While the Samsung v. Apple reversal was the big news this week, there were also two precedential Federal Circuit decisions. In Asetek, the Circuit affirmed validity, infringement and damages but in a surprising ruling opposed by Chief Judge Prost, remanded the grant of an overly broad injunction without lifting the injunction. The panel vacated and remanded a determination of obviousness in NuVasive because the Board did not adequately explain the bases for its finding. This is the second case in the past month involving a NuVasive/Medtronic dispute in which a decision by the Board has been vacated because the Board failed to follow correct procedures in making its rulings.
In Asetek, the Circuit affirms validity, infringement and damages but in a surprising ruling opposed by Chief Judge Prost, remands the grant of an overly broad injunction without lifting the injunction. The panel vacates and remands a determination of obviousness in NuVasivebecause the Board did not adequately explain the bases for its finding. This is the second case in the past month involving a NuVasive/Medtronic dispute in which a decision by the Board has been vacated because the Board failed to follow correct procedures in making its rulings.
Asetek v. CMI – In this action involving computer cooling systems, the full panel affirms determinations of non-invalidity, infringement and damages. The majority remands the injunction so the district court can evaluate whether the injunction is overly broad as to products provided by the supplier Cooler Master to its customer CMI that do not abet an infringement by CMI. Chief Judge Prost dissents as to the remand, arguing that that portion of the injunction should be vacated.
Appellants argued that there can be no infringement because the alleged “heat exchanging interfaces” in the accused products are not “removably attached” or “removably coupled” to reservoirs. This follows, according to appellants, because removing the heat exchanging interfaces would render the products nonfunctional. But because the parties elected to provide the jury only with the claim language itself, without any claim construction, the only issue is whether there is substantial evidence to support the jury’s application of the jury instruction. The panel finds such substantial evidence here.
The panel also rejects appellants’ argument that the asserted claims would have been obvious over Koga and Ryu because Koga’s “sucking channel” is a “thermal exchange chamber.” The panel rules that the district court’s rejection of this argument was not clear error since, even though Koga’s “sucking channel” exchanges some heat, it is not necessarily a “thermal exchange chamber.”
Appellants argued that, in calculating a 14.5% royalty award, Asetek’s damages expert improperly relied on Asetek’s per-unit profit margin. According to the argument, the expert’s approach circumvented the requirement, applicable when lost-profits damages are sought, that a patent owner prove that it would have made the infringer’s sales “but for” the infringement—a requirement not applicable to reasonable-royalty damages. The panel rejects the argument, noting that a patent owner would be unlikely to be interested in accepting a royalty rate lower than its profit margin. Negotiating for a per-unit payment equal to its per-unit profit can be a logical approach for a patent owner that is uncertain of how many sales might be lost by granting the license at issue.
The panel also rejects appellants’ argument that Cooler Master’s earlier dismissal from the case with prejudice precludes an injunction against Cooler Master. The panel bases this ruling on the fact that a party who sues a tortfeasor is ordinarily not barred by a prior judgment from seeking relief for tortious action by the same tortfeasor that occurs subsequent to the original action. The rationale is simple: claim preclusion requires a party to assert all claims that the party could have asserted in the earlier lawsuit; and a party cannot assert claims based on tortious conduct that had not occurred at that time.
Finally, the panel indicates that the injunction appears to be overly broad insofar as the injunction reaches Cooler Master’s sale, importation, etc., other than conduct that abets a new violation by CMI, the only party adjudicated liable for infringement. However, the majority is reluctant to disturb the status quo, which has existed for a year, so does not think it is appropriate to vacate the injunction. As noted above, Judge Prost disagrees with that part of the decision.
NuVasive– The Circuit vacates and remands an IPR determination of obviousness as to a spinal fusion implant since the Board did not adequately explain the bases for its determination of obviousness.
Before getting to the merits of the appeal, the panel first rules that NuVasive waived its ability to raise on appeal the issue of whether the prior art product literature was publically accessible. NuVasive challenged the public accessibility of the literature during the preliminary proceedings of the IPR but failed to challenge public accessibility during the trial phase. In fact, during oral argument before the Board, NuVasive declined to argue public accessibility when asked by the Board if it was still disputing the public availability of the literature. NuVasive’s attorney responded: “That is correct, we’re leaving that issue aside. We’re focusing entirely on the obviousness . . . . We’re not abandoning the other arguments in our Patent Owner response, specifically with the dependent claims, we’re just not addressing them right now because they’re already addressed. So, we’re going to assume that these are prior art . . . .”
The panel concludes that there was a waiver since, as a result of NuVasive failing to contest public accessibility, that issue was not addressed by the Board, and the Circuit did not have the benefit of the Board’s informed judgment on the issue.
In addressing the issue of whether the Board had adequately explained its obviousness determination, the panel first notes that, according to KSR, the motivation to combine analysis should be made explicit. Although KSR noted that identifying a motivation to combine “need not become a rigid and mandatory formula,” the Board must articulate a reason why a PHOSITA would combine the prior art references.
The Board determined that claim 1 would have been obvious over a combination of Baccelli and the product literature. But the Board failed to explain why a PHOSITA would have been motivated to modify either of the literature references in light of Baccelli. The majority of the Board’s analysis was limited to summaries of the parties’ arguments. The Board stated “we are not persuaded by NuVasive’s argument, because the question is whether it would have been obvious to a PHOSITA to combine the cited references, and not whether any specific implants on the market contain a radiopaque marker in a central region.” In addition, the Board invoked the high level of skill in the art when it agreed with Medtronic’s assertion that NuVasive’s argument “vastly underestimates the ordinary skill of surgeons in this field.” However, the Board never actually made an explanation-supported finding that the evidence affirmatively proved that the PHOSITA would have sought this additional information from the other reference. Medtronic’s arguments amount to nothing more than conclusory statements that a PHOSITA would have been motivated to combine the prior art references to obtain additional information.
Asetek Danmark A/S v. CMI USA Inc., fka Cooler Master USA, Inc., Cooler Master Co., Ltd.,
Case No. 2016-1026, -1183 (December 6, 2016)
The ’362 and ’764 patents describe and claim systems and methods for cooling a central processing unit (CPU) using cooling liquid. Cooler Master is a Taiwanese supplier of cooling devices for heat generating components of computers. CMI is a U.S. company that—as reflected in its name (“Cooler Master USA, Inc.”) until February 2013, a month after this suit began— collaborates with Cooler Master in designing and selling “Cooler Master”-branded products in the United States. CMI also “assists” Cooler Master in setting the manufacturer’s suggested retail price of the accused products sold in the United States. The evidence, seemingly undisputed, is that, by oral agreement, CMI was Cooler Master’s exclusive U.S. distributor of Cooler Master products. Between 2012 and 2013, CMI began selling “Cooler Master”-branded products in the United States.
In its January 2013 suit against CMI and Cooler Master, Asetek asserted that they were infringing the ’362 patent and ’764 patent by selling, offering to sell, and importing the various products. By September 5, 2014, the litigation was far enough along that CMI moved for summary judgment of invalidity. Cooler Master did not join that motion, however, because, the day before, it and Asetek stipulated to Cooler Master’s dismissal with prejudice—a dismissal entered on September 5, 2014. Asetek agreed to that dismissal after CMI and Cooler Master witnesses testified, in discovery, to Cooler Master’s exclusive distribution arrangement with CMI for the accused products in the United States.
The case went to trial a few months later. At trial, CMI argued that the ’362 patent was not infringed, that the ’764 patent was anticipated by Koga, and that the ’362 and ’764 patents were obvious over Koga and Ryu. The district court granted Asetek’s motion for judgment as a matter of law that Koga did not anticipate claim 4 of the ’764 patent, and the jury returned a verdict for Asetek on the remaining issues. The jury found that CMI infringed, directly and contributorily, the asserted claims of the ’362 patent and rejected CMI’s Koga-based anticipation challenge to the remaining claims of the ’764 patent. The jury found Asetek entitled to a 14.5% reasonable-royalty rate and awarded $404,941 in damages.
In April 2015, the district court entered its findings of fact and conclusions of law on matters the parties had reserved to it. The court concluded that CMI failed to prove that the ’362 and ’764 patents were invalid for obviousness, lack of written description, or indefiniteness. In September 2015, the district court denied CMI’s motions for judgment as a matter of law or a new trial on infringement and damages as well as for a new trial on obviousness. The district court also granted Asetek’s motion for an injunction against CMI and Cooler Master, the latter not then a party. CMI and Cooler Master appeal.
The Parties Did Not Ask for Claim Construction and the Substantial Evidence Supports the Infringement Verdict
Appellants argue that the jury was required to find the ’362 patent not infringed as a matter of law. Specifically, they contend that the alleged “heat exchanging interfaces” in the accused products are not “removably attached” or “removably coupled” to “reservoirs,” as the asserted claims require. The reason, appellants say, is that removing the “heat exchanging interfaces” in the accused products would “damage the products or otherwise render them nonfunctional.”
We reject appellants’ non-infringement argument. Where the parties and the district court elect to provide the jury only with the claim language itself, and do not provide an interpretation of the language in the light of the specification and the prosecution history, the jury’s findings must be tested by the charge actually given and by giving the ordinary meaning of the language of the jury instruction, and the only question is one of substantial evidence. The parties did not request a construction of the claim terms “removably attached” or “removably coupled,” and they did not object to the district court’s jury instructions. Applying the ordinary meaning, then, we conclude that substantial evidence supports the finding of infringement.
There Is No Clear Error in the Finding that Koga Is Not a “Thermal Exchange Chamber”
Appellants argue that the subject matter of the asserted claims of the ’764 patent would have been obvious over Koga and Ryu. Specifically, they argue that, as a matter of law, Koga’s “sucking channel” is a “thermal exchange chamber” (a requirement of all asserted claims of the ’764 patent) because the “sucking channel” “exchanges some heat.” The district court found that Koga did not teach this claim element, a factual component of the obviousness analysis. That finding is not clear error. Specifically, the fact that Koga’s “sucking channel” exchanges some heat, no matter how minimal and inevitable, does not entail that it is properly considered a “thermal exchange chamber.”
Substantial Evidence Supports the Jury’s 14.5% Royalty
CMI argues that, in calculating the 14.5% royalty award, Asetek’s damages expert, Dr. Mody, improperly relied on Asetek’s per-unit profit margin under its licensing agreement with another company, Corsair. According to CMI, Dr. Mody’s approach circumvented the requirement, applicable when lost-profits damages are sought, that a patent owner prove that it would have made the infringer’s sales “but for” the infringement—a requirement not applicable to reasonable-royalty damages. Additionally, CMI argues that the royalty award is not supported by substantial evidence because the Asetek-Corsair license included a maximum royalty rate of 7%. We reject both arguments.
35 U.S.C. § 284 guarantees to a patent holder damages “adequate to compensate for the infringement, but in no event less than a reasonable royalty.” There is no dispute here about the propriety of using the common hypothetical-negotiation approach to calculating a reasonable royalty, under which the finder of fact attempts to ascertain the royalty upon which the parties would have agreed had they successfully negotiated an agreement just before infringement began.
To the extent that Dr. Mody’s analysis referred to Asetek’s per-unit profit on its cooling units, CMI’s legal objection lacks merit. The fact that a royalty calculation relies in part on the patent owner’s per-unit profits does not make it an unreasonable award. A patent owner would be unlikely to be interested in accepting a royalty rate lower than its profit margin on the patented products. Negotiating for a per-unit payment equal to its per-unit profit can be a logical approach for a patent owner that is uncertain of how many sales might be lost by granting the license at issue or is just using its own experience to place a value on the right to use the technology at issue.
Nor has CMI shown, as it suggests, that the use of Asetek’s per-unit profit in the royalty analysis makes lost-profits damages no longer worth pursuing by patent owners. There are obvious reasons for some patent owners to pursue lost profits. In some circumstances, e.g., where the patent owner is a strong economic monopolist, proof of lost sales caused by the infringement and the profits on those lost sales (as well as loss of profits from sales made at prices lowered by the infringement) may be less uncertain than proof of a reasonable royalty under the standards applicable to the latter. And a lost-profit award can be higher. A hypothetical-negotiation analysis for a royalty considers not only the patent owner’s interests, but also the other side of the negotiation table under the particular conditions of the hypothetical negotiation. A lost-profits analysis is different, because as a general matter, the patent owner is entitled to be made whole, upon proper proof, for its loss of profits caused by the infringement, without discounting for the rational interests limiting willingness to pay on the infringer’s side.
Finally, substantial evidence supports the jury’s finding that a hypothetical negotiation between Asetek and CMI would have resulted in a 14.5% reasonable royalty rate, even though one portion of the Corsair license included a maximum royalty rate of 7%. First, as Dr. Mody testified, the Corsair license included an effective royalty rate of between 10% and 19%. Using that range, Dr. Mody concluded that Asetek and CMI would have agreed to a royalty rate of about 16%. Second, Dr. Mody testified that Asetek would have sought a higher royalty rate from CMI than from Corsair because Asetek would have treated CMI as a “competitor,” rather than a valued “customer” (like Corsair).
Appellants’ Two-Part Challenge to the Injunction
Cooler Master and CMI together challenge the injunction on two grounds. First, they argue that Cooler Master’s September 2014 dismissal from the case with prejudice precluded the district court from subjecting Cooler Master to the injunction’s obligations. Second, they argue that the injunction is too broad in scope insofar as the injunction reaches Cooler Master’s conduct (sale, importation, etc., involving the identified “Cooler Master”-branded products) other than conduct that abets a new violation by CMI, the only party adjudicated liable for infringement.
The Injunction Was Not Improper as to Cooler Master Just Because It Had Been Dismissed from the Case
Appellants contend that, even if an injunction against Cooler Master would be proper had no claim ever been filed against it in this case, it cannot be enjoined because it was initially a defendant and the claims against it were dismissed with prejudice. Appellants rest that contention on the premise that dismissal is an adjudication that has claim-preclusive effect. But, while the premise is correct, the inference appellants urge—that claim preclusion bars relief as to future conduct—is not.
Appellants’ argument assumes that the “claim” covered by the dismissal, which concerned Cooler Master’s pre-dismissal conduct, is the same as a “claim” covering conduct subject to the injunction, which is Cooler Master’s future conduct—not just post-dismissal, but post-trial and post-injunction-issuance. It is well established, however, that the difference in timing means that the two situations do not involve the same “claim” for claim-preclusion purposes, even if all the conduct is alleged to be unlawful for the same reason. As we have explained, “a party who sues a tortfeasor is ordinarily not barred by a prior judgment from seeking relief for discrete tortious action by the same tortfeasor that occurs subsequent to the original action.” The rationale is simple: claim preclusion requires a party to assert all claims that the party could have asserted in the earlier lawsuit; and a party cannot assert claims based on “tortious conduct” that had not occurred at that time—those claims could not have been asserted and therefore are not barred.
The cases cited by Appellants establish only that a stipulated dismissal “generally constitutes a final judgment on the merits” that “precludes a party from reasserting the same claims” or “same cause,” or from challenging “acts [that] fell within the scope of the pleadings” of the dismissed action. They do not address future conduct like that covered by the injunction at issue here.
The Injunction Was Overly Broad in Restricting Conduct of Cooler Master that Does Not Abet a New Violation by CMI
The fundamental principle relevant to appellants’ narrower, scope objection to the injunction here is that an injunction may not make punishable the conduct of persons who act independently and whose rights have not been adjudged according to law. But as that formulation suggests, an injunction may reach certain conduct by persons not held liable for the underlying wrong where the conduct is not undertaken “independently” of the persons who have been held liable. Federal Rule 65(d) reflects the standards when it declares that an injunction binds only the parties, the parties’ officers, agents, servants, employees, and attorneys, and other persons who are in active concert or participation with them who receive actual notice of the injunction by personal service or otherwise.
Here the injunction imposes two sorts of obligations on Cooler Master—it restricts conduct by Cooler Master that abets a new violation by CMI; and it also restricts conduct by Cooler Master that does not abet a new violation by CMI. Judge Learned Hand wrote that the non-liable party “must either abet the liable party, or must be legally identified with him.” Alemite Mfg. Corp. v. Staff, 42 F.2d 832 (2d Cir. 1930), quoted in Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 96 F.3d 1390 (Fed. Cir. 1996) (Additive Controls I). Sometimes “privity” is used for the “legally identified” category, which covers a number of bases for binding a non-liable person to obligations imposed on a liable person; but whatever the labels, both categories are well established in the law and recognized as within the “active concert or participation” standard of Rule 65(d).
The second category, which is the only one at issue in this appeal, is less well defined than the first. And its implementation by the courts has reflected a fact-specific approach and particular caution so as to protect the strong, underlying background principle shared with the related area of preclusion law: everyone should have his own day in court. But this category, included within the “active concert or participation” standard, embraces at least two types of situations of potential relevance here.
The “legally identified” category has long covered at least some situations in which the non-liable person is a successor of the liable person in a relevant respect. Another subcategory recognized in various cases involves situations in which a party’s litigation of a case is sufficiently controlled by another person that the latter may be said to have had its day in court and on that ground be subject to the injunctive obligations. In the present case the district court specifically invoked the “successor” standards. And in entering the injunction, the district court relied on certain facts: “CMI is authorized by . . . Cooler Master to sell Cooler Master-branded liquid-cooling devices in the United States”; “CMI and Cooler Master have an exclusivity agreement where CMI is Cooler Master’s exclusive U.S. distributor”; and “CMI and Cooler Master jointly developed the infringing products.” “Because of Cooler Master’s past history in developing the infringing products and its contractual relationship with CMI,” the court then concluded, “Cooler Master is an appropriate subject of the injunction under Rule 65(d)(2).”
In drawing that conclusion, the district court relied on this court’s decision in Aevoe Corp. v. AE Tech Co., Ltd., 727 F.3d 1375 (Fed. Cir. 2013). While that decision is instructive in various ways, it involves different facts from the present case in at least one respect. In Aevoe, the non-liable persons were barred from selling the “infringing products obtained from” the liable person. Here, Cooler Master is the supplier; it does not acquire the products at issue from CMI.
We do not decide what ultimate legal significance that distinction may have here. A chain of title to particular units is just one of a number of facts of potential relevance to the inquiry into the proper scope of the injunction here. Here, besides other facts, Asetek has alleged that, while Cooler Master may not acquire its products from CMI, CMI’s cooperation in modifying its exclusivity deal was obtained or needed in order for Cooler Master to engage, other than through CMI, in the U.S.-focused sales and related activities involving the products at issue.
A Remand Is Appropriate Rather than the Injunction Being Vacated
We do not think it advisable to resolve the issue of the proper scope of the injunction here without a fuller picture of the facts described by the district court. Rather, we think, further proceedings are warranted before a final conclusion is drawn about the injunction in this case.
Nor do we think it appropriate to vacate the injunction at present. We have discretion pursuant to 28 U.S.C. § 2106. Leaving the injunction in force for a time would preserve the status quo that has existed for a year, appellants not having sought a stay from us. And, although we are refraining from drawing any conclusions, we are not convinced, on the present record, that the district court’s injunction is so unlikely to be found improper that the status quo should be disturbed. Accordingly, we choose to leave the injunction in place for now, and we remand for further proceedings to determine the proper reach of the injunction.
Second, such proceedings might be unnecessary if Asetek chooses to file a new injunctive infringement action against Cooler Master. In such an action, Asetek might seek a preliminary injunction, relying on the judgment reached after full litigation in the present case. We do not prejudge the merits of any such request, or the merits of any such separate suit. We note only that such a proceeding might produce rulings that postpone the need to decide, or even moot, the delicate remedial issue that we here remand to the district court.
Chief Judge Prost’s Dissent
I respectfully dissent from the majority’s decision to remand this case for further proceedings regarding the injunction while keeping it in force. The correct course of action would be to vacate the portions of the injunction that improperly reach Cooler Master (who has not been found to infringe the asserted patents) in its own capacity.
In Re NuVasive, Inc., Case No. 2015-1670 (December 7, 2016)
NuVasive is the assignee of the ’156 patent, which is directed to a spinal fusion implant of non-bone construction releasably coupled to an insertion instrument dimensioned to introduce the spinal fusion implant into any of a variety of spinal target sites. In response to Medtronic’s petition, the PTAB instituted inter partes review and in a final written decision concluded that the instituted claims would have been obvious over an SVS-PR brochure, a Telamon brochure, a Telamon guide, and a U.S. patent application to Baccelli.
NuVasive argues on appeal that the PTAB’s Final Written Decision should be reversed for two reasons: (1) “the PTAB erred in concluding that the SVS-PR brochure and Telamon references are printed publication prior art”; and (2) “the PTAB erred in concluding it would have been obvious to include radiopaque markers proximate to the medial plane.”
NuVasive Waived Its Arguments as to the Treatment of the References as Printed Publications
As an initial matter, the court must consider whether the SVS-PR brochure and Telamon references were publicly accessible such that they qualify as printed publications pursuant to 35 U.S.C. § § 311(b) and 102. But we first must determine whether NuVasive preserved its public accessibility arguments for appeal. While the court retains case-by-case discretion over whether to apply waiver, we have held that a party waives an argument that it failed to present to the PTAB because it deprives the court of the benefit of the PTAB’s informed judgment.
NuVasive challenged the public accessibility of the prior art references during the preliminary proceedings of the IPR, but failed to challenge public accessibility during the trial phase. In fact, during oral argument before the PTAB, NuVasive explicitly declined to make further arguments as to public accessibility:
[PTAB Judge]: I take it you no longer are disputing the public availability of the Telamon references?
[NuVasive’s Attorney]: That is correct, we’re leaving that issue aside. We’re focusing entirely on the obviousness to modify these markers in the medial plane. We’re not abandoning the other arguments in our Patent Owner response, specifically with the dependent claims, we’re just not addressing them right now because they’re already addressed.
So, we’re going to assume that these are prior art . . . .
NuVasive abandoned its challenge to the public accessibility determination even though the PTAB had warned NuVasive that this would result in waiver. Because NuVasive no longer contested the public accessibility of the prior art references, the PTAB did not address this issue in the Final Written Decision. As a result, we do not have the benefit of the PTAB’s informed judgment on the public accessibility issue, and NuVasive waived its arguments on this issue.
The PTAB Did Not Adequately Explain How Claim 1 Would Have Been Obvious Over the Prior Art
NuVasive argues that the PTAB’s Final Written Decision did not make adequately explained findings as to why a PHOSITA would have been motivated to combine the prior art references and place the radiopaque markers on the medial plane. According to NuVasive, the PTAB relied on only one conclusory statement by Medtronic’s expert that the modification would provide “additional information.”
Two distinct yet related principles are relevant to our review. First, the PTAB must make the necessary findings and have an adequate evidentiary basis for its findings. Second, the PTAB must examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made. This explanation enables the court to exercise its duty to review the PTAB’s decisions to assess whether those decisions are “arbitrary, capricious, an abuse of discretion, or . . . unsupported by substantial evidence . . . .” 5 U.S.C. § 706(2)(A)–(E) (2012). We cannot exercise our duty of review unless we are advised of the considerations underlying the action under review. Indeed, the orderly functioning of the process of review requires that the grounds upon which the PTAB acted be clearly disclosed and adequately sustained. Although we do not require perfect explanations, we may affirm the PTAB’s findings “if we may reasonably discern that it followed a proper path, even if that path is less than perfectly clear.” Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359 (Fed. Cir. 2015).
The relevant principles apply with equal force to the PTAB’s motivation to combine analysis. Our precedent dictates that the PTAB must make a finding of a motivation to combine when it is disputed. See KSR (stating that the PTAB’s motivation to combine “analysis should be made explicit.”). Although identifying a motivation to combine “need not become a rigid and mandatory formula,” KSR, the PTAB must articulate a reason why a PHOSITA would combine the prior art references.
Our recent decisions demonstrate that the PTAB knows how to meet this burden. We have, however, identified some insufficient articulations of motivation to combine. First, “conclusory statements” alone are insufficient and, instead, the finding must be supported by a “reasoned explanation.” In re Lee, 277 F.3d 1338 (Fed. Cir. 2002). Second, it is not adequate to summarize and reject arguments without explaining why the PTAB accepts the prevailing argument. See Cutsforth, Inc. v. MotivePower, Inc., 636 F. App’x 575 (Fed. Cir. 2016). Third, although reliance on common sense may be appropriate in some circumstances, see KSR (“Rigid preventative rules that deny factfinders recourse to common sense . . . are neither necessary under our case law nor consistent with it.”), the PTAB cannot rely solely on common knowledge or common sense to support its findings, see Arendi S.A.R.L. v. Apple Inc., 832 F.3d 1355 (Fed. Cir. 2016) (“References to ‘common sense’ . . . cannot be used as a wholesale substitute for reasoned analysis and evidentiary support . . . .”).
With these principles in mind, we turn to the PTAB’s findings regarding motivation to combine. Here, the PTAB acknowledged that the key issue was “whether it would have been obvious to a PHOSITA to combine the cited references,” and then found that independent claim 1 would have been obvious over a combination of Baccelli and either the SVS-PR brochure or the Telamon references. In reaching this conclusion, the PTAB failed to explain the reason why a PHOSITA would have been motivated to modify either the SVS-PR or Telamon implants, in light of Baccelli, to place radiopaque markers “proximate to said medial plane” (i.e., near the middle of the implant), as the ’156 patent teaches. The majority of the PTAB’s analysis was limited to summaries of the parties’ arguments, as the USPTO acknowledged during oral argument. The PTAB began by summarizing Medtronic’s and NuVasive’s arguments on whether the “additional information” that could be obtained from placing radiopaque markers near the middle of the implant would benefit a PHOSITA. The PTAB stated “we are not persuaded by NuVasive’s argument, because the question is whether it would have been obvious to a PHOSITA to combine the cited references, and not whether any specific implants on the market contain a radiopaque marker in a central region.” In addition, the PTAB invoked the high level of skill in the art when it “agreed” with Medtronic’s assertion that “the addition of markers along the medial plane would not confuse” a PHOSITA and found that NuVasive’s argument “vastly underestimates the ordinary skill of surgeons in this field.” However, the PTAB never actually made an explanation-supported finding that the evidence affirmatively proved that the PHOSITA would have sought this additional information.
The PTAB avers that it “effectively” adopted Medtronic’s arguments, but the PTAB neither expressly did so nor provided reasoned explanations for crediting the arguments. Medtronic’s arguments amount to nothing more than conclusory statements that a PHOSITA would have been motivated to combine the prior art references to obtain additional information. In its summary of Medtronic’s arguments, the PTAB never articulated why the additional information would benefit a PHOSITA when implanting a posterior lumbar interbody fusion implant, such as the implants disclosed by the SVS-PR brochure and the Telamon references. It also failed to explain the type of additional information a PHOSITA would obtain or how the PHOSITA would use that information.
In sum, the PTAB failed to articulate a reason why the PHOSITA would have been motivated to modify the SVS-PR or Telamon implants, in light of Baccelli, to obtain this additional information. Because we cannot “reasonably discern” the PTAB’s reasoning as to motivation to combine, judicial review cannot “meaningfully be achieved.” Therefore, the PTAB’s decision is vacated and the case remanded for additional PTAB findings and explanations regarding the PHOSITA’s motivation to combine the prior art references.
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