Nexus: the PTAB’s Objective Indicia of Non-Obviousness Analysis Under Fox Factory Designated as Precedential

As reported in our December 2019 newsletter, in Lectrosonics v. Zaxcom[i] the Patent Trial and Appeal Board (PTAB or Board) granted Zaxcom’s motion to amend and, under a nexus-analysis framework, found each of the substitute claims to be patentable because there was sufficient nexus between the objective indicia and the claims. After the December article published, the Board’s analysis under Fox Factory[ii] regarding nexus to objective indicia of non-obviousness was made precedential.

The Board found that for objective indicia of nonobviousness to be accorded substantial weight, Patent Owner must establish a nexus between the evidence and the merits of the claimed invention. That is, a patentee is entitled to a presumption of nexus “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.’”[iii]

The purpose of the coextensiveness requirement is to ensure that the patentees product is tied to the patentable claim language and not to claimed features that were already known in the art. For example, a patent is not coextensive with a patentee’s product when that product includes a “critical” unclaimed feature that is claimed by a different patent.

If the coextensiveness requirement cannot be met, a patent owner can still prove nexus by showing that the “evidence of secondary considerations is the ‘direct result of the unique characteristics of the claimed invention.’”[iv] But there must still be “a nexus to some aspect of the claim not already in the prior art.”[v] In other words, if the argued secondary considerations actually result from features that are not claimed, there is no nexus to the merits of the claimed invention.

Finally, the Board must also weigh the secondary considerations evidence presented in the context of whether the claimed invention as a whole would have been obvious to a skilled artisan.[vi]

Here, as we previously reported,[vii] the challenged claims recited systems and methods for “combining” locally recorded audio data with remotely recorded audio data using a wearable device. The PTAB did not find Zaxcom’s evidence of objective indicia of non-obviousness sufficient because, the proffered evidence related to the elimination of “dropouts,” which are caused by a loss of audio data. In contrast, the challenged claims were broader, encompassing situations where audio data is merely “combined,” without necessarily having any tie to a drop out event.

The PTAB further held that Zaxcom’s amended claims did have a sufficient nexus to the praise its commercial embodiment received because the amended claims specifically recite “replacing” audio data with locally recorded audio data. According to the PTAB, Zaxcom received industry praise for the “replacing” feature. Indeed, Zaxcom showed that its inventors received a technical Emmy award from the National Academy of Television Arts and Sciences for its commercial product. The Emmy related to the product’s ability to eliminate “dropouts” by “replacing” audio data and thereby dramatically simplify the recording process. And both parties’ experts agreed that the industry praise related to the elimination of “dropouts” afforded by the invention.

In Fox Factory, the Federal Circuit raised the “nexus” bar, making it more difficult for patent owners to prove that the objective indicia of non-obviousness of a product being sold by the patentee is essentially the claimed invention. With the USPTO designating Lectrosonics as precedential, it looks as though the higher bar is here to stay.

[i] Lectrosonics, Inc. v. Zaxcom, Inc., Case IPR2018-01129, Paper 33 (Jan. 24, 2020) (Precedential).

[ii] Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366, 1373 (Fed. Cir. 2019)

[iii] Id. at 61 (citing Fox Factory at 1373).

[iv] Id. at 33.

[v] Id.

[vi] Id.

[vii] https://www.sternekessler.com/news-insights/publications/amending-claims-ipr-objective-indicia-may-be-strategic-guide-post

This article appeared in the July 2020 issue of PTAB Strategies and Insights. To view our past issues, as well as other firm newsletters, please click here.