Thursday, September 14, 2017

In Intellectual Ventures v. Motorola, Judge Newman challenges nonobviousness finding

The outcome of the Intellectual Ventures case [ 2017 U.S. App. LEXIS 17666 ]:

We hold that substantial evidence supports the jury's verdict regarding the validity of claim 41 of the '144 patent and claims 1, 10, 11, and 13 of the '462 patent, but conclude that substantial evidence does not support the jury's verdict of direct infringement of claim 41 of the '144 patent. Since a finding of direct infringement is a predicate to any finding of indirect infringement, we reverse all of the infringement findings with respect to the '144 patent. We therefore affirm the district court's judgment in part, reverse in part, and remand for further proceedings on the asserted claims of the '462 patent.

Judge Newman dissented in part:

I agree with the holding of non-infringement of the '144 patent, and join the judgment of reversal of the district court's judgment of liability with respect to that patent.1 I respectfully dissent from my colleagues' sustaining the validity of the '144 and '462 patents, for I believe that the claims in suit would have been obvious to a person of ordinary skill in the field of the invention.


Although my colleagues state that "the jury was free to disbelieve [Motorola's] expert and credit [IV's] expert," Maj. Op. at 12 (alterations in original), the court's obligation is to assure that questions of law are correctly decided, and that for factual disputes, substantial evidence on the record as a whole supports the legal conclusion. The question of law is whether a person of ordinary skill in this art would deem it obvious to combine an authenticating step as in Micali, with the process of Overend. See 35 U.S.C. ยง 103 (whether "the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.").


Applying law and precedent, the combination of Overend and Micali renders claim 41 obvious. First, "when a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result." KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 416, 127 S. Ct. 1727, 167 L. Ed. 2d 705 (2007). And second, "[w]hen a patent simply arranges old elements [*37] with each performing the same function it had been known to perform and yields no more than one would expect from such an arrangement, the combination is obvious." Id. at 417 (internal quotation marks and citation omitted). The Court explained that "a court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions." Id.

In light of the evidence, no reasonable jury could have found claim 41 to be nonobvious. There is not substantial evidence that a receipt confirming delivery is not a delivery confirmation message as in the prior art, especially given the express teachings of Micali's authenticating device. A "patent for a combination which only unites old elements with no change in their respective functions . . . obviously withdraws what already is known into the field of its monopoly and diminishes the resources available to skillful men." Id. at 415-16 (quoting Great Atl. & Pac. Tea Co. v. Supermarket Equip. Corp., 340 U.S. 147, 152-153, 71 S. Ct. 127, 95 L. Ed. 162, 1951 Dec. Comm'r Pat. 572 (1950)).


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