Although formally a part of the obviousness inquiry for decades, secondary considerations (also known as “objective indicia”) were in practice traditionally not afforded much attention by practitioners and courts. In recent years, however, the Federal Circuit has instructed not only district courts but also the International Trade Commission (“ITC”) and the Patent Trial and Appeal Board (“PTAB”) to consider secondary considerations, where present, in making obviousness determinations.1 A September 2017 split decision from the Federal Circuit, however, may have put a halt to this trend.2 In Intercontinental Great Brands LLC v. Kellogg North America Co., Judge Taranto, writing for the majority, explained that secondary considerations need not be considered before a “prima facie case of obviousness” is reached, but that they do need to be considered before an “ultimate conclusion of obviousness” is reached.3 In a nonprecedential decision three months later, Judge Taranto disagreed with the Court of Federal Claims’s dismissal of secondary considerations before a strong obviousness showing, and emphasized that “[secondary considerations] must be considered in every case where present.”4 This article considers these two recent Federal Circuit decisions, particularly in view of the recent trend at the Federal Circuit with respect to secondary considerations.
Secondary considerations such as commercial success of an invention, long felt but unsolved needs, and failure of others in making the invention have been formally part of the obviousness analysis for decades.5 In practice, however, practitioners often placed little importance on secondary considerations in their arguments, and district courts often treated secondary considerations as “secondary” to other obviousness reasonings such as motivation to combine.6 The result was that courts often reached obviousness conclusions first, and reviewed secondary considerations only after such obviousness conclusions were already reached.7
In recent years, however, the Federal Circuit has emphasized the importance and role of secondary considerations in making obviousness determinations. In a string of decisions, the Federal Circuit instructed district courts, the ITC, and the PTAB alike to account for secondary considerations, where present, in making obviousness determinations, even in the presence of other strong obviousness factors.8 Notwithstanding a few contrary decisions, the Federal Circuit appeared in recent years to generally endorse an approach in which secondary considerations, where present, are to be considered along with the other Graham factors in determining obviousness, and not merely as a “secondary” inquiry after a finding of obviousness is made.
In September 2017, however, Judge Taranto authored a split decision from the Federal Circuit that may have reversed course. In Intercontinental, the district court had, as the patentee described, treated objective indicia as an “afterthought,” “writing off the patent before turning to objective indicia,” and “repeatedly not[ing] its finding of obviousness before considering the objective indicia.”9 Judge Taranto explained that the district court had concluded only that the patent challenger had made a “strong prima facie showing of obviousness” before reviewing the objective indicia, and not before an “ultimate conclusion” of obviousness.”10 The decision noted that the district court had drawn its prima facie obviousness conclusion “based on the Graham factors directed to identifying the teachings of the prior art, as well as the considerations this court has identified as bearing on the questions of motivation to combine,” and that therefore the district court had not drawn an “ultimate conclusion regarding obviousness” before considering the objective indicia.11 As Judge Reyna described in his dissent, the majority decision appeared to separate, in an unprecedented approach, the obviousness determination process into some intermediate “prima facie determination of obviousness” step and an “ultimate conclusion on obviousness” step.12
In a non-precedential decision three months later, Judge Taranto may have attempted to scale back on the approach presented in Intercontinental. In American Innotek Inc. v. United States, the Court of Federal Claims had found the claims at issue obvious, finding that objective indicia, no matter how indicative of non-obviousness, “cannot overcome a strong showing of obviousness based on combinations of prior art applied according to the prior art’s expected function.”13 The Federal Circuit, without commenting or elaborating on the “prima facie” and “ultimate conclusion” distinction discussed in Intercontinental, noted that the court’s reasoning had gone “too far” and that “[o]bjective indicia of nonobviousness must be considered in every case where present.”14 The Federal Circuit also suggested that whether secondary considerations are “decisive in the face of strong other evidence of obviousness,” may depend on a case-by-case basis.15
Overall, the standards for precisely how courts should evaluate secondary considerations in an obviousness analysis are continuing to evolve, and may not be as clear as some may have thought based on Supreme Court and recent Federal Circuit decisions. Nevertheless, given the Federal Circuit’s strong emphasis in several cases on the importance of considering secondary considerations in obviousness determinations, professionals practicing before district courts, the PTAB and the ITC would be well advised to present strong secondary consideration arguments, where present. Doing so should help focus attention on them from the start and prevent a judge from deeming them merely afterthoughts or side arguments. As to the question of whether secondary considerations must be considered before or after an obviousness determination, whether “prima facie” or “ultimate,” it remains to be seen whether the Federal Circuit will clarify the approach presented in Intercontinental in view of its other precedents.
1 See, e.g., In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 676 F.3d 1063, 1080 (Fed. Cir. 2012); Apple Inc. v. Int’l Trade Comm’n, 725 F.3d 1356, 1365 (Fed. Cir. 2013); and PPC Broadband Inc. v. Corning Optical Commc’ns RF, LLC, 815 F.3d 734, 746–47 (Fed. Cir. 2016).
2 Intercontinental Great Brands LLC v. Kellogg N. Am. Co., 869 F.3d 1336 (Fed. Cir. 2017).
3 Id. at 1345.
4 Am. Innotek, Inc. v. United States, No. 17-1178, slip op. at 2–3 (Fed. Cir. Dec. 19, 2017) (non-precedential).
5 The Supreme Court first described the role of secondary considerations in the determination of obviousness in Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17–18, 86 S. Ct. 684, 694, 15 L. Ed. 2d 545 (1966), explaining that “[s]uch secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented.” In Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538 (Fed. Cir. 1983), the Federal Circuit explained that “so-called ‘secondary considerations’ must always when present be considered en route to a determination of obviousness.” In KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406, 127 S. Ct. 1727, 1734, 167 L. Ed. 2d 705 (2007), the Supreme Court clarified the obviousness analysis set forth in Graham, explaining that secondary considerations are one of four factors to be considered in making an obviousness determination.
6 See, e.g., Robert W. Harris, The Emerging Primacy of “Secondary Considerations” as Validity Ammunition: Has the Federal Circuit Gone Too Far?, 71 J. Pat. & Trademark Off. Soc’y 185, 187–89 (1989).
8 In In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 676 F.3d 1063, 1077 (Fed. Cir. 2012), the Federal Circuit reversed the district court’s obviousness determination, explaining that the purpose of objective indicia of non-obviousness is to refute the evidence of obviousness, and that a court must consider all evidence, including objective indicia of non-obviousness before making an ultimate conclusion of obviousness. In Apple Inc. v. Int’l Trade Comm’n, 725 F.3d 1356, 1365–67 (Fed. Cir. 2013), the Federal Circuit was “troubled by the ITC’s obviousness analysis” and remanded the appealed case back to the ITC because the ITC had determined obviousness before even mentioning secondary considerations. In PPC Broadband Inc. v. Corning Optical Commc’ns RF, LLC, 815 F.3d 734, 746–47 (Fed. Cir. 2016), the Federal Circuit reversed the PTAB’s rejection of secondary considerations and held that the PTAB’s rejection of secondary considerations must be explained even when there is a strong case of obviousness.
9 Intercontinental Great Brands LLC v. Kellogg N. Am. Co., 869 F.3d 1336, 1345 (Fed. Cir. 2017).
12 Id. at 1357-58.
13 Am. Innotek, Inc. v. United States, No. 17-1178, slip op. at 2 (Fed. Cir. Dec. 19, 2017) (non-precedential).
15 Despite these comments, the Federal Circuit affirmed the finding of obviousness noting that a proper analysis of secondary considerations would lead to the same conclusion reached by the Court of Federal Claims. American Innotek, No. 17-1178, slip op. at 3.
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