Secondary considerations are an important tool to fight against the ever-present specter of hindsight in an obviousness analysis, focusing on factors outside the prior art disclosures such as the commercial success, long-felt need, copying, and industry praise of the claimed invention. Secondary considerations are often mistakenly thought to be relevant once the claims are found to be obvious based on the prior art disclosures alone. Despite the name, however, the Federal Circuit has emphasized that secondary considerations often represent “the most probative and cogent evidence of non-obviousness in the record,”1 and must be analyzed as “part of the whole obviousness analysis, not just an afterthought.”2
Despite the Federal Circuit’s directive, patent owners relying on secondary considerations of non-obviousness often face an uphill battle in proceedings at the Patent Trial and Appeal Board (“PTAB”), where secondary considerations are rarely successful in rescuing claims from invalidity. The PTAB recently passed a grand milestone and has now issued 1,001 final decisions, 192 of which substantively addressed secondary considerations. Of those decisions addressing secondary considerations, only one found that secondary considerations weighed in favor of non-obviousness.3 The challenged claims in that lone petition, Phigenix, Inc. v. Immunogen, Inc., involved immunoconjugates in the pharmaceutical and drug delivery fields.4 The PTAB found that the patent owner presented “substantial evidence of objective indicia of non-obviousness” including a long-felt, unmet need for, and corresponding commercial success of, an “immunoconjugate capable of targeting a solid tumor in patients without excessive toxicity.”5 But even in this case, the PTAB analyzed these secondary considerations only after it had already concluded that the petitioner failed to show obviousness.6
However, the Federal Circuit recently reversed the PTAB’s rejection of secondary considerations in PPC Broadband, Inc. v. Corning Optical Communications, holding that the PTAB’s rejection of secondary considerations must be explained even where there is a strong case of obviousness.7 The PTAB in PPC Broadband found that objective considerations weighed toward non-obviousness. The patent owner provided evidence of a long-felt but unresolved need for the claimed coaxial cable connectors having ground continuity that could be established in a loosely connected state.8 There was also substantial evidence of the failure of others and copying through specific evidence that the petitioner looked to the claimed invention after struggling to design prototype coaxial cables with similar continuity.9
Several factors, substantive and procedural, are likely responsible for reducing the impact of secondary considerations in proceedings with the PTAB. This article addresses several of those factors in greater detail, and considers strategies for effectively leveraging or rebutting secondary considerations in view of those factors.
PTAB Procedure Inherently De-Emphasizes Secondary Considerations
The two-step institution decision and final decision procedure lends itself to naturally asserting and considering these objective indicia as “secondary” — relegated to use as a defense to an otherwise obvious claim instead of as part of the overall obviousness determination. Indeed, the PTAB has indicated that secondary considerations may be less likely to carry the day for the patent owner in an institution decision, because the petitioner is only required to show a “reasonable likelihood” that the claims are obvious based on “the information presented in the petition.”10 As a result, the PTAB typically requires that the petition only address secondary considerations sufficient to show a reasonable likelihood of success in view of the prosecution record. That is, if secondary considerations were asserted successfully during prosecution, the PTAB has denied institution for failing to address those considerations in the petition.11 For other considerations outside the patent’s prosecution history, however, the petition generally leaves that evidence for the patent owner to assert. As a result, patent owners often choose to focus on the petition’s alleged shortcomings and do not typically assert evidence of secondary considerations in their preliminary responses.
Patent owners may be better served by asserting strong secondary considerations early (e.g., in a response to the petition itself) instead of waiting until after institution. Asserting secondary considerations after the PTAB has determined that there is a reasonable likelihood of obviousness risks framing those arguments as subordinate. Even though they may be less likely to succeed at institution, early assertion of secondary considerations may help frame these objective factors as part of the invention story. If the patent owner does not include these secondary considerations as part of its initial non-obviousness argument, it should not be surprising when the PTAB follows suit.
Nexus Requirement is Applied Stringently
Failing to sufficiently establish a nexus with the claimed invention appears to be the PTAB’s most common reason for rejecting secondary considerations of non-obviousness. Although the petitioner has the burden of showing invalidity, the patent owner has the burden of establishing that secondary considerations share a nexus with the invention.12 The PTAB holds the patent owner to its burden and often disregards the impact of objective evidence of non-obviousness because the patent owner has not sufficiently shown a nexus.13
The PTAB has found a failure to establish nexus for many reasons. For example, where the patent owner’s assertion of commercial success strays from aspects of the claimed invention, the PTAB has found a lack of nexus.14 Evidence of secondary considerations must be specific, supported by evidence in the record; general assertions of success and industry praise have been found insufficient.15 Commercial success based on elements known in the prior art have also been disregarded. In addition, the PTAB has rejected evidence of commercial success based on licenses because they may have been entered into to avoid costly litigation.16 The secondary considerations must, therefore, be specifically tied to the particular improvement over the prior art embodied by the claims.
In the final decision at issue in PPC Broadband, the Federal Circuit took issue with the PTAB’s conclusion, based on lack of nexus, that evidence of commercial success was not persuasive.17 The PTAB had disregarded commercial success of the patent owner’s “SignalTight connectors” because it found the patent owner had not met its burden to show those SignalTight connectors embodied all of the claim elements at issue.18 On appeal, the Court found this decision was in error in view of the multiple declarations supporting the patent owner’s commercial success argument and the failure of the petitioner to challenge that these connectors were commercial embodiments of the patented invention.19 In remanding, the Court held that if the record consists of undisputed evidence as to a secondary consideration that points toward non-obviousness, “it is error for the Board to find to the contrary without further explanation.”20 While there may be good reasons for disregarding that evidence, e.g., if the commercial success is based on unclaimed or non-novel features, such reasons must be explicit to support disregarding otherwise unrebutted evidence.
Limited Availability of Discovery
In proceedings at the PTAB, the parties must automatically produce specific categories of materials relevant to the petition, referred to as “routine discovery.”21 Routine discovery includes any exhibits cited in a filed paper or in testimony, cross examination of affidavit testimony, and a party must produce any relevant information inconsistent a position taken by that party during the proceeding.22 But, unlike the broad discovery available in district court, parties seeking any discovery beyond this automatic, routine discovery, referred to “additional discovery,” have the burden to show that discovery is “necessary in the interest of justice.”23
Whether a party has adequately shown that the requested additional discovery is “necessary in the interest of justice” is generally analyzed with reference to the Garmin factors, which can prove to be quite limiting.24 Even when granting a motion for additional discovery, the PTAB can still rewrite discovery requests on its own to tailor the request as it deems necessary.25 This limitation on discovery naturally has a comparatively larger impact on access to evidence of secondary considerations, which is more likely to be in the possession of third-parties or a petitioner accused of infringement rather than the patent owner.
Some examples may be useful to show the impact of limited discovery on access to secondary considerations evidence. In St. Jude Medical, Cardiology Division, Inc. v. Board of Regents of the University of Michigan, the patent owner sought discovery of documents regarding the nexus of an improvement embodied in one of petitioner’s products and its commercial success.26 In support of its request, the patent owner argued that the “documents may contain information” related to establishing a nexus with petitioner’s own commercial success.27 The Board denied the request outright because the “mere possibility of finding useful information is insufficient to demonstrate that the requested discovery is necessary in the interest of justice.”28 Thus, because patent owner did not know what the documents contained, or if they would support its argument, the additional discovery regarding nexus was denied.
In Smith & Nephew v. Convatech Technologies, Inc., patent owner sought discovery into evidence of the petitioner’s failure to create the medical device other than through the claimed methods and evidence of copying.29 The patent owner argued that this evidence would establish that the Food and Drug Administration considered petitioner’s product to be “substantially equivalent” to its own patented product in support of copying. The PTAB found this was not sufficient, reasoning that simply having a product that embodies the patent cannot be enough “because otherwise every [successful] infringement suit would automatically confirm the nonobviousness of a patent.”30 Regarding failure of others, the PTAB held that the requested discovery would not necessarily be useful because a failure of others is not relevant to nonobviousness “unless it is shown that widespread efforts of skilled workers having knowledge of the prior art had failed to find a solution to the problem.”31 Thus, even if patent owner found that petitioner made some attempt and failed, the PTAB determined it would not have been useful to its case. The PTAB therefore found that the patent owner did not adequately show that “something useful [would] be uncovered if discovery is authorized.”32 As these examples demonstrate, a party seeking additional discovery on secondary considerations must typically prove the usefulness of the evidence sought in discovery before it is even obtained. Satisfying this burden may be next to impossible when the substance of material sought is yet unknown.
These discovery limitations may be tempered if district court litigation is proceeding in parallel. However, many district court cases are stayed in favor of an IPR or CBMR petition, and additional discovery in that proceeding is available only after institution. Thus, patent owners that believe the opposing party may have evidence in support of secondary considerations may consider seeking that evidence before the pending litigation is stayed. That option would be unavailable, however, where the petitioner files a petition before the patent owner initiates litigation.
No Presumption of Validity
The difference in success rate between district court and PTAB could also be attributed to the different applicable presumptions. While patents enjoy a presumption of validity in district court litigation, the proceedings at the PTAB do not carry such a presumption. Secondary consideration arguments by their nature are very fact dependent, often based on drawing conclusions from activities that do not explicitly relate to the asserted claims or accused products, and in some cases depend more heavily on expert testimony. Without the benefit of the doubt on the underlying issue of invalidity, a patent owner’s nuanced argument based on secondary considerations may be less likely to succeed.
There may be other reasons for why secondary considerations appear to be less successful in the PTAB. But one thing is clear. Patent owners must take the unique posture of PTAB proceedings into account to successfully assert secondary considerations. But even then, only a strong argument based on evidence clearly tied to the claimed improvement over prior art is likely to succeed.