As we have previously discussed (on February 1, March 1, March 30, and May 19), reliance on secondary considerations of non-obviousness has been hit or miss for patent owners trying to convince PTAB panels that the secondary considerations outweigh a prima facie case of obviousness. As with the decision discussed on May 19, the patent owner in Xactware Solutions, Inc. v. Eagle View Techs., Inc., IPR2016-00592 (Paper 50) (PTAB August 25, 2017), successfully relied on secondary considerations to overcome the prior art. The PTAB found that the prior art disclosed the claim limitations, but ultimately concluded that Patent Owner’s secondary considerations were decisive. The PTAB provided thoughtful analysis regarding the issues of nexus and commercial success.

Patent Owner asserted that the secondary considerations, commercial success, and industry praise, were related to two products sold by Patent Owner. In finding sufficient nexus between Patent Owner’s products and the challenged claims, the PTAB relied on Patent Owner’s step by step explanation along with expert testimony as to how the products performed the claims. Petitioner argued that the expert testimony was not reliable because the expert never actually used Patent Owner’s product, and based his opinion only on discussions with engineers and review of the products’ user manuals. The PTAB disagreed with Petitioner, finding that the expert’s opinion and Patent Owner’s extensive evidence were sufficient to establish a nexus between Patent Owner’s products and the challenged claims.

Petitioner asserted that the PTAB should discount Patent Owner’s evidence of commercial success because the success related to the sale of reports created by the products, not the license or sale of the products themselves. The PTAB again found in favor of Patent Owner, finding that “[t]he choice to sell the output of the claimed method or claimed apparatus, as opposed to selling or licensing software that practices the claims does not undermine Patent Owner’s commercial success in the marketplace that is attributable to its claimed invention.”

Takeaways

The PTAB’s detailed analysis of nexus and commercial success provides patent owners with a reference as to what types of evidence will carry sufficient weight in overcoming allegations of obviousness. Further, the PTAB’s finding that nexus exists between the challenged claims and the output of Patent Owner’s products is instructive that nexus goes beyond the products embodying the claims.