Evidence of commercial success must have a nexus to the claimed invention

A patent claiming a system and method for connecting a portable media player to a different electronic device was subject to two inter partes reexaminations and one ex parte reexamination. The examiner and the Patent Trial and Appeal Board (PTAB) invalidated the patent as both anticipated and obvious. On appeal, the Federal Circuit affirmed.

The crux of the claimed invention was that a portable media player can be connected to a second device, such as a car audio system, and that when connected, the system provides a graphical user interface on the second device to control the portable media player. The PTAB held that certain claims were obvious over two media storage related references. In addition to arguing against prima facie obviousness, the patentee also argued its invention achieved commercial success because (i) a $25 billion industry developed around in-vehicle device integration, which it said was covered by the claims; and (ii) the patentee’s licensing of the patent and its siblings to a number of entities in excess of $50 million. The PTAB rejected this commercial success evidence because it did not have a nexus to the claimed invention.

On appeal, the Federal Circuit affirmed the patent’s obviousness and agreed that the patentee’s evidence of commercial success was not relevant. The Federal Circuit held that the patentee’s argument that the claims “are directed to the general field of device integration, without more, does not establish a meaningful connection with the asserted commercial success.” Further, the Federal Circuit held that the patentee’s evidence of licensing did not have a nexus to the claimed invention because the patentee did not submit the actual licenses into the record. The patentee only submitted an affidavit from its president, which claimed that the revenue was from licensing the reexamination patent “and related patents.” Without the actual licenses, the Federal Circuit could not determine “if the licensing program was successful either because of the merits of the claimed invention or because the licenses were entered into as business decisions to avoid litigation, because of prior business relationships, or for other economic reasons.”