Federal Circuit finds Patent Obvious in view of Common Sense despite Objective Evidence

In Wyers v. Master Lock Co., 95 USPQ2d 1525 (Fed. Cir. 2010), plaintiff Philip W. Wyers (Wyers) sued defendant Master Lock Company (Master) for infringement of its patents for hitch pin locks.  Hitch pin locks are typically used to secure draw bars or tow-ball mount to a hitch receiver attached to a motor vehicle.  Wyers’ patents describe a barbell-shaped lock with a stop portion on one end, a locking head on the other end, and a shank portion which passes through the aligned apertures of the hitch receiver and the tow-ball mount.

The use of barbell-shaped locks and locks on trailer hitch receivers was well known in prior art.  Specifically, the prior art had examples of locks with a lock head, a shackle having a stop member, a shank, and a latch.  Moreover, the prior art also had examples of barbell-shaped locks being used as a trailer hitch receiver lock.

Wyers’ patents claim improvements to the prior art locks; mainly a removable sleeve to increase the shank’s diameter.  The removable sleeve allows adjusting the diameter of the shank which can be used with trailer hitch receivers of different apertures sizes.  The patent claims also include an external seal designed to protect the locking mechanism from contaminants.

At the trial level, the two main questions the court asked were “whether the use of the removable sleeve to adjust the operative thickness of a shank would have been obvious;” and “whether Master Lock presented clear and convincing evidence that the use of the external flat flange seal would have been obvious.” JMOL Order, 2009 WL 1309774 at 3 and 5.  The district court found held that plaintiff’s patents were not obvious and awarded $5.35 million in damages, $1.1 million in interest, and a 24% royalty for any infringing products Master sold based on Wyers’ patent.

On appeal, the parties agreed that the case turned on whether the claims were obvious based on prior art.  The court said that the issues in dispute were, “(1) whether the prior art references are in the same field of endeavor as the patented invention; (2) whether there was sufficient motivation to combine the references; (3) the existence and significance of pertinent secondary considerations.”

In reviewing the first question, the Federal Circuit noted that the test of whether the art is from the same field of endeavor is “(1) whether the art is from the same field of endeavor, regardless of the problem addressed, and (2) if the reference is not within the field of the inventor’s endeavor, whether the reference still is reasonably pertinent to the particular problem with which the inventor is involved.” Comaper Corp. v. Antec, Inc., 596 F.3d 1343, 1351 (Fed. Cir. 2010) (quoting In re Clay, 966 F.2d 656, 658-59 (Fed. Cir. 1992)).”  The Federal Circuit noted that the jury at the trial court applied the wrong standard.  The correct standard is whether a person of ordinary skill in the field of locksmithing would find this improvement to be obvious, not the standard of a layman on a jury.  The appellate court, also said the prior art was relevant because the prior art was within the “same field of endeavor.”  The prior art was directed towards trailer-towing applications, as were most of Wyers’ patents.

On the second question as to whether there was motivation to combine the adjustable sleeve with the prior art barbell locks and whether there was motivation to combine the prior art locks with an external sealing mechanism, the Federal Circuit noted that the test is no longer strictly one of express motivations to combine.  KSR International Co. v. Teleflex, Inc., 550 U.S. 398 (2007).  “Common sense” is one standard when looking for a reason to combine references.  Moreover, the Federal Circuit noted that, while the facts supporting obviousness are to be determined by a jury, the ultimate question of whether the facts support “common sense” or reasons to make combinations are susceptible to resolution at summary judgment and motions JMOL.

In applying this standard, the Federal Circuit said that sleeves were used in prior art in a towing arrangement similar to a hitch receiver/tow bar arrangement, and could be combined with a barbell-shaped hitch pin lock in order to address different aperture sizes in standard hitch receivers.  In addition, the Federal Circuit noted prior art in the Down patent that “sleeves of different external diameter may be provided for the attachment of trailer towing eyes of different internal diameter.  When the sleeve is used, the pin accommodates larger diameter towing eyes; without the sleeve, the pin fits smaller ones.”    Thus, a person of ordinary skill in the art of locksmithing would have been likely put these two designs together.

The Federal Circuit concluded that “it was a mater of common sense to combine the Down patent with the prior art barbell locks in order to arrive at the invention claimed in the [Wyers’ patents], and that one of ordinary skill in the art would have had a reasonable expectation of success in doing so.”

Furthermore, the Federal Circuit noted that “it is a matter of common sense that a flat external seal used in the prior art padlocks could be combined with a barbell-shaped hitch pin lock.”  This is because prior to Wyers’ filing, the concept of using external or internal seals to protect a lock’s head from contaminants, was widely known.

Lastly, in evaluating the effect of secondary considerations, the Federal Circuit noted that for objective evidence of secondary considerations to be accorded substantial weight, its proponent must establish a nexus between the evidence and the merits of the claimed invention. In re Huang, 100 F.3d 135 (Fed. Cir. 1996); In re GPAC Inc., 57 F.3d 1573 (Fed. Cir. 1995).  Here, plaintiff could not prove that Master’s $20 million in sales of the accused product were the result of any of the supposed features of Wyers’ patents.  Further, there was no evidence of copying of Wyers’ design.  Thus, any secondary considerations here can not overcome a strong prima facie case of obviousness, as was the case here.

Significance for Patent Applicants and Owners

Rejections under 35 U.S.C. §103 using common sense as a basis are particularly perplexing for patent practitioners as what constitutes common sense appears to be a subjective test.  As is evident from the Federal Circuit’s analysis, the use of common sense is based upon an analysis of prior art within the record.  While such a robust record is expected in inter partes proceedings, however, it is unclear as to how Patent Examiners performing examination in an ex parte process would be able to develop a sufficient record to substantiate a prima facie burden.  Moreover, the United States Patent and Trademark Office has not provided examples of how such a conclusion would be made in its proposed Examination Guidelines Update: Developments in the Obviousness Inquiry After KSR v.Teleflex, Fed. Reg. Vol. 75, No. 169, pp. 53643 (September 1, 2010).  Thus, patent applicants should be mindful that, when faced with a rejection based upon common sense, the Examiner must still provide evidence supporting this conclusion and require this evidence as grounds of traversing the rejection.

 

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.

Federal Circuit Affirms Obviousness of Gene Sequencing Claim As “Obvious To Try.”

In In re Kubin, 561 F.3d 1351 (Fed. Circ. 2009), the applicants filed Patent Application Serial No. 09/667,859 drawn to gene sequencing claims.  The applicants applied for a patent claiming DNA molecules (“polynucleotides”) that encoded a protein (“polypeptide”) known as the Natural Killer Cell Activation Inducing Ligand (“NAIL”).  Natural Killer (“NK”) cells play a major role in fighting tumors and viruses, and express surface molecules that can activate cytotoxic mechanisms when activated.  NAIL is a specific receptor protein on the cell surface that is involved in activating NK cells.  Applicants claimed the DNA that encodes the CD48-binding region of NAIL proteins.  Applicants’ claim 73 described a genus of isolated polynucleotides that encode a protein that binds CD48 and is at least 80% identical to the amino acid sequence that Applicants have disclosed in their specification.  In their specification, Applicants disclosed generic examples of variants of the amino acid sequence that could be contemplated under their claimed invention as at least 80% identical to the disclosed sequence.  However, the applicants did not set forth any specific examples of sequences of any such variants.

The Board upheld a rejection of applicants’ claimed invention under 35 U.S.C. § 112, 1^st paragraph for lack of written description and a rejection under 35 U.S.C. § 103(a) for obviousness.  With respect to the lack of written description, the Board asserted that applicants had not described what domains of their described amino acid sequences were associated with the required binding to CD48, and thus did not describe which of NAIL’s amino acids could be varied and still bind.  The Board held that, without correlating the structure of the sequence with function, the specification did not provide adequate written description for claim 73.

The Board also affirmed that claim 73 was obvious under 35 U.S.C. § 103(a), under the combined teachings of U.S. Patent No. 5,688,690 (“Valiante”) and 2 Joseph Sambrook et al., Molecular Cloning: A Laboratory Manual 43-84 (2d ed. 1989) (“Sambrook”).  The Board found (and Applicants did not dispute) the receptor protein p38 of Valiante to be the same protein as NAIL, existing on the surface of the NK cell and able to activate cytotoxicity.  Valiante taught that the DNA and protein sequences for p38 could be obtained by conventional methods (such as those set forth in Sambrook).  The Board held that the disclosure of p38, along with a detailed method of isolating its DNA, including disclosure of a specific probe to do so, established Valiante’s possession of p38’s amino acid sequence and provided a reasonable expectation of success in obtaining a polynucleotide encoding p38, within the scope of applicants’ claim 73. Further, the Board asserted that, given the importance of NAIL’s role in human immune response, motivation existed to apply conventional methodologies (like those of Sambrook) to isolate the NAIL cDNA.

On appeal, the Federal Circuit sustained the Board’s factual inquiries underlying the 35 U.S.C. § 103(a) rejection.  Specifically, the Applicants argued that there is insubstantial evidence to find that their methodology of isolating NAIL is equivalent to the teachings and methodologies of Valiante and Sambrook.  However, the Federal Circuit asserted that the claimed invention is not to the processes used, but rather to the results of those processes.  The Court held that the record was sufficient to show that Valiante’s examples would produce the claimed nucleotide.

Further, the Federal Circuit found that substantial evidence existed that the Applicants used conventional techniques as taught by Valiante and Sambrook to isolate the gene sequence for NAIL.  The Court rejected the Applicants’ argument that Valiante and Sambrook fail to provide guidance for preparing the cell culture to serve as a useful source of mRNA for the preparation of a cDNA library due to Applicants’ own admissions.  Specifically, the argument was rejected because Applicants asserted that the nucleic acid molecule had been derived from DNA or RNA isolated in pure form and in a quantity or concentration that enabled identification, manipulation and recovery of its component nucleotide sequences using standard biochemical methods (such as those provided by Sambrook). 

The Federal Circuit further held that prior art showing NAIL’s binding to the CD48 protein was not necessary to assert a finding of obviousness because CD48 binding is a property necessarily present in NAIL.  The Federal Circuit noted that discovering new qualities in a product that others had discovered or new functionality in a structure suggested by prior art is not an invention.  In re Wiseman, 596 F.2d 1019, 1023 (CCPA 1979); Gen. Elec. Co. v. Jewel Incandescent Lamp Co., 326US 242, 249 (1945).  Since the Board found that Valiante’s p38 was the same protein as applicants’ NAIL protein, Valiante’s teaching to obtain the cDNA encoding of p38 necessarily teaches one to obtain the cDNA of NAIL.  P38’s cDNA would necessarily exhibit the CD48 binding property and would fall under the scope of claim 73.

The Federal Circuit next rejected the idea that the “obvious to try” test should only be applied to predictable arts (as opposed to a more unpredictable arena like biotechnology).  The Federal Circuit held that patent law does not customize its tests for specific scientific fields.   In so doing, the Federal Circuit noted that its prior decision in In re Deuel, 51 F.3d 1552 (Fed. Cir. 1995), which held that obvious to try was inappropriate as an obviousness rationale in the biotechnological arts, was suspect and greatly limited or overruled after the Supreme Court’s decision in KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007).  Rather, the Supreme Court held in KSR that where there is an identified need or pressure, and a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue known options within his or her technical grasp.  Solutions of this kind would not be the product of innovation, but rather one of ordinary skill and common sense.  Thus, the fact that a combination was obvious to try might show it was obvious under 35 U.S.C. § 103.

After rejecting the analysis in In re Deuel, the Federal Circuit noted that the Supreme Court “actually resurrects this court’s own wisdom in In re O’Farrell [853 F.2d 894, 903 (Fed. Cir. 1988)].“  In re O’Farrell, which predated In re Deuel, noted that obvious to try was a rationale supporting an obviousness rejection.  However, the Federal Circuit also noted that the court in In re O’Farrell “cautioned that ‘obvious to try’ is an incantation whose meaning is often misunderstood.”  In order to differentiate between obviousness resulting from obvious to try and impermissible hindsight, the court in In re O’Farrell outlined situations (paralleled in KSR) in which passing the “obvious to try” test would be erroneously equated with obviousness. 

The first class of cases to which “obvious to try” should not be applied were those where the prior art gave no indication which parameters to vary or which choices were likely to be successful.  The second class of cases consisted of those exploring new technologies or a general approach where only general guidance existed as to the particular form of the invention or how to achieve it.  However, in contrast to these two cases, an obviousness finding under an “obvious to try” test would be appropriate when the prior art “contained detailed enabling methodology for practicing the claimed invention, a suggestion to modify the prior art to practice the claimed invention, and evidence suggesting that it would be successful.” 853 F.2d at 902 (emphasis added).  The prior art did not have to require absolute predictability of success, but merely a reasonable expectation of such.

The Federal Circuit held that the Applicants’ case was dissimilar to either of the erroneous “obvious to try” classes.  With regards to claim 73, Valiante and Sambrook, which together teach a protein identical to NAIL, a commercially available monoclonal antibody specifically for NAIL, and explicit instructions for obtaining the DNA sequence for NAIL, gave more than general guidance as to how to achieve the specific form of the invention and provide clear direction as to which methods are likely to be successful.  Further, the prior art provided a reasonable expectation of successfully obtaining a polynucleotide of claim 73.  Thus, the Federal Circuit held that the “obvious to try” test should be applicable in this case.  Further, the Court asserted that use of the test shows that claim 73 was obvious and thus not patentable.

The Federal Circuit affirmed the Board’s ruling that applicants’ claims were obvious as a matter of law under the “obvious to try” test.  The prior art provided an identical protein to that claimed by applicants, a commercially available monoclonal antibody for that protein, and explicit instructions for obtaining the DNA for that protein.  Thus, the “obvious to try” test was appropriate because the prior art provided clear direction as to which methods were likely to be successful to achieve the invention, and a reasonable expectation of successfully obtaining a polynucleotide under claim 73.

Significance to Patent Applicants

In re Kubin removed a bright line distinction in how to apply obviousness analysis in predictable arts as opposed to those deemed unpredictable.  As such, merely by labeling a technology such as biotechnology unpredictable will no longer immunize applicants from the full scope of analysis authorized by the Supreme Court in KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007) and Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966). 

That being said, In re Kubin also reinforces the requirement that rejections based upon a conclusion that something is “obvious to try” must still be substantiated by evidence.  The Federal Circuit in In re Kubin heavily relied upon the existence of a manual as evidence of routine processing, and that the claimed result was merely the routine processing of a known protein.  Without such evidence, “obvious to try” is merely a conclusory statement.  Therefore, even after KSR, applicants should require that examiners provide evidence as to why a particular result would have been obvious to try.

Federal Circuit Finds Evidence Required to Support Conclusion of “Obvious to Try” Under KSR Test

In Takeda Chemical Industries Ltd. v. Alphapharm Pty. Ltd., 83 U.S.P.Q.2d 1169 (Fed. Cir. 2007), Takeda developed the drug ACTOS^®, which is used to control blood sugar in patients who suffer from Type 2 diabetes. ACTOS^® uses a specific TZD compound that is covered by U.S. Patent 4,687,777 (the “’777 patent”).  Alphapharm filed an Abbreviated New Drug Application (“ANDA”) pursuant to the Hatch-Waxman Act in order to manufacture a generic version of ACTOS^®.  As such, Takeda filed suit against Alphapharm for infringement of the ‘777 patent. 

As a defense, Alphapharm asserted that the ‘777 patent was obvious under 35 U.S.C. §103 as the patented TZD compound would have been obvious to try in light of an existing compound admitted to be in the prior art and which is structurally similar to the patented TZD compound: compound b,.  The District Court found that Alphapharm had not provided sufficient evidence to maintain a prima facie obviousness defense as there was insufficient evidence as to why compound b would have been modified to meet the requirements of the claimed compound.  The District Court further noted that the prior art taught away from the use of the compound b.  Lastly, the District Court found that there was unrebutted evidence of unexpected results, which further supported a finding of non-obviousness.

On appeal, the Federal Circuit affirmed the findings of the District Court.  In reviewing the Supreme Court’s decision in KSR International Co. v. Teleflex Inc., 127 S. Ct. 1727, 82 U.S.P.Q.2d 1385 (2007), the Federal Circuit affirmed that mere structural similarity is not sufficient to make out a prima facie obviousness defense as set forth in In re Deuel, 51 F.3d 1552, 34 U.S.P.Q.2d 1210 (Fed. Cir. 1995).  As characterized by the Federal Circuit, In re Deuel stands for the proposition that “close or established ‘[s]tructural relationships may provide the requisite motivation or suggestion to modify known compounds to obtain new compounds.’”   However, while “a known compound may suggest its homolog, analog, or isomer because such compounds ‘often have similar properties and therefore chemists of ordinary skill would ordinarily contemplate making them to try to obtain compounds with improved properties’ … in order to find a prima facie case of unpatentability in such instances, a showing that the ‘prior art would have suggested making the specific molecular modifications necessary to achieve the claimed invention’ was also required.” 

The Federal Circuit held that such evidence of suggestion remained after KSR since the Supreme Court in KSR “acknowledged the importance of identifying ‘a reason that would have prompted a person of ordinary skill in the relevant field to combine the elements in the way the claimed new invention does’ in an obviousness determination.”  As such, the Federal Circuit found that there needs to be evidence as to “some reason that would have led a chemist to modify a known compound in a particular manner to establish prima facie obviousness of a new claimed compound.” 

Since Alphapharm did not provide any such evidence, the District Court was correct in finding nonobviousness based solely on compound b.  Specifically, the District Court noted that the evidence of record indicated that there were “hundreds of millions of TZD compounds” and the prior art “specifically identified fifty-four compounds, including compound b, that were synthesized according to the procedures described in the patent, but did not disclose experimental data or test results for any of those compounds.”  Further, the District Court relied upon a prior art article which reviewed 101 TZD compounds, including compound b, recommended three other compounds for use instead of compound b, and specifically criticized compound b.  Lastly, testimony from witnesses, including Alphapharm’s head of intellectual property department, admitted that, especially in light of the prior art article, there was no suggestion as to why compound b would be investigated as opposed to the three more promising TZD compounds identified in the article.  As such, based upon the record as a whole, there was insufficient evidence as to why, out of the TZD compounds, compound b would have been used or why a chemist would have investigate compound b to obtain the claimed TZD compound in the ‘777 patent.

Moreover, the Federal Circuit rejected Alphapharm’s argument that adjusting compound b to achieve the claimed TZD compound would have been “obvious to try.”  Specifically, the Federal Circuit found that the Supreme Court, in analyzing whether a combination would be obvious to try, limited such a situation to “'[w]hen there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions [such that] a person of ordinary skill has good reason to pursue the known options within his or her technical grasp.’” In applying the factors outlined in KSR, the Federal Circuit noted that the prior art identified more than a few predictable solutions since there were “a broad selection of compounds” and “any one of which [of the broad selection of compounds] could have been selected as a lead compound for further investigation.”

Lastly, the Federal Circuit found that, even if compound b were chosen, there was insufficient evidence that one skilled in the art would typically make modifications to the TZD compounds to achieve the patented TZD compound.  There was no evidence that there would have been an expectation of success in making a specific substitution or structural change to compound b to achieve the patented TZD compound, and the prior art article actually suggested that other changes should be made instead.  Thus, the Federal Circuit also found that the art was not predictable and that the number of solutions was more than finite, as would be required to find obviousness under the Supreme Court’s test in KSR.