The U.S. Court of Appeals for the Federal Circuit upheld a district court’s decision that claims were obvious based on a newly cited single prior art reference combined with admissions of prior art in the specification.   Tokyo Keiso Co. v. SMC Corp., Case Nos. 08-1045, -1112 (Fed. Cir., Jan. 9, 2009) (Lourie, J.) (non-precedential). 

Tokyo Keiso owns a patent directed to a volume flow meter that measures the flow volume of fluids passing through a pipe.   Tokyo Keiso sued SMC Corporation in a California district court for infringement patent.  The district court found the patent claims to be obvious as a matter of law based on another patent and article on the subject of the invention, neither of which the U.S. Patent and Trademark Office (USPTO) had considered in its examination.  Tokyo Keiso appealed.

On appeal, Tokyo Keiso argued that the district court erred by failing to conduct a claim-by-claim analysis, instead analyzing a non-existent claim that was broader than any of the asserted claims.   The Federal Circuit affirmed the finding of obviousness, noting that the patent specification concedes as prior art most of the limitations of the asserted claims and then finding that the remaining limitations were disclosed in the article.  The Court also noted that the combination would have been obvious since the prior art article was “within the same field of endeavor” as the patent and both addressed the same problem (i.e., acoustic interaction) and the same solution (i.e., the use of a plastic measuring line). 

Finally, Tokyo Keiso asserted that the district court did not properly consider evidence of objective indicia of non-obviousness, including unrebutted evidence showing a long-felt need and commercial success.   On this issue, the Federal Circuit implicitly endorsed the district court’s rejection of a “long-felt need” argument in support of non-obviousness, reiterating what the district court stated:  “given the fact that the flow meter business involves a niche market, it is not surprising that it took a few years for a company to expand on the prior art at issue here.” 

Practice Note:   Patent drafters should be mindful of admitting prior art in the specification, especially when claim limitations are directed to the prior art.