Obviousness In The Wake Of Arendi

Authors: Amy Simpson (https://www.perkinscoie.com/en/professionals/amy-e-simpson.html) and Kyle Canavera (https://www.perkinscoie.com/en/professionals/kyle-ryan-canavera.html).

Since the U.S. Court of Appeals for the Federal Circuit issued its opinion in Arendi S.A.R.L. v. Apple Inc. last August,[1] many patent commentators have asserted that the decision marked a significant change in the analysis of obviousness under 35 U.S.C. § 103, especially as a weakening of single-reference obviousness grounds. Notwithstanding this decision, petitioners and the Patent Trial and Appeal Board have continued to rely on single-reference obviousness to assert and find that claims are obvious.

Basics of a Single-Reference Obviousness Challenge

An obviousness challenge typically relies on the combination of multiple prior art references in asserting that the prior art discloses all limitations of a challenged claim. In contrast, a “single-reference” obviousness ground is based on one prior art reference.

Single-reference obviousness grounds are used in situations where the asserted basis for unpatentability falls between an anticipation ground—where one reference discloses all elements of the patent claims—and the more traditional “multiple-reference” obviousness grounds—where two or more prior art references are combined for disclosure of all elements of the patent claims.

With single-reference obviousness, the cited prior art reference does not disclose all of the elements of the patent claims (because a single prior art reference disclosing all of the claim elements would constitute anticipation), but the party challenging the patent asserts that the nondisclosed element can be addressed without an additional prior art reference. Practitioners regularly use a variety of techniques to fill apparent holes in the single prior art reference. For example, practitioners might argue that the missing element, while not explicitly disclosed in the single reference, is so clearly suggested by the single reference that it would have been an obvious modification. Practitioners also might argue that the missing element would have been a common-sense modification to the single reference; a modification so simple that any ordinary artisan would think of it with basic common sense.

Effect of Arendi Decision

In Arendi, the Federal Circuit signaled to the PTAB that it should not readily use common sense to compensate for missing claim elements in a single-reference § 103 challenge.

When Arendi was before the PTAB, the board invalidated a patent based on a single-reference § 103 ground, finding a missing limitation to be an obvious modification “as a matter of common sense.” Arendi, 832 F.3d at 1360 (citation omitted). While the court acknowledged that the common sense of an ordinary artisan is relevant, it also stated that common sense should usually be used in connection with showing a motivation to combine references. The court said that common sense should be used to address a missing claim element only if that claim element is “unusually simple and the technology particularly straightforward.” Id. at 1362.

Finding the missing claim element to be important, the court reversed the PTAB’s invalidity ruling. While the court suggested that this narrow limitation on the use of common sense was already part of the court’s precedent, some commentators expressed the view that Arendi had actually taken a single, fact-specific holding and expanded it into a bright-line precedent having broader relevance to obviousness challenges, especially those based on a single prior art reference.

Despite such commentary, the statistics appear to show that Arendi has not deterred IPR petitioners from advancing single-reference obviousness grounds. Although only a year has passed since the Federal Circuit’s decision, the chart below seems to show no significant change in the rate of assertion of single-reference obviousness.[2] As the decision occurred in August 2016, any change in petitioners’ direction should have been detectable by the end of Q4 2016,[3] but no such change is observable. The rate at which petitions included a single-reference obviousness ground has remained within historical norms; that is, 30% to 40%. As of publication time, data for part of Q1 2017 does show some change over previous quarters, but we note the small amount of data available for the quarter.[4] We expect that data for all of Q1 2017 will conform to the historical trend once all proceedings from that quarter have reached the institution stage.

Note: The data for Q1 2017 are partial and do not reflect the entire quarter.

Similarly, there seems to be no significant change in the rate at which the PTAB has instituted single-reference obviousness grounds,[5] with the institution rate hovering between 45% and 60%.

Note: The data for Q2 2017 are partial and do not reflect the entire quarter.

Practice Tips

While the data to date show no significant change in the assertion or success of single-reference obviousness challenges, Arendi has undoubtedly become part of the relevant body of precedent for an obviousness analysis. For example, the PTAB has cited Arendi for the proposition that common sense alone cannot be used as a substitute to fill in an element or limitation missing from the lone reference.

Based on our review of recent PTAB decisions citing Arendi, we provide the following practice tips when challenging claims using a single-reference § 103 ground:

• Support Common Sense Rationale with Evidence

When relying on common sense to support a single-reference obviousness ground, provide contemporaneous publications supporting your common sense argument, such as a publication showing a motivation to modify the base reference in the allegedly common-sense way.

In such a situation, the publication is used as evidence of the state of the art, and not as a part of the obviousness combination, because it is not relied on as disclosing one of the claim elements. Therefore, the petitioner can avoid some of the challenges of proving a “motivation to combine” and some objective indicia of nonobviousness issues. At the same time, the publication provides support for the reliance on common sense and, importantly, something that would satisfy the substantial evidence standard of review when the PTAB’s decision is appealed to the Federal Circuit.

• Do Not Count on Expert Testimony

Do not expect that providing superficial or conclusory language in an expert report will suffice as the reasoning needed to support the use of common sense. The Federal Circuit in Arendi explicitly found superficial language in the expert report to be insufficient. Petitioners should assume that the PTAB will police this issue in a manner that is consistent with Arendi.

• Build a Backup Argument

Strengthen the common sense position with alternative theories of obviousness that are supported by Federal Circuit and Supreme Court case law. For example, in cases where common sense is a viable part of an obviousness theory, it is often effective to present the missing element as a modification that is “obvious to try” (which can also be phrased as an “obvious design choice”), which finds support in KSR International Co. v. Teleflex, Inc., 550 U.S. 398 (2007). For this alternative theory of obviousness, use contemporaneous documentary evidence to show that an ordinary artisan would have chosen from a limited number of modifications in relation to the missing element. By constraining the realm of possible modifications, one of which is the missing element, the modification becomes “obvious to try” as an alternative to being “common sense.”

DISCLAIMER:  This article reflects the views of the authors and does not necessarily represent the views of Perkins Coie LLP or its clients.

ENDNOTES

[1] Arendi S.A.R.L. v. Apple Inc., 832 F.3d 1355 (Fed. Cir. 2016).

[2] The data set for this analysis includes all IPR proceedings filed between July 1, 2015, and August 15, 2017. The data are grouped into quarters by filing date. However, importantly, only IPRs that had reached an institution decision on the merits by August 15, 2017, were included in this analysis. So, numerous classes of IPRs are excluded: (1) IPRs settled prior to reaching institution; (2) IPRs dismissed on procedural grounds (e.g., failure to join Real Parties-in-Interest); and (3) IPRs pending an institution decision as of the cutoff date.

[3] Note that the quarters indicated here are by calendar year, not the U.S. Patent and Trademark Office fiscal year. So Arendi, decided in August 2016, fell midway through Q3 2016.

[4] Because this data were collected as of August 15, 2017, only a small number of the IPRs filed in Q1 2017 had reached the institution stage in this data set, and thus only that small number was included in this analysis.

[5] The data set for this analysis is the same as previously identified. The data are grouped into quarters by the date of the institution decision.