A Little Reminder to the PTO about Due Process and the Importance of Objective Evidence of Non-Obviousness
By Alison Baldwin --
In its decision on September 24th, the Federal Circuit reminded the Patent Office that the principles of due process are still alive and kicking and cannot be ignored by the Patent Office's judiciary.
The case came to the Federal Circuit on appeal from a decision by the USPTO's Board of Patent Appeals and Interferences (BPAI) holding invalid various claims of U.S. Patent No. 6,260,097, which had been finally rejected as invalid by the examiner during an inter partes reexamination. The '097 patent relates to dynamic random-access memory (DRAM). Specifically, the claims are directed to what the assignee, Rambus, refers to as the "dual-edge/double-data-rate" functionality because the system transfers data at twice the rate by employing both the rising and falling edges of a clock signal that synchronizes the operations within the system. While the technology at issue in this case is outside the normal parlance of the Patent Docs faithful, the issues raised by the Federal Circuit in its decision are applicable to any technology.
Rambus appealed the Board's decisions on the issues of claim construction and obviousness. The Federal Circuit agreed with the Board's claim construction and, for purposes of this post, we will not address the Court's claim construction analysis as it was fairly routine. The real take-away for the reader of the Rambus v. Rea decision were the three errors the Federal Circuit found with the Board's obviousness decision.
The first error by the Board was a shifting the burden onto the Patentee to prove that the claims were not obvious. In its opinion, the BPAI had concluded that "Rambus ha[d] not demonstrated that skilled artisans . . . would not have been able to arrive at the broadly claimed invention." Rambus v. Rea, p. 11, citing Board decision. As the Federal Circuit reminded the Patent Office, the burden is the Office's, not the Applicants, to present evidence of invalidity. This is particularly true in a reexamination proceeding where "a preponderance of the evidence must show nonpatentability before the PTO may reject the claims." Id. at 11. As we enter the new age of reexamination under the inter partes review process, this opinion serves as an important reminder to the new ALJs empaneled as part of the Patent Trial and Appeal Board.
The second error by the Board was created when the Board supplied its own reasons, that differed from those set forth previously by the examiner, to combine the prior art references to arrive at its obviousness determination. The Board may not rely on new facts and rationales not previously raised to the applicant by the examiner because the applicant has to have a "fair opportunity to react to the thrust of the rejection." Id. at 12. If the applicant has not had an "fair opportunity" to respond to the rejection, then the Board must designate its decision a new ground of rejection and provide appellant with an opportunity to respond. The Federal Circuit did not issue an opinion on the merits of the Board's obviousness determination -- it just took issue with the procedure used. However, it was a good reminder to the BPAI that these steps in the process cannot be skipped.
The final error by the Board was in its mistreatment of objective evidence non-obviousness. The Board took a very restrictive view of the nexus required between the evidence and the merits of the claimed invention. First, Rambus presented uncontested evidence of long-felt need and industry praise due to the claimed dual-edge data transfer functionality through an industry article and a press release by a Rambus competitor. However, the Board held that this evidence was not commensurate with the scope of the claims because the evidence discussed only one embodiment of the claims. The Court reminded the BPAI that the objective evidence need only be "reasonably commensurate with the scope of the claims." A patentee is not required to produce objective evidence of nonobviousness for every potential embodiment of the claim.
Rambus also presented uncontested evidence of commercial success through its licensing activities relating to its dual-edge data transfer functionality. The Board held that the evidence lacked nexus because "competitors have many reasons for taking licenses which are not necessarily related to obviousness." Id. at 15. The Federal Circuit took issue with the Board's position because there was no evidence in the record to support that assertion that the commercial value of the licenses stemmed from factors other than the claimed invention.
Finally, the Board held that all of the objective evidence of non-obviousness presented by Rambus lacked a nexus because the "dual-edge functionality" was disclosed in the prior art and, therefore, was not novel. The Federal Circuit reminded the BPAI that the obviousness inquiry must center around "the claimed invention as a whole." Id. The Court held that the evidence presented by Rambus was not limited to just the feature disclosed in the prior art. However, the Court declined to make a final factual determination regarding the objective evidence and remanded back to the PTO.
Viewing the Rambus v. Rea decision in light of other recent Federal Circuit decisions this year, such as Plantronics, Inc. v. Aliph, Inc. (July 31, 2013), Apple Inc. v. ITC (August 7, 2013), and Leo Pharmaceutical Products v. Rea (August 12, 2013), the Federal Circuit could not be sending a clearer message to all judiciary involved in invalidity determinations. Objective evidence of non-obviousness is not an optional component of the obviousness inquiry -- it is absolutely required and must be given its full consideration and weight.
Rambus Inc. v. Rea (Fed. Cir. 2013)
Panel: Circuit Judges Moore, Linn, and O'Malley
Opinion by Circuit Judge Moore