June 3, 2009
The Rubber Meets The Road
Titan Tire sued Case for infringing D360,862, claiming a tractor tire. "In May 2007, Titan filed a motion for a preliminary injunction to prohibit Case from selling backhoes with infringing tires." The motion was denied, because Titan "was not likely to withstand" an obviousness challenge. On appeal, the CAFC exposits on preliminary injunctions, and adds a dash on design patent obviousness.
Titan Tire et al v. Case et al (CAFC 2008-1078) precedential
The gist, in three words: carry your burden.
When a patentee sues an alleged infringer for patent infringement and, for the purpose of immediately preventing further alleged infringement, moves under 35 U.S.C. § 283 for the extraordinary relief of a preliminary injunction, the patentee's entitlement to such an injunction is a matter largely within the discretion of the trial court. Genentech, Inc. v. Novo Nordisk, A/S, 108 F.3d 1361, 1364 (Fed. Cir. 1997).
The factors the trial court considers when determining whether to grant a preliminary injunction are of longstanding and universal applicability. As the Supreme Court recently reiterated, there are four: "[a] plaintiff seeking a preliminary injunction must establish  that he is likely to succeed on the merits,  that he is likely to suffer irreparable harm in the absence of preliminary relief,  that the balance of equities tips in his favor, and  that an injunction is in the public interest." Winter v. Natural Res. Def. Council, Inc., 129 S. Ct. 365, 374 (2008) (citing Supreme Court cases). We note in passing that some cases state the first factor as requiring a "reasonable" likelihood of success on the merits. It is not clear whether the addition of "reasonable" adds anything substantive to the test, but in any event, for our purposes the Supreme Court's current statement of the test is the definitive one.
With regard to the first factor--establishing a likelihood of success on the merits--the patentee seeking a preliminary injunction in a patent infringement suit must show that it will likely prove infringement, and that it will likely withstand challenges, if any, to the validity of the patent. See Genentech, 108 F.3d at 1364. In assessing whether the patentee is entitled to the injunction, the court views the matter in light of the burdens and presumptions that will inhere at trial. See Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 429 (2006) ("[T]he burdens at the preliminary injunction stage track the burdens at trial.").
At trial, as we explained in our recent case of Technology Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1327 (Fed. Cir. 2008), an issued patent comes with a statutory presumption of validity under 35 U.S.C. § 282. Because of this presumption, an alleged infringer who raises invalidity as an affirmative defense has the ultimate burden of persuasion to prove invalidity by clear and convincing evidence, as well as the initial burden of going forward with evidence to support its invalidity allegation.4 Tech. Licensing, 545 F.3d at 1327. Once the challenger presents initially persuasive evidence of invalidity, the burden of going forward shifts to the patentee to present contrary evidence and argument. Id. Ultimately, the outcome of the trial on this point will depend on whether, in light of all the evidence, the party challenging the patent's validity has carried its burden of persuasion to prove by clear and convincing evidence that the patent is invalid. Id. at 1328.
4 Hereafter, an unqualified reference to going forward with evidence should be understood to mean both factual evidence and factual and legal argument. See Tech. Licensing, 545 F.3d at 1327.
Before trial, when the question of validity arises at the preliminary injunction stage, the application of these burdens and presumptions is tailored to fit the preliminary injunction context. To begin, the patent enjoys the same presumption of validity during preliminary injunction proceedings as at other stages of litigation. Canon Computer Sys., Inc. v. Nu-Kote Int'l, Inc., 134 F.3d 1085, 1088 (Fed. Cir. 1998). Thus, if a patentee moves for a preliminary injunction and the alleged infringer does not challenge validity, the very existence of the patent with its concomitant presumption of validity satisfies the patentee's burden of showing a likelihood of success on the validity issue. See Purdue Pharma L.P. v. Boehringer Ingelheim GmbH, 237 F.3d 1359, 1365 (Fed. Cir. 2001); Canon, 134 F.3d at 1088.
If, instead, the alleged infringer responds to the preliminary injunction motion by launching an attack on the validity of the patent, the burden is on the challenger to come forward with evidence of invalidity, just as it would be at trial. The patentee, to avoid a conclusion that it is unable to show a likelihood of success, then has the burden of responding with contrary evidence, which of course may include analysis and argument.
While the evidentiary burdens at the preliminary injunction stage track the burdens at trial, importantly the ultimate question before the trial court is different. As this court explained in New England Braiding Co. v. A.W. Chesterton Co., the trial court "does not resolve the validity question, but rather must . . . make an assessment of the persuasiveness of the challenger's evidence, recognizing that it is doing so without all evidence that may come out at trial." 970 F.2d 878, 882-83 (Fed. Cir. 1992). Instead of the alleged infringer having to persuade the trial court that the patent is invalid, at this stage it is the patentee, the movant, who must persuade the court that, despite the challenge presented to validity, the patentee nevertheless is likely to succeed at trial on the validity issue.
In New England Braiding, as part of its exposition on how these burdens operate in the context of a preliminary injunction, the court said:
The district court cannot be held to have erred in deciding that the patentee failed to make a sufficient showing of likelihood of success required to support a preliminary injunction where the evidence presented in support of invalidity raises a substantial question, although the defense may not be entirely fleshed out. . . .
While it is not the patentee's burden to prove validity, the patentee must show that the alleged infringer's defense lacks substantial merit.
Id. at 883 (emphases added).
The precise meaning of the emphasized language, referring, first, to evidence presented by the alleged infringer to support an invalidity defense that "raises a substantial question," and, second, to the patentee's obligation to show that the alleged infringer's defense "lacks substantial merit," is less than entirely clear, and leaves room for different interpretations. There are several possible ways a trial court could understand that language. To begin, the trial court might assume that only the evidence the challenger presents is relevant to the question of whether the challenger succeeds in raising a "substantial question" of invalidity, and that that evidence alone could be the basis for the trial court to deny the injunction.
Alternatively, the trial court could understand its task to involve not only examining the alleged infringer's evidence of invalidity, but also considering rebuttal evidence presented by the patentee and determining whether the patentee can show that the invalidity defense "lacks substantial merit." This latter understanding more properly acknowledges both parts of the above quote from New England Braiding, and our cases have made clear that the patentee's rebuttal of the challenger's invalidity evidence is an important part of the court's overall evaluation of the evidence. See, e.g., Genentech, 108 F.3d at 1364 ("In other words, if Novo raises a 'substantial question' concerning validity . . . (i.e., asserts a defense that Genentech cannot show 'lacks substantial merit') the preliminary injunction should not issue" (citing New England Braiding, 970 F.2d at 882-83)). A few cases have focused the discussion on whether the challenger succeeded in establishing a substantial question of invalidity without emphasizing that the patentee must be given the opportunity to show that the invalidity defense "lacks substantial merit." However, the extensive assessment of the evidence on both sides in those cases demonstrates that what underlies those decisions is the necessary balancing of all the evidence before the court. See, e.g., E.I. duPont de Nemours & Co. v. MacDermid Printing Solutions L.L.C., 525 F.3d 1353, 1358-63 (Fed. Cir. 2008).
On what it means to "raise a substantial question" -
Accepting, then, that the trial court looks at both sides of the evidence, the evidence presented by the patentee as well as by the alleged infringer, there remains still a question as to exactly how the trial court is to understand what is meant by saying the challenger's evidence "raises a substantial question" of invalidity. On the one hand, a trial court could understand that phrase to describe a procedural step involving assessment of evidence that the challenger has put forward initially. If the trial court determines that the challenger's evidence is sufficient to raise "a substantial question" of invalidity, the trial court must then afford the patentee the opportunity to show that the invalidity defense "lacks substantial merit." In other words, the trial court's determination that a "substantial question" has been raised by the alleged infringer could be considered a trigger for the patentee's opportunity to respond to the evidence presented by the challenger.
An alternative to that way of understanding the phrase "raises a substantial question" is to see it as a description of the question a trial court must resolve regarding the evidence of invalidity at the preliminary injunction stage, after necessarily taking into account the patentee's responses. That is, it refers to the net of the evidence after the trial court considers all evidence on both sides of the validity issue available at this early stage of the litigation. Under this view, a finding of a "substantial question" of invalidity is a substantive conclusion by the trial court, a conclusion that the patentee is unlikely to succeed on the merits of the validity issue because the patentee is unable to establish that the alleged infringer's invalidity defense "lacks substantial merit."
While our cases since New England Braiding have not always been explicit as to which of these two meanings of "raises a substantial question" was intended,5 our precedents establish that the phrase refers to a conclusion reached by the trial court after considering the evidence on both sides of the validity issue. Thus the trial court first must weigh the evidence both for and against validity that is available at this preliminary stage in the proceedings. Then, as explained in New England Braiding, if the trial court concludes there is a "substantial question" concerning the validity of the patent, meaning that the alleged infringer has presented an invalidity defense that the patentee has not shown lacks substantial merit, it necessarily follows that the patentee has not succeeded in showing it is likely to succeed at trial on the merits of the validity issue. 970 F.2d at 883.
5 Compare Purdue Pharma, 237 F.3d at 1363 ("If Roxane defends with evidence raising a 'substantial question' concerning validity . . . , Purdue was required to produce countervailing evidence demonstrating that these defenses 'lack substantial merit.'"), with Genentech, 108 F.3d at 1364 ("In other words, if Novo raises a 'substantial question' concerning validity . . . (i.e., asserts a defense that Genentech cannot show 'lacks substantial merit') the preliminary injunction should not issue." (citing New England Braiding, 970 F.2d at 882-83)).
Addressing the difference between "substantial question" and "substantial evidence" -
Even with that understanding in mind, there remains yet further clarification necessary to assess the trial court's responsibilities in this preliminary injunction setting. First, the weight of evidence necessary for a showing of a "substantial question" regarding invalidity should not be confused with the similarly phrased but quite different test usually known as "substantial evidence" in the record. This latter is a low evidentiary threshold applicable to review of jury verdicts and certain administrative law matters, including matters on appeal to us from the United States Patent and Trademark Office. See, e.g., Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938) (explaining that "substantial evidence" in the administrative review context means "more than a mere scintilla" and "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion"); In re Gartside, 203 F.3d 1305, 1312 (Fed. Cir. 2000). It is not an evidentiary test applicable to a trial court's decision whether to grant or deny a preliminary injunction.
At the same time, the alleged infringer at the preliminary injunction stage does not need to prove invalidity by the "clear and convincing" standard that will be imposed at trial on the merits. See, e.g., Amazon.com, 239 F.3d at 1358 ("Validity challenges during preliminary injunction proceedings can be successful, that is, they may raise substantial questions of invalidity, on evidence that would not suffice to support a judgment of invalidity at trial."). As we have noted, the trial court must decide whether to grant a preliminary injunction in light of the burdens the parties will bear at trial, sometimes requiring the court to make its decision based on less than a complete record or on disputed facts whose eventual determination will require trial. See Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981); New England Braiding, 970 F.2d at 883.
Thus, when analyzing the likelihood of success factor, the trial court, after considering all the evidence available at this early stage of the litigation, must determine whether it is more likely than not that the challenger will be able to prove at trial, by clear and convincing evidence, that the patent is invalid. We reiterate that the "clear and convincing" standard regarding the challenger's evidence applies only at trial on the merits, not at the preliminary injunction stage. The fact that, at trial on the merits, the proof of invalidity will require clear and convincing evidence is a consideration for the judge to take into account in assessing the challenger's case at the preliminary injunction stage; it is not an evidentiary burden to be met preliminarily by the challenger.
If the trial court is persuaded, then it follows that the patentee by definition has not been able to show a likelihood of success at trial on the merits of the validity issue, at least not at this stage.7 This decision process, which requires the court to assess the potential of a "clear and convincing" showing in the future, but in terms of what is "more likely than not" presently, rests initially in the capable hands and sound judgment of the trial court.
7 See Gonzales, 546 U.S. at 428-29 (plaintiff deemed likely to succeed on the merits at preliminary injunction stage when defendant failed to show it would more likely than not succeed on its affirmative defense at trial).
It is important to remember that, however engaged the court may be in the process of determining whether the alleged infringer has shown a "substantial question" of invalidity as we have explained it, that process does not change the court's ultimate decision point. As the Supreme Court and this court have made clear, the first factor to be dealt with in the preliminary injunction analysis is the traditional one: has the plaintiff established a likelihood of success on the merits? Asking whether the challenger has raised a substantial question of invalidity in the manner we have described may be a useful way of initially evaluating the evidence, but the ultimate question regarding the first preliminary injunction factor remains that of the patentee's likelihood of success on the merits. The Supreme Court has stated that the general rules applicable to injunctions in civil actions apply equally to injunctions in patent cases;8 there is no room for making the substantial question test a substitute or replacement for the established test for injunctions. That test places the burden on the plaintiff to prove likelihood of success.
8 See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 394 (2006) ("[T]he decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and . . . such discretion must be exercised consistent with traditional principles of equity in patent disputes no less than in other cases governed by such standards.").
Design Patent Obviousness
Design patents are subject to the nonobviousness requirement of 35 U.S.C. § 103. See 35 U.S.C. § 171.
Our precedents teach that "the ultimate inquiry under section 103 is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved." Durling v. Spectrum Furniture Co., 101 F.3d 100, 103 (Fed. Cir. 1996) (citing In re Rosen, 673 F.2d 388, 390 (CCPA 1982)). Durling explains that this general principle translates into "whether one of ordinary skill would have combined teachings of the prior art to create the same overall visual appearance as the claimed design," id. (citing In re Borden, 90 F.3d 1570, 1574 (Fed Cir 1996)), and that this in turn requires that "one must find a single reference, 'a something in existence, the design characteristics of which are basically the same as the claimed design.'" Id. (quoting In re Rosen, 673 F.2d at 391). Once the primary reference is found, other "secondary" references "may be used to modify it to create a design that has the same overall visual appearance as the claimed design." Id. Further, these secondary references must be "'so related [to the primary reference] that the appearance of certain ornamental features in one would suggest the application of those features to the other.'" Id. (quoting In re Borden, 90 F.3d at 1575 (alteration in original)).
Titan complained that the trial court had no primary reference. The CAFC scolded that risked missing the forest for the trees.
This process, first finding a primary reference in the prior art and then modifying it with secondary prior art references to demonstrate the claimed design's obviousness, may have a tendency to draw the court's attention to individual features of a design rather than the design's overall appearance. In this respect, it is similar to the "point of novelty" test that until recently was used in the infringement side of design patent law. The "point of novelty" test required a trial court to examine the prior art and the claimed design, identify one or more points of novelty that distinguished the claimed design from the prior art, and then determine whether those points of novelty were included in the accused design, a sometimes contentious analysis. See Egyptian Goddess, Inc. v. Swisa, 543 F.3d 665, 670-71 (Fed. Cir. 2008) (en banc). One perceived problem with the point of novelty test was that it might cause the court to focus "on whether the accused design has appropriated a single specified feature of the claimed design, rather than on the proper inquiry, i.e., whether the accused design has appropriated the claimed design as a whole." Id. at 677.
Titan carped of the district court citing KSR.
Design patents, like utility patents, must meet the nonobviousness requirement of 35 U.S.C. § 103, and it is not obvious that the Supreme Court necessarily intended to exclude design patents from the reach of KSR.
Posted by Patent Hawk at June 3, 2009 6:03 PM | Injunction
It is interesting (or frightening) that the CAFC effectively changed the references applied by the district court to arrive at the "right" decision vis-a-vis patentability. (The district court used ‘683 patent and the Ram tire to find the claims obvious, both of which were before the Examiner and apparently considered during prosecution.) From what I can tell, whether the "BF Goodrich Silvertown Power Industrial tire" does or does not have hexagonal lugs was neither argued or found either at the trial court or the PTO (the Silvertown was apparently not before the Examiner, nor candidly shown in the decision), yet the CAFC apparently both found and relied on this fact to reach the "right" conclusion:
"The trial court considered Titan’s argument that none of these prior art designs appear to have hexagonal lug heads, the main feature of the patented design that is missing from the primary references. However, at least one of those references, the BF Goodrich Silvertown Power Industrial tire, does appear to have enlarged, six-sided lug heads, and therefore qualifies as a secondary reference for modifying one of the primary references to create a design with the same overall visual appearance as the design in the ’862 patent."
Trial court decision:
This case should be a red flag regarding any "presumption of validity" for design patents. The district court blew aside the Examiner's patentability determination with no deference to findings of fact, and the CAFC blew aside the district court's insufficient reasoning (the hexagonal shape was key to the Examiner's allowance) and made its own findings of fact. It is certainly arguable (under 103) that the patent should have never issued in the first place, but once it does, the presumption of validity should preclude these unpredictable legal shenanigans. (The CAFC should not even consider arguments not made below - in such cases, the case should be remanded for further proceedings, as the CAFC has often unashamedly stated in its decisions. Here, however, the CAFC not only considered a new obviousness rejection, it apparently created it!)
Posted by: niRPa at June 4, 2009 4:58 AM
I agree with your last paragraph: "This case ... created it!)
Posted by: John Prosecutor at June 5, 2009 11:22 AM