Secondary Considerations Arguments Precluded By Prior Nexus Testimony

by | Sep 20, 2024 | Estoppel, Evidentiary Issues, Final Written Decisions, PTAB News

By Fabian Bramwell,* Daniel Sloan, Jen Bachorik, and Matt Johnson –

On June 6, 2024, the PTAB issued a Final Written Decision concluding claims 1-6 of U.S. Patent No. 8,899,655 B1 (“the ’655 patent”) unpatentable.  Yita LLC v. MacNeil IP LLC, IPR2023-00172, Paper 70 (PTAB Jun. 6, 2024) (“Decision”).  The PTAB also held that Patent Owner, MacNeil Automotive Products LLC, was “collaterally estopped from relitigating the factual issue of the reasons for the industry praise and commercial success.”  Id. at 109.

The ’655 patent relates to a process for manufacturing a vehicle floor tray, such as a floor tray that closely fits the vehicle foot well where it is placed.  Representative claim 1, which is the only independent claim challenged, is reproduced below:

1. A process for manufacturing a vehicle floor tray, comprising the steps of:

digitally measuring the three-dimensional position of a plurality of points on a substantially carpeted surface of a vehicle foot well for which the vehicle floor tray is to be provided;

storing said points in a memory;

using the stored points to construct an electronic model of the vehicle foot well surface;

using the electronic model of the vehicle foot well surface to construct an electronic three-dimensional image of the vehicle floor tray;

creating a vehicle tray data file from the electronic three-dimensional image of the vehicle floor tray;

using the vehicle tray data file to make a vehicle tray mold; and

manufacturing the vehicle floor tray by molding polymer material in the mold.

The ’655 patent describes a “need” for a floor tray that provides a “more exact fit to the vehicle foot well for which it is provided” so that it “stays in place.”  ’655 Patent, col. 2., ll. 9-13.

Yita LLC and Jinrong (SH) Automotive Accessory Industrial Development Co. LLC (collectively, “Petitioner”) requested inter partes review of the ’655 patent in November 2022, and the PTAB instituted review in June 2023.  Petitioner alleged that claims 1 to 6 of the ’655 patent are unpatentable as obvious over certain cited references.  In the Final Written Decision, after evaluating the first three Graham factors, the PTAB determined that the cited references teach or suggest all the limitations of the claims and that a person of ordinary skill in the art would have been motivated to combine the cited references with a reasonable expectation of successfully arriving at the claimed invention of the ’655 patent.

The PTAB then turned to the issue of whether evidence of objective indicia of non-obviousness (i.e., secondary considerations) presented by Patent Owner, such as expert skepticism, commercial success, and industry praise, would support patentability of dependent claim 6.

For the PTAB to accord substantial weight to evidence of secondary considerations in its Graham factors analysis, a Patent Owner must first demonstrate a legally and factually sufficient connection between the evidence and the claimed invention, i.e., a nexus.  Decision at 102.  A nexus is presumed “when the evidence is tied to a specific product that is ‘coextensive’ with a claimed invention.”  Id.  Such presumption may exist when “the unclaimed features [of the product] amount to nothing more than additional insignificant features.”  Id. (quoting Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366, 1373-74 (Fed. Cir. 2019)).  On the other hand, “objective evidence of nonobviousness lacks a nexus if it exclusively relates to a feature that was ‘known in the prior art.’”  Yita LLC v. MacNeil IP LLC, 69 F.4th 1356, 1364 (Fed. Cir. 2023) (internal quotations omitted).  Without this presumption of nexus, a patentee can instead establish a nexus – nexus in fact – by showing that the evidence of secondary considerations is the “direct result of the unique characteristics of the claimed invention.”  Id. (quoting In re Huang, 100 F.3d 135, 140 (Fed. Cir. 1996).  Once nexus is established, secondary considerations, such as expert skepticism, commercial success, and industry praise, may be evaluated.

Here, Petitioner contended there was no presumed nexus between the claims and evidence of secondary considerations because the claimed invention was a process and Patent Owner’s evidence related to a product (i.e. floor trays), and, thus, the commercial product cannot embody or be coextensive with the claimed process.  Petitioner also argued that, in addition to the claimed method, several other methods to create a closely conforming tray exist.  In addition, the Vice-President of Product Development of WeatherTech®, a company identified by Patent Owner as a real party in interest, even testified that “several unclaimed but ‘important’ steps” are used to make the floor trays.  Decision at 104.  Accordingly, at least in part because these unclaimed steps or features were not insignificant, the evidence cannot be tied to the product and therefore a nexus may not be presumed.  Alternatively, Petitioner argued that Patent Owner was precluded from arguing its secondary consideration rationales based on commercial success and industry praise under a theory of collateral estoppel. In particular, Petitioner contended that Patent Owner previously litigated the same secondary considerations in a case concerning apparatus claims granted in a related patent (i.e. the grandparent of the ’655 patent).  In the previous case, the Federal Circuit found that Patent Owner’s evidence relating to these secondary considerations was closely linked to a physical feature – a “closely conforming vehicle tray” – that it determined was known in the prior art.  Id. at 106.  Thus, the Federal Circuit considered evidence of industry praise and commercial success irrelevant to obviousness there.

On the other hand, Patent Owner argued that it was entitled to a presumption of nexus for claim 6 because the method of manufacturing used by WeatherTech® Direct, LLC to make its floor trays embodied and was coextensive with the claimed features.  But Patent Owner also admitted that claim 6 is materially different from claim 1 at issue in the grandparent.  Id. at 107.  Notably, Patent Owner presented substantially the same evidence to establish a presumption of nexus here as it did in the previous case.  Alternatively, even if a nexus may not be presumed, Patent Owner argued that evidence of secondary considerations, including evidence described in a declaration from the Vice-President, is the “direct result of the unique characteristics of the claimed invention,” providing nexus in fact.  Decision at 103.  The Vice-President’s expert testimony here attributed secondary considerations relating to commercial success and industry praise to the method of manufacture used to make closely conforming floor trays having a reservoir, whereas his expert testimony in the prior case attributed it to the “fit” that the floor liners had within the foot wells for which they were custom designed.  Id. at 106.  The expert tried to justify the discrepancy between his attributions as “just a lapse.”  Id.  In response to Petitioner’s alternative line of argument, Patent Owner argued that collateral estoppel did not apply because the issues in both cases were not identical given the differences between the claims.

It is well-established that “[t]he same evidence of secondary considerations cannot be presumed to be attributable to two different combinations of features.”  Id. at 107 (quoting Fox Factory, Inc., 944 F.3d at 1373).  Because of Patent Owner’s admission that claim 6 is materially different from claim 1 in the grandparent case, the PTAB concluded that Patent Owner could not rely on substantially the same evidence to presume nexus here that it had used in the previous case.

After concluding that Patent Owner was not entitled to a presumption of nexus, the PTAB evaluated whether Patent Owner established nexus in fact.  In doing so, however, the PTAB found that Patent Owner’s conflicting testimony on nexus from the Vice President was the result of “litigation induced bias” and that it was entitled to little or no weight.  In addition, the PTAB noted that the Vice President’s testimony regarding nexus focused on the commercial success being tied to the closely conforming floor trays, a feature not recited in claim 6.

Nonetheless, the PTAB found that Patent Owner failed to establish that its evidence of nexus differed from the previously litigated grandparent.  See id. at 107.  Because the same factual issue regarding industry praise and commercial success was already litigated in the prior case, the PTAB found that Patent Owner was collaterally estopped from relitigating the facts underlying these secondary considerations.  Id. at 109, 111-112.

Takeaways:  Patent owners may consider relying on evidence from experts outside their employ to establish a nexus for a secondary considerations analysis.  Patent owners should also be aware that secondary considerations findings in a related patent’s dispute may preclude additional arguments on those considerations.  Finally, an overall litigation strategy should be carefully considered when related patents are subject to separate proceedings.

* Fabian was a Summer Associate in Jones Day’s New York Office.

 

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Matthew Johnson

Partner at Jones Day
Matt Johnson is one of the Firm's primary contacts on practice before the PTAB. Currently co-chairing the Firm's PTAB subpractice and involved in proceedings at the Board since the first day of their availability in September 2012, Matt regularly represents clients as both petitioners and patent owners at the Board. He further works as an advocate for clients in appeals from Board proceedings at the Federal Circuit.