The U.S. Court of Appeals for the Federal Circuit recently reasserted its position that prior art references addressing the same or similar problem can provide sufficient motivation to combine in the context of an obviousness rejection. Commonwealth Sci. Indus. Research Org. v. Buffalo Technology (USA), Inc. et al., Case No. 07-1449 (Fed. Cir., Sept. 19, 2008) (Bryson J.; Lourie, J., concurring).

Patent holder Commonwealth Scientific and Industrial Research Organization (CSIRO) is Australia’s national science agency. The patent at issue claims a solution to the “multipath” problem that was commonly encountered in development of modern wireless local area networking and covers a core component of the now widely used 802.11a/g wireless LAN technology standard. Consequently, CSIRO has been active in the defense of this patent, while companies such as Microsoft, Apple and Dell have filed a class action against it.

CSIRO accused Buffalo Technology of infringing various claims of the patent-in-suit. A district court granted CSIRO summary judgment on the contested issues of patent validity and infringement along with a permanent injunction against Buffalo. The court’s decision was possibly the first patent infringement case in which a non-manufacturer in entity (NPE) not commercializing its patents proved it deserved a permanent injunction against a non-competitor. Unfortunately, the question of whether entry of the permanent injunction constituted an abuse of discretion was not reached by the Federal Circuit due to a remand on the issue of summary judgment with respect to obviousness.

The case came before the Court in an unusual posture—the parties had agreed to permit the district court to make findings of fact with respect to infringement, anticipation and written description, but not obviousness. As a result, even though the district court granted summary judgment for the accused infringer, the Court treated findings on these claims as if there had been a bench trial, but treated the obviousness claim under the normal summary judgment standard.

On the anticipation issue, Buffalo argued that a single reference disclosed every element of the accused claim based on its incorporation by reference of another piece of prior art. However, the Federal Circuit concluded that the reference did not “identify with detailed particularity what specific material it incorporates and clearly indicate where that material is found in the various documents” and thus did not anticipate.

The Federal Circuit disagreed with the district court on issue of summary judgment with respect to obviousness because it found that there was a factual issue as to the motivation to combine prior art references. Buffalo put forth evidence that the references directly dealt with the multipath transmission problem sought to be resolved by the patent, while CSIRO offered an expert declaration that the references were not directly analogous. The Federal Circuit concluded that this factual dispute, combined with evidence of secondary considerations of non-obviousness raised by Commonwealth, precluded summary judgment since the district court was not empowered, on summary judgment, to find facts with respect to these competing factual claims. Since the remainder of the judgment was affirmed, the issue of whether CSIRO, a NPE, was entitled to a permanent injunction was not reached.

In remanding on the issue of summary judgment with respect to obviousness, the Federal Circuit reminded the district court of the standard for establishing obviousness under KSR and noted that the district court’s pre-KSR analysis of summary judgment regarding obviousness was flawed because Buffalo’s three prior art references addressed the same or a very similar problem, i.e. the multipath problem, a factual issue mitigating in favor of the propriety of combining the references.

Practice Note: This Federal Circuit decision supports the KSR position that prior art references need not address an identical problem to be combined. Parties alleging obviousness should consider, identify and focus on a similarity in the problems addressed by prior art references.