In explaining the weight of a jury’s factual findings, the U. S. Court of Appeals for the Federal Circuit explained that a jury’s implicit factual findings (on obviousness) are binding on a district court and supported their verdict of non-obviousness.  Further, the Federal Circuit explained that by granting judgment as a matter of law that the patents were invalid, the district court erred.  Kinetic Concepts, Inc. v. Smith & Nephew, Case No. 11-1105 (Fed. Cir., Aug. 13, 2012) (O’Malley, J.) (Dyk, J., concurring in the result).

This case is noteworthy for the Court’s explanation that implicit factual findings of a jury are binding and should be considered in determining whether there was substantial evidence in reaching the verdict of obviousness.  The patents at issue in this case were directed to methods and apparatuses for treating wounds by applying suction.  The jury was asked to make several factual findings as to whether the defendant had proven the asserted claims were obvious.  The jury determined that the claims and the prior art exhibited differences, that there were objective considerations favoring non-obviousness and that obviousness was not established by clear and convincing evidence.  The jury also found that the defendant infringed the asserted claims.

Pursuant to Rule 50(b), Smith and Nephew (S&N) moved for judgment as a matter of law (JMOL), arguing that all of the asserted claims of the patents were obvious. In its motion, S&N asserted that substantial evidence did not support the jury’s explicit findings that additional differences between the prior art and the asserted claims existed and also that multiple objective indicia of non-obviousness were present.

KCI argued that, in addition to the explicit jury findings, the jury’s implicit findings necessary to determine the ultimate question of obviousness should be presumed to have been found in KCI’s favor. Further, KCI argued that these findings, both explicit and implicit, should not be disturbed by the trial court unless they are not supported by substantial evidence.

S&N’s position was that the jury’s verdict of non-obviousness was advisory only and that there were no implicit factual findings in support of the advisory verdict on non-obviousness to which the court should defer. KCI, on the other hand, argued that a jury’s verdict on the ultimate question of obviousness is always advisory because, as a question of law, obviousness must be determined by the court;  but the court has to assume that the jury found the appropriate underlying  facts, and the verdict should only be disturbed applying the substantial evidence test

Ultimately, the district court concluded that, contrary to the jury’s explicit findings, “the differences between the claimed invention and the prior art, if any, are minimal,” that “such minimal variations would have been apparent to one having ordinary skill in the art” and that “the evidence is clear and convincing that there is no legally sufficient basis on the record to conclude that all asserted claims of the patents in suit were not obvious.” KCI appealed

The Federal Circuit reversed.  According to the Federal Circuit, the jury’s explicit and implicit factual finds are binding and reviewed under the substantial evidence test.  As the Court explained, in this instance, since the district court included the ultimate question of obviousness on the special verdict form, all of the factual determinations underlying the ultimate question were implicitly put to the jury for resolution, and the district court was required to accept all implicit factual findings supporting the jury’s conclusion with respect to the ultimate conclusion of obviousness that were supported by substantial evidence.

Similarly, the Court explained that it must review all of the jury’s explicit and implicit factual findings for substantial evidence and then examine the legal conclusion of obviousness de novo to determine whether it is correct in light of the factual findings that it finds adequately supported. 

Practice Note:  When seeking a trial by jury, if a jury is asked to determine the question of obviousness, the jury’s implicit factual findings are binding on the court and the parties if supported by substantial evidence.