Lectrosonics, Inc. v. Zaxcom, Inc.

When a patent owner offers objective indicia of nonobviousness in an IPR, the Board first asks whether a presumption of nexus applies, which requires a showing that the evidence is tied to a specific product that embodies the claimed features and is coextensive with them (Fox Factory). If the patent owner does not analyze coextensiveness, the presumption is inappropriate, but the Board must still consider whether the evidence is the direct result of the unique characteristics of the claimed invention, and nexus fails where the evidence is directed to a feature the claims do not require. Because nexus is tested against claim scope, the Board assesses it anew when substitute claims in a motion to amend change that scope. No prior Board precedent is named in the text as addressed on this issue; the Board applies the Federal Circuit's Fox Factory framework for presumed nexus and the continuing opportunity to prove nexus. Petitioners should check whether the patent owner has actually shown a product that is coextensive with the claims, and should show that praise or need tied to unclaimed features, such as dropout repair under original claims that did not require it, lacks nexus. Patent owners must tie each item of secondary-considerations evidence to the claim limitations themselves and cannot rely on bare reference to a commercial product or to the invention. Binding authority the Board relied on includes Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366 (Fed. Cir. 2019), In re Kao, 639 F.3d 1057 (Fed. Cir. 2011), WBIP, LLC v. Kohler Co., 829 F.3d 1317 (Fed. Cir. 2016), and ClassCo, Inc. v. Apple, Inc., 838 F.3d 1214 (Fed. Cir. 2016). LEGAL TEST OR STANDARD: A proponent of objective indicia must establish a nexus between the evidence and the merits of the claimed invention; there is no nexus unless the evidence is reasonably commensurate with the scope of the claims. A presumption of nexus arises when the patentee shows that the evidence is tied to a specific product that embodies the claimed features and is coextensive with them. If the presumption is inappropriate, the patent owner may still prove nexus by showing the evidence is the direct result of the unique characteristics of the claimed invention. There is no nexus where the consideration results from something other than what is both claimed and novel, but evidence need not be tied exclusively to elements absent from the prior art, and the claimed combination as a whole may serve as the nexus. TRIGGERING FACTS: The patent owner offered long-felt need, failure of others and industry praise evidence, including awards, declarations and user manuals, tied to its products, but gave no analysis showing that the products were coextensive or nearly coextensive with the claims. For original claims 7, 8 and 11, the evidence mainly concerned fixing dropouts, a feature the claims did not require because they were directed to locally recording and timestamping audio data, so nexus failed. For substitute claims 21 to 26, which added a replacing limitation, the Board considered nexus anew. Declarations and the Emmy award specifically addressed dropout repair and backup recording, which established nexus even without the presumption. KEY QUOTE: "However, “[a] finding that a presumption of nexus is inappropriate does not end the inquiry into secondary considerations.”" (Paper 33, p. 33) PRIOR PRECEDENT AFFECTED: No prior precedential or informative decision is directly affected. The Board follows Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366 (Fed. Cir. 2019), In re Kao, 639 F.3d 1057 (Fed. Cir. 2011), WBIP, LLC v. Kohler Co., 829 F.3d 1317 (Fed. Cir. 2016), and ClassCo, Inc. v. Apple, Inc., 838 F.3d 1214 (Fed. Cir. 2016). PRACTICE TIP: Patent owners should submit a claim-by-claim coextensiveness analysis for the product and, if it falls short, map each piece of praise or need evidence to a specific claim limitation. Petitioners should argue that evidence is directed to unclaimed features. Both sides should redo the nexus analysis when substitute claims change claim scope.