CAFC analyzes copying in Liqwd case

The outcome in Liqwd:



Liqwd, Inc., appeals from a decision by the Patent Trial
and Appeal Board that certain claims in its patent on formulations and methods of
keratin treatment are unpatentable as obvious. In its obviousness analysis, based on
evidence presented by Liqwd, the Board found that L’Oreal
USA, Inc., used Liqwd’s confidential information and copied Liqwd’s patented method. But the Board disregarded
its factual finding when concluding that the copying involved was legally irrelevant. Because that conclusion was
error, we vacate the Board’s obviousness determination
and remand. We agree with the other appealed aspects of
the Board’s final written decision.



An issue



Liqwd argues that the Board erred by ruling that
L’Oreal’s copying of Liqwd’s unpublished ’885 patent application
“did not qualify as an objective indicium of nonobviousness” despite the Board’s factual finding that “[L’Oreal]
used maleic acid because of [L’Oreal’s] access to [Liqwd’s]
non-public information, rather than because of
[L’Oreal’s] . . . independent development.” Appellant
Br. 27 (quoting J.A. 45). L’Oreal responds and relies on
Iron Grip Barbell in arguing that Liqwd did not show replication of any specific
product embodying the claimed invention, so there is no evidence of copying by L’Oreal.
Appellee Br. 37–40. We therefore review whether the
Board erred in determining that L’Oreal’s “development of
its products due to access to non-public information about
[Liqwd’s] patent application” was not “copying of the type
that is relevant to the question of obviousness of the
challenged claims of the ’419 patent” on the basis that the
evidence did not show L’Oreal copied a specific product.
J.A. 45–46. We conclude this was error.
This court has consistently held that objective indicia
“‘may often be the most probative and cogent evidence’ of
nonobviousness.” Advanced Display Sys., Inc. v. Kent State
Univ., 212 F.3d 1272, 1285 (Fed. Cir. 2000) (quoting
Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538
(Fed. Cir. 1983)). Objective indicia are essential safeguards that protect
against hindsight bias. In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent
Litig., 676 F.3d 1063, 1079 (Fed. Cir. 2012). The objective
indicia analysis is, therefore, a fundamental part of the
overall § 103 obviousness inquiry. See W.L. Gore & Assocs.,
Inc. v. Garlock, Inc., 721 F.2d 1540, 1555 (Fed. Cir. 1983).
As a result, the Board must consider all such evidence of
objective indicia and determine the weight to give it “en
route to a determination of obviousness.” Stratoflex, Inc.
713 F.2d at 1538.
It is well established that copying by a competitor is a
relevant consideration in the objective indicia analysis.
Iron Grip Barbell, 392 F.3d at 1325. Such copying may be
evidence that the patented invention is nonobvious. Vandenberg v. Dairy Equip. Co., 740 F.2d 1560, 1567 (Fed. Cir.
1984). “Copying requires duplication of features of the patentee’s work
based on access to that work, lest all infringement be mistakenly treated as copying.” Institut Pasteur
& Universite Pierre Et Marie Curie v. Focarino, 738 F.3d
1337, 1347–48 (Fed. Cir. 2013). Evidence of copying may
include internal documents, direct evidence such as photos
of patented features or disassembly of products, or access
and similarity to a patented product. Iron Grip Barbell,
392 F.3d at 1325.

(...)

Other cases following Iron Grip Barbell have also emphasized that similarities between an issued patent and an
accused product do not, on their own, establish copying. In
Wyers v. Master Lock Co., we held that the patent owner
failed to establish copying despite its argument that “competitors’ copying and marketing of convertible shank hitch
pin locks shortly after the invention’s existence became
known supports a finding of nonobviousness.” 616 F.3d
1231, 1245–46 (Fed. Cir. 2010) (citing Iron Grip Barbell,
392 F.3d at 1325). We again distinguished between infringement and copying, reasoning that “[n]ot every competing product that arguably falls within the scope of a
patent is evidence of copying; otherwise, ‘every infringement suit would automatically confirm the nonobviousness
of the patent.’” Id. at 1246 (quoting Iron Grip Barbell, 392
F.3d at 1325). In Tokai Corp. v. Easton Enterprises, Inc.,
although we restated that “[c]opying requires evidence of
efforts to replicate a specific product,” we emphasized the
vital difference between infringement and copying. 632
F.3d 1358, 1370 (Fed. Cir. 2011) (quoting Wyers, 616 F.3d
at 1246).


Bottom line:


We therefore vacate the Board’s obviousness determination and remand the case for the Board to consider this
evidence in its obviousness analysis. See Knoll Pharm. Co.
v. Teva Pharms. USA, Inc., 367 F.3d 1381, 1385 (Fed. Cir.
2004) (“The so-called ‘objective’ criteria must always be
considered and given whatever weight is warranted by the
evidence presented.” (internal citation omitted));
Stratoflex, Inc. 713 F.2d 1530, 1539 (Fed. Cir. 1983) (the
obviousness analysis requires that “all pieces of evidence
on that issue have been fully considered and each has been
given its appropriate weight”).