Seagate Technology (US) Holdings, Inc. v. Enova Technology Corporation

Addressing the nexus requirement for secondary considerations raised as a defense to an obviousness challenge, the Patent Trial and Appeal Board (PTAB or Board) found that the patent owner failed to establish the required nexus with respect to its evidence of secondary considerations. The PTAB also denied the patent owner’s request to enter a revised protective order in connection with some confidential exhibits, explaining that the patent owner’s redactions to those exhibits and the parties’ lack of agreement prevented the Board from determining whether good cause existed to enter the order. Seagate Technology (US) Holdings, Inc. v. Enova Technology Corporation, Case No. IPR2014-01449 (PTAB, Dec. 18, 2015) (Goodson, APJ).

The patent owner, Enova, attempted to rebut a claim of obviousness based on several secondary considerations, including industry praise, commercial success, copying and licensing. Regarding industry praise, the patent owner provided examples of a company praising Enova’s products and of industry awards the patent owner had received. But the PTAB found that the patent owner failed to “establish a sufficient nexus between the merits of the claimed invention and industry praise of Patent Owner’s products,” noting that the patent owner did not “identify any praise due to specific elements that are recited in the challenged claims” and failed to “provide any analysis explaining how its products embody any of the challenged claims of the patent [at issue].”

Regarding commercial success, the patent owner pointed to its prior business relationship with the petitioner, Seagate, and claimed that the petitioner had praised and advertised the patent owner’s products. The PTAB noted that the patent owner did not establish that the petitioner’s products included the claimed features of the patent, but instead merely relied upon allegations disputed by the petitioner in a district court proceeding. The PTAB further noted that the patent owner provided no evidence of the size of market for comparison of the petitioner’s sales. Accordingly, the PTAB found that the patent owner’s proposed “objective indicia of commercial success” did not rebut the obviousness conclusion.

With respect to copying and licensing, the patent owner noted that several companies have licensed the patent at issue. Focusing again on the nexus requirement, the PTAB noted that the “it is not sufficient that a product is within the scope of a claim in order for objective evidence of nonobviousness tied to that product to be given substantial weight” and that “a showing of copying is only equivocal evidence of nonobviousness in the absence of more compelling objective indicia of other secondary considerations.” The PTAB also noted that the versions of licenses the patent owner produced were “almost entirely redacted” such that the patent owner’s assertions regarding the agreements could not be verified. Thus, the patent owner had not shown a nexus with respect to the licenses and evidence of copying.

Separately, the patent owner submitted a revised protective order in connection with its request to seal certain purportedly confidential exhibits, which it submitted in heavily redacted form. According to the patent owner, although the revised protective order reflects the terms of a protective order in a co-pending district court proceeding between the parties, the parties did not agree on the terms of the order. Focusing again on the redaction issue, the PTAB noted that it “cannot ascertain that the contents of the redacted Exhibits constitute the Patent Owner’s confidential information.” As such, and because the parties did not agree as to the scope of the revised order, the PTAB also rejected the patent owner’s proposed protective order and instead entered the default protective order.