Court Opinion

ID: 4297450
Source: CourtListenerOpinion
Date Created: 2018-07-25 15:00:36.74119+00
Date Added: 2024-06-11T14:41:20.913132
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                ______________________

                     ZUP, LLC,
                  Plaintiff-Appellant

                          v.

          NASH MANUFACTURING, INC.,
                Defendant-Appellee
              ______________________

                      2017-1601
                ______________________

   Appeal from the United States District Court for the
Eastern District of Virginia in No. 3:16-cv-00125-HEH,
Judge Henry E. Hudson.
                ______________________

                Decided: July 25, 2018
                ______________________

   MATTHEW MICHAEL WAWRZYN, Wawrzyn & Jarvis
LLC, Glenview, IL, argued for plaintiff-appellant.

   JOSEPH F. CLEVELAND, JR., Brackett & Ellis, Fort
Worth, TX, argued for defendant-appellee.
                ______________________

    Before PROST, Chief Judge, NEWMAN and LOURIE,
                    Circuit Judges.
2                     ZUP, LLC   v. NASH MANUFACTURING, INC.

     Opinion for the court filed by Chief Judge PROST.
    Dissenting opinion filed by Circuit Judge NEWMAN.
PROST, Chief Judge.
     Appellant ZUP, LLC (“ZUP”) appeals the decision of
the United States District Court for the Eastern District
of Virginia, which granted summary judgment in favor of
Appellee Nash Manufacturing, Inc. (“Nash”). The district
court invalidated claims 1 and 9 of U.S. Patent
No. 8,292,681 (“the ’681 patent”) as obvious and, in the
alternative, held that Nash does not infringe claim 9. We
affirm the district court’s holding that claims 1 and 9 are
invalid as obvious and do not reach the infringement
question.
                             I
    ZUP and Nash are competitors in the water recrea-
tional device industry. Nash has been a part of the indus-
try for over fifty years and has designed and
manufactured water skis, knee boards, wake boards, and
other similar recreational devices. Meanwhile, ZUP is a
relative newcomer to the industry, having entered the
market in 2012 with its “ZUP Board.” The ZUP Board is
designed to assist riders who have difficulty pulling
themselves up out of the water into a standing position
while being towed behind a motorboat.
                            A
    ZUP owns the ’681 patent, which includes twelve
claims. Generally, the claims of the ’681 patent cover a
water recreational board and a method of riding such a
board in which a rider simultaneously uses side-by-side
handles and side-by-side foot bindings to help maneuver
between various riding positions. According to the patent,
this allows a rider to more readily move from lying prone,
to kneeling, to crouching, and then to standing.
ZUP, LLC   v. NASH MANUFACTURING, INC.                       3

    Claims 1 and 9 of the ’681 patent are at issue in this
case. Claim 1 states:
    1. A water recreation device comprising:
     a riding board having a top surface, a bottom sur-
         face, a front section, a middle section, and a
         rear section;
     a tow hook disposed on the front section of the
         riding board;
     first and second handles disposed side-by-side on
         the front section of the top surface of the rid-
         ing board aft of the tow hook;
     first and second foot bindings disposed side-by-
         side on the middle section of the top surface of
         the riding board aft of the first and second
         handles; and
     a plurality of rails protruding from the bottom
         surface of the riding board and extending sub-
         stantially the full length of the riding board;
     wherein the tow hook includes a rearward-facing
         concave section sized to receive a tow rope bar
         and positioned to allow the riding board to be
         pulled in a forward direction by a tow rope at-
         tached to the tow rope bar,
     wherein the first and second handles and the
         first and second foot bindings are configured
         for simultaneous engagement by a rider to po-
         sition the rider in a crouching stance facing in
         a forward direction,
     wherein the plurality of rails are disposed rela-
         tive to a longitudinal axis along the bottom
         surface of the riding board, the longitudinal
         axis projecting rearwardly from a reference lo-
         cation substantially central to the front sec-
         tion, and each of the plurality of rails is
         laterally spaced closer to the longitudinal axis
         nearest the rear section of the riding board
4                     ZUP, LLC   v. NASH MANUFACTURING, INC.

       than the each of the plurality of rails is later-
       ally spaced from the longitudinal axis nearest
       the front section of the riding board thereby
       allowing the water that moves across the bot-
       tom surface nearest the front section of the
       riding board to funnel towards the bottom sur-
       face nearest the rear section of the riding
       board for the purpose of generating lift force
       against the bottom surface of the riding board.
’681 patent, claim 1. Likewise, claim 9 states:
    9. A method of riding a water recreation device on
    a body of water comprising:
     placing a water recreation device into a body of
        water, the water recreation device comprising:
        a riding board having a top surface, a bottom
            surface, a front section, a middle section,
            and a rear section;
        a tow hook disposed on the front section of the
            riding board;
        first and second handles disposed side-by-side
            on the front section of the top surface of
            the riding board aft of the tow hook; and
        first and second foot bindings disposed side-
            by-side on the middle section of the top
            surface of the riding board aft of the first
            and second handles;
     attaching a tow rope to said tow hook, said tow
        rope also attached to a water vehicle;
     grasping the first and second handles of the wa-
        ter recreation device to establish a prone start
        position by a rider;
     maintaining said prone start position by the rid-
        er until the riding board has achieved a sub-
        stantially parallel position relative to the
        surface of the water;
ZUP, LLC   v. NASH MANUFACTURING, INC.                     5

     achieving a kneeling position by the rider by
        placing both knees on the top surface of the
        riding board;
     achieving a crouching position by the rider by
        placing a first foot into the first foot binding
        and then placing a second foot into the second
        foot binding;
     grasping the tow rope by the rider by releasing
        the first and second handles;
     removing the tow rope from the tow hook by the
        rider;
     standing on the riding board by the rider while
        continuing to grasp the tow rope.
’681 patent, claim 9.
     In sum, claims 1 and 9 contain the following elements:
(1) a riding board; (2) a tow hook on the front of the riding
board; (3) a plurality of rails on the bottom surface of the
riding board; (4) side-by-side handles on the front of the
riding board; (5) side-by-side foot bindings on the middle
of the riding board; and, at least as stated in claim 1,
(6) the ability to simultaneously engage the handles and
foot bindings to position the rider in a crouching stance.
                              B
    In 2013, ZUP and Nash began discussions about a po-
tential joint manufacturing venture for the ZUP Board.
Their negotiations eventually fell through, and Nash
brought the accused product, the “Versa Board,” to mar-
ket in May 2014.
    Like the ZUP Board, the Versa Board has a tow hook
on the front section of the board. Unlike the ZUP Board,
however, the Versa Board has several holes on the top
surface of the board that allow users to attach handles or
foot bindings in various configurations. See J.A. 427–29.
Although Nash warns against having the handles at-
tached to the board while standing, see J.A. 430 ¶¶ 22–23,
6                     ZUP, LLC   v. NASH MANUFACTURING, INC.

a user could theoretically ignore Nash’s warnings and
attach the handles and foot bindings in a configuration
that mirrors the configuration of the ZUP Board, see
J.A. 139.
    After seeing the Versa Board displayed at a surf expo
in 2014, Glen Duff, ZUP’s Chief Innovative Officer and
inventor of the ’681 patent, approached Keith Parten,
Nash’s president, to express concern that the Versa Board
infringed the ’681 patent. After another failed attempt to
secure a partnership with Nash, ZUP turned to litigation.
    In its complaint, ZUP alleged: (1) contributory in-
fringement of the ’681 patent; (2) induced infringement of
the ’681 patent; (3) trade secret misappropriation under
the Virginia Uniform Trade Secrets Act; and (4) breach of
contract. Nash counterclaimed, seeking declaratory relief
as to non-infringement and invalidity.
    The district court granted Nash’s summary judgment
motion with respect to invalidity, thus rendering the
infringement claims moot. Specifically, the district court
held claim 1 obvious over U.S. Patent No. 5,163,860
(“Clark”) in view of U.S. Patent No. 6,306,000 (“Parten
’000”); U.S. Patent No. 7,530,872 (“Parten ’872”); U.S.
Patent No. 5,979,351 (“Fleischman”); U.S. Patent No.
5,797,779 (“Stewart”); and U.S. Patent No. 6,585,549
(“Fryar”). ZUP, LLC v. Nash Mfg., Inc., 229 F. Supp. 3d
430, 446 (E.D. Va. 2017). The district court also held
claim 9 obvious over Clark in view of Parten ’000, Stew-
art, and U.S. Patent No. 4,678,444 (“Monreal”). Id. at
447.
    Although the district court recognized that its invalid-
ity decision rendered ZUP’s contributory and induced
infringement claims moot, id. at 450, it nonetheless
conducted an alternative analysis, stating that it would
have granted Nash’s summary judgment motion with
respect to non-infringement of claim 9, id. at 450–55.
Finally, the district court granted summary judgment in
ZUP, LLC   v. NASH MANUFACTURING, INC.                    7

Nash’s favor with respect to the non-patent claims. Id. at
455–56.
   ZUP timely appealed. We have jurisdiction under 28
U.S.C. § 1295(a)(1).
                              II
     We review a grant of summary judgment under the
law of the regional circuit. Memorylink Corp. v. Motorola
Sols., Inc., 773 F.3d 1266, 1270 (Fed. Cir. 2014). The
Fourth Circuit reviews a grant of summary judgment de
novo, using the same standard applied by the district
court. Gallagher v. Reliance Standard Life Ins. Co., 305
F.3d 264, 268 (4th Cir. 2002), as amended (Oct. 24, 2002).
Disposition of a case on summary judgment is appropriate
“if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judg-
ment as a matter of law.” Fed. R. Civ. P. 56(a).
    Depending on the record in a particular case, “sum-
mary judgment of invalidity for obviousness may be
appropriate.” Intercont’l Great Brands LLC v. Kellogg N.
Am. Co., 869 F.3d 1336, 1344 (Fed. Cir. 2017). In particu-
lar, where “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.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398,
427 (2007).
                              A
   The primary issue in this case is whether claims 1
and 9 of the ’681 patent are invalid as obvious under 35
U.S.C. § 103(a). 1 Although the “ultimate judgment of

    1   Section 103 has since been amended. See Leahy
Smith America Invents Act, Pub. L. No. 112-29, sec. 3(c),
§ 103, 125 Stat. 284, 287 (2011) (“AIA”). Because the
8                      ZUP, LLC   v. NASH MANUFACTURING, INC.

obviousness is a legal determination,” KSR, 550 U.S. at
427, it is based on underlying factual inquiries, including
(1) the scope and content of the prior art; (2) the differ-
ences between the claims and the prior art; (3) the level of
ordinary skill in the pertinent art; and (4) any secondary
considerations of non-obviousness. Graham v. John Deere
Co., 383 U.S. 1, 17–18 (1966). Likewise, whether one of
skill in the art would have had a motivation to combine
pieces of prior art in the way claimed by the patent is also
a factual determination. Intercont’l Great Brands, 869
F.3d at 1343.
    Here, there appears to be no dispute with respect to
the content of the prior art or the differences between the
prior art and the ’681 patent. And, the parties agree that
the relevant level of skill in the art is “a person with at
least 3–5 years’ experience in the design and manufacture
of water recreational devices or [who has] a bachelor’s
degree in mechanical engineering.” ZUP, 229 F. Supp. 3d
at 438; Appellant’s Br. 13. The only issues raised on
appeal pertain to (1) whether a person of ordinary skill in
the art would have been motivated to combine the prior
art references in the way claimed in the ’681 patent, and
(2) whether the district court properly evaluated ZUP’s
evidence of secondary considerations.
                             1
    A “motivation to combine may be found explicitly or
implicitly in market forces; design incentives; the ‘interre-
lated teachings of multiple patents’; ‘any need or problem
known in the field of endeavor at the time of invention

application that led to the ’681 patent was filed before
March 16, 2013, pre-AIA § 103(a) applies.          See id.
sec. 3(n)(1), 125 Stat. at 293; Redline Detection, LLC v.
Star Envirotech, Inc., 811 F.3d 435, 449 n.7 (Fed. Cir.
2015).
ZUP, LLC   v. NASH MANUFACTURING, INC.                    9

and addressed by the patent’; and the background
knowledge, creativity, and common sense of the person of
ordinary skill.” Plantronics, Inc. v. Aliph, Inc., 724 F.3d
1343, 1354 (Fed. Cir. 2013) (citing Perfect Web Techs., Inc.
v. InfoUSA, Inc., 587 F.3d 1324, 1328 (Fed. Cir. 2009)
(quoting KSR, 550 U.S. at 418–21)).
     The district court first found that all the elements of
the claimed invention existed in the prior art. Specifical-
ly, the district court pointed to earlier patents on water
recreational boards that included the same elements used
in the ’681 patent: a riding board, a tow hook, handles,
foot bindings, and a plurality of rails on the bottom sur-
face of the riding board. ZUP, 229 F. Supp. 3d at 446–47.
From this, the district court explained that the ’681
patent “identifie[s] known elements in the prior art that
aided in rider stability while engaging a water recreation-
al device and simply combined them in one apparatus and
method.” Id. at 447. The district court then concluded
that one of ordinary skill in the art would have been
motivated to combine the various elements from the prior
art references, noting that such motivation would have
stemmed from a desire “to aid in rider stability, to allow a
wide variety of users to enjoy the device, and to aid users
in maneuvering between positions on a water board”—all
motivations that were “a driving force throughout the
prior art and have been shared by many inventors in the
water recreational device industry.” Id.
     The record evidence supports the district court’s anal-
ysis. Although ZUP contends that a person of skill in the
art would have been focused on achieving rider stability
in a predetermined riding position, the evidence contra-
dicts this assertion. Helping riders switch between riding
positions had long been a goal of the prior art. See Clark
at 1:25–34 (describing the difficulty of maneuvering from
a prone position to a kneeling position and lessening this
difficulty by eliminating the need for the rider to hold the
tow rope while moving to a kneeling position); id. at 1:40–
10                     ZUP, LLC   v. NASH MANUFACTURING, INC.

45 (“As the towing speed increases, the user may either
remain prone, pull himself into a kneeling position, or rise
to a standing position without worrying about holding the
tow rope.”); see also Parten ’000 at 2:53–54 (describing a
rider changing from prone, to kneeling, to sitting, to
standing); Parten ’872 at 3:52–58 (“The present invention
. . . increases the likelihood that a young, weak or other-
wise inexperienced rider of the aquatic recreational device
will achieve proper body positioning on the aquatic recre-
ational device.”). And the only evidence ZUP points us to
is the testimony of its expert, noting the “general frustra-
tion to the industry that there was no product that would
enable the weakest and most athletically challenged
members of the boating community to ski or wakeboard.”
Reply Br. 4 (citing J.A. 414 ¶ 15).
     The prior art accomplished this goal of helping riders
maneuver between positions by focusing on rider stability.
Indeed, ZUP even admits that achieving rider stability is
an “age-old motivation in this field.” Appellant’s Br. 22.
Such stability was enhanced in the prior art through the
same components employed in the ’681 patent: tow hooks,
handles, foot bindings, and other similar features. See
Fleischman at 2:45–46 (describing handles that “allow the
riders to hang on while being towed”); id. at fig. 1 (depict-
ing side-by-side handles on the front section of a water
sled); U.S. Patent No. 5,083,955 (“Echols”) at 1:39–40
(describing “a pair of stirrups for the rider’s feet”); id. at
fig. 1 (depicting foot bindings); Clark at 2:30–34 (describ-
ing how a rider may hold a leash attached to the riding
board to aid in rider stability); Stewart at 2:57–63 (de-
scribing a “palm grip which provides a rider handhold” to
increase stability).
    In the face of the significant evidence presented by
Nash regarding the consistent desire for riders to change
positions while riding water recreational boards (and the
need to maintain stability while doing so), and given that
the elements of the ’681 patent were used in the prior art
ZUP, LLC   v. NASH MANUFACTURING, INC.                    11

for this very purpose, there is no genuine dispute as to the
existence of a motivation to combine. 2
                              2
     ZUP’s second argument on appeal relates to the dis-
trict court’s analysis of ZUP’s evidence of secondary
considerations. Secondary considerations “help inoculate
the obviousness analysis against hindsight.” Mintz v.
Dietz & Watson, Inc., 679 F.3d 1372, 1378 (Fed. Cir.
2012); see also Graham, 383 U.S. at 36. As explained
below, however, ZUP’s minimal evidence of secondary
considerations does not create a genuine dispute of fact
sufficient to withstand summary judgment on the ques-
tion of obviousness.
    ZUP contends that the district court improperly
shifted the burden to prove non-obviousness to ZUP,
stating that “the District Court could not possibly find an
absence of material fact when Nash—the challenger with
the burden of proof—introduced no evidence [as to sec-
ondary considerations] and ZUP submitted two affidavits
demonstrating secondary considerations.” Reply Br. 5; see
also Appellant’s Br. 23–25.

    2    To the extent ZUP argues that the prior art refer-
ences do not teach or suggest combining the various
stability components for simultaneous use, this is unavail-
ing. “A person of ordinary skill is also a person of ordi-
nary creativity, not an automaton.” KSR, 550 U.S. at 421.
Given the consistent focus on rider stability in this indus-
try, it would have been obvious to one of skill in the art to
have a rider use both the handles and the foot bindings at
the same time while maneuvering between riding posi-
tions. This is simply “the predictable use of prior art
elements according to their established functions.” Id. at
417.
12                    ZUP, LLC   v. NASH MANUFACTURING, INC.

     Any concerns regarding improper burden allocation
can be quickly dismissed. Our precedent is clear that “the
burden of persuasion remains with the challenger during
litigation because every issued patent is entitled to a
presumption of validity.” Novo Nordisk A/S v. Caraco
Pharm. Labs., Ltd., 719 F.3d 1346, 1353 (Fed. Cir. 2013).
While this burden of persuasion remains with the chal-
lenger, a patentee bears the burden of production with
respect to evidence of secondary considerations of non-
obviousness. Id. Here, the district court adhered to our
precedent in analyzing the evidence presented. Although
ZUP takes issue with the court’s statement that “ZUP has
failed to establish either that a long-felt but unresolved
need existed in the water recreational device industry or
that its product somehow solved any such need,” see
Appellant’s Br. 23–24 (quoting ZUP, 229 F. Supp. 3d at
449), the district court was merely referring to the burden
of production with respect to such evidence, see, e.g., ZUP,
229 F. Supp. 3d at 449 (finding “that ZUP has provided no
evidence apart from conclusory statements made by its
expert that any long-felt but unresolved need existed in
the industry”; “that ZUP has failed to provide any evi-
dence that others in the industry attempted and failed to
make a board with stabilizing features”; and that “ZUP
has provided no evidence that Nash attempted to inde-
pendently create the device described in the ’681 patent
and failed”); see also Prometheus Labs., Inc. v. Roxane
Labs., Inc., 805 F.3d 1092, 1102 (Fed. Cir. 2015) (rejecting
the same argument based on similar language in a dis-
trict court opinion where we were persuaded that the
district court had merely been referring to the patent
owner’s burden of production). It is clear that the district
court kept the ultimate burden of persuasion on the
patent challenger throughout the obviousness analysis.
Any argument that the district court improperly shifted
the burden is therefore without merit.
ZUP, LLC   v. NASH MANUFACTURING, INC.                  13

   ZUP’s argument also suggests that summary judg-
ment could not be granted based on the record evidence.
This argument is similarly unavailing.
    Obviousness is ultimately a legal determination, and
a strong showing of obviousness may stand “even in the
face of considerable evidence of secondary considerations.”
Rothman v. Target Corp., 556 F.3d 1310, 1322 (Fed. Cir.
2009); see also Motorola, Inc. v. Interdigital Tech. Corp.,
121 F.3d 1461, 1472 (Fed. Cir. 1997) (“In reaching an
obviousness determination, a trial court may conclude
that a patent claim [was] obvious, even in the light of
strong objective evidence tending to show non-
obviousness.”).
    Before the district court, ZUP presented evidence of
three secondary considerations: long-felt but unresolved
need; copying; and commercial success. On appeal, ZUP
focuses only on long-felt but unresolved need and copying.
See Appellant’s Br. 24–25. Accordingly, we do not address
any evidence of commercial success.
    With respect to long-felt but unresolved need, ZUP
proffered testimony from its expert, James Emmons,
stating that “[f]or over 50 years, advances in the water-
sports market focused on creating stability for a rider
strictly within one of the three segments (tubing, knee-
boarding, or skiing/wakeboarding)” and that “it was a
general frustration to the industry that there was no
product that would enable the weakest and most athleti-
cally challenged members of the boating community to ski
or wakeboard.” Appellant’s Br. 24 (citing J.A. 414 ¶¶ 15–
16). ZUP contends that it then corroborated this testimo-
ny with Nash’s “enthusiastic acceptance” of the ZUP
Board, pointing to a statement by Nash’s president, Mr.
14                     ZUP, LLC   v. NASH MANUFACTURING, INC.

Parten. 3 Appellant’s Br. 24. During an initial phone
conference in 2014, Mr. Parten complimented the ZUP
Board, telling ZUP: “You have a great product by the
way!” J.A. 139 ¶ 23. Further, after Mr. Duff explained
his goal to market the ZUP Board to “Wally Weekender,”
Mr. Parten agreed, stating: “Think you are spot on with
Wally Weekender. Same guy that rides a kneeboard and
tube. Want to be able to do it the first time every time.”
J.A. 139 ¶ 23. In ZUP’s view, Mr. Parten’s positive re-
sponse to the ZUP Board demonstrates the existence of a
long-felt but unresolved need for a water recreation device
that eases the process of achieving a standing position.
    As we have said before, “[w]here the differences be-
tween 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.” Geo. M. Martin Co. v.
All. Mach. Sys. Int’l LLC, 618 F.3d 1294, 1304–05 (Fed.
Cir. 2010). That is true here, where the differences be-
tween the claimed invention and the prior art are mini-
mal. Moreover, the record evidence indicates that the
claimed invention was not the first to achieve the goal of
helping users maneuver between positions on a water
recreational board. See id. (noting that the alleged unre-
solved need had been met by prior art devices); see also
Clark at 1:25–34 (describing the difficulty of maneuvering
from a prone position to a kneeling position and lessening
this difficulty by eliminating the need for the rider to hold
the tow rope while moving to a kneeling position); id. at
1:40–45 (“As the towing speed increases, the user may
either remain prone, pull himself into a kneeling position,
or rise to a standing position without worrying about
holding the tow rope.”).

     3   Mr. Parten is the named inventor on several pa-
tents, including two of the prior art references relevant to
this appeal—Parten ’000 and Parten ’872.
ZUP, LLC   v. NASH MANUFACTURING, INC.                    15

    ZUP presented even less compelling evidence of copy-
ing. See J.A. 139–40 (Emmons Decl.); J.A. 417 ¶¶ 6–7
(Duff Decl.). “Our case law holds that copying requires
evidence of efforts to replicate a specific product, which
may be demonstrated through internal company docu-
ments, direct evidence such as disassembling a patented
prototype, photographing its features, and using the
photograph as a blueprint to build a replica, or access to
the patented product combined with substantial similari-
ty to the patented product.” Wyers v. Master Lock Co.,
616 F.3d 1231, 1246 (Fed. Cir. 2010). Nash did obtain a
sample product from ZUP during the parties’ initial
business discussions. J.A. 419 ¶ 5 (Parten Decl.). But,
the evidence ZUP points us to suggests that, for Nash’s
Versa Board to resemble the claimed invention, a user
would need to ignore Nash’s instructions on how to use
the Versa Board—instructions that specifically discourage
users from keeping the handles attached to the board
while standing. See Appellant’s Br. 25 (emphasizing the
district court’s statement that “it is feasible for a user to
ignore [Nash’s] instructions and attach both the handles
and the foot bindings in a configuration that is nearly
identical to the ZUP Board”); see also J.A. 139.
    In sum, we agree with the district court’s assessment
of the summary judgment record. Even drawing all
reasonable inferences in favor of ZUP, such evidence is
insufficient to withstand summary judgment on the
question of obviousness. The weak evidence of secondary
considerations presented here simply cannot overcome the
strong showing of obviousness. See Ohio Willow Wood Co.
v. Alps S., LLC, 735 F.3d 1333, 1344 (Fed. Cir. 2013)
(“[W]here a claimed invention represents no more than
the predictable use of prior art elements according to
established functions, as here, evidence of secondary
indicia are frequently deemed inadequate to establish
non-obviousness.”).
16                     ZUP, LLC    v. NASH MANUFACTURING, INC.

    We have considered ZUP’s remaining arguments and
find them unpersuasive. As such, we hold that summary
judgment as to obviousness is appropriate on this record.
                             B
    ZUP also appeals the district court’s alternative
holding that Nash does not infringe claim 9 of the ’681
patent. Because this court affirms the district court’s
holding of invalidity, we do not address the district court’s
alternative holding as to non-infringement.
                             III
     For the foregoing reasons, this court affirms the dis-
trict court’s holding that claims 1 and 9 of the ’681 patent
are invalid as obvious.
                       AFFIRMED
  United States Court of Appeals
      for the Federal Circuit
                ______________________

                     ZUP, LLC,
                  Plaintiff-Appellant

                           v.

          NASH MANUFACTURING, INC.,
                Defendant-Appellee
              ______________________

                      2017-1601
                ______________________

   Appeal from the United States District Court for the
Eastern District of Virginia in No. 3:16-cv-00125-HEH,
Judge Henry E. Hudson.
                ______________________

NEWMAN, Circuit Judge, dissenting.
    A wakeboard is not a complicated device, but its en-
joyment in water sports has long challenged weak and
inexperienced riders attempting to stand up on a fast-
moving board while bouncing on wake. 1 Sportsman Glen
Duff knew the problem and, after four years of experi-
mentation, he devised a wakeboard that facilitated usage

   1   A wakeboard is “a short board with foot bindings
on which a rider is towed by a motorboat across its wake
and especially up off the crest for aerial maneuvers.”
Merriam-Webster dictionary online.
2                      ZUP, LLC   v. NASH MANUFACTURING, INC.

regardless of a rider’s strength or athleticism. He ob-
tained U.S. Patent No. 8,292,681 (“the ’681 Patent”),
assigned to ZUP, LLC. Mr. Duff exhibited his “ZUP
Board” at the Surf Expo, a trade show for the water sports
industry. Thereafter ZUP and Keith Parten, President
and CEO of Nash Manufacturing, Inc. (“Nash”), a leading
producer of water sports equipment including wake-
boards, discussed a possible commercial arrangement.
Parten told Duff: “You have a great product by the way!”
Maj. Op. at 14. However, commercial discussions broke
down, and soon thereafter Nash introduced a similar
wakeboard, the “Versa Board,” the product that is
charged with infringement.
     The district court granted summary judgment of pa-
tent invalidity, and alternatively summary judgment of
non-infringement. There was no trial. My colleagues
affirm the judgment of invalidity, and do not reach in-
fringement. These rulings, however, were rendered on
incorrect application of the law of obviousness and with-
out regard to the principles of summary judgment.
    I respectfully dissent.
                        DISCUSSION
            ZUP’s U.S. Patent No. 8,292,681
   The ’681 Patent, in its Abstract, describes the ZUP
Board as
    having advantages such as improved stability,
    maneuverability and ease of use. Embodiments of
    the contemplated water recreation device include
    a riding board, handles and a tow hook assembly
    that are configured to allow a rider to more easily
    transition to a standing forward-facing position
    while riding the device. The contemplated device
    may also include foot bindings or foot grips for
    added ride stability.
ZUP, LLC   v. NASH MANUFACTURING, INC.                 3

’681 Patent, Abstract. Patent Figures 1A and 1C describe
this new wakeboard’s top and underside:

    Patent Figures 9A–H illustrate the method of use of
the wakeboard; showing the handles, foot grips, and tow
hook, whereby the rider rises from a prone to a standing
position with the assistance of these elements:

                9A                        9B
4                     ZUP, LLC   v. NASH MANUFACTURING, INC.

             9C                              9D

             9E                              9F

             9G                              9H

Claims 1 and 9 are representative, with claim 1 directed
to the wakeboard’s structure and claim 9 to the method of
use. Claim 1 recites:
    1. A water recreation device comprising:
        a riding board having a top surface, a bot-
            tom surface, a front section, a middle
            section, and a rear section;
        a tow hook disposed on the front section of
            the riding board;
ZUP, LLC   v. NASH MANUFACTURING, INC.                       5

           first and second handles disposed side-by-
                side on the front section of the top sur-
                face of the riding board aft of the tow
                hook;
           first and second foot bindings disposed
                side-by-side on the middle section of
                the top surface of the riding board aft
                of the first and second handles; and
           a plurality of rails protruding from the
                bottom surface of the riding board and
                extending substantially the full length
                of the riding board;
           wherein the tow hook includes a rear-
                ward-facing concave section sized to
                receive a tow rope bar and positioned
                to allow the riding board to be pulled
                in a forward direction by a tow rope
                attached to the tow rope bar,
           wherein the first and second handles and
                the first and second foot bindings are
                configured for simultaneous engage-
                ment by a rider to position the rider in
                a crouching stance facing in a forward
                direction,
           wherein the plurality of rails are disposed
                relative to a longitudinal axis along
                the bottom surface of the riding board,
                the longitudinal axis projecting rear-
                wardly from a reference location sub-
                stantially central to the front section,
                and each of the plurality of rails is lat-
                erally spaced closer to the longitudinal
                axis nearest the rear section of the rid-
                ing board than the each of the plurali-
                ty of rails is laterally spaced from the
                longitudinal axis nearest the front sec-
                tion of the riding board thereby allow-
                ing the water that moves across the
6                      ZUP, LLC   v. NASH MANUFACTURING, INC.

            bottom surface nearest the front sec-
            tion of the riding board to funnel to-
            wards the bottom surface nearest the
            rear section of the riding board for the
            purpose of generating lift force against
            the bottom surface of the riding board.
The parties, the district court, and my colleagues all agree
that the structure and the placement of handles and foot
bindings is novel. However, the district court and my
colleagues hold that because some prior art wakeboards
have handles and some have foot supports, nothing more
is needed for summary judgment of obviousness. The
district court stated:
    It is evident to the Court that Duff identified
    known elements in the prior art that aided in rid-
    er stability while engaging a water recreational
    device and simply combined them in one appa-
    ratus and method. The elements in Claim 1 and 9
    are used for the exact same purpose as they were
    in the prior art and, as expected, lead to the antic-
    ipated success of assisting riders in reaching a
    standing position.
ZUP, LLC v. Nash Mfg., Inc., 229 F. Supp. 3d 430, 447
(E.D. Va. 2017) (“Dist. Ct. Op.”). However, only Duff
achieved the district court’s “anticipated success.” The
criteria for summary judgment of obviousness are not
met, as I next discuss:
             The district court’s judgment
     Summary judgment of patent invalidity requires that
all reasonable factual allegations are resolved in favor of
the non-movant, Teleflex, Inc. v. Ficosa N. Am. Corp., 299
F.3d 1313, 1323 (Fed. Cir. 2002) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)), and that
when so resolved, there is clear and convincing evidence
that the patented invention would have been obvious to a
ZUP, LLC   v. NASH MANUFACTURING, INC.                       7

person of ordinary skill. Microsoft Corp. v. i4i Ltd. P’ship,
564 U.S. 91, 95 (2011). The district court strayed from
these long-recognized rules.
     Although the prior art is close, the novelty of the ’681
Patent’s wakeboard is not disputed. On the issue of
obviousness, my colleagues apply an incorrect analysis of
the standard factual considerations, as set forth in Gra-
ham v. John Deere Co., 383 U.S. 1 (1966). The four Gra-
ham factors are: (1) the scope and content of the prior art;
(2) the differences between the claims and the prior art;
(3) the level of ordinary skill in the field of the invention;
and (4) objective considerations of obviousness. Id. at 17–
18; see also KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398,
399 (2007) (reaffirming the four Graham factors).
     My colleagues hold that only three of the four Graham
factors are considered in order to establish a prima facie
case of obviousness, and that the fourth Graham factor is
applied only in rebuttal, whereby the fourth factor must
be of sufficient weight to outweigh and thereby rebut the
first three factors. Maj. Op. at 15. However, as stated in
Apple Inc. v. Samsung Electronics Co., 839 F.3d 1034,
1048 (Fed. Cir. 2016) (en banc), “determination of whether
a patent claim is invalid as obvious under § 103 requires
consideration of all four Graham factors, and it is error to
reach a conclusion of obviousness until all those factors
are considered.” The Court in Graham explored the
interaction among the four factors, and explained how
each may affect judicial understanding of the others. The
Court recognized that the fourth factor, the objective
indicia, are “more susceptible of judicial treatment than
are the highly technical facts often present in patent
litigation,” and that such indicia “may lend a helping
hand to the judiciary.” Graham, 383 U.S. at 35–36. In
Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1539
(Fed. Cir. 1983), this court observed that the “so-called
secondary considerations . . . may often be the most
probative and cogent evidence in the record,” for they
8                     ZUP, LLC   v. NASH MANUFACTURING, INC.

place the invention in the context in which it arose, and
aid judges in understanding obviousness of the invention
as perceived by persons in the relevant field.
    A ruling of invalidity on the ground of obviousness re-
quires more than that the claim elements were previously
known. As the Court instructs in KSR:
    [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. Although common sense directs one to
    look with care at a patent application that claims
    as innovation the combination of two known de-
    vices according to their established functions, it
    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. at 418–19. However, my colleagues apply the flawed
reasoning against which KSR warned, and hold that the
concededly novel ZUP Board would have been “prima
facie obvious” 2 because it uses known components; my

    2  Black’s Law Dictionary (10th ed. 2014) defines
“prima facie obviousness” as:
    A procedural tool used in the examination of U.S.
    patent applications in which the patent examiner
    must make an initial showing of obviousness be-
    fore the applicant must produce evidence of non-
    obviousness. The patent examiner bears the
    initial burden of establishing obviousness. A pri-
    ma facie case of obviousness is established when
    the examiner articulates nonconclusory, explicit
    reasons for obviousness that are rationally sup-
    ported by the factual record.
ZUP, LLC   v. NASH MANUFACTURING, INC.                    9

colleagues relegate to rebuttal the evidence of long-felt
need, failure of others, copying, and commercial success,
and conclude that “[t]he weak evidence of secondary
considerations presented here simply cannot overcome the
strong showing of obviousness.” Maj. Op. at 15.
    The requirement that the secondary considerations
“overcome” the conclusion based on the first three factors
is incorrect, for the obviousness determination must be
based on the invention as a whole including the evidence
of all four Graham factors. It is incorrect to convert the
fourth Graham factor into “rebuttal,” requiring it to
outweigh the other three factors. Consideration of the
objective indicia “is not just a cumulative or confirmatory
part of the obviousness calculus, but constitutes inde-
pendent evidence of nonobviousness.”          Ortho-McNeil
Pharm., Inc. v. Mylan Labs., Inc., 520 F.3d 1358, 1365
(Fed. Cir. 2008). This evidence must be considered to-
gether with the other evidence, and not separated out and
required to outweigh or rebut the other factors. All of the
factors must be considered in connection with proving
invalidity by clear and convincing evidence. Apple Inc. v.
Samsung Elecs. Co., 839 F.3d 1034, 1048 (Fed. Cir. 2016)
(en banc).
     The fourth Graham factor is of particular analytic
value in guarding against judicial hindsight. The majori-
ty’s decision is a textbook example of hindsight, where the

The concept of prima facie obviousness based solely on
prior art is a procedural tool of ex parte examination. See
In re Piasecki, 745 F.2d 1468, 1471–72 (Fed. Cir. 1984)
(“The concept of prima facie obviousness in ex parte
patent examination is but a procedural mechanism to
allocate in an orderly way the burdens of going forward
and of persuasion as between the examiner and the
applicant.”).
10                    ZUP, LLC   v. NASH MANUFACTURING, INC.

inventor’s teaching is used as a template to render the
invention obvious. Precedent warns against this fallacy,
see, e.g., KSR, 550 U.S. at 421 (“A factfinder should be
aware, of course, of the distortion caused by hindsight
bias and must be cautious of arguments reliant upon ex
post reasoning.”); Polaris Industries, Inc. v. Arctic Cat,
Inc., 882 F.3d 1056, 1068 (Fed. Cir. 2018) (“We have
observed that the prejudice of hindsight bias often over-
looks that the genius of invention is often a combination
of known elements which in hindsight seems preor-
dained.”) (internal quotation marks omitted); In re Ethi-
con, 844 F.3d 1344, 1355–56 (Fed. Cir. 2017) (the
“‘insidious’ exercise of decisional hindsight, whereby that
which the inventor taught is used by the decision-maker
to reconstruct the invention.”); Iron Grip Barbell Co. v.
USA Sports, Inc., 392 F.3d 1317, 1320 (Fed. Cir. 2004)
(“[W]e are mindful of the repeated warnings of the Su-
preme Court and this court as to the danger of hindsight
bias.”). The district court and the panel majority do not
identify any suggestion in the prior art to make the
specific wakeboard modifications made by Duff—the only
source of these modifications is judicial hindsight.
    My colleagues also err in their analysis of the objec-
tive indicia. For example, the panel majority concedes
that Nash obtained the patented wakeboard and used it
to develop a wakeboard that “resembled the claimed
invention.” Maj. Op. at 15. Yet the panel majority holds
that because ZUP did not give Nash a “blueprint” of the
ZUP Board, the evidence of copying is somehow dimin-
ished. Id. at 15. No precedent, no logic, requires a “blue-
print” in order to copy a simple structure in plain view
and possessed by the accused infringer.
     The district court also misapplied the factor of long-
felt need. The court reasoned that since improvement in
wakeboards was known to be desirable, this sufficed to
provide the motivation to make the improvement
achieved by Duff. Dist. Ct. Op. at 447. Motivation to
ZUP, LLC   v. NASH MANUFACTURING, INC.                     11

solve a known problem is not motivation to make a specif-
ic solution, as the district court erroneously equated:
    Additionally, the Court finds that one of ordinary
    skill in the art would have been motivated in 2008
    to combine these elements in order to aid in rider
    stability, to allow a wide variety of users to enjoy
    the device, and to aid users in maneuvering be-
    tween positions on a water board. These motiva-
    tions are a driving force throughout the prior art
    and have been shared by many inventors in the
    water recreational device industry. And the spe-
    cific desire to aid users in maneuvering between
    positions on a water board has been a consistent
    motivation in the prior art for decades.
Dist. Ct. Op. at 447 (internal citations omitted). The
panel majority adopts this reasoning, although neither
my colleagues nor the district court find that Duff’s novel
combination was suggested in the prior art as the path to
long-sought improvement. To the contrary, Duff’s rea-
lignment of known elements in a crowded field, achieving
benefits not previously achieved, weighs against obvious-
ness.
    The sport of wakeboarding has long challenged inex-
perienced and weak riders. The prior art has long sought
improvement, yet no one presented the specific structure
created by Duff. And I repeat the words of Nash’s CEO,
himself an inventor of water sports products, that “you
have a great product by the way!”
    On the proper analysis, summary judgment of obvi-
ousness was improperly granted. See Surowitz v. Hilton
Hotels Corp., 383 U.S. 363, 373 (1966) (“The basic purpose
of the Federal Rules is to administer justice through fair
trials, not through summary dismissals as necessary as
they may be on occasion.”). On consideration of all of the
Graham factors, applied to the invention as a whole, clear
and convincing evidence of obviousness was not present-
12                   ZUP, LLC   v. NASH MANUFACTURING, INC.

ed. From my colleagues’ contrary ruling, I respectfully
dissent.