense approach in KSR International Co. v. Teleflex Inc., 127 S.Ct 1727;  82 USPQ2d 1385 (2007) decision.  The Federal Circuit, in Perfect Web Techs. v. InfoUSA, Inc. relied upon that decision in finding that a bulk E-mailing patent was obvious in light of the prior art reference and the common sense of a person of ordinary skill.

Perfect Web involved U.S. Patent No. 6,631,400, which directed to a methods of bulk E-mail distribution. Claim 1 is representative of the asserted claims and is as follows:

1. A method for managing bulk e-mail distribution comprising the steps:

(A) matching a target recipient profile with a group of target recipients;

(B) transmitting a set of bulk E-mails to set target recipients in said matched group;

(C) calculating a set of bulk E-mails to said target recipients in said matched group;

(D) if said calculated quantity does not exceed a prescribed minimum quantity of successfully received E-mails, repeating steps (A)-(C) until said calculated quantity exceeds said prescribed minimum quantity.

Perfect Web did not argue any of the remaining claims separately, leaving the Federal Circuit to decide the case based on claim 1.  Of the four steps present in the claim, Perfect Web conceded that the prior art taught the first three, steps (A) through (C), specifically the matching, transmitting, and calculating steps. Perfect Web, 92. U.S.P.Q.2d at 1851. This left only the question whether step (D) was obvious in view of the prior art disclosure of the first three steps.  The district court had found that the inclusion of step (D) was obvious, and in the alternative, that the claims were invalid for anticipation and lack of statutory subject matter.

The Federal Circuit affirmed the district court’s holding that step (D) was obvious, and therefore did not address the district court’s alternative findings of anticipation and lack of statutory subject matter. 

The district court held that the final step (D) of claim 1 was obvious, nothing more than “the logical result of common sense application of the maxim ‘try, try again’.”  Perfect Web, 92 U.S.P.Q.2d 1851-52. On appeal, Perfect Web argued that the district court improperly applied hindsight reasoning and failed to provide any evidence or fact-finding to support the conclusion of obviousness. Id. at 1852. Furthermore, the district court failed to properly consider Perfect Web’s evidence of a long-felt need in the art. Id.

The Federal Circuit held that the district court properly applied the common sense of a person of ordinary skill to the facts of the case to reach the conclusion that a person of ordinary skill would have found the

additional step (D) of claim 1 to be obvious. Perfect Web, 92 U.S.P.Q.2d at 1851. The Federal Circuit began with the Supreme Court’s KSR decision.  In KSR, the Supreme Court noted that common sense could be the basis for a determination of obviousness. KSR Int’l Co. v. Teleflex, Inc., 82 U.S.P.Q.2d 1385 (2007). A person of ordinary skill in the art should be expected to apply common sense principles to the problems before him, and this insight should not be disregarded.

The Federal Circuit also found strains of the Supreme Court’s reasoning in prior Federal Circuit cases.  The Federal Circuit’s predecessor court found common sense to be an appropriate source of obviousness reasoning in its 1969 Bozek decision.  In re Bozek, 416 F.2d 1385, 1390 (CCPA 1969). The Federal Circuit held in In re Zurko that patent examiners could not invoke the common sense of the person of ordinary skill without some basis in the record.  In re Zurko, 258 F.3d 1379, 1383, 1385 (Fed. Cir. 2001).  Similarly, the Federal Circuit held in In re Lee that patent examiner must explain why their findings support their conclusion.  In re Lee, 277 F.3d 1338, 1344 (Fed. Cir. 2002).

Acknowledging Perfect Web’s concerns, the Federal Circuit cautioned against an improper use of common sense. Perfect Web, 92 U.S.P.Q.2d at 1854-55. The Supreme Court looked favorably on a common sense approach, but the analysis must be based on the evidence, and the reasoning “must be made explicit”. KSR, 82 U.S.P.Q.2d at 1396. Therefore, a court or an Examiner must present the facts upon which the finding of common sense is based, including facts relating to the nature of the problem solved, the level of skill in the art, the teachings of the prior art, and the other Graham factual findings. As noted by the Federal Circuit, “while an analysis of obviousness always depends on evidence that supports the Graham factual findings, it also may include recourse to logic, judgment, and common sense…”  Perfect Web, 92 U.S.P.Q.2d at 1854.

Once these facts have been established based on the evidence of record, the court (or Examiner) can apply common sense principles, where appropriate, to these facts in order to determine whether the invention would have been obvious to the person of ordinary skill in the art.

The use of common sense, even once the facts have been established, must still be based on articulated reasoning.  The Federal Circuit interpreted the Supreme Court’s reminder that “the analysis should be made explicit” as referring not only to the findings of fact, but also the reasoning behind the court’s application of common sense or other principles not clearly based in the evidence. Perfect Web, 92 U.S.P.Q.2d at 1854. A district court must therefore present its reasoning “with sufficient clarity for review”. Id. at 1855.

Applying these considerations to the current case, the Federal Circuit found the district court’s reasoning to be sound.  The evidence of record showed that the first three steps (A) – (C) were known in the art. Perfect Web, 92 U.S.P.Q.2d at 1852. The only remaining step, step (D), merely involved repeating steps (A) – (C) until a minimum quantity of successfully received E-mails is reached. Id. at 1854-55. In other words, step (D) merely involved repeating a known procedure until success is reached.  Repeating this procedure would be the only realistic way to achieve success if the minimum quantity was not reached in the first iteration. Id. In light of these facts, the district court found that it would be common sense for the person of ordinary skill in the art to “try, try again” and repeat the procedure (step (D)) until successful. Id.

The Federal Circuit was not persuaded by Perfect Web’s expert testimony to the contrary. Expert testimony is one example of a “wider diversity of sources to bridge the gap between the prior art and a conclusion of obviousness”.  Perfect Web, 92 U.S.P.Q.2d at 1853-54. Other sources include market forces, design pressures, and known problems and needs in the art. Id. at 1854. Such evidence can be used to supplement or bolster a common sense finding.  Expert testimony, the Federal Circuit noted, could be helpful in cases where the technology is complex and the level of ordinary skill is high. Id. In cases where the technology is simple, or the level of skill low, expert testimony may not be necessary.  In this case, the level of skill was low and was found to require a high school education, and limited computer and marketing experience. Id. Given this low level of skill, the Federal Circuit found no need to resort to expert testimony in determining whether step (D) was obvious. Id.

Even taking the expert testimony into account, the Federal Circuit found InfoUSA’s experts to be more persuasive than that of Perfect Web. Perfect Web, 92 U.S.P.Q.2d at 1855. Both of InfoUSA’s experts testified that repeating the steps according to the claimed step (D) would be the obvious and, in some cases, only way to ensure a minimum level of success. Id. In contrast, Perfect Web’s expert did not directly address the issue; the expert’s testimony was primarily directed toward an obviousness analysis of three prior art references. Id. The expert even admitted that the person of ordinary skill had limited options if an initial delivery fell short of expectations, and that one of these options included step (D): repeating the previous steps until the minimum level was achieved. Id.

The Federal Circuit also supported the district court’s finding that step (D) of claim 1 would have been obvious to try. Perfect Web, 92 U.S.P.Q.2d at 1855. Prior to KSR, claims could not be found obvious on the grounds that the proposed modification would have been “obvious to try”.  However, the KSR decision allowed such a finding in certain situations. Id. at 1853 (citing KSR). If a person of ordinary skill were faced with a problem having a finite number of identified, predictable solutions, it follows that these solutions would be obvious to try. Id.  In Perfect Web, the record showed only three solutions to the problem at hand, one of which was the claimed step (D). Id. at 1855. In light of this limited number of solutions, the district court found that it would have been obvious for the person of ordinary skill in the art to try the claimed step (D). Id.

Perfect Web did not present sufficient evidence to rebut these findings.  Perfect Web presented no evidence to show that step (D) had unexpected results or would not have had a reasonable expectation of success. Perfect Web, 92 U.S.P.Q.2d at 1855. Perfect Web did attempt to present evidence showing a long-felt need for an efficient bulk E-mailing system. Id. at 1856. According to expert testimony, the prior art systems relied heavily on oversending E-mails. Id.  Oversending, however, was inefficient in that marketers had to transmit messages for which they could not be paid, and because customers objected to the large amount of messages being sent. Id. The Federal Circuit did not find this evidence persuasive.  Although Perfect Web identified a need, Perfect Web did not show that this need was long-felt. Id. Perfect Web did not present any evidence showing how long the need was felt, or when the problem first arose. Id. Perfect Web’s expert did not provide any evidence to support the conclusion that the claimed method reduced marketing costs or the number of customers opting out of the bulk E-mail program. Id. Without this evidentiary support, the Federal Circuit gave the expert’s conclusion little weight.

Significance for Patent Applicants and Owners

Perfect Web clarifies the ground rules of the post-KSR obviousness analysis.  Although a “common sense” approach can be applied, common sense merely supplements, and does not supplant, the prior approach.  The Graham factors must still be addressed, and must still be based on evidence of record.  Once these factors have been established, the fact-finder can apply the common sense of a person of ordinary skill to determine whether the proposed modification or combination or prior art would have been obvious.  The reasoning set forth must be explicit and clear, with reference to the evidence of record. 

During patent prosecution, Examiners may be tempted to skip the Graham factors and assert that it would have been “common sense” for a person of ordinary skill to make a proposed combination.  The Perfect Web decision does not permit such carte blanche usage of common sense.  In such situations, the patent prosecutor should remind the Examiners that the Graham factors cannot be ignored, and explain why, in view of the evidence, the claimed invention would not have been the result of “common sense”.  Secondary evidence and expert declarations can also be presented to rebut a common sense argument, but this evidence should be directed specifically toward the relevant issues: level of skill in the art, number and predictability of available solutions, reasonable expectation of success, and the like.  Perfect Web Techs. therefore clarifies the use of common sense in a post KSR approach, and also places important limits on its use.  It is these limits that will provide comfort to patent prosecutors fearing broad obviousness rejections.

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