CAFC addresses the meaning of "common sense" in Arendi case; Apple loses

From the beginning of the case:


On December 2, 2013, Apple Inc., Google, Inc. and
Motorola Mobility LLC (collectively “Appellees”)) filed a
petition for inter partes review (“IPR”) of U.S. Patent No.
7,917,843 (the “’843 patent”), which is owned by appellant
Arendi S.A.R.L. (“Arendi”). On June 9, 2015, the Patent
Trial and Appeal Board (“Board”) issued a decision finding
claims 1-2, 8, 14-17, 20-21, 23-24, 30, 36-39, and 42-43
would have been obvious. Because the Board misapplied
our law on the permissible use of common sense in an
obviousness analysis, we reverse.



The issue


The Board further explained that the obviousness inquiry
“not only permits, but requires consideration of
common knowledge and common sense.” Id. at *14 (citing
DyStar Textilfarben GmbH & Co. Deutschland KG v. C.H.
Patrick Co., 464 F.3d 1356, 1367 (Fed. Cir. 2006); Perfect
Web Techs., Inc. v. InfoUSA, Inc., 587 F.3d 1324, 1329
(Fed. Cir. 2009)). It rejected Arendi’s argument, relying
on K/S HIMPP v. Hear-Wear Technologies, LLC, 751 F.3d
1362, 1365 (Fed. Cir. 2014), that “common sense” may
only be applied when combining references that disclose
all the required limitations. The Board stated that the
conclusion of obviousness follows from the readily apparent
benefit provided by the retrieval and display of preexisting
information to a user. The Board found, in any
event, that in this case, “a claimed structural feature is
not missing from the applied prior art.” Arendi, 2015 Pat.
App. LEXIS 6053, at *15.



The CAFC observed:


The single question at issue here is whether the
Board misused “common sense” to conclude that it would
have been obvious to supply a missing limitation in the
Pandit prior art reference to arrive at the claimed invention.
It is true that common sense and common
knowledge have their proper place in the obviousness
inquiry. We stated in Perfect Web that “[c]ommon sense
has long been recognized to inform the analysis of obviousness
if explained with sufficient reasoning.” 587 F. 3d
at 1328. And we stated in Randall that “[i]n KSR, the
Supreme Court criticized a rigid approach to determining
obviousness based on the disclosures of individual priorart
references, with little recourse to the knowledge,
creativity, and common sense that an ordinarily skilled
artisan would have brought to bear when considering
combinations or modifications.” Randall Mfg. v. Rea, 733
F.3d 1355, 1362 (Fed. Cir. 2013) (citing KSR, 550 U.S. at
415-22); see also DyStar, 464 F.3d at 1367. Hence, we do
consider common sense, common wisdom, and common
knowledge in analyzing obviousness.



HOWEVER, the CAFC then noted:

But there are at least three caveats to note in applying
“common sense” in an obviousness analysis.


First,
common sense is typically invoked to provide a known
motivation to combine, not to supply a missing claim
limitation. In DyStar, a pre-KSR case, we held a patent
obvious where “all claim limitations [were] found in a
number of prior art references,” 464 F.3d at 1360, and a
person of ordinary skill in the art would have combined
the references to achieve a “cheaper, faster, and more
convenient” process. Id. at 1371 (quoting Sandt Tech.,
Ltd. v. Resco Metal & Plastics Corp., 264 F.3d 1344, 1355
(Fed. Cir. 2001)). We stated that: “an implicit motivation
to combine exists not only when a suggestion may be
gleaned from the prior art as a whole, but when the
‘improvement’ is technology-independent and the combination
of references results in a product or process that is
more desirable.” DyStar, 464 F.3d at 1368. Similarly, in
Randall, we invoked common sense to vacate the Board’s
determination of non-obviousness where “the Board failed
to consider a wealth of well-documented knowledge that is
highly material to evaluating the motivation to combine
references.” Randall, 733 F.3d at 1356. There, the
Board’s decision to ignore the existence of a “prevalent,
perhaps even predominant method” of achieving the
limitation at issue was prejudicial error. Id. at 1363.



The case relied on by Apple et al. was dismissed:


Second, in Perfect Web, the only case Appellees identifies [sic]
in which common sense was invoked to supply a
limitation that was admittedly missing from the prior art,
the limitation in question was unusually simple and the
technology particularly straightforward. “The patented
invention involves comparing the number of successfully
delivered e-mail messages in a delivery against a predetermined
desired quantity, and if the delivery does not
reach the desired quantity, repeating the process of
selecting and e-mailing a group of customers until the
desired number of delivered messages has been achieved.”
Perfect Web, 587 F.3d at 1326. There, the missing claim
limitation—step D of steps A-D—was nothing more than
an instruction to repeat steps A, B, and C until a particular
quantity of email was sent in accordance with the
claim. By contrast, the missing search at issue here
“plays a major role in the subject matter claimed” and
“affects much more than step (i).” Appellant’s Br. 24.
That is—if the search in step (i) is missing, then “the
claims would be almost void of content” because the
premise of the patent is to use information in a first
program to find related information in a second program.
Id. at 25. Thus, the facts in Perfect Web are distinguishable
from the case at bar and ought to be treated as the
exception, rather than the rule.



And finally a reasoned explanation is required:


Third, our cases repeatedly warn that references to
“common sense”—whether to supply a motivation to
combine or a missing limitation—cannot be used as a
wholesale substitute for reasoned analysis and evidentiary
support, especially when dealing with a limitation
missing from the prior art references specified. Indeed,
we stated that although there is no problem with using
common sense “without any specific hint or suggestion in
a particular reference,” the Board’s “utter failure to
explain the ‘common knowledge and common sense’ on
which it relied” is problematic. DyStar, 464 F.3d at 1366
(explaining our reasoning in In re Lee, 277 F.3d 1338,
1341, 1344 (Fed. Cir. 2002)). See also In re Zurko, 258
F.3d 1379, 1383, 1385 (Fed. Cir. 2001) (reversing Board
where it adopted examiner’s unsupported assertion that
claim limitation missing from cited references was “basic
knowledge” and it “would have been nothing more than
good common sense” to combine the references).



The conclusory statements of In re Lee are to be avoided:


In re Lee, 277 F.3d 1338,
1341 (Fed. Cir. 2002). We vacated the Board’s decision,
holding that “[c]onclusory statements such as those here
provided do not fulfill the agency’s obligation” to explain
all material facts relating to a motivation to combine. Id.
at 1344.



Hear-wear arose:


Hear-
Wear, 751 F.3d at 1365 (emphasis added). We distinguished
KSR, finding that “the present case does not
present a question” regarding “combining or modifying
references” but “[i]nstead, it is about whether the Board
declined to accept a conclusory assertion from a third
party about general knowledge in the art without evidence
on the record, particularly where it is an important
structural limitation that is not evidently and indisputably
within the common knowledge of those skilled in the
art.” Id. at 1365-66 (emphasis added and deleted).



The CAFC also noted:


The “use of common sense does not require a ‘specific
hint or suggestion in a particular reference,’ only a reasoned
explanation that avoids conclusory generalizations.”
Perfect Web, 587 F.3d at 1329 (quoting DyStar, 464
F.3d at 1366); see also Plantronics, Inc. v. Aliph, Inc., 724
F.3d 1343, 1354 (Fed. Cir. 2013) (“the mere recitation of
the words ‘common sense’ without any support adds
nothing to the obviousness equation.”); Ball Aerosol &
Specialty Container, Inc. v. Ltd. Brands, Inc., 555 F.3d
984, 993 (Fed. Cir. 2009) (“the analysis that ‘should be
made explicit’ refers not to the teachings in the prior art
of a motivation to combine, but to the court’s analysis.”).
But conclusory statements and unspecific expert testimony
regarding searches in general are precisely what the
Board relied upon in drawing its conclusion that it would
have been “common sense” to search a database for a
telephone number to be added. In so doing, the Board
ignored Arendi’s arguments regarding the differences
between searching for duplicate entries with a telephone
number versus with a name or address. And these errors
were particularly problematic considering the fact that a
key limitation of the ’843 patent was missing from the
prior art reference in dispute.