Addressing the issues of teaching away and commercial success, the US Court of Appeals for the Federal Circuit remanded a case to the Patent Trial and Appeal Board (PTAB) to reconsider its final written decision issued in one of two inter partes reviews (IPRs) where the PTAB found the challenged claims unpatentable over one combination of references but not the other. Polaris Industries, Inc. v. Arctic Cat, Inc., Case Nos. 16-1807; -2280 (Fed. Cir., Feb. 9, 2018) (O’Malley J).

Arctic Cat, a manufacturer of all-terrain vehicles (ATVs), filed two IPR petitions for a patent held by its competitor, Polaris Industries, for the configuration of ATVs. The PTAB found the patents obvious from a combination of prior art presented in one IPR but not the other, and the parties cross-appealed. The Federal Circuit affirmed the PTAB IPR decision finding the patent valid, but overturned in part the IPR decision finding it invalid and remanded for reconsideration.

The Federal Circuit upheld the PTAB’s claim constructions and part of its conclusion on the motivation to combine prior art. Specifically, the Court found that the PTAB properly gave a broad interpretation for the placement of the claimed plates because the claims and specification allowed for it, but properly narrowed the term “extending between” to require no intervening parts because such a construction conformed to all of the patent examples. The Court also upheld the PTAB’s conclusion that a skilled artisan would have been motivated to combine or rely on the asserted prior art because the prior art dune buggies were analogous to the claimed ATVs and the component placement in the prior art allowed for comparable placement of the driveshaft as taught in the challenged patent.

The Federal Circuit remanded the case to the PTAB, however, finding that the obviousness analysis was inadequate. First, the Court found that the PTAB had failed to take into account uncontested evidence of teaching away. It was undisputed that the prior art suggested that placing the fuel tank under the seat would require raising the occupancy area, and that the claimed fuel tank configuration was therefore taught to be undesirable because it would raise the center of gravity and make the ATV more dangerous. As noted by the Court, since the claimed tank placement ran counter to the prior art teaching, the PTAB relied on a theory of “subjective preference” to nevertheless find obviousness: “one of ordinary skill has the ability to weigh the various benefits and disadvantages based on subjective preferences in an analysis largely unrelated to obviousness” (emphasis in original).

The Court rejected this framework: “[w]e have never articulated a framework for analyzing whether claims would have been obvious that includes the phrase ‘subjective preference’ or that permits a tribunal to wholly disregard the significance of prior art teachings based on such a characterization.” In short, the Court found that the PTAB’s analysis did not comport with a proper obviousness analysis by allowing hindsight bias, focusing on what a skilled artisan would have been able to do rather than motivated to actually do, and discarding relevant evidence of teaching away. While the Court acknowledged that merely expressing a general preference without criticizing, discrediting or otherwise discouraging the invention is not teaching away, statements of preference are still relevant to motivation.  

Second, the Federal Circuit found that the PTAB erred by rejecting Polaris’s uncontested claims of commercial success as “conclusory.” The Court explained that a plaintiff need not provide more than conclusory statements as to commercial success where its evidence is otherwise unchallenged. If the plaintiff provides sufficient evidence to tie the objective evidence of commercial success to a specific product that embodied the claim features, the plaintiff is entitled to a “presumption of a nexus,” which may be rebutted by defendant’s evidence. Arctic Cat provided no evidence to overcome the presumption, however, and therefore the Court found that the PTAB erred in disregarding commercial success in its obviousness analysis.