Obviousness May Soon Return To High Court
Obviousness May Soon Return To High Court
Authored by Derek F. Dahlgren and Spencer J. Johnson for Law360June 16, 2017
Last October the Federal Circuit issued a surprising (in more ways than one) en banc decision in the Apple/Samsung smartphone wars. While we have previously covered this decision in some detail regarding its break from the Federal Circuit’s usual en banc practice, the procedural and substantive issues regarding the decision are again in the spotlight, as Apple Inc. recently filed a response in opposition to Samsung Electronics Co. Ltd.’s petition for a writ of certiorari to the U.S. Supreme Court.
From those who have publicly commented on the case,
To touch briefly on some the issues created by the en banc decision, the questions presented to the Supreme Court in Samsung’s petition include such basic and far-reaching concepts in patent law as the law of obviousness, the issuance of injunctions for patent infringement, and evidentiary standards for proving patent infringement.
While the importance of these concepts should be clear to those with any familiarity with
The importance of these issues to patent law, especially that of obviousness, was also noted by some of the dissents to the en banc holding. For example, Judge Timothy Dyk noted that obviousness is the most commonly litigated invalidity issue, with its importance reflected in the 38 amicus briefs filed in KSR v. Teleflex, a recent Supreme Court case on obviousness.
The dissenting judges shared a position that this case did not warrant en banc review. Some of their concerns were procedural, and these concerns were amplified given the importance of the legal concepts affected by the en banc majority’s decision. The procedural concerns begin with an assumption that en banc review is intended to be rare and reserved for exceptional or important cases. Judge Jimmie Reyna, for example, stated that en banc review is generally disfavored, and noted that this en banc review neither maintained uniformity of court decisions nor involved a question of exceptional importance, but instead seemed to focus on reversing the outcome of the earlier panel’s decision.
Even if en banc review were appropriate, the dissenting judges indicated that greater input from those who would be
Outside of the merits of challenging the Federal Circuit’s position on obviousness, all of the above discussion goes to the importance of the decision as perceived by the dissenting judges of the Federal Circuit and by parties potentially affected by the decision. While the procedural irregularities alone may not demand Supreme Court review, an issue of patent law as fundamental as obviousness likely does, particularly as this was the first obviousness case in decades addressed en banc, and arguably altered the obviousness analysis beyond the bounds permitted by Supreme Court precedent.
Moving to the substance of the conflict between the parties at this stage, the issue that has received the most attention from the amici briefs and the most pages from the parties is how the en banc court applied the obviousness analysis. Specific issues discussed in the petition (points made in the petition, dissents or amicus briefs are largely in alignment
Beginning with the identification of the appropriate legal standard for obviousness, unlike the characterization of Samsung’s argument in Apple’s response, the argument actually presented in Samsung’s petition does not claim that the majority cited the incorrect rule or quoted the wrong case in presenting the standard for obviousness. Instead, the thrust of the argument is that, while the rule may be that obviousness is a question of law based on underlying facts, the en banc opinion has expanded the “underlying facts” to the point of having effectively turned the inquiry into a factual issue for the jury. Although the factual considerations underlying the determination of obviousness may be broad, KSR emphasized that the ultimate
Apple’s brief in opposition argues that this approach is not in conflict with Supreme Court and other prior opinions, and that it is not evidence of varying approaches taken by the Federal Circuit with regard to obviousness, but that the Federal Circuit is instead merely applying the same approach to different circumstances. Apple criticizes Samsung’s citation of cases meant to support its point, but in doing so appears to overlook that in this very case the vigorous dissent of Judge Dyk discusses “the profound changes in the law of obviousness that the majority creates,” and that Chief Judge Prost notes that parts of the majority opinion involve “a new approach that neither we nor the Supreme Court has sanctioned.” For Apple to argue that the Federal Circuit’s approach is consistent with all its past cases, whether or not cited by Samsung in its brief, seems thin given the characterization by members of the Federal Circuit that this very case deals with new law.
Apple maintained its position that the en banc opinion was merely an application of existing law to the facts of this case through its brief. For example, where Samsung argued, acknowledging the dissents of Judges Dyk and Prost, that the en banc court had improperly dismissed a prior art combination as involving art from different fields of endeavor despite a lack of substantial evidence on which such a distinction could be made, Apple responded that the en banc court had only held that the jury could have reasonably found a lack of motivation to combine the references.
Apple’s argument is based partially on the en banc court not categorically basing its decision on the references being in different fields, and partially on the jury’s ability to reject Samsung’s evidence, which Apple characterized as being Samsung’s “expert’s conclusory testimony” that there would be a motivation to combine the references. As such, according to Apple, there was no conflict between this decision and existing law. This, again, overlooks the explicit rejection of such a position by Chief Judge Prost, who noted that by the end of the trial Samsung had presented evidence that the references should be combined, and Apple’s expert had not given an explanation as to why there would be no motivation. Further, reviewing the majority opinion shows that the bulk of Apple’s argument against a motivation to combine on appeal and at the trial level was based on, for example, one reference being to a smartphone, and the other being to a wall-mounted touchscreen, or to one reference being to spelling correction, and the other to word completion. When these distinctions are repeated throughout the majority’s analysis, an explicit statement that the combination is rejected because of the difference in fields, such as what Apple appears to suggest is needed, is not required to determine that improper weight was given to such distinctions.
Moving on to the next major area in obviousness addressed by the parties, Apple argues that the emphasis placed on secondary considerations of nonobviousness by the en banc majority is proper, as the Supreme Court “has long directed that secondary considerations may play a pivotal role in the obviousness analysis.” While it may be correct that cases such as Graham and KSR have invited inquiry into these factors, secondary considerations
The problems that this approach presents are compounded when such considerations are applied to the obviousness analysis even without a clear demonstration of the nexus between, for example, commercial success and the
For other secondary considerations such as commercial success, there is no dispute that the iPhone as a product has been a
As such, unlike the Transocean case cited by Chief Judge Prost, where a compelling “seven types of secondary considerations supported nonobviousness,” this case instead aligns with the caution presented in Transocean, where it was noted that few cases have such extensive evidence to overcome a prima facie case of obviousness. It is clear the approach of the majority presents potential consequences where crowds cheering at a marketing event or surveys that show the value of features already known in the prior art
Beyond the instant case, the en banc court’s decision could impact the patent field greatly. Interpreting more of the obviousness analysis as questions of fact and inferring decisions of fact in black-box jury verdicts will insulate the ultimate determination of obviousness from being truly reviewed de novo. This risks less consistency between district courts and greater unpredictability for those parties relying on the court system to resolve intellectual property disputes. Further, courts and the U.S. Patent and Trademark Office may be forced to accept less-than-firm evidence of nonobviousness if secondary considerations are not required to have a close nexus to the innovation claimed in a patent. This could lead to lower quality patents being issued and
Whether obviousness will return to the Supreme Court remains to be seen. But between procedural issues in the lower court’s decision, an internal division in the court as to how to address these fundamental standards, and the
This article was originally published in Law360's Expert Analysis section on June 16, 2017. To read the article on Law360's site, please