`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.
`
`