In a recent inter partes review (IPR), a patent owner overcame a facially persuasive obviousness challenge by relying on evidence from an earlier litigation to establish objective indicia of nonobviousness.
In RTI Surgical, Inc. v. LifeNet Health, the petitioner challenged various claims of a patent directed to a soft tissue graft product. Although the Patent Trial and Appeal Board agreed with the petitioner that nearly all of the claims were anticipated, the patent owner managed to save one dependent claim—claim 4—that differed from the other claims in that it required the soft tissue graft to be suitable for use "without rehydration."
Because of this additional limitation, petitioner argued that claim 4 would have been obvious in light of the anticipating references and an additional piece of prior art that taught a way to use soft tissue grafts without rehydration. The board reviewed this prior art and determined that all of the elements of claim 4 could be found in those references. The board further found that petitioner made a "moderately persuasive" showing that a skilled artisan would have been motivated to make the proposed combination of references with a reasonable expectation of success. The patent owner, however, marshalled enough objective indicia of nonobviousness—including (i) whether there existed a long-felt but unresolved need, (ii) the failure of others, (iii) industry adoption of the patented invention, (iv) industry praise and (v) commercial success of the patented invention—to overcome the petitioner's obviousness showing.
Much of the most persuasive objective indicia evidence came from an earlier successful lawsuit. The patent owner had previously sued a company called LifeCell for infringing a patent related to the patent under review, and successfully obtained a $35 million judgment. In the IPR, the patent owner used trial transcripts and documents containing sales information from this lawsuit as objective evidence that claim 4 was not obvious.
To make the objective indicia evidence relevant, the patent owner had to first establish a "nexus" between the merits of claim 4 and LifeCell's product sales. This required a fairly extensive showing by the patent owner. First, it submitted an expert declaration comparing claim 4 to LifeCell's soft tissue graft products, concluding that the product was covered by—and co-extensive with—the claims. Then, the patent owner provided evidence that LifeCell advertisements specifically touted that its soft tissue grafts were "ready to use" because they did not require rehydration. Petitioner attempted to counter patent owner's "nexus" showing by arguing that the benefits of the LifeCell soft tissue graft product stemmed from their unpatented features. The board dismissed this counterargument because petitioner did not provide evidence to support it.
With nexus established, the patent owner provided evidence of two types of objective indicia that the board found very persuasive: industry adoption and commercial success. Specifically, the patent owner submitted undisputed evidence that LifeCell, an industry-leading manufacturer, had shifted its product sales from a noninfringing soft tissue graft product to an infringing soft tissue graft product and upon doing so, the infringing product cannibalized sales of the noninfringing product. The patent owner further submitted undisputed evidence that the infringing soft tissue graft product accounted for a significant part of LifeCell's revenues. The board found that this evidence demonstrated that the market preferred and rapidly adopted the invention of claim 4, making it less likely that the invention was obvious.
The patent owner had presented additional objective indicia evidence that the board did not find persuasive. Specifically, the patent owner provided evidence of a failure by LifeCell to develop a noninfringing ready-to-use graft product. But the board gave this evidence little weight because it involved a single entity attempting a single failed approach. The board further disregarded the patent owner's evidence of industry praise as too insignificant. The alleged "praise" consisted only of two isolated instances, one of which the board characterized as anonymous and promotional in nature. Moreover, the board gave no weight to the patent owner's evidence of "long-felt need" because the evidence post-dated the filing of the patent application.
Taking all of the evidence together, the board ultimately determined that the patent owner's "objective indicia" evidence of nonobviousness outweighed the petitioner's obviousness evidence and concluded that claim 4 was not obvious.
Practice Tip: When faced with a strong obviousness challenge, a patent owner should consider presenting evidence of objective indicia of nonobviousness. This may include evidence of record from a prior litigation. To successfully rely on that evidence, a patent owner must establish a nexus between the evidence presented and the claimed features.
RTI Surgical, Inc. v. Lifenet Health, IPR2019-00572, Paper 74 (PTAB August 4, 2020).
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