In Intercontinental Great Brands LLC v. Kellogg North American Co., [2015-2082, 2015-2084] (September 7, 2017), the Federal Circuit affirmed summary judgment that Kraft’s U.S. Patent No. 6,918,532 was invalid for obviousness, but was not unenforceable for inequitable conduct.

The district court found that the absence of a “convenient opening and reclosing arrangement” was a “known problem” for cookie packaging and that the prior art’s resealable, tray-included packaging for foods offered a skilled artisan a solution to the problem simply by replacing the existing “tray” with a “frame” i.e., a tray with higher sides. The court considered the simple and clear teachings of the art, the importance of common sense and ordinary creativity, and the conclusory character of Kraft’s expert’s assertions of nonobviousness. The court concluded that Kraft’s evidence of objective indicia, though substantial, was not entitled to much weight in the ultimate legal assessment of obviousness. On the issue of inequitable conduct, the court found that Kellogg had not presented evidence that could meet the standard for intent to deceive established in Therasense,

The Federal Circuit said that Kraft’s arguments that the district court treated the objective indicia as an “afterthought,” “writing off the patent before turning to objective indicia,” and “repeatedly not[ing] its finding of obviousness before considering the objective indicia,” mischaracterized the district court’s reasoning, finding that the district court drew its conclusion of obviousness only after, not before, considering the objective indicia.

The Federal Circuit held that the district court did not draw an ultimate conclusion of obviousness before considering the objective indicia. The contrary is not shown by the court’s “not uncommon” choice of words when conducting the ultimate weighing, namely, that the objective indicia “do not overcome Kellogg’s extremely strong prima facie showing.”

The Federal Circuit rejected Kraft’s argument that objective indicia must be considered before drawing a conclusion about whether a person of ordinary skill had motivation to combine the prior art, finding that the staged consideration undertaken by the district court, and reflected in its cases, makes sense within the motivation-to-combine framework.

The Federal Circuit also rejected Kraft’s argument that the district court failed to provide “explicit and clear reasoning providing some rational underpinning” for its invocation of common sense in its motivation-to-combine analysis. The Federal Circuit said that the court relied on the record demonstrating the “known problem” of an insufficiently “convenient opening and reclosing arrangement” for cookie packaging and the suggestion in the prior art that it was useful for a variety of items.

The Federal Circuit also found that that the “enhanced burden” when the prior art relied upon for invalidation was previously considered by the USPTO “provides no basis for a different result.” First the Federal Circuit noted that there is no specific PTO determination of nonobviousness based on the particular prior art now at issue. Second, the Federal Circuit found the showing of obviousness to be sufficiently strong that no PTO contrary determination could alter the conclusion about summary judgment.

On the cross-appeal of the finding of no inequitable conduct, the Federal Circuit saw no reversible error in the district court’s conclusion that Kellogg’s evidence was insufficient to permit a finding of the intent required for inequitable conduct based on Kraft’s reexamination arguments. Kellogg alleged that an item in the prior art considered by the Board during reexamination contained a misprint, and that Kraft committed inequitable conduct by not so informing the Board. This sentence containing the misprint was material, because it resulted in the Board’s reversing the reexamination Examiner. However, the Federal Circuit said that Kellogg also had to prove that Kraft, in what it did not say about the sentence that was the focus of the Board’s attention, had a “specific intent to mislead or deceive the PTO.”

The Federal Circuit said that the intent requirement is demanding, and citing Therasense said that the evidence must be “sufficient to require a finding of deceitful intent in the 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.”

The Board noted that there was no evidence of whether or not Kraft actually believed it was a misprint, just Kellogg’s argument of what Kraft had to have believed. The Federal Circuit said that without more evidence of Kraft’s belief, one reasonable inference on the record — especially given Kellogg’s burden of persuasion — is that Kraft did not believe that there was a misprint.

The district court’s obviousness analysis, approved by the Federal Circuit, relied upon the identification of the problem to be solved in the Background. Prosecutors need to be careful in drafting the background section, so that it does not make the invention seem like the logical (and thus obvious) solution to the problem that perhaps only the inventor had the insight to identify in advance.