Holding

In Chemours Company FC, LLC v. Daikin Industries, Ltd., Nos. 20-1289, -1290 (Fed. Cir. July 22, 2021), a CAFC panel held that the PTAB (“Board”) erred by finding the very patent at issue in an IPR to be a “blocking patent” and that the proffered sales evidence of commercial success was therefore “weak.”

Background

A “blocking patent” is an earlier U.S. patent that prevents practice of a later invention. In some instances, the CAFC has found that such prior blocking patents may reduce the weight given to objective indicia of nonobviousness, such as failure of others, long-felt but unmet need, and commercial success. The rationale is that the existence of the prior blocking patent may have dissuaded or legally barred competitors from commercializing the purportedly obvious idea, thus rendering weak the normal inference of nonobviousness resulting from such objective indicia. See, e.g., Acorda Therapeutics, Inc. v. Roxane Labs., Inc., 903 F.3d 1310 (Fed. Cir. 2018); Sanofi-Aventis Deutschland GMBH v. Mylan Pharms. Inc., 791 Fed. Appx. 916 (Fed. Cir. 2019); and Galderma Labs., L.P. v. Tolmar, Inc., 737 F.3d 731 (Fed. Cir. 2013).

In Chemours, the Board evaluated the obviousness of Chemours’ patent, including sales evidence proffered by Chemours for its commercial polymer FEP 9494 covered by the patent. The Board determined Chemours evidence of commercial success was weak because it concluded that the existence of the patent covering its FEP 9494 product was a blocking patent that would have precluded others from freely entering the market. Chemours, at *16.

Federal Circuit Decision

The CAFC reversed, finding the Board erred by misapplying the “blocking patent” doctrine to the patent at issue itself. Id. The CAFC explained that “[a] blocking patent is one that is in place before the claimed invention because ’such a blocking patent may deter non-owners and non-licensees from investing the resources needed to make, develop, and market such a later, ‘blocked’ invention.’” Id. In view of this explanation, the CAFC concluded that “the challenged patent, which covers the claimed invention at issue, cannot act as a blocking patent.” Id. at *16-17.

Take Aways

The burden of showing obviousness is on the examiner during prosecution, on the petitioner in an AIA Post Grant Proceeding  and on the challenger in district court litigation. MPEP §2142; Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., 719 F.3d 1346 (Fed. Cir. 2013). Patent owners may have strong commercial success arguments as to why that burden has not been met, as in the Chemours case where the blocking patent doctrine was being misapplied. Of course, the patent owner would have to overcome attacks that there is no nexus between the merits of the claimed invention and that the commercial success is not commensurate in scope with the claimed invention.  Chemours also dealt with those issues, and we shall deal with them in a separate post entitled “Objective Indicia: Nexus Analysis May Require Evaluation of Claims as a “Unique Combination”.  

Stacy Lewis, a law clerk at Finnegan, also contributed to this article.