Last week, the United States Court of Appeals for the Federal Circuit once again had the opportunity to address the matter of Transocean Offshore Deepwater Drilling, Inc. v. Maersk Drilling USA, Inc. This second appeal by Transocean challenged the decision of the district court to grant judgment as a matter of law (JMOL). Specifically, Transocean challenged the district court ruling that (1) the asserted claims of U.S. Patent Nos. 6,047,781 (’781 patent), 6,085,851 (’851 patent), and 6,068,069 (’069 patent) are invalid for obviousness and lack of enablement; (2) Maersk Drilling USA, Inc. (Maersk) did not infringe the asserted claims; and (3) Transocean was not entitled to damages. Transocean also appealed from the district court’s conditional grant of a new trial. The Federal Circuit ultimately agreed with Transocean and reversed the district court. See Federal Circuit decision in Transocean II.
Previously, the Federal Circuit vacated the district court’s grant of summary judgment of noninfringement and reversed its grant of summary judgment of invalidity for obviousness and lack of enablement. See Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc., 617 F.3d 1296, 1301 (Fed. Cir. 2010) (Transocean I). On remand, a jury found that Maersk failed to prove that the asserted claims would have been obvious or that they were not enabled. The jury made specific findings that the prior art failed to disclose every element of the asserted claims and that each of seven objective factors indicated nonobviousness. The jury also found that Maersk infringed and awarded $15 million in compensatory damages.
Notwithstanding the victory provided to Transocean by the jury, the district court granted Maersk’s motions for judgment as a matter of law (JMOL) that the asserted claims are invalid as obvious and not enabled, that Maersk did not infringe, and that Transocean is not entitled to damages. Essentially, the court found that the jury was completely wrong, and essentially merely granted summary judgment again, but after the jury verdict, leaving the case not all that different from when it first arrived at the Federal Circuit.
Perhaps most interesting is the discussion of obviousness, and more particularly the discussion of secondary considerations. There has been scant development of secondary considerations since KSR v. Teleflex, so any case that does discuss secondary considerations is important to consider. The good news is that the Federal Circuit found that there was substantial evidence to support the jury’s determinations relative to secondary considerations, although there was no direct discussion as to the interplay between secondary considerations and KSR specifically.
In the first appeal, Transocean I, the Federal Circuit, per Judge Moore, stated:
We agree that Horn and Lund establish a prima facie case that the claims would have been obvious. In combination, Horn and Lund teach all of the limitations of the claims…. We hold that the teachings of the references as well as this reason to combine support a prima facie case that the claims would have been obvious to one of ordinary skill in the art.
In Transocean I, the Federal Circuit went on to say:
Although we hold that Horn in view of Lund present a prima facie case of obviousness, this is not the end of the analysis. At the district court, Transocean presented significant objective evidence of nonobviousness. First, Transocean presented evidence of industry skepticism…. Second, Transocean presented evidence of industry praise for its dual activity rig…. Third, Transocean presented evidence that its implementation of the dual activity invention has been a commercial success…. Finally, Transocean presented evidence that the success of its invention caused others to copy it, including Maersk USA.
Ultimately, the Federal Circuit would go on to reverse the grant of summary judgment of invalidity based on obviousness because the district court failed to consider the objective evidence of nonobviousness.
Then in Transocean II, again per Judge Moore, the Federal Circuit explained that simply because the Court had previously recognized there to be a prima facie case of obviousness did not mean that a conclusion of obviousness was ultimately mandated. Judge Moore wrote:
The establishment of a prima facie case, however, is not a conclusion on the ultimate issue of obviousness. By definition, the existence of a prima facie case simply means that the party challenging a patent has presented evidence “sufficient to establish a fact or raise a presumption [of obviousness] unless disproved or rebutted.” Black’s Law Dictionary (9th ed. 2009). The prima facie inquiry is based on the first three Graham factors—the scope and content of the prior art, the differences between the prior art and the claims, and the level of ordinary skill in the art—which the Supreme Court described as the background against which the obviousness or nonobviousness of the subject matter is determined. 383 U.S. at 17. A party is also free to introduce evidence relevant to the fourth Graham factor, objective evidence of nonobviousness, which may be sufficient to disprove or rebut a prima facie case of obviousness. See Mintz v. Dietz & Watson, Inc., 679 F.3d 1372, 1378-79 (Fed. Cir. 2012).
As we have repeatedly held, “evidence rising out of the so-called ‘secondary considerations’ must always when present be considered en route to a determination of obviousness.” Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538 (Fed. Cir. 1983). Objective evidence of nonobviousness is an important component of the obviousness inquiry because “evidence of secondary considerations may often be the most probative and cogent evidence in the record. It may often establish that an invention appearing to have been obvious in light of the prior art was not.” Id. This objective evidence must be “considered as part of all the evidence, not just when the decisionmaker remains in doubt after reviewing the art.” Id. at 1538-39. Thus, in order to determine obviousness, the decisionmaker must be able to consider all four Graham factors.
After Transocean I, on remand the jury made express findings on objective evidence of nonobviousness, including findings related to commercial success, industry praise, unexpected results, copying, industry skepticism, licensing, and long-felt but unsolved need. Despite the jury finding in favor of Transocean on each, the district court concluded that the evidence failed to support the jury findings, seemingly just reinstating the original summary judgment determination that the Federal Circuit had already kicked back as inappropriate.
After review of Transocean’s offered evidence of secondary considerations, the Federal Circuit determined that in each case there was indeed substantial evidence to support the jury’s determination.