Court Opinion

ID: 4105197
Source: CourtListenerOpinion
Date Created: 2016-12-07 16:01:31.094893+00
Date Added: 2024-06-11T07:46:06.094691
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                 ______________________

               IN RE: NUVASIVE, INC.,
                       Appellant
                ______________________

                       2015-1670
                 ______________________

    Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2013-
00506.
                 ______________________

               Decided: December 7, 2016
                ______________________

    MICHAEL T. ROSATO, Wilson, Sonsini, Goodrich &
Rosati, PC, Seattle, WA, argued for appellant. Also repre-
sented by ANDREW SWANSON BROWN; RICHARD TORCZON,
Washington, DC; GRACE J. PAK, PAUL DAVID TRIPODI II,
Los Angeles, CA.

    JOSEPH MATAL, Office of the Solicitor, United States
Patent and Trademark Office, Alexandria, VA, argued for
intervenor Michelle K. Lee. Also represented by NATHAN
K. KELLEY, SCOTT WEIDENFELLER.
                ______________________

 Before MOORE, WALLACH, and TARANTO, Circuit Judges.
WALLACH, Circuit Judge.
    Appellant NuVasive, Inc. (“NuVasive”) appeals the fi-
nal written decision of the U.S. Patent and Trademark
2                                         IN RE: NUVASIVE, INC.

Office’s (“USPTO”) Patent Trial and Appeal Board
(“PTAB”), finding claims 1–14, 19–20, and 23–27 of U.S.
Patent No. 8,361,156 (“the ’156 patent”) invalid as obvi-
ous. See Medtronic, Inc. v. NuVasive, Inc., No. IPR2013-
00506, 2015 WL 996352, at *2 (P.T.A.B. Feb. 11, 2015).
We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(4)(A) (2012). We vacate and remand.
                        BACKGROUND
    NuVasive is the assignee of the ’156 patent, which
generally relates to “[a] system and method for spinal
fusion comprising a spinal fusion implant of non-bone
construction releasably coupled to an insertion instru-
ment dimensioned to introduce the spinal fusion implant
into any of a variety of spinal target sites.” ’156 patent,
Abstract. The ’156 patent includes one independent claim
(claim 1) and 26 dependent claims (claims 2–27). Illustra-
tive claim 1 recites in relevant part:
    A spinal fusion implant of non-bone construction
    positionable within an interbody space between a
    first vertebra and a second vertebra, said implant
    comprising:
    ...
          at least first and second radiopaque mark-
          ers oriented generally parallel to a height
          of the implant, wherein said first radio-
          paque marker extends into said first side-
          wall at a position proximate to said medial
          plane, and said second radiopaque marker
          extends into said second sidewall at a po-
          sition proximate to said medial plane.
Id. col. 12 ll. 32–67 (emphases added).
IN RE: NUVASIVE, INC.                                    3

    In response to Medtronic, Inc.’s (“Medtronic”) peti-
tion, 1 the PTAB instituted the subject inter partes review
to determine whether claims 1–14, 19–20, and 23–27
would have been obvious over, inter alia, a Synthes Ver-
tebral     Spacer-PR brochure       (“SVS-PR brochure”)
(J.A. 769–70), a Telamon Verte-Stack PEEK Vertebral
Body Spacer brochure (“Telamon brochure”) (J.A. 771–72),
a Telamon Posterior Impacted Fusion Devices guide
(“Telamon guide”) (J.A. 773–82), and U.S. Patent Applica-
tion Publication No. 2003/0028249 (“Baccelli”) (J.A. 744–
51). See Medtronic, Inc. v. NuVasive, Inc., No. IPR2013-
00506, 2014 WL 1253040, at *11–12 (P.T.A.B. Feb. 13,
2014). The PTAB later issued the Final Written Decision
concluding the claims would have been obvious over
various combinations of, inter alia, the SVS-PR brochure,
the Telamon brochure and Telamon guide (collectively,
“the Telamon references”), and Baccelli. See Medtronic,
2015 WL 996352, at *14.
                        DISCUSSION
     NuVasive argues that the PTAB’s Final Written Deci-
sion should be reversed for two reasons: (1) “the [PTAB]
erred in concluding that the SVS-PR brochure and Tela-
mon 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.”    Appellant’s Br. 22, 26 (capitalization
omitted). After articulating the applicable standard of
review, we address these arguments in turn.
                   I. Standard of Review

    1    Medtronic initially opposed NuVasive’s appeal,
but later withdrew as Appellee. The USPTO intervened
pursuant to 35 U.S.C. § 143 (2012) and, although it did
not file a brief, participated at oral argument.
4                                      IN RE: NUVASIVE, INC.

    We review the PTAB’s factual determinations for sub-
stantial evidence and its legal determinations de novo.
See In re Gartside, 203 F.3d 1305, 1316 (Fed. Cir. 2000).
“Substantial evidence is something less than the weight of
the evidence but more than a mere scintilla of evidence.”
In re Kotzab, 217 F.3d 1365, 1369 (Fed. Cir. 2000) (cita-
tion omitted). It is “such relevant evidence as a reasona-
ble mind might accept as adequate to support a conclu-
conclusion.” In re Applied Materials, Inc., 692 F.3d 1289,
1294 (Fed. Cir. 2012) (internal quotation marks and
citation omitted).
         II. NuVasive Waived Its Arguments as to
    the PTAB’s Treatment of the Prior Art References as
                   Printed Publications
     As an initial matter, the court must consider whether
the SVS-PR brochure and Telamon references were pub-
licly accessible such that they qualify as printed publica-
tions pursuant to 35 U.S.C. § 311(b) 2 and 35 U.S.C. § 102
(2006). 3 Pursuant to § 311(b), “[a] petitioner in an inter
partes review may request to cancel as unpatentable [one]
or more claims of a patent only on a ground that could be

     2   Congress amended § 311 when it enacted the
Leahy-Smith America Invents Act (“AIA”).            Pub. L.
No. 112-29, § 6(a), 125 Stat. 284, 299 (2011). Although
the amendments to § 311 did not take effect until Sep-
tember 16, 2012, the amendments “apply to any patent
issued before, on, or after th[e] effective date” and, thus,
apply to the ’156 patent. See id. § 6(c)(2)(A), 125 Stat.
at 304.
     3   Congress amended § 102 when it enacted the AIA.
Pub. L. No. 112-29, § 3(b)(1), 125 Stat. at 285–87. Howev-
er, because the application that led to the ’156 patent was
filed before March 16, 2013, the pre-AIA § 102 applies.
See id. § 3(n)(1), 125 Stat. at 293.
IN RE: NUVASIVE, INC.                                       5

raised under [§] 102 or [§] 103 and only on the basis of
prior art consisting of patents or printed publications.” 35
U.S.C. § 311(b). Section 102 provides that prior art
includes “printed publication[s]” describing the invention
either “before the invention thereof” or “more than one
year prior to the date of the [patent] application . . . .” 35
U.S.C. § 102(a), (b).
     We first must determine whether NuVasive preserved
its public accessibility arguments for appeal. In appeals
from the PTAB, “we have before us a comprehensive
record that contains the arguments and evidence present-
ed by the parties and our review of the [PTAB]’s decision
is confined to the four corners of that record.” In re Watts,
354 F.3d 1362, 1367 (Fed. Cir. 2004) (internal quotation
marks and citation omitted). While the court “retains
case-by-case discretion over whether to apply waiver,”
Harris Corp. v. Ericsson Inc., 417 F.3d 1241, 1251 (Fed.
Cir. 2005) (citations omitted), 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,” Watts, 354 F.3d at 1367–
68.
    NuVasive waived its public accessibility arguments
before the PTAB and may not raise them on appeal.
NuVasive challenged the public accessibility of the prior
art references during the preliminary proceedings of the
inter partes review, J.A. 159–63 (section of NuVasive’s
Preliminary Response that addresses public accessibility),
but failed to challenge public accessibility during the trial
phase, J.A. 227–93 (NuVasive’s Trial Response that fails
to address public accessibility). In fact, during oral argu-
ment before the PTAB, NuVasive explicitly declined to
make further arguments as to public accessibility of the
Telamon references:
    [PTAB Judge]: I take it you no longer are disput-
    ing the public availability of the Telamon refer-
    ence[s]?
6                                      IN RE: NUVASIVE, INC.

    [NuVasive’s Attorney]: That is correct, we’re leav-
    ing that issue aside. We’re focusing entirely on
    the obviousness to modify these markers in the
    medial plane. We’re not abandoning the other ar-
    guments in our Patent Owner response, specifical-
    ly with the dependent claims, we’re just not
    addressing them right now because they’re al-
    ready addressed.
    So, we’re going to assume that these are prior
    art . . . .
J.A. 527 (emphases added). NuVasive abandoned its
challenge to the public accessibility determination even
though the PTAB had warned NuVasive that this would
result in waiver. J.A. 201–02 (where the PTAB indicated
in a scheduling order that “[t]he patent owner is cau-
tioned that any arguments for patentability not raised
and fully briefed in the response will be deemed waived”).
Because NuVasive no longer contested the public accessi-
bility of the prior art references, the PTAB did not ad-
dress this issue in the Final Written Decision. See
generally Medtronic, 2015 WL 996352. As a result, we do
not have “the benefit of the [PTAB]’s informed judgment”
on the public accessibility issue, Watts, 354 F.3d at 1368,
and NuVasive waived its arguments on this issue.
III. The PTAB Did Not Adequately Explain How Claim 1
       of the ’156 Patent Would Have Been Obvious
                     Over the Prior Art
    Having determined that NuVasive waived its argu-
ments that the SVS-PR brochure and Telamon references
were publicly accessible prior art, we examine whether
the PTAB adequately set forth findings and explanations
to support the conclusion that a combination of these
prior art references would have rendered claim 1 of the
’156 patent obvious. It did not.
           A. Legal Standard for Obviousness
IN RE: NUVASIVE, INC.                                      7

     A patent claim is invalid as obvious “if the differences
between the subject matter sought to be patented and the
prior art are such that the subject matter as a whole
would have been obvious at the time the invention was
made to a person having ordinary skill in the [relevant]
art [(‘PHOSITA’)] . . . .” 35 U.S.C. § 103(a) (2006). 4 The
ultimate determination of obviousness is a question of
law, but that determination is based on underlying factu-
al findings. See Gartside, 203 F.3d at 1316. The underly-
ing factual findings include (1) “the scope and content of
the prior art,” (2) “differences between the prior art and
the claims at issue,” (3) “the level of ordinary skill in the
pertinent art,” and (4) the presence of secondary consider-
ations of nonobviousness such “as commercial success,
long felt but unsolved needs, failure of others,” and unex-
pected results. Graham v. John Deere Co., 383 U.S. 1,
17–18 (1966); United States v. Adams, 383 U.S. 39, 50–52
(1966).
    In assessing the prior art, the PTAB “consider[s]
whether a PHOSITA would have been motivated to
combine the prior art to achieve the claimed invention.”
In re Warsaw Orthopedic, Inc., 832 F.3d 1327, 1333 (Fed.
Cir. 2016) (internal quotation marks, brackets, and cita-
tion omitted); see KSR Int’l Co. v. Teleflex Inc., 550 U.S.
398, 418 (2007) (“[I]t can be important to identify a reason
that would have prompted a [PHOSITA] to combine the
elements in the way the claimed new invention does.”).
Although we review this factual finding for substantial
evidence, “[t]he factual inquiry whether to combine refer-
ences must be thorough and searching,” and “[t]he need

    4    Congress amended § 103 when it enacted the AIA.
Pub. L. No. 112-29, § 3(c), 125 Stat. at 287. However,
because the application that led to the ’156 patent was
filed before March 16, 2013, the pre-AIA § 103 applies.
See id. § 3(n)(1), 125 Stat. at 293.
8                                        IN RE: NUVASIVE, INC.

for specificity pervades [our] authority” on the PTAB’s
findings on motivation to combine. In re Lee, 277 F.3d
1338, 1343 (Fed. Cir. 2002) (internal quotation marks and
citations omitted); see id. (stating that “[t]his precedent
has been reinforced in myriad decisions[] and cannot be
dispensed with” and listing supporting precedent).
    B. The PTAB Failed to Articulate a Motivation to
           Combine the Prior Art References
     NuVasive argues that, inter alia, the PTAB’s Final
Written Decision did not make adequately explained
findings as to why a PHOSITA would have been motivat-
ed to combine the prior art references and place the
radiopaque markers on the medial plane. Appellant’s
Br. 27–28. According to NuVasive, the PTAB relied on
only one conclusory statement by Medtronic’s expert that
the modification would provide “additional information.”
Id. (emphasis omitted). We agree with NuVasive.
    Two distinct yet related principles are relevant to our
review. First, the PTAB must make the necessary find-
ings and have an adequate “evidentiary basis for its
findings.” Lee, 277 F.3d at 1344. Second, the PTAB
“must examine the relevant data and articulate a satis-
factory explanation for its action including a rational
connection between the facts found and the choice made.”
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 43 (1983) (internal quotation marks and
citation omitted); see Synopsys, Inc. v. Mentor Graphics
Corp., 814 F.3d 1309, 1322 (Fed. Cir. 2016) (stating that,
as an administrative agency, the PTAB “must articulate
logical and rational reasons for [its] decisions” (internal
quotation marks and citation omitted)).
     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); see Dickinson v. Zurko, 527 U.S.
IN RE: NUVASIVE, INC.                                    9

150, 152 (1999) (holding that § 706 governs our reviews of
the USPTO’s findings of fact and providing the framework
for this review). We “cannot exercise [our] duty of review
unless [we] are advised of the considerations underlying
the action under review.” SEC v. Chenery Corp., 318 U.S.
80, 94 (1943). Indeed, “the orderly functioning of the
process of review requires that the grounds upon which
the [PTAB] acted be clearly disclosed and adequately
sustained.” Id. Although we do not require perfect ex-
planations, 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, 1365 (Fed. Cir.
2015) (citation omitted).
    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 motiva-
tion to combine when it is disputed. See, e.g., Lee, 277
F.3d at 1343–45; see also KSR, 550 U.S. at 418 (stating
that the PTAB’s motivation to combine “analysis should
be made explicit” (citation omitted)). Although identifying
a motivation to combine “need not become [a] rigid and
mandatory formula[],” KSR, 550 U.S. at 419, 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. For example, in Nike,
Inc. v. Adidas AG, we affirmed the PTAB’s finding of a
motivation to combine where it determined that a
PHOSITA “interested in Nishida’s preference to minimize
waste in the production process would have logically
consulted the well-known practice of flat-knitting, which
eliminates the cutting process altogether.” 812 F.3d 1326,
1337 (Fed. Cir. 2016) (emphasis added).           Thus, a
PHOSITA “would have been motivated to address the
problem identified in Nishida by applying the teachings of
the Schuessler References to arrive at the invention in
10                                     IN RE: NUVASIVE, INC.

Nike’s proposed substitute claims.” Id. Similarly, in
Allied Erecting & Dismantling Co. v. Genesis Attach-
ments, LLC, we affirmed the PTAB’s explanation that “a
skilled artisan could modify Caterpillar in view of Ogawa
by treating the first jaw like the second” to “allow[] for a
greater degree of movement between the jaws, without
impacting the quick change functionality . . . .” 825 F.3d
1373, 1381 (Fed. Cir. 2016) (emphasis added) (citations
omitted). In each of these cases, the PTAB identified a
reason why a PHOSITA would have combined the prior
art references—i.e., “minimiz[ing] waste” (Nike, 812 F.3d
at 1337) and “allow[ing] for a greater degree of move-
ment” (Allied, 825 F.3d at 1381)—that had a foundation
in the prior art.
    The PTAB must provide “a reasoned basis for the
agency’s action,” and “we will uphold a decision of less
than ideal clarity if the agency’s path may reasonably be
discerned.” Bowman Transp., Inc. v. Ark.-Best Freight
Sys., Inc., 419 U.S. 281, 285, 286 (1974). The PTAB’s own
explanation must suffice for us to see that the agency has
done its job and must be capable of being “reasona-
bly . . . discerned” from a relatively concise PTAB discus-
sion. In re Huston, 308 F.3d 1267, 1281 (Fed. Cir. 2002).
    We have, however, identified some insufficient articu-
lations of motivation to combine. First, “conclusory
statements” alone are insufficient and, instead, the find-
ing must be supported by a “reasoned explanation.” Lee,
277 F.3d at 1342, 1345. 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, 578
(Fed. Cir. 2016) (“The majority of the [PTAB]’s Final
Written Decision is spent summarizing the parties’ argu-
ments and offers only conclusory analysis of its own.
While the decision does specify when it is rejecting a
party’s argument, the [PTAB] does not explain why it
accepts the remaining arguments as its own analysis.
IN RE: NUVASIVE, INC.                                     11

This leaves little explanation for why the [PTAB] found
the claimed invention obvious.”). Third, although reliance
on common sense may be appropriate in some circum-
stances, see KSR, 550 U.S. at 421 (“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 find-
ings, see Arendi S.A.R.L. v. Apple Inc., 832 F.3d 1355,
1362 (Fed. Cir. 2016) (“[R]eferences to ‘common
sense’ . . . cannot be used as a wholesale substitute for
reasoned analysis and evidentiary support . . . .”); see also
In re Rouffet, 149 F.3d 1350, 1357 (Fed. Cir. 1998) (ex-
plaining that the Board of Patent Appeals and Interfer-
ences cannot simply invoke “the high level of skill in the
art” as proof positive of its findings).
    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,” Medtronic, 2015 WL 996352, at *6, 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, see id. at *5–8.
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. See
Oral Argument at 14:30–15:55, http://oralarguments.cafc.
uscourts.gov/default.aspx?fl=2015-1670.mp3. The PTAB
began by summarizing Medtronic’s and NuVasive’s argu-
ments on whether the “additional information” that could
be obtained from placing radiopaque markers near the
middle of the implant would benefit a PHOSITA. See
12                                     IN RE: NUVASIVE, INC.

Medtronic, 2015 WL 996352, at *6–7 (citing, inter alia,
J.A. 591 (Medtronic’s expert’s statement that a PHOSITA
“would have considered it to be common sense” to place
radiopaque markers along the medial plane “to provide
additional information regarding the orientation or loca-
tion of an implant”)). The PTAB stated “[w]e are not
persuaded by [NuVasive]’s argument, because the ques-
tion 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.” Id. at *6. In
addition, the PTAB invoked the high level of skill in the
art when it “agree[d]” with Medtronic’s assertion that “the
addition of markers along the medial plane would not
confuse” a PHOSITA and found that NuVasive’s argu-
ment “vastly underestimates the ordinary skill of sur-
geons in this field.” Id. at *7 (citation omitted). 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 Medtron-
ic’s arguments, Oral Argument at 14:52–15:11,
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20
15-1670.mp3, but the PTAB neither expressly did so nor
provided reasoned explanations for crediting the argu-
ments. 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 Med-
tronic’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. Alt-
hough the PTAB did “credit the testimony” of NuVasive’s
expert that placing radiopaque markers along the medial
IN RE: NUVASIVE, INC.                                    13

plane “would provide . . . better alignment of the implant,”
Medtronic, 2015 WL 996352, at *7 (internal quotation
marks, brackets, and citation omitted), NuVasive’s ex-
pert’s statement was made in reference to benefits recog-
nized after the priority date of the ’156 patent, J.A. 4893
(explaining that these “uses were not disclosed in the
cited prior art references”). This statement addresses
neither the benefits that could have been obtained by
combining the prior art references nor the PHOSITA’s
motivation to combine at the time of the invention.
    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 motiva-
tion to combine, Ariosa, 805 F.3d at 1365 (citation omit-
ted), judicial review cannot “meaningfully [be] achieved,”
Lee, 277 F.3d at 1342. 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.
                        CONCLUSION
    We have considered the parties’ remaining arguments
and find them unpersuasive. For these reasons, the Final
Written Decision of the U.S. Patent and Trademark
Office’s Patent and Trial Appeal Board is
              VACATED AND REMANDED
                          COSTS
    Each party shall bear its own costs.