Post-KSR: Expert testimony enough for infringer to avoid summary judgment of no invalidity?June 19, 2007

In a nonprecedential ruling yesterday, the Federal Circuit reversed a district court's grant of summary judgment of no obviousness. The twist was that the only evidence in the record cited by the court as demonstrating a genuine issue of material fact was the testimony of the defendant's expert witness that there would have been a reason to modify the prior art in order to produce the claimed invention.

Relying on the Supreme Court's recent KSR decision, the Federal Circuit said that this was enough, because the reason to combine or modify prior art references need not be found in the prior art, but can also be provided by "background knowledge" of one of ordinary skill in the art as well as "demands known to the design community or present in the marketplace." Although this is a nonprecedential ruling, this case may provide those accused of infringement a blueprint for how to avoid summary judgment of the validity of a patent: provide expert testimony that a reason existed to modify or combine the prior art to produce the claimed invention.

Omegaflex holds two patents (the '749 and '052 patents) relating to pipe fitting technology. The key limitation at issue in this case is the requirement for a "locating sleeve" that makes it easier to align two pipes, particularly in hard-to-reach areas, tight spaces, or when the pipes are of poor quality, situations commonly encountered in the field. An example of the fittings at issue is below:

Locating sleeve fitting

Parker-Hannifin ("Parker") is a competitor that sells competing fittings. Omegaflex sued Parker for infringement, and Parker defended on the basis of invalidity, specifically that the asserted patents were obvious. The relevant prior art references are the Sweeney patent and a product previously sold by Parker, the Parker Compressing Fitting ("PCF"). It was undisputed that the Sweeney patent disclosed all limitations of the asserted patents with the exception of the locating sleeve. The PCF, while designed for use with a different style of pipe, was sold with an option to insert a locating sleeve when aid for proper alignment is desired. Parker asserted that the claimed inventions were obvious based on the combination of these pieces of prior art.

The district court disagreed, granting summary judgment of no invalidity (in addition to summary judgment of infringement, which Parker did not appeal). Specifically, the district court held that nothing in the Sweeney patent suggests that alignment would be a problem, and therefore a skilled artisan would have no reason to improve the alignment capabilities of Sweeney, particularly because it purports to produce a "leak-tight seal." As a result, there was no motivation to combine the Sweeney patent with the PCF device. Further, while the PCF and its marketing contemplated problems with alignment, there would be no motivation to combine the two, as Sweeney did not recognize an alignment problem. There likewise would have been no expectation of success, based on testimony from Parker engineers that they had considered adding a locating sleeve on one of their earlier products, but thought that it would impede flow and increase cost, so they chose not to add a sleeve. Finally, the district court found objective indicia of nonobviousness, including skepticism among artisans that it would be a valuable addition to the Sweeney patent, the fact that Parker eventually decided to add a locating sleeve of its own, and that the patents fulfilled a long-felt need, as a distributor characterized the Omegaflex patents as a "breakthrough."

The Federal Circuit was not so convinced. First, the court quoted extensively from KSR:

The Supreme Court recently explained that "a patent composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art." KSR Int'l Co. v. Teleflex Inc., 127 S. Ct. 1727, 1741 (2007). "[I]t can be important to identify a reason that would have prompted a person of ordinary skill in the relevant field to combine the elements in the way the claimed new invention does." Id. In identifying such a "reason," the Court cautioned that "the analysis need not seek out precise teachings [in the prior art] directed to the specific subject matter of the challenged claim." Id.; see also DyStar Textilfarben GmbH & Co. Deutschland KG v. C.H. Patrick Co., 464 F.3d 1356, 1366 (Fed. Cir. 2006) ("[W]e have stated explicitly that evidence of a motivation to combine need not be found in the prior art themselves," citing In re Dembiczak, 175 F.3d 994, 999 (Fed. Cir. 1999)) (emphasis in original). Rather, courts must also "look to interrelated teachings of multiple patents; the effects of demands known to the design community or present in the marketplace; and the background knowledge possessed by a person having ordinary skill in the art." KSR Int'l, 127 S. Ct. at 1740-41; see also DyStar, 464 F.3d at 1366-67 (holding that a reason to combine may come from "the knowledge of one of ordinary skill in the art," "the nature of the problem to be solved," or "common knowledge and common sense") (internal quotations and citations omitted).

(emphasis added). Turning to the facts in the summary judgment record, the Federal Circuit found sufficient evidence to generate a genuine issue of material fact on the issue of obviousness. Parker offered the testimony of an expert, David Geary, who opined that one of ordinary skill in the art "would have recognized the importance of proper alignment in practicing the Sweeney patent and thus would have thought of adding a locating sleeve." Omegaflex offered contrary testimony from its own expert, but according to the Federal Circuit, "Parker's expert evidence cannot simply be disregarded at summary judgment given that Parker was the non-movant." This led the district court to "fail[] to account for evidence regarding the knowledge of a skilled artisan," and the erroneous grant of summary judgment of nonobviousness.

The Federal Circuit found similar issues of material fact with regard to whether there was a reasonable expectation of success in the modification as well as the secondary indicia of nonobviousness, also based on Geary's testimony:

The Geary evidence regarding reasonable expectation of success at least raises a genuine issue of material fact as to whether a skilled artisan would have held such an expectation.

. . .

Indeed, there is evidence from Geary and the PCF that the use of locating sleeves as alignment aids in other applications was well-established. Certainly there is at least a genuine issue of material fact as to whether such skepticism existed.

In the end, the Federal Circuit found a genuine issue of material fact regarding obviousness based entirely on the testimony of the defendant's expert, and reversed the grant of summary judgment. This is interesting, given the Supreme Court's statement in KSR that:

Where, as here, 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, summary judgment is appropriate.

Apparently this only works one way: summary judgment of obviousness may be more frequently appropriate post-KSR, but summary judgment of no obviousness, at least where there is a defense expert involved (which is the vast majority of cases), looks to be hard to come by. Of course, this is a nonprecedential decision, but it looks to be a portent of how the Federal Circuit will treat obviousness in the future.

To read the full decision in Omegaflex, Inc. v. Parker-Hannifin Corp., click here.

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