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FOX Factory, Inc. v. SRAM, LLC

Nexus for Claims and Secondary Considerations Presumed Only Where Product Lacks Significant Unclaimed Features

FOX Factory, Inc. v. SRAM, LLC, __ F.3d __, 2019 WL ___ (Fed. Cir. Dec. 18, 2019) (PROST, Wallach, Hughes) (PTAB) (3 of 5 stars)

Fed Cir vacates IPR confirmation of claims as nonobvious. SRAM’s patent relates to an improved bicycle chainring structure. The Board erred in its presumption of nexus between SRAM’s claims and its evidence of secondary considerations for nonobviousness. The opinion describes how SRAM’s “X-Sync” product had “unclaimed features that the patentee describes as ‘critical’” to its operation. “In light of the patentee’s own assertions about the significance of the unclaimed features, no reasonable fact finder could conclude that these features are insignificant.” Op. at 12–13. Thus the Board’s presumption of a nexus between evidence concerning X-Sync and SRAM’s claims was erroneous. The opinion emphasizes that the coextensiveness inquiry does not merely consider “whether the claims broadly cover the product that tis the subject of the evidence of secondary considerations.” Id. at 17. It acknowledges that, under this reasoning, “[w]here a product embodies claims from two patents, a presumption of nexus can be appropriate only if the claims of both patents generally cover the same invention.” Id. On remand, the Board can consider whether SRAM can establish nexus based on the evidence, rather than by presumption.

The Board did not err in determining that a skilled artisan would have been motivated to combine the asserted references, based on the evidence. FOX also did not waive its right to an SAS-type remand by not raising to the Board, as SAS issued after the Board’s final decision, or by not including it in its Notice of Appeal (FOX filed a separate motion to remand before its opening brief was due).

KEYWORDS: INTER PARTES REVIEW; SECONDARY CONSIDERATIONS; PRESUMPTION OF NEXUS