INTERCONTINENTAL GREAT BRANDS V. KELLOGG: Sep. 7, 2017. Before Taranto (majority), Prost, and Reyna (dissent).

Takeaways:

  • The CAFC affirmed summary judgment of patent invalidity as to asserted claims based on 35 U.S.C. § 103. The CAFC held that, in a patent concerning food packaging, the “frame” element is disclosed in the Graham patent, and the remaining elements are shown in the Machinery Update The CAFC also held that the extremely strong prima facie showing of obviousness is not overcome by Kraft’s substantial evidence of objective indicia, which included commercial success, industry praise, and copying by Kellogg.
  • The CAFC affirmed summary judgment rejecting Kellogg’s counterclaim of inequitable conduct based on Kraft’s failure to inform the Patent Trial and Appeal Board of a misprint in a reference during a reexamination. The CAFC held that Kellogg failed to meet the demanding Therasense standard, in part because Kellogg presented no admission indicating that any relevant Kraft officer or representative actually believed the sentence to be a misprint.

Procedural Posture:

Kraft appealed N.D. Ill.’s summary judgment invalidating as obvious the asserted claims of U.S. Patent No. 6,918,532. Kellogg cross-appealed summary judgment rejecting Kellogg’s counterclaim of inequitable conduct by Kraft. CAFC affirmed.

Synopsis:

  • Obviousness: The CAFC noted that a claimed invention is unpatentable if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious to one of ordinary skill in the relevant art. The CAFC also noted that obviousness is a legal question based on underlying factual determinations, and among such determinations are the scope and content of the prior art; differences between the prior art and the claims at issue; the level of ordinary skill in the pertinent art; any objective indicia of non-obviousness; and whether a relevant skilled artisan had a motivation to combine pieces of prior art in the way claimed in the patent at issue. The CAFC further explained that once the relevant fact issues are resolved, the ultimate judgment of obviousness is a legal determination for the court.
  • Obviousness: The Federal Circuit referenced KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007), in which the U.S. Supreme Court criticized a rigid approach to determining obviousness based on the disclosures of individual prior-art references, with little recourse to the knowledge, creativity, and common sense of an ordinarily skilled artisan when considering combinations or modifications. The CAFC further noted that KSR requires an analysis that reads the prior art in context, taking account of demands known to the design community, the background knowledge possessed by a person having ordinary skill in the art, and the inferences and creative steps that a person of ordinary skill in the art would employ.
  • Obviousness—Motivation to Combine: The Federal Circuit noted that a motivation to combine may be found explicitly or implicitly in market forces; design incentives; the interrelated teachings of multiple patents; any need or problem known in the field of endeavor at the time of invention and addressed by the patent; and in the background knowledge, creativity, and common sense of a person of ordinary skill.
  • Summary Judgment—Obviousness: The Federal Circuit affirmed summary judgment invalidating all asserted claims under 35 U.S.C. § 103. Regarding independent claims 1 and 34, the CAFC agreed with the district court that the record put beyond reasonable dispute that all claim elements except the “frame” element were shown in the Machinery Update articles, and the “frame” element was shown in the prior art of cookie packaging, such as the Graham patent. The CAFC also agreed with the district court that the only reasonable inference on the record was that a relevant skilled artisan would have been motivated to combine those prior-art references. According to the CAFC, the district court specifically stressed that the absence of a “convenient opening and reclosing arrangement” was a “known problem” for cookie packaging, and that the Machinery Update resealable tray-included packaging for foods offered a skilled artisan a solution to the problem simply by replacing the Machinery Update “tray” with a frame, i.e., a tray with higher sides. Regarding objective indicia, the CAFC also agreed with the district court that while Kraft presented strong evidence of commercial success, industry praise, and copying by Kellogg, the evidence does not overcome Kellogg’s extremely strong prima facie showing of obviousness.
  • Obviousness—Objective Indicia: The CAFC explained that objective indicia include commercial success traceable to the claimed invention, industry praise, copying, and certain other facts concerning people’s actions and statements.
  • Obviousness: Kraft argued that objective indicia must be evaluated before drawing a conclusion about whether a reasonable jury could find that a relevant skilled artisan had a motivation to combine the prior art, not merely before drawing the ultimate obviousness conclusion. However, the CAFC disagreed, noting that Kraft cited no precedent for such a holding. The CAFC further explained that the staged consideration undertaken by the district court makes sense within the motivation-to-combine framework. According to the CAFC, when a challenger shows that a motivation to combine existed, this showing commonly supports and leads readily to the ultimate determination of obviousness. However, the CAFC noted that a conclusion of obviousness does not follow automatically from a finding of motivation to combine, and additional evidence, such as that of objective indicia, may prevent drawing such a conclusion. The CAFC further noted that structuring the analysis this way implements the expansive and flexible approach required by KSR, and that it is consistent with the U.S. Supreme Court’s treatment of objective indicia as evidence to be weighed in the overall legal determination of obviousness.
  • Inequitable Conduct: Regarding Kellogg’s inequitable conduct charge, the CAFC stated that Kellogg had to prove that Kraft had a specific intent to mislead or deceive the USPTO. Citing Therasense, Inc. v. Beckton, Dickinson & Co., 649 F.3d 1276, 1290–91 (Fed. Cir. 2011), the CAFC noted that the intent requirement is demanding: the evidence must be sufficient to require a finding of deceitful intent in light of all the circumstances; deceptive intent must be the single most reasonable inference able to be drawn from the evidence; and when there are multiple reasonable inferences that may be drawn, intent to deceive cannot be found.
  • Inequitable Conduct: The CAFC was unpersuaded by Kellogg’s argument that the district court erred when it granted summary judgment rejecting Kellogg’s inequitable-conduct charge. The CAFC noted that the only issue concerned the arguments Kraft made about the Packaging News article to PTAB during reexamination of the ’532 patent. The CAFC further noted that Kellogg’s charge rested on a sentence in Packaging News that described the Re-Seal It packaging as not using “conventional wrapping film.” Kellogg contended that the sentence is a misprint, and that Kraft committed inequitable conduct by not so informing PTAB. Although PTAB relied on the sentence to reverse the examiner’s rejections of Kraft’s claims, the CAFC concluded that there was no reversible error in the district court’s conclusion that Kellogg’s evidence was insufficient. The CAFC explained that, even if the sentence was a misprint, the record does not support an inference of deceptive intent under the Therasense The CAFC noted that Kellogg presented no admission or anything similar indicating that any relevant Kraft officer or representative during the reexamination actually believed the sentence to be a misprint. Further, the CAFC noted that during the reexamination, neither the ex parte requester nor the examiner suggested that the Packaging News article contained a misprint, and the absence of such a statement indicates that the alleged misprint was not as obvious as Kellogg claims.
  • Other Opinion—Obviousness: Judge Reyna dissented from the majority’s decision to affirm summary judgment of obviousness, stating that he would find that the district court improperly found a prima facie case of obviousness before considering Kraft’s evidence of objective indicia. Judge Reyna explained that, consistent with the prima facie approach endorsed by some of the Federal Circuit’s past decisions, the district court proceeded in four steps: it (1) considered the first three Graham factors; (2) made a legal prima facie determination of obviousness; (3) considered objective indicia of non-obviousness; and (4) made an ultimate conclusion of obviousness. He further explained that steps one and three are factual, whereas steps two and four are legal. However, Judge Reyna stated that he reads U.S. Supreme Court and Federal Circuit precedent to require all factual analysis to occur prior to achieving a legal conclusion on non-obviousness, and that this should be done without resort to an intermediate prima facie conclusion. According to Judge Reyna, the prima facie framework followed by the district court excludes objective indicia in the primary analysis and artificially creates a heightened standard of proof for objective indicia. Further, Judge Reyna noted that the purpose of the patent system is to promote the progress of science and useful arts, and that this purpose is undermined by premature findings of obviousness and over-invalidation of innovative patents.