Teva argues that the Board made two legal errors. First, Teva argues that, in finding no presumption of nexus between the claims and the secondary considerations based on the commercial products, the Board misapplied this court's holding in Fox Factory, Inc. v. SRAM, LLC , 944 F.3d 1366 (Fed. Cir. 2019). Second, with regard to the AlderBio license, Teva argues that the Board erred by focusing on AlderBio's products rather than the scope of the license.
Evidence of objective indicia of nonobviousness must have a nexus to the claims, i.e., "there must be a legally and factually sufficient connection between the evidence and the patented invention." Fox Factory, Inc. v. SRAM, LLC , 944 F.3d 1366, 1373 (Fed. Cir. 2019) (internal quotation marks omitted). Here, the Board found both a presumption of nexus and a nexus-in-fact between the claimed designs and the evidence of commercial success and praise.
However, even absent a presumption of nexus, "the patent owner is still afforded an opportunity to prove nexus by showing that the evidence of secondary considerations is the 'direct result of the unique characteristics of the claimed invention.' " Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366, 1373-74 (Fed. Cir. 2019) (quoting In re Huang, 100 F.3d 135, 140 (Fed. Cir. 1996)). Volvo Penta challenges both the Board's finding that it was not entitled to a presumption of nexus and that it did not otherwise independently show nexus.
There can be "a presumption of nexus for objective considerations when the patentee shows that the asserted objective evidence is tied to a specific product" and that product "is the invention disclosed and claimed in the patent." WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1329 (Fed. Cir. 2016) (internal quotation marks omitted); see also Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366, 1374 (Fed. Cir. 2019) ("[W]hat we do require is that the patentee demonstrate that the product is essentially the claimed invention."). The presumption can apply "even when the product has additional, unclaimed features."
We vacated the Board's decision because it applied the wrong legal standard for evaluating the relevance of secondary considerations to obviousness. Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366, 1373-78 (Fed. Cir. 2019). We noted the inconsistency of SRAM's arguing, in the '027 and '250 patent IPRs, for the nonobviousness of each patent based upon the same secondary considerations evidence.
"In order to accord substantial weight to secondary considerations in an obviousness analysis, the evidence of secondary considerations must have a 'nexus' to the claims, i.e., there must be a legally and factually sufficient connection between the evidence and the patented invention." Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366, 1373 (Fed. Cir. 2017) (quotation marks omitted). "The patentee bears the burden of showing that a nexus exists."
J.A. 81. "In order . . . to accord substantial weight to secondary considerations," the Board recognized, "there must be a 'legally and factually sufficient connection' "—i.e., a nexus—"between the evidence and the patented invention." J.A. 72-73 (quoting Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366, 1373 (Fed. Cir. 2019)). And "if the marketed product embodies the claimed features, and is coextensive with them, then a nexus is presumed."
A patentee may establish nexus by showing that the secondary considerations evidence is a "direct result of the unique characteristics of the claimed invention." Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366, 1373-74 (Fed. Cir. 2019) (quoting In re Huang, 100 F.3d 135, 140 (Fed. Cir. 1996)). For patents claiming combinations of prior art features, a patentee must show that the secondary considerations evidence is "attributable to the claimed combination of [prior art features], as opposed to, for example, prior art features in isolation or unclaimed features." Id. at 1378 (citing Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023, 1034 (Fed. Cir. 2016)).
"[A] patentee is entitled to a rebuttable presumption of nexus between the asserted evidence of secondary considerations and a patent claim if the patentee shows that the asserted evidence is tied to a specific product and that the product 'is the invention disclosed and claimed.'" Fox Factory v. SRAM, LLC, 944 F.3d 1366, 1373 (Fed. Cir. 2019) (emphasis added) (quoting Demaco, 851 F.2d at 1392). The presumption applies "when the patentee shows that the asserted objective evidence is tied to a specific product and that product 'embodies the claimed features, and is coextensive with them.'"
We presume a nexus "when the patentee shows that the asserted objective evidence is tied to a specific product and that product ‘embodies the claimed features, and is coextensive with them.’ " Fox Factory, Inc. v. SRAM, LLC , 944 F.3d 1366, 1373 (Fed. Cir. 2019) (quoting Polaris Indus., Inc. v. Arctic Cat, Inc. , 882 F.3d 1056, 1072 (Fed. Cir. 2018) ). The coextensive requirement does not require a patentee to prove perfect correspondence between the product and a patent claim.