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August 22, 2010


A "bundle breaker" is a machine that separates stacked sheets of corrugated cardboard. 6,655,566 claimed an improvement that allowed a bundle breaker to simultaneously separate stacks of different heights. George M. Martin is this country's king of cardboard stacking. Martin has been stacking cardboard since 1960, and has about 90% of the cardboard stacker machine market. Martin has sold bundle breakers, which incorporate '566's claimed technology, since 2002. Martin sued chief competitor Alliance Machine Systems International for infringement. A hung jury resulted in the judge breaking Martin's potential bundle by ruling the asserted claims obvious. Martin stacked his hopes on the CAFC.

George M. Martin & The Martin Family Trust v. Alliance Machine Systems International (CAFC 2009-1132) precedential

Bundle breakers of this sort were well known in the art when the application for the '566 patent was filed.

The problem '566 attempted to solve was uneven pressure in clamping cardboard logs/stacks for breaking.

The '566 patent describes the result of unequal pressure:

[M]ore pressure is exerted on the taller logs which can damage compressible material like corrugated cardboard. If the logs are not compressible, then insufficient pressure is placed on the shorter logs and shifting of the logs can occur when the bundles are broken off from the log . . . . In the industry, this problem is called a 'lack of compliance' problem; i.e., the force on all the side by side logs is not substantially equal.

'566 patent, col.2 ll.16-31.

The inventors of the '566 patent, Merrill Martin and Daniel Talken, came up with an improved clamp structure to solve the lack of compliance problem, which they called a "compliance structure."

Claim 1 of the '566 patent, the only independent claim, appears in Jepson form. In other words, the preamble describes prior art bundle breakers and then claims the compliance structure mounted on each upper clamp as an improvement. See The Manual of Patent Examining Procedure ("MPEP") § 2129 ¶ III (8th ed., rev.8, July 2010) (explaining Jepson claims).

The dependent claims add various limitations...

After four days of deliberation, the jury called it quits. The judge then found the claims "so lop-sided in favor of obviousness" under the crushing influence of Obzilla (KSR v. Teleflex).

This court reviews the grant of a JMOL motion without deference, Ericsson, Inc. v. Harris Corp., 352 F.3d 1369, 1373 (Fed. Cir. 2003), applying the law of the regional circuit, Riverwood Int'l Corp. v. R.A. Jones & Co., 324 F.3d 1346, 1352 (Fed. Cir. 2003). "A jury's inability to reach a verdict does not necessarily preclude a judgment as a matter of law." Headwaters Forest Defense v. County of Humboldt, 240 F.3d 1185, 1197 (9th Cir. 2000), vacated on other grounds, 534 U.S. 801 (2001). The test in the Ninth Circuit is "whether the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion . . . ." White v. Ford Motor Co., 312 F.3d 998, 1010 (9th Cir. 2002) (internal quotation marks omitted).

Under 35 U.S.C. § 103(a), a patent is invalid "if the differences between the [claimed] subject matter . . . 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." Whether a patent is invalid as obvious is ultimately a determination of law based on underlying determinations of fact. Monarch Knitting Mach. Corp. v. Sulzer Morat GmbH, 139 F.3d 877, 881 (Fed. Cir. 1998). Those underlying determinations of fact relate to "the scope and content of the prior art, the differences between the prior art and the claimed invention, the level of ordinary skill in the art, and any relevant secondary considerations, such as commercial success, long-felt need, and the failure of others." Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1310 (Fed. Cir. 2009) (internal quotation marks omitted). Thus, this court will affirm a district court's judgment on obviousness as a matter of law if "the content of the prior art, the scope of the patent claim and the level of ordinary skill in the art are not in material dispute, and the obviousness of the claim is apparent in light of these factors." KSR, 550 U.S. at 427.

References for three prior art machines left the judge with the dispositive impression "that the differences between the prior art and the claimed improvement were minimal." The CAFC agreed.

Martin attacked one reference (the Visy machine) by alleging "that the machine did not work for its intended purpose."

The district court appropriately rejected that argument. Under an obviousness analysis, a reference need not work to qualify as prior art; "it qualifies as prior art, regardless, for whatever is disclosed therein." Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1357 (Fed. Cir. 2003). "Even if a reference discloses an inoperative device, it is prior art for all that it teaches." Beckman Instruments, Inc. v. LKB Produkter AB, 892 F.2d 1547, 1551 (Fed. Cir. 1989).

To be clear, prior art must teach a person of ordinary skill to make an apparatus that works for its intended purpose. Beckman Instruments, 892 F.2d at 1551... The Visy machine simply did not work at "production speed." As discussed, however, the claims do not require a threshold throughput or commercial speed.

The secondary considerations of non-obviousness "could not overcome 'the fact that nearly every single person or entity who encountered the lack of compliance problems in the industry came up with the same general hydraulic design to manage it.'"

Secondary considerations of non-obviousness must be considered when present. Sud-Chemie, Inc. v. Multisorb Techs., Inc., 554 F.3d 1001, 1008 (Fed. Cir. 2009). As the Supreme Court recently reaffirmed, "'[s]uch secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented.'" KSR, 550 U.S. at 406 (quoting Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17-18 (1966)). In some rare instances, the secondary consideration of simultaneous invention might also supply "indicia of 'obviousness.'" Ecolochem, Inc. v. S. Cal. Edison Co., 227 F.3d 1361, 1376, 79 (Fed. Cir. 2000) (quoting Graham, 383 U.S. at 17-18).

The commercial success of a product is relevant to the non-obviousness of a claim only insofar as the success of the product is due to the claimed invention. Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299, 1312 (Fed. Cir. 2006). Here, Alliance conclusively established that much of George Martin's commercial success was due to Martin's pre-existing market share in the stacker market, which, according to Martin's president, gave it a "huge advantage" in selling other products because it allowed Martin to sell a "single-source system." Thus, this factor carries little weight.

Evidence of a long-felt but unsolved need provides another secondary consideration of non-obviousness. Ecolochem, 227 F.3d at 1376-77. Where the differences between the prior art and the claimed invention are as minimal as they are here, however, it cannot be said that any long-felt need was unsolved.

Industry praise must also be linked to the patented invention. Power-One, Inc. v. Artesyn Techs., Inc., 599 F.3d 1343, 1352 (Fed. Cir. 2010). The only evidence of industry praise on which the Trust reasonably relies as opposed to self-serving statements by Martin's president that the patented feature offers "increased productivity and increased profitability" is an internal Alliance email in which an Alliance employee reports a customer's statement that "the Martin breaker is the cat's meow." But that same email notes that the customer also chose the Martin Quik-Break because "[t]he interface between the stacker and the breaker will be handled by a single vendor." As with the commercial success factor, this reference to Martin's market share in the stacker market reduces the impact that this evidence could have in establishing industry praise.

Martin's argument that Alliance copied its design went nowhere.

This court has noted, however, "that a showing of copying is only equivocal evidence of non-obviousness in the absence of more compelling objective indicia of other secondary considerations." Echolochem, 227 F.3d at 1380.

The fact that the prior art was contemporaneous damned supposed novelty.

Independently made, simultaneous inventions, made "within a comparatively short space of time," are persuasive evidence that the claimed apparatus "was the product only of ordinary mechanical or engineering skill." Concrete Appliances Co. v. Gomery, 269 U.S. 177, 184 (1925). But see Lindemann Maschinenfabrik GMBH v. Am. Hoist & Derrick Co., 730 F.2d 1452, 1460 (Fed. Cir. 1984) ("Because the statute, 35 U.S.C. § 135, (establishing and governing interference practice) recognizes the possibility of near simultaneous invention by two or more equally talented inventors working independently, that occurrence may or may not be an indication of obviousness when considered in light of all the circumstances.").

The existence of the Pallmac and Visy machines, however, shows that the Tecasa machine was invented within a "comparatively short space of time." As discussed, the evidence reveals that the relevant Pallmac machine was first installed in 1998, and the Visy machine was first sold in 1996, approximately three and five years, respectively, before the Trust alleges its invention was reduced to practice. The district court was therefore correct to conclude that the invention of the Tecasa machine, occurring only a year later than the earliest possible reduction-to-practice date of the claimed invention, qualified as a simultaneous invention. As such, "'though not determinative of statutory obviousness, [it is] strong evidence of what constitutes the level of ordinary skill in the art.'" Ecolochem, 227 F.3d at 1379 (quoting The Int'l Glass Co. v. United States, 408 F.2d 395, 405 (Ct. Cl. 1969)).

Balancing all of the secondary considerations, this court agrees with the district court that, in light of the strong evidence of obviousness based on the Pallmac and Visy prior art coupled with the near-simultaneous invention of the Tecasa machine, the Trust's objective evidence of non-obviousness, even if fully credited by a jury, would fail to make a difference in this case.


Posted by Patent Hawk at August 22, 2010 1:15 PM | Prior Art


Everything thing in this case doesn't favor the patentee on the validity issue: (1) use of Jepson claim format (not a good idea these days); (2) at least one prior art device that existed with a date before the filing date of patent and which showed every feature in the claims; and (3) no nexus between the "secondary considerations" and the key features of the claimed invention. The final verdict here is hardly a surprise.

Posted by: EG at August 23, 2010 5:59 AM