Prost, Chief Judge.
Appellant FOX Factory, Inc. ("FOX") appeals the decisions of the Patent Trial and Appeal Board ("Board") in two inter partes reviews ("IPRs") of claims 1-6 and 13-19 ("the challenged claims") of U.S. Patent No. 9,182,027 ("the '027 patent"). The Board found that the prior art references asserted by FOX disclose all the limitations of the '027 patent's independent claims and that a skilled artisan would have been motivated to combine the asserted prior art. The Board nevertheless concluded, based on its analysis of secondary considerations, that FOX had not shown that the challenged claims would have been obvious. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A) (2012). For the reasons below, we vacate and remand for further proceedings.
Bicycle chainrings are the toothed disks to which the bicycle crankarms are attached, collectively forming the crankset. Pedaling the crankarms rotates the chainring, which engages with and rotates the chain. Chains can be susceptible to disengaging from the chainring. This problem is especially prevalent with geared bicycles, which can experience severe changes in chain tension and energy motion of the chain, particularly when riding over rough terrain. Bicycles have employed extraneous structures, such as chain guides, to improve chain retention.
SRAM, LLC ("SRAM") owns the '027 patent, which generally covers an improved chainring structure that better maintains the chain, obviating the need for extraneous structures. For instance, the '027 patent discloses a chainring with alternating narrow and wide tooth tips, which allegedly improves chain retention because the narrow and wide teeth better fit inside the inner and outer chain links, respectively. In addition, the '027 patent discloses teeth offset from the center of the chainring, which also purportedly improves chain retention by providing "better guiding of the chain to one side of the chainring." Appellee's Br. 8 (quoting '027 patent col. 6 ll. 8-13).
The independent claims of the '027 patent —claims 1, 7, 13, and 20—recite a chainring with alternating narrow and wide tooth tips and teeth offset from the center of the chainring. Claims 7-12 and 20-26 generally cover tooth tips offset toward the body of the bicycle ("inboard offsets"), and claims 1-6 and 13-19 require teeth offset away from the body of the bicycle ("outboard offsets"). Claim 1 is representative of the "outboard offset" independent claims:
'027 patent claim 1. Claim 7 is representative of the "inboard offset" independent claims:
Id. at claim 7.
The '027 patent specification discloses additional chainring features that are not recited by the independent claims. Like the features claimed, each of the disclosed but non-claimed features contribute to improving chain retention. For example, the specification discloses forwardly protruding tip portions that "function[ ] to engage a chain link earlier than a chain lacking the tip portion and provide[ ] better guiding of the chain." '027 patent col. 5 ll. 47-51; see also id. at fig.5. The specification also discloses a "hook feature 78 ... that may be formed on the rear flank 70 of each" tooth and "may cooperate with the tip portion 76 to provide better guiding of the chain." Id. at col. 5 ll. 52-55; see also id. at fig.5. The specification further discloses "inner link-receiving recesses." Id. at col. 5 ll. 26-44; see also id. at figs.5, 7. Furthermore, the '027 patent explains that the narrow and wide teeth preferably fill at least 80% of the axial distance of the corresponding space in the chain link (">80% gap filling"). Id. at col. 4 ll. 19-41.
SRAM also owns U.S. Patent 9,291,250 ("the '250 patent"), which is a continuation of the '027 patent and includes claims reciting a chainring with alternating narrow and wide teeth and wide teeth with >80% gap filling. '250 patent claim 1; see also J.A. 5270, 5282. In separate IPR proceedings, SRAM stated that this "combination of features" claimed in the '250 patent, "amongst several others disclosed in the '250 patent, leads to a chainring that will retain a chain in even the worst conditions." J.A. 5282-83. SRAM also explained that the >80% gap filling feature "allows the inventive chainring to better retain the chain under many conditions and amounts to the `heart' of the challenged '250 patent claims combined with the narrow and wide tooth configuration." J.A. 5284. SRAM further described the >80% gap filling limitation as "critical." J.A. 5289.
SRAM sells thirteen different versions of its "X-Sync" chainrings. It is undisputed that twelve of the thirteen versions embody the inboard offset claims and the thirteenth version embodies the outboard offset claims.
FOX filed two petitions collectively requesting inter partes review of claims 1-26 of the '027 patent. One petition requested inter partes review of the outboard offset
The Board found that Japanese Utility Model No. S56-42489 ("JP-Shimano") and U.S. Patent No. 5,285,701 ("Parachinni") together disclose every limitation of the outboard offset independent claims and that a skilled artisan would have been motivated to combine the references. FOX Factory, Inc. v. SRAM, LLC, IPR2017-00472, 2018 WL 1889561, at *3-7 (P.T.A.B. Apr. 18, 2018) (J.A. 1-70) ("Board Decision 472"). The Board determined that JP-Shimano discloses the claimed narrow and wide teeth, and Parachinni discloses the claimed outboard offset. Id. at *3-5. The Board also found that a skilled artisan would have been motivated to combine the references because the skilled artisan would have recognized that the combination of the two features would improve chain retention better than either feature alone. Id. at *5-7.
Nevertheless, the Board determined, based on its analysis of secondary considerations, that FOX had not shown that the challenged claims would have been obvious. Id. at *21. SRAM submitted secondary considerations evidence pertaining to its X-Sync products. The Board determined that SRAM was entitled to a presumption of nexus between the challenged outboard offset claims and secondary considerations evidence pertaining to SRAM's X-Sync products, subject to two limitations. Id. at *7-10.
First, the Board stated that evidence of secondary considerations "specifically directed" to either an inboard or outboard offset X-Sync product is only entitled to a presumption of nexus with the claims reciting the same type of offset. Id. Second, the Board explained that the presumption of nexus only applies when a product is "coextensive" with a patent claim. Id. at *7. The Board interpreted the coextensiveness requirement to mean only that the claims must broadly cover the product that is the subject of the secondary considerations evidence. Id. at *9-10. Through that lens, the Board explained that SRAM's secondary considerations evidence pertaining to a specific X-Sync product or component (chainring, crankset, or drivetrain) is only coextensive with the claims broadly covering that particular component. Id. at *10-11. For instance, in the Board's view, SRAM's independent claims, which cover a chainring, are only coextensive with sales or industry praise of X-Sync chainrings, not sales or industry praise of X-Sync cranksets or drivetrains. Id. at *11.
FOX argued that SRAM's products are not coextensive with the challenged claims because the products include numerous unclaimed features. Id. at *9. The Board rejected this argument, reasoning that "[u]nclaimed features do not prevent the presumption of nexus, but they may be the basis for rebutting the presumption." Id.
FOX also argued that, under this court's decision in Therasense, Inc. v. Becton, Dickinson & Co., 593 F.3d 1289 (Fed. Cir. 2010), vacated on other grounds, 374 F. App'x 35 (2010), SRAM's products are not coextensive with the independent claims because the X-Sync products also embody the claims of additional patents that cover a different invention than the claims of the '027 patent. Board Decision 472, at *9.
Weighing the evidence, the Board determined that FOX could not rebut the nexus presumption, and due to SRAM's "extremely strong overall showing of objective indicia of non-obviousness," FOX had not shown by a preponderance of the evidence that the challenged claims would have been obvious. Id. at *21. FOX appealed the Board's obviousness determinations.
"We review the PTAB's factual findings for substantial evidence and its legal conclusions de novo." Redline Detection, LLC v. Star Envirotech, Inc., 811 F.3d 435, 449 (Fed. Cir. 2015) (citation omitted). "Substantial evidence is something less than the weight of the evidence but more than a mere scintilla of evidence," meaning that "[i]t is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." In re NuVasive, Inc., 842 F.3d 1376, 1379-80 (Fed. Cir. 2016) (internal quotation marks and citations omitted). "If two inconsistent conclusions may reasonably be drawn from the evidence in record, the PTAB's decision to favor one conclusion over the other is the epitome of a decision that must be sustained upon review for substantial evidence." Elbit Sys. of Am., LLC v. Thales Visionix, Inc., 881 F.3d 1354, 1356 (Fed. Cir. 2018) (internal quotation marks, brackets, and citation omitted). Obviousness is a legal question based on underlying fact findings. In re DBC, 545 F.3d 1373, 1377 (Fed. Cir. 2008).
On appeal, FOX contends that the Board applied the wrong standard for determining whether SRAM was entitled to a presumption of nexus between the challenged claims and SRAM's evidence of secondary considerations. We agree.
A patent claim is invalid "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 ordinary skill in the art to which the claimed invention pertains." 35 U.S.C. § 103 (2012).
In order to accord substantial weight to secondary considerations in an obviousness analysis, "the evidence of secondary considerations must have a `nexus' to the claims, i.e., there must be `a legally and factually sufficient connection' between the evidence and the patented invention." Henny Penny Corp. v. Frymaster LLC, 938 F.3d 1324, 1332 (Fed. Cir. 2019) (quoting Demaco Corp. v. F. Von Langsdorff Licensing Ltd., 851 F.2d 1387, 1392 (Fed. Cir. 1988)). "The patentee bears the burden of showing that a nexus exists." WMS Gaming Inc. v. Int'l Game Tech., 184 F.3d 1339, 1359 (Fed. Cir. 1999). "To determine whether the patentee has met that burden, we consider the correspondence between the objective evidence and the claim scope." Henny Penny, 938 F.3d at 1332.
As first recognized in Demaco Corp. v. F. Von Langsdorff Licensing Ltd., a patentee is entitled to a rebuttable presumption of nexus between the asserted evidence of secondary considerations and a patent claim if the patentee shows that the asserted evidence is tied to a specific product and that the product "is the invention disclosed and claimed." 851 F.2d at 1392 (emphasis added). That is, presuming nexus is appropriate "when the patentee shows that the asserted objective evidence is tied to a specific product and that product `embodies the claimed features, and is coextensive with them.'" Polaris Indus., Inc. v. Arctic Cat, Inc., 882 F.3d 1056, 1072 (Fed. Cir. 2018) (quoting Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d 1120, 1130 (Fed. Cir. 2000)). Conversely, "[w]hen the thing that is commercially successful is not coextensive with the patented invention—for example, if the patented invention is only a component of a commercially successful machine or process," the patentee is not entitled to a presumption of nexus. Demaco, 851 F.2d at 1392.
We have reaffirmed the importance of the "coextensiveness" requirement in subsequent opinions. See, e.g., Sight-Sound Techs., LLC v. Apple Inc., 809 F.3d 1307, 1319 (Fed. Cir. 2015) ("If a product both embodies the claimed features and is coextensive with the claims at issue, a nexus is presumed. In other words, a nexus exists if the commercial success of a product is limited to the features of the claimed invention." (citation and quotation marks omitted)); Therasense, 593 F.3d at 1299.
A finding that a presumption of nexus is inappropriate does not end the inquiry into secondary considerations. See In re Huang, 100 F.3d 135, 140 (Fed. Cir. 1996). To the contrary, the patent owner is still afforded an opportunity to prove nexus
The parties dispute whether the X-Sync chainrings are coextensive with the independent claims.
The independent claims cover a chainring that includes wide and narrow teeth and either inboard or outboard offset teeth. It is undisputed that the X-Sync chainrings include unclaimed features. See generally Appellant's Br.; Appellee's Br. 24-25. For example, SRAM does not dispute that its X-Sync chainrings embody the independent claim of a different patent —the '250 patent—which, as explained previously, covers a chainring with both wide and narrow teeth and wide teeth with >80% gap filling. See J.A. 5282-85 (Preliminary Patent Owner Response). As discussed in more detail below, because the independent claims of the '027 patent do not recite this >80% gap filling feature, the independent claims are not coextensive with the X-Sync chainrings.
To be sure, we have never held that the existence of one or more unclaimed features, standing alone, means nexus may not be presumed. Indeed, there is rarely a perfect correspondence between the claimed invention and the product. As we explained, the purpose of the coextensiveness requirement is to ensure that nexus is only presumed when the product tied to the evidence of secondary considerations "is the invention disclosed and claimed." Demaco, 851 F.2d at 1392 (emphasis added). Thus, if the unclaimed features amount to nothing more than additional insignificant features, presuming nexus may nevertheless be appropriate.
Put differently, the degree of correspondence between a product and a patent claim falls along a spectrum. At one end of the spectrum lies perfect or near perfect correspondence. At the other end lies no or very little correspondence, such as where "the patented invention is only a component of a commercially successful machine or process." Id. Although we do not require the patentee to prove perfect correspondence to meet the coextensiveness requirement, what we do require is that the patentee demonstrate that the product is essentially the claimed invention. See id. While coextensiveness is an issue of fact that should ordinarily be decided by the fact finder in the first instance, no reasonable fact finder could conclude, under the proper standard, that the X-Sync chainrings are coextensive with the patent claims.
It is undisputed that the X-Sync chainrings include unclaimed features that the
In short, because the independent claims do not include the >80% gap filling feature, we cannot say that the X-Sync chainrings are the invention claimed by the independent claims. Accordingly, the Board erred in presuming nexus between the independent claims of the '027 patent and secondary considerations evidence pertaining to SRAM's X-Sync chainrings.
The lack of coextensiveness between the independent claims of the '027 patent and SRAM's X-Sync chainrings appears to extend far beyond the gap filling feature to additional unclaimed features. More specifically, FOX contends, and SRAM does not contest, that the X-Sync chainrings further include the following unclaimed features: (1) forwardly protruding tooth tips, Appellant's Br. 22-26; see also '027 patent col. 5 ll. 45-51, fig.5; (2) hook features on the teeth, Appellant's Br. 22-26; see also '027 patent col. 5 ll. 52-55, fig.5; and (3) mud-clearing recesses, Appellant's Br. 22-26. As to the first, the '027 patent specification explains that forwardly protruding tooth tips "function[ ] to engage a chain link earlier than a chain lacking the tip portion and provide[ ] better guiding of the chain." '027 patent col. 5 ll. 45-51; see also id. at fig.5. As to the second, the '027 patent specification explains that such hook features "cooperate with the [forwardly protruding tips] 76 to provide better guiding of the chain." Id. at col. 5 ll. 52-55; see also id. at fig.5. As to the third, SRAM's marketing materials explain that these recesses "get rid of mud so the chain remains in place no matter what conditions you're up against." J.A. 5316.
SRAM's counterarguments are unpersuasive. First, SRAM argues that the existence of unclaimed features in a commercial product is irrelevant to the question of whether nexus can be presumed between that product and a patent claim.
On a broader note, if we were to agree with the positions taken by both SRAM and the Board—i.e., that the coextensiveness requirement is met so long as the patent claim broadly covers the product that is the subject of the secondary considerations evidence, irrespective of the nature of any unclaimed features—then the coextensiveness requirement would rest entirely on minor variations in claim drafting. For instance, suppose a patent includes some claims specifically covering novel "brake pads" and others directed to an "automobile" in which the body of the claim recites little more than the novel brake pads. It is beyond dispute that the "brake pad" claims would not be entitled to a nexus presumption with any secondary considerations evidence tied to commercially sold automobiles containing those brake pads (e.g., commercial success or praise of the automobiles). In SRAM
We reject SRAM's attempt to reduce the coextensiveness requirement to an inquiry into whether the patent claims broadly cover the product that is the subject of the evidence of secondary considerations. Such an interpretation is inconsistent with Demaco's requirement that nexus can only be presumed where the evidence of secondary considerations is tied to a specific product that "is the invention disclosed and claimed." Demaco, 851 F.2d at 1392 (emphasis added). Nor is such an interpretation consistent with Demaco's explanation that nexus cannot be presumed where, for example, "the patented invention is only a component of a commercially successful machine or process." Id. We are bound by Demaco and decline to depart from it.
Second, SRAM also argues that because the '250 patent is a continuation of the '027 patent, failing to presume nexus in this case "would result in the absurd situation that multiple continuations on a patent would prohibit a presumption of nexus." Appellee's Br. 50. SRAM continues that "[t]his Court has recognized time and again that related patents can share a presumption of nexus." Id. at 53. Where a product embodies claims from two patents, a presumption of nexus can be appropriate only if the claims of both patents generally cover the same invention. In each of the cases SRAM cites for the proposition that the claims of multiple patents can share a presumption of nexus with the same product, the claims of each of the patents covered essentially the same invention. See, e.g., WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1324-25 (Fed. Cir. 2016) (presuming nexus between a product and the asserted claims of two related patents where the patents covered essentially the same invention, and the court identified a single claim as representative of both patents); PPC Broadband, 815 F.3d at 737-39 (presuming nexus between a product and the asserted claims of three patents where the asserted claims of all three patents recited the same essential features); Gator Tail, LLC v. Mud Buddy LLC, 618 F. App'x 992, 995, 999-1000 (Fed. Cir. 2015) (presuming nexus between a product and all of the asserted claims where "the [related] patents essentially claim the same invention"); Media Techs. Licensing, LLC v. Upper Deck Co., 596 F.3d 1334, 1336-39 (Fed. Cir. 2010) (unclear as to whether nexus was presumed, and in any event the related patents were drawn to the same invention).
In addition, although the fact that SRAM separately sought patent protection for the combination of wide and narrow teeth with this >80% gap filling feature is alone probative of whether this combination of features adds up to more than an insignificant additional feature, see Therasense, 593 F.3d at 1299, a presumption of nexus might well be inappropriate in this case even if SRAM never sought such patent protection. In particular, the X-Sync products are not coextensive with the independent claims of the '027 patent because the products include a "critical" unclaimed feature not covered by the independent claims of the '027 patent that materially impacts the product's functionality by "lead[ing] to a chainring that will retain a chain in even the worst conditions." See J.A. 5282-84, 5289. This is true regardless of whether SRAM included these unclaimed features in other patents.
We note that the Board's determinations in these IPR proceedings on the '027 patent and the IPR proceedings on the '250 patent highlight one reason why nexus may not be presumed under these circumstances. Between these two proceedings, the Board presumed nexus between the independent claims of both patents and the secondary considerations evidence submitted by SRAM, see J.A. 6458-62, even though (a) SRAM relies on essentially the same evidence of secondary considerations in both proceedings; J.A. 5455-76, 6363-88; see also J.A. 5282-84, 5289; and (b) the '027 and '250 patent claims cover different inventions. The same evidence of secondary considerations cannot be presumed to be attributable to two different combinations of features. See Therasense, 593 F.3d at 1299. In such situations, the patentee retains the burden of proving the degree to which evidence of secondary considerations tied to a product is attributable to a particular claimed invention. See, e.g., WMS Gaming, 184 F.3d at 1359.
Because the Board erroneously presumed nexus between the evidence of secondary considerations and the independent claims, we vacate the Board's obviousness determination and remand for further proceedings. On remand, SRAM will have the opportunity to prove nexus between the challenged independent claims and the evidence of secondary considerations. More specifically, SRAM will bear the burden of proving that the evidence of secondary considerations is attributable to the claimed combination of wide and narrow teeth with inboard or outboard offset teeth, as opposed to, for example, prior art features in isolation or unclaimed features. See, e.g., Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023, 1034 (Fed. Cir. 2016) (for patent claims covering a combination of prior art features, to establish nexus, patentee must show that the evidence of secondary considerations is attributable to "the combination of the two prior art features ... that is the purportedly inventive aspect of the [challenged] patent" as opposed to unclaimed features or either prior art feature in isolation).
Separate from the issue of nexus, in its response to FOX's statement of the case, SRAM briefly contends that we can enter judgment in favor of SRAM on an alternative ground: that substantial evidence does not support the Board's conclusions that a
Even if this argument is properly preserved, it is meritless. Substantial evidence —including the declarations submitted by FOX's expert—supports the Board's conclusion that a skilled artisan would have been motivated to combine the asserted prior art because the skilled artisan would have recognized that the combination of prior art features would better address chain drop than either feature in isolation. See, e.g., J.A. 4492-4513, 5219-27, 5762-89, 6099-6106. Therefore, we affirm the Board's determination that a skilled artisan would have been motivated to combine the asserted prior art.
FOX also raises a SAS-based remand request. In one of the underlying inter partes review proceedings, IPR 2017-00118, the Board instituted review of only two of the eight grounds of unpatentability raised by FOX. Three weeks after the Board's final written decision, the Supreme Court issued its decision in SAS Institute v. Iancu, ___ U.S. ___, 138 S.Ct. 1348, 200 L.Ed.2d 695 (2018). Shortly after this appeal was docketed, and before any briefs were filed, FOX moved to terminate the appeal as to IPR2017-00118 on the ground that the Board failed to follow the requirements set forth in SAS by failing to institute review of all eight grounds FOX raised. Motion of Appellant FOX Factory, Inc., for Remand of Appeal No. 2018-2024 (IPR2017-00118) in View of Intervening Authority at 1-2 (Sept. 28, 2018), ECF No. 22 ("Motion"). Although we chose not to terminate the appeal as to IPR No. 2017-00118, we now remand to the Board to consider the non-instituted grounds.
SRAM contends that FOX waived its right to a remand (and to terminate the appeal) pursuant to SAS because FOX failed to raise its SAS objection before the Board. Appellee SRAM, LLC's Opposition to Appellant's Motion to Remand at 2 (Oct. 2, 2018), ECF No. 24. This argument, however, is unavailing because SAS issued after the Board's final written decision, and we have not required filing a request for reconsideration to preserve a SAS-based remand. See BioDelivery Scis. Int'l, Inc. v. Aquestive Therapeutics, Inc., 898 F.3d 1205, 1208 (Fed. Cir. 2018) ("We also declined to find that a party waived its right to seek SAS-based relief due to failure to argue against partial institution before the PTAB.").
SRAM also argues that FOX waived its right to a remand because FOX failed to explicitly raise its SAS objection in its
We vacate the Board's obviousness determinations in IPR 2017-00118 and IPR 2017-00472 and remand for it to reevaluate the import of the evidence of secondary considerations with the burden of proving nexus placed on the correct party. We also remand IPR 2017-00118 for the Board to consider the non-instituted grounds.
The parties shall bear their own costs.