The US Court of Appeals for the Federal Circuit vacated and remanded a Patent Trial & Appeal Board decision invalidating a patent, finding that the Board erred in assessing nexus and weight to be accorded to objective evidence of nonobviousness. Volvo Penta of the Americas, LLC v. Brunswick Corp., Case No. 22-1765 (Fed. Cir. Aug. 24, 2023) (Moore, Lourie, Cunningham, JJ.)

Volvo Penta owns a patent directed to a tractor-type stern drive for a boat. A stern drive is a type of engine that is mounted in the hull of a boat and connected to a drive unit mounted outside of the hull, typically on the stern. In the industry, this arrangement is often referred to as an inboard/outboard drive. In 2015, Volvo Penta launched its commercial embodiment of the patent called the Forward Drive and was popular particularly for wake surfing and other water sports. The Forward Drive included forward-facing propellers that increased the distance between the propeller and swimmers or surfers compared to prior pulling-type stern drive boats.

In August 2020, Brunswick launched its own drive, the Bravo Four S, which embodies Volvo Penta’s patent. On that same day, Brunswick filed a petition for inter partes review asserting that the challenged claims were anticipated or obvious based on several references, two of which were Kiekhaefer and Brandt. In response, Volvo Penta argued that a person of ordinary skill in the art would not have been motivated to combine Kiekhaefer and Brandt with a reasonable expectation of success and that the objective indicia of nonobviousness overcame any prima facie case of obviousness. In support, Volvo Penta offered evidence of copying, industry praise, commercial success, skepticism, failure of others and long-felt but unsolved need. Volvo Penta also argued that it was entitled to a presumption of nexus between the objective indicia and the claimed invention, and, even if there was no presumption, there was still nexus.

The Board found that Kiekhaefer did not anticipate the challenged claims, but it would have been obvious to redesign the stern drive of Brandt in light of Kiekhaefer’s outboard motor to arrive at the challenged claims. After finding a motivation to combine (and prima facie obviousness), the Board turned to Volvo Penta’s objective evidence of nonobviousness. The Board first determined that Volvo Penta was not entitled to a presumption of nexus because, even though the Forward Drive and Bravo Four S indisputably embody the challenged claims, Volvo Penta did not make sufficient arguments on coextensiveness. The Board also found that regardless of the presumption, Volvo Penta did not otherwise show nexus because it failed to identify the “unique characteristics” or “merits” of the claimed invention.

Despite finding no nexus, the Board still analyzed the objective evidence and concluded that Volvo Penta’s objective evidence weighed somewhat in favor of nonobviousness but that Brunswick’s strong evidence of obviousness outweighed the objective evidence. The Board therefore concluded that the challenged claims were unpatentable. Volvo Penta appealed.

Volvo Penta raised three primary arguments on appeal:

1. The Board’s motivation to combine finding was not supported by substantial evidence.

2. The Board erred in finding no nexus.

3. The Board erred when considering Volvo Penta’s objective evidence.

The Federal Circuit rejected Volvo Penta’s motivation to combine argument. The Court found that the Board considered and evaluated all the evidence of record to conclude that a person of skill in the art would have modified Brandt’s pushing-type stern drive to be a pulling-type stern drive because it resulted in improved speed and efficiency. The Court therefore concluded that the Board’s motivation to combine analysis was supported by substantial evidence.

Turning to the objective evidence on nonobviousness (specifically to the issue of nexus), the Federal Circuit found that Volvo Penta did not provide sufficient evidence of coextensiveness. The Court explained that Volvo Penta’s evidence amounted to a single conclusory sentence that the Forward Drive and Bravo Four S are commercial embodiments of the challenged patent. The Court found that this statement simply shows that both the Forward Drive and Bravo Four S embody the challenged claims, not that they are coextensive with the challenged claims.

The Federal Circuit then turned to whether Volvo Penta proved a nexus independent of the presumption. Here, the Court found that the Board erred by finding that Volvo Penta had not identified the unique characteristics of the claimed invention that were tied to the objective evidence. The Court explained that the documents submitted by Volvo Penta demonstrated a connection between the claim elements and the objective evidence of nonobviousness because they show that the inventive combination of propeller arrangement and steering axis location provided certain benefits praised in the industry and not achieved by drives in the prior art. The evidence also showed that boat manufacturers strongly desired Volvo Penta’s Forward Drive and were urging Brunswick to bring a forward drive to market. The Court found that this evidence was sufficient to show nexus between the unique features of the claimed invention, a tractor-type stern drive and the evidence of secondary considerations.

Turning to the objective evidence factors, the Federal Circuit found that the Board’s analysis of objective indicia of nonobviousness, including its assessment of the weight it gave to different objective criteria, was overly vague and ambiguous. For instance, the Board found clear evidence of copying but only afforded that factor “some weight,” as opposed to finding it to be strong evidence of nonobviousness. Similarly, with respect to commercial success and industry praise, the Board found that boat manufacturers strongly desired Volvo Penta’s Forward Drive and were urging Brunswick to bring such a drive to market yet only afforded these factors “some weight.” The Court also found that the Board failed to properly evaluate evidence of long-felt need in the form of an article that indicated that Volvo Penta’s Forward Drive was “radical,” game changing” and starting a “revolution.”

The Federal Circuit therefore vacated the Board’s decision and remanded with instructions to consider the totality of the evidence of obviousness, including the teachings of the combined references in relation to secondary considerations.