DISCUSSION – IN RE NUVASIVE (Dec. 2016 Fed. Cir. Case)
On December 7, 2016, in the matter of In re Nuvasive, the Federal Circuit vacated and remanded a PTAB final decision because the PTAB’s written opinion did not adequately explain why the invention was obvious over the prior art.
The case arose as the result of a post-grant inter parties proceeding to determine whether certain of Nuvasive’s claims in a patent granted in 2006 would have been obvious over the prior art. Therefore the analysis was conducted under the statute in effect before the pre-America Invents Act (AIA) was applicable since the effective filing date was before March 16, 2013. Prior to the AIA, a patent claim was invalid “if the differences between the subject matter sought to be patented and the prior art would have been obvious at the time [of the invention] to a person having ordinary skill in the [relevant] art.” 35 U.S.C. § 103(a) (2006). Emphasis added. The AIA revised 35 U.S.C. § 103 to change the date on which to assess the obviousness of an invention from the “time the invention was made” to “before the effective filing date of the claimed invention.” The change generally expanded the scope of available prior art that can be used to either reject patent application claims or to invalidate patent claims in a post-grant proceeding. Nevertheless, the obviousness determination rules are still applicable to pre and post-AIA obviousness considerations whether the determination is being made by an examiner, the PTAB or a court.
In finding that the claims of an invention are obvious over the prior art, references may be combined to establish that a person of ordinary skill in the art would have been motivated to combine the prior art to achieve the claimed invention. A finding of obviousness, however, must be supported by a reasoned explanation. Conclusory statements without more are insufficient. The U.S. Supreme Court stated as such in the 2007 case of KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398, 418 (“It can be important to identify a reason that would have prompted a person of ordinary skill in the art to combine the elements in the way the claimed invention does.”).
The Nuvasive court reminded the TTAB that the Federal Circuit’s precedent has always followed the requirement that “ ‘[t]he factual inquiry whether to combine references must be thorough and searching,’ ” and ‘ “[t]he need for specificity pervades [our] authority on the PTAB’s findings on motivation to combine . . .. Our precedent dictates that the PTAB must make a finding of motivation to combine when it is disputed.’ ” “ ‘Although identifying a motivation to combine need not become [a] rigid and mandatory formula, the PTAB must articulate a reason why a person of ordinary skill in the art would combine the prior art references.’ ” Slip opinion at 9 quoting several cases.
The opinion goes on to admonish the PTAB for its failure to do as much in the Nuvasive matter by stating “[o]ur recent decisions demonstrate that the PTAB knows how to meet the burden” and cite several cases where the court had had no problem with the rationale given by the PTAB in finding a motivation to combine references. Slip opinion at 9.
The court found that the PTAB’s motivation-to combine explanation was insufficient to show that the agency had done its job in the Nuvasive matter for several reasons:
- The PTAB has made “conclusory statements” which alone are insufficient if not supported by a “reasoned explanation.”
- The PTAB’s final written decision summarized the parties’ arguments without providing its own analysis.
- The PTAB relied on common sense to reach its conclusions. “ ‘[R]eferences to common sense . . . cannot be used as a wholesale substitute for reasoned analysis and evidentiary support.’ ” Nuvasive court quoting Arendt S.A.R.L. v. Apple, Inc. 832, F.3d 1355, 1362 (Fed. Cir. 2016).
- The PTAB failed to explain the reason why a person of ordinary skill in the art would have been motivated to modify either of the [prior art references] in light of a third prior art reference to achieve Nuvasive’s invention. Court’s emphasis.
Unfortunately for Nuvasive, the court did not simply reverse the PTAB but remanded the case for additional PTAB findings and explanations regarding why a person of ordinary skill in the art would be motivated to combine the prior art references. Whether or not the PTAB can meet its burden from the record remains to be seen.
TAKE HOME POINTS AND TIPS
No matter how the case turns out, the Nuvasive decision does, however have some take home points. Whether dealing with an application or a post-grant proceeding, the PTAB has the burden of articulating the reasons why it is rejecting a claim(s) on the basis of obviousness resulting from a motivation to combine. The examiner of an application has the same burden. Neither mere conclusory statements nor “common sense” opinions are sufficient in rendering an obviousness opinion. A rationale must be provided. The rationale need not be a treatise but must be clear and well thought out. The Nuvasive court cited several cases in which the PTAB’s rationale was found sufficient because there was indeed a foundation in the prior art. For example, in Allied Erecting & Dismantling Co. v. Genesis Attachments, LLC, the Federal Circuit affirmed the PTAB’s decision that “a skilled artisan could modify Caterpillar in view of Ogawa by treating the first jaw like the second for a greater degree of movement between the jaws, without impacting the quick change functionality.” 825 F. 3d 1373, 1381 (Fed. Cir. 2016).
The Nuvasive decision again emphasizes that the PTAB (and by extension, the application examiner) must explain its/her rationale for an obviousness rejection. Failure of an examiner to apply the proper legal framework in asserting obviousness may well provide the patent applicant with a solid argument for overcoming an obviousness rejection. In fact the MPEP (Manual of Patent Examining Procedure) has detailed sections on the various grounds for rejection of patent claims resulting from subject matter eligibility issues under 35 U.S.C. § 101; anticipation and the on-sales bar under 35 U.S.C. § 102; obviousness under 35 U.S.C. § 103; and indefiniteness under 35 U.S.C. § 112. Failure of the PTAB to apply the framework for establishing obviousness during either a pre-grant appeal or a post-grant proceeding may well provide the applicant/patent owner with solid arguments for overcoming an obviousness finding by the PTAB.
In conclusion, it is also strongly recommended that the applicant have a good understanding of the relevant prior art at the time the application is filed and conduct an honest assessment as to where “obviousness” and other types of patentability issues could arise. It is important for applicants to understand that the lack of a similar invention on the market at the time the applicant is considering filing an application DOES NOT mean that there is no relevant prior art. Basically any publicly available publication from advertisements to old patent publications from anywhere in the world can serve as prior art. Patent procurement should therefore always focus on two considerations. The first consideration is to obtain patent protection with the maximum number of claims. The second consideration is to end up with approved claims that will stand up in a post-grant proceeding whether initiated before the PTAB or as the result of a patent infringement proceeding. Remember that a patent is only as good as long as it can be practiced. Even a seemingly sound patent may be subject to a validity challenge during its lifetime.
THE FOREGOING IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT LEGAL ADVICE!
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