No Need to Neglect Nexus: Prosecution
`Lessons from FOX Factory v. SRAM
`Kelvin L. Varghese
`
`On December 18, 2019, in FOX Factory, Inc.
`
`v. SRAM, LLC1 (“Fox Factory”), the U.S.
`Court of Appeals for the Federal Circuit addressed
`the conditions under which a patent owner is
`entitled to the presumption of a nexus between a
`claimed invention and evidence of secondary con-
`siderations. Secondary considerations or objective
`indicia of non-obviousness, if present, must be con-
`sidered in determining whether a patent claim is
`obvious.2 Evidence of secondary considerations
`may help demonstrate that the claim is not obvi-
`ous, even when the prior art would have suggested
`that the claim is obvious.3 Secondary considerations
`include long-felt but unsolved needs, failure of oth-
`ers, unexpected results, commercial success, copy-
`ing, licensing, and praise.4
`To be relevant, secondary considerations evi-
`dence must be commensurate in scope with the
`claimed invention.5 In that regard, there must be
`a “nexus,” or sufficient connection, between the
`claimed invention and the evidence of secondary
`considerations.6 In some circumstances, the patent
`owner is entitled to a presumption of nexus, which
`makes it easier for the patent owner to demon-
`strate that a nexus exists between the claims and the
`evidence.7
`In Fox Factory, the Federal Circuit reversed
`the holding by the Patent Trial and Appeal Board
`that the challenged claims in an inter partes review
`(“IPR”) were entitled to a presumption of nexus
`based on the commercial success of the patent own-
`er’s product, because the patent owner had other
`patents directed to “critical” aspects of the product
`that were not recited in the challenged claims.8
`The question of whether a patent owner is enti-
`tled to a presumption of nexus and the related ques-
`tion of whether the patent owner has established
`
`Kelvin L. Varghese is a patent attorney at Haynes and Boone,
`LLP. Mr. Varghese, who may be contacted at kelvin.varghese@
`haynesboone.com, expresses his appreciation to Angela Oliver
`and Jonathan Bowser for their contributions to this article.
`
`such a nexus, even without the presumption, typi-
`cally arises when the validity of the patent is being
`challenged in an IPR (as in FOX Factory) or during
`litigation.9
`While FOX Factory is instructive mostly for
`those forums, there are also prosecution lessons to
`be learned. In particular, FOX Factory suggests pur-
`suing claims of different scope that cover different
`combinations of product features, keeping patent
`families alive long enough for there to be evidence
`of commercial success, and maintaining good com-
`munication with the patent owner about the prod-
`uct features. Such strategies may afford the patent
`owner flexibility to select during IPR or litigation
`which claims have better facts to demonstrate nexus.
`
`PROSECUTION STRATEGY
`Obtaining multiple patents that cover differ-
`ent features in the same commercial product is a
`common prosecution strategy. For example, a com-
`mercial product may have multiple components,
`which will be referred to here as Features A and B
`for ease of reference. For a variety of practical and
`legal reasons, an applicant may wish to pursue dif-
`ferent patent applications or different claims in the
`same patent application covering Features A and B,
`respectively.
`
`Obtaining multiple patents that
`cover different features in the same
`commercial product is a common
`prosecution strategy.
`
`For example, the reality of R&D is that engi-
`neers may develop Features A and B at different
`times. If a patent application is filed as each product
`feature is developed, the specification and claims in
`that application will be directed to only the respec-
`tive product feature developed at the time of filing.
`Furthermore, an applicant is often motivated to
`file as soon as each product feature is developed in
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`Volume 32 • Number 6 • June 2020
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`Regeneron v. Novartis
`IPR2021-00816
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`order to be the first to file for protection on that
`feature. Further still, prior to commercial launch, it
`may be unclear whether Feature A, Feature B, or a
`combination of the two will make the product a
`commercial success.10
`With applications typically drafted before com-
`mercial launch, the applicant may not be able to
`plan for nexus arguments at this early stage, and
`ensuring the patent owner has any infringement
`case at all is usually a higher priority than setting up
`good nexus arguments.
`Patent owners often prefer independent claims
`directed to one product feature because a claim
`directed only to Feature A has a broader scope and
`may encompass more competitor products than a
`claim that requires both Features A and B.
`
`How then can prosecution be tailored
`to help the patent owner both obtain
`broad coverage and make winning
`nexus arguments?
`
`Many applicants also prefer to file targeted appli-
`cations directed to one product feature rather than
`an omnibus application that covers multiple product
`features because targeted applications are cheaper
`and faster to prepare.
`Finally, even when omnibus applications are
`filed, restriction requirements have become so com-
`mon that it may be harder for the applicant to pur-
`sue claims directed to multiple features in the same
`application.
`
`CONSEQUENCES OF FOX FACTORY
`FOR PROSECUTION STRATEGY
`Tension has been introduced between how
`applicants typically approach prosecution to cover
`a commercial product and the ability to establish a
`presumption of nexus for patent claims directed to
`that product under FOX Factory. FOX Factory reaf-
`firmed that a patent owner is entitled to the pre-
`sumption of nexus only by demonstrating that the
`product is “coextensive” with the claimed inven-
`tion.11 “‘[I]f the patented invention is only a com-
`ponent of a commercially successful machine or
`process,’ the patentee is not entitled to a presump-
`tion of nexus” because the product and the claimed
`invention are not coextensive.12 Nexus may be
`presumed even if the product includes “additional
`
`insignificant features” that are not in the claimed
`invention.13
`That is, the presumption of nexus could still
`apply to a patent directed to Feature A if Feature
`B is an insignificant feature. However, the fact that
`there is another patent directed to Feature B favors
`the conclusion that Feature B is not an insignificant
`feature.14
`Thus, prosecution resulting in multiple patents
`covering different product features may harm the
`patent owner’s ability to argue for a presumption
`of nexus.
`Pursuing different applications directed to differ-
`ent product features may also make it harder for the
`patent owner on the ultimate question of whether
`the nexus between evidence of secondary consid-
`erations and the claimed invention has been estab-
`lished, even without the presumption.
`Proving nexus requires “showing that the evi-
`dence of secondary considerations is the ‘direct
`result of the unique characteristics of the claimed
`invention.’”15 If the claimed invention is directed to
`Feature A, the evidence of secondary considerations
`must also be attributable to Feature A (not Feature
`B or a combination of Features A and B).16 This
`prevents the patent owner from relying on the same
`evidence of commercial success for a first patent
`directed to Feature A, a second patent directed to
`Feature B, and a third patent directed to the combi-
`nation of Features A and B.17
`While a patent owner may be more likely to
`cover competitors with a relatively broader pat-
`ent directed only to Feature A, obtaining evidence
`of commercial success specifically attributable to
`Feature A will be an obstacle in establishing a nexus
`between the commercial success and that patent.
`
`PROSECUTION LESSONS FROM FOX
`FACTORY
`How then can prosecution be tailored to help
`the patent owner both obtain broad coverage and
`make winning nexus arguments?
`One lesson from FOX Factory is to pursue claims
`that cover different combinations of features. If a
`patent owner obtains claims directed to Feature A,
`claims directed to Feature B, and claims directed the
`combination of Features A and B, then the patent
`owner can be strategic about which claims to assert.
`With respect to the presumption of nexus, the pat-
`ent owner can then assert the claims it is confident
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`Regeneron v. Novartis
`IPR2021-00816
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`can be shown to be coextensive with its product.
`FOX Factory suggests that the strongest case for the
`presumption of nexus is with claims directed to the
`combination of Features A and B for a product that
`has both Features A and B.18
`On the ultimate question of nexus, even with-
`out the presumption, the patent owner can evaluate
`the evidence of commercial success and determine
`which product feature (or combination of product
`features) the evidence may be attributed to. This
`allows the patent owner to make nexus arguments
`about the particular claims that are best supported
`by the evidence, and if nexus arguments are less of a
`priority than building an infringement case against
`a competitor, the patent owner still has relatively
`broader claims that individually cover Features A
`and B to assert.
`Pursuing claims of different scope depends on
`what is described in the specification, and varying
`claim scope becomes easier to pursue if the appli-
`cant files an omnibus application that describes all
`of its product features.
`For example, in the first application and/or
`later-filed continuing applications, the applicant has
`maximum flexibility to choose independent and
`dependent claims directed to Feature A, Feature
`B, and the combination of Features A and B (e.g.,
`the applicant may pursue an independent claim
`directed to Feature A and an independent claim
`directed to Feature B to cover each feature indi-
`vidually). In order to cover the combination of fea-
`tures, the application can include an independent
`claim directed to Features A and B, or one or more
`dependent claims directed to Feature B that depend
`from the independent claim directed individually to
`Feature A (or vice versa).
`However, covering different combinations of
`product features with different applications is more
`challenging. Assuming the earliest application is
`directed to Feature A, the applicant will only be
`able to pursue claims directed to Feature A in that
`application.
`However, if a later filed application directed to
`Feature B also includes a description of Feature A
`(e.g., a continuation-in-part or a completely sepa-
`rate application that incorporates the earlier appli-
`cation by reference19), the applicant may use the
`later filed application to pursue claims directed
`to Feature B alone and/or the combination of
`Features A and B.
`
`FOX Factory also reaffirms the importance of
`keeping patent families alive with continuations
`or divisionals that are pending at least until after a
`product launches and preferably, until after there is
`evidence of commercial success. The applicant can
`use these continuing applications to pursue claims
`that are specifically directed to the product feature
`(or combination of product features) to make the
`claim “coextensive” with the product (i.e., for the
`presumption of nexus argument) and/or that the
`evidence of commercial success is attributable to
`(i.e., for a nexus argument, even without the pre-
`sumption). Applicants typically keep continuing
`applications pending in order to pursue claims cov-
`ering competitor products with one or more of the
`product features, and the ability to use those con-
`tinuing applications to establish good nexus argu-
`ments is yet another reason to keep patent families
`alive.
`Additionally, FOX Factory is a reminder for pros-
`ecution counsel to maintain good communication
`with the applicant throughout the life cycle of a
`product.
`
`Additionally, FOX Factory is a reminder
`for prosecution counsel to maintain
`good communication with the
`applicant throughout the life cycle of a
`product.
`
`For example, during R&D, the applicant should
`be asked which combination of features is being
`considered for a product, as that information may
`be used to draft a specification that describes the
`combination of features (e.g., in an omnibus appli-
`cation or a continuation-in-part, or with an incor-
`poration by reference to earlier applications), and
`the applicant is typically willing to share this infor-
`mation prior to launch (e.g., as part of a freedom to
`operate analysis).
`The patent owner should also be intentional
`about gathering and maintaining specific evi-
`dence that tracks which product feature is driv-
`ing commercial success, including, for example,
`customer surveys targeted to the product feature
`(or combination of product features) that is pro-
`vided by an issued claim or for which protection
`is being pursued in a continuing application(s).
`After launch, prosecutors should inquire about
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`Regeneron v. Novartis
`IPR2021-00816
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`product sales to learn what feature or combina-
`tion of features is making the product a com-
`mercial success, which allows prosecutors to
`verify that claims directed to these feature(s) have
`already been obtained, or pursue such claims in
`continuations or divisionals.
`During prosecution, nexus arguments can seem
`far off and be eclipsed by more imminent concerns.
`However, as discussed above, support for nexus
`arguments may still be obtained by taking steps that
`are good practice for other reasons.
`As such, without much extra effort, applicants
`and prosecution counsel can work together to
`preserve the flexibility during IPR or litigation to
`make winning nexus arguments by pursuing claims
`directed to different combinations of product fea-
`tures, keeping continuing applications pending, and
`maintaining good communication.
`
`Notes
` 1. 944 F.3d 1366 (Fed. Cir. 2019).
` 2. See Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966);
`Ormco Corp. v. Align Technology, Inc., 463 F. 3d 1299, 1311
`(Fed. Cir. 2006).
` 3. See Graham, 383 U.S. at 17-18.
` 4. Id.; see also Leapfrog Enters., Inc. v. Fisher-Price, Inc., 485
`F.3d 1157, 1162 (Fed. Cir. 2007).
` 5. See In re Kao, 639 F.3d 1057, 1068 (Fed. Cir. 2011).
`
` 6. See In re GPAC Inc., 57 F.3d 1573, 1580 (Fed. Cir.
`1995); Demaco Corp. v. F. Von Langsdorff Licensing Ltd.,
`851 F.2d 1387, 1392 (Fed. Cir. 1988) (explaining that
`the term “nexus” “designate[s] a legally and factually
`sufficient connection between the proven success and
`the patented invention, such that the objective evi-
`dence should be considered in the determination of
`nonobviousness”).
` 7. See Fed. R. Evid. 301.
` 8. 944 F.3d at 1376-78.
` 9. The nexus between claims and secondary consider-
`ations in the obviousness analysis can also come up dur-
`ing prosecution, but this is less common. See Manual
`of Patent Examination Procedure (“MPEP”) §§ 716.03,
`2145.
` 10. Applicants may have some idea because those features
`are usually the ones worth the expense of preparing and
`prosecuting patent applications, but they cannot know
`definitively before the product is sold.
` 11. Fox Factory, 944 F.3d at 1373 (quoting Polaris Indus., Inc. v.
`Arctic Cat, Inc., 882 F.3d 1056, 1072 (Fed. Cir. 2018)).
` 12. Id. (quoting Demaco, 851 F.2d at 1392).
` 13. Id. at 1374.
` 14. Id. at 1375.
` 15. Id. at 1374 (quoting In re Huang, 100 F.3d 135, 140 (Fed.
`Cir. 1996)).
` 16. See id. at 1373-74, 1378.
` 17. See id. at 1378.
` 18. See id. at 1373.
` 19. See MPEP § 608.01(p)(I).
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`Volume 32 • Number 6 • June 2020
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`Intellectual Property & Technology Law Journal 17
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`Regeneron Exhibit 1243.004
`Regeneron v. Novartis
`IPR2021-00816
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`Reproduced with permission of copyright owner. Further reproduction
`prohibited without permission.
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`Regeneron Exhibit 1243.005
`Regeneron v. Novartis
`IPR2021-00816
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