February 24, 2022 - Last Week in the Federal Circuit

Last Week In The Federal Circuit (February 14-18): When Objective Indicia Evidence Both Is, And Is Not, Sufficient For Non-Obviousness

Despite no precedential patent decisions at the Federal Circuit last week, the Court still addressed some interesting issues, including a decision in which the Patent Trial and Appeal Board rejected a patentee’s alleged objective indicia of non-obviousness for a patent’s broader claims, but upheld them as to narrower substitute claims.  Below we provide our usual weekly statistics and a detailed discussion of our case of the week—our highly subjective selection based on whatever case piqued our interest.

Precedential opinions:  2

Non-precedential opinions:  10

Rule 36:  5

Longest pending case from argument:  Jones v. United States, No. 20-2182 (166 days)

Shortest (non-Rule 36) pending case from argument: Travel Sentry Inc. v. Tropp, No. 21-1908 (5 days)

Cases of the week:  Zaxcom, Inc. v. Lectrosonics, Inc., Nos. 20-1350, -1405; and Nos. 20-1921, -1922, -1943, -1944

Panel:  Judges Taranto, Lourie, and Schall, with Judge Taranto writing both opinions

You should read these cases if:  you are involved in a dispute with objective indicia of non-obviousness.

In this week’s case of the week, the Federal Circuit upheld three Patent Trial and Appeal Board decisions assessing three Zaxcom patents.  The Zaxcom patents are directed to wireless audio recording systems.  Each patent relates to recording audio locally on a device and streaming it wirelessly to a remote recorder, which records the audio a second time.  The original claims required that the locally recorded audio data be “combined” with the remotely recorded audio data.  The Federal Circuit agreed with the Board that, under the broadest reasonable interpretation of the claim language, the claims cover two applications:

(1)   combining the two recordings to create a multi-track audio file (“multitrack creation”); and

(2)   combining the locally and remotely recorded audio to repair corruption or dropouts in the remotely recorded audio data (“dropout repair”).

At the Board, Zaxcom sought to rebut alleged obviousness combinations by introducing objective indicia of non-obviousness — evidence of industry praise, commercial success, and solving a long-felt but unmet need.  But the Board found that this evidence was directed solely “to the critical feature of dropout repair,” and the Federal Circuit affirmed that finding under the deferential substantial evidence standard of review.  Because the original claims were broad enough to also cover the multitrack creation approach disclosed in the obviousness combinations advanced by Petitioner Lectrosonics, the Board also found that the objective indicia evidence lacked the required nexus to the full scope of Zaxcom’s claims and thus failed to support non-obviousness.  The Federal Circuit affirmed that Zaxcom’s evidence was “insufficient to overcome the prior-art evidence of obviousness”—the evidence “in short, says nothing to suggest non-obviousness of one of the two types of systems and methods within the claims’ coverage.”

The Board reached a different conclusion with respect to Zaxcom’s amended claims, and the Federal Circuit affirmed that too.  The Federal Circuit explained that “[t]he substitute claims narrow the ‘combined’ claim limitation to a limitation that requires ‘replacing’ the remotely recorded data with local audio data,” and “Lectrosonics accepts that the substitute claims are directed to dropout repair.”  Because the amended claims were limited to dropout repair, the Board found a sufficient nexus between the industry praise and the amended claims.  The Federal Circuit saw “no basis for reversing the Board’s findings,” particularly because the objective indicia evidence directly discussed the “dropout repair” feature that the narrowed claims required.  As a result, the Federal Circuit upheld all three patents in their amended form.

The Federal Circuit non-precedential decisions thus provide clear examples of when objective indicia does, and does not, have a sufficient connection to claims to support non-obviousness.  In addition, one of the Board decisions here was designated precedential at the Board for its holding that a nexus between the evidence and the merits of the claimed invention must be established in order for objective indicia of non-obviousness to be given substantial weight.  Parties thus should expect that issues of nexus will continue to be a focus in proceedings before the Board involving objective indicia of non-obviousness.