Saturday, February 19, 2022

CAFC addresses amendments in IPRs in ZAXCOM, INC. v. LECTROSONICS, INC.; back and forth with "industry praise"; Emmy Award as evidence

The outcome was affirmance of initial rejection and acceptability ("not unpatentable") of amended claims:

Lectrosonics, Inc. petitioned the Patent and Trademark Office to institute an inter partes review, under 35 U.S.C. §§ 311–19, of all claims of U.S. Patent No. 9,336,307, which is owned by Zaxcom, Inc. After institution of the requested review, Zaxcom filed a motion to replace the original claims 1–14 with fourteen corresponding claims—substitute claims 15–28—if the Patent Trial and Appeal Board held the original claims unpatentable. The Board issued a final written decision holding all original claims unpatentable, and it therefore addressed Zaxcom’s proposed substitute claims, which it allowed to be added to the patent because Lectrosonics had not proved them unpatentable. Lectrosonics, Inc. v. Zaxcom, Inc., No. IPR2018-00972, 2019 WL 5849856, at *29 (P.T.A.B. Nov. 7, 2019). Zaxcom appeals the Board’s rejection of the original claims, and Lectrosonics appeals the Board’s approval of the substitute claims. We affirm both determinations.

Industry praise did not work here to overcome obviousness:

Zaxcom argues, as to claims 1–11, that no obviousness conclusion should be drawn because its evidence of industry praise and long-felt need should have outweighed the above-recited determinations based on the prior art. But given the adopted claim construction, the Board determined that Zaxcom’s evidence of such objective indicia lacked the nexus to the claimed invention required to alter a conclusion of obviousness that would be justified based on the prior-art analysis. Id. at *10–11. Zaxcom specifically focused on a Technical Achievement Academy Award, J.A. 4272, an Engineering Emmy Award, J.A. 4304, and declarations from sound mixers, J.A. 4273–78; J.A. 4281– 84, praising Zaxcom’s wireless recording systems. The Board reasonably found that the praise was primarily directed to the systems’ critical feature of dropout repair, while the claims of the ’307 patent, under the BRI construction properly adopted, are broadly directed to wirelessly transmitting audio data and combining local and remote audio data from a plurality of devices—a technique already known in the prior art. The evidence, in short, says nothing to suggest non-obviousness of one of the two types of systems and methods within the claims’ coverage. We therefore agree with the Board that, based on that finding, the objective indicia evidence is insufficient to overcome the prior-art evidence of obviousness. See Intercontinental Great Brands LLC v. Kellogg North America Co., 869 F.3d 1336, 1343–44, 1347 (Fed. Cir. 2017) (overall obviousness determination is a legal one based on weighing of prior-art and objective-indicia facts). Thus, the Board properly held claims 1–11 unpatentable for obviousness.

BUT, as to the counterclaim, industry praise was enough [!]

Having found the asserted prior-art basis for an obviousness conclusion relatively weak in light of the narrowed scope of the claims, the Board determined that the objective indicia evidence was strong in light of that narrowed scope—strong enough to support an overall conclusion of nonobviousness. Id. at *23–29. We affirm the Board’s findings and ultimate conclusion. In particular, the Board determined that Zaxcom’s evidence of industry praise and long-felt need was entitled to a presumption of nexus, noting that these indicia were commensurate in scope with the claims as now narrowed, id. at *25, a determination that comports with the legal standards for a presumption, see, e.g., Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366, 1373 (Fed. Cir. 2019); Polaris Indus., Inc. v. Arctic Cat, Inc., 882 F.3d 1056, 1072 (Fed. Cir. 2018). The Board also reasonably found that the evidence positively showed a nexus, Lectrosonics, 2019 WL 5849856, at *25, as the substitute claims are undisputedly directed to dropout repair in systems with wearable recording devices, and this feature was discussed in at least the Emmy Award, J.A. 4304, and substantial portions of the declarations, see, e.g., J.A. 4276–77 ¶ 6, J.A. 4283–84 ¶ 6. We see no basis for reversing the Board’s findings or the conclusion that these findings outweigh the weak prior-art case and therefore warrant rejection of the obviousness challenge to the substitute claims.


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