The patentee need not necessarily establish an independent nexus between the products produced under a license agreement and the claimed invention for licensing activity to be a relevant secondary factor in the obviousness inquiry. Here, for example, the fact that the ultimate products that were produced under license had additional components beyond the claimed invention did not preclude a finding that the license itself was directly attributable to the claimed invention. “[T]he relevant inquiry is whether there is a nexus between the patent and the licensing activity itself, such that the fact-finder can infer that the licensing arose out of recognition and acceptance of the subject matter claimed in the patent.” This would be a good case to consult before introducing licensing activity as objective indicia of non-obviousness.
Background / Facts: The patents on appeal here from rejection at the PTO during inter partes review (IPR) proceedings are directed to methods of using folates to lower levels of homocysteine in the human body. In response to an obviousness rejection, the patentee cited objective indicia of non-obviousness including its licensing arrangements to further demonstrate the validity of its patents.
Issue(s): Whether the failure to establish a nexus between a claimed invention and the ultimate products produced under a license agreement is required for licensing activity to be a relevant secondary factor in the obviousness inquiry.
Holding(s): No. “The Board discounted [the patentee’s] licenses to [a manufacturer], and [the manufacturer’s] sublicenses to [a distributor], because [the patentee] failed to show a nexus between the claimed inventions and [the distributor’s] products. But the relevant inquiry is whether there is a nexus between the patent and the licensing activity itself, such that the fact-finder can infer that the licensing ‘arose out of recognition and acceptance of the subject matter claimed’ in the patent. [] Although evidence that the licensee ultimately manufactured a product that embodies the claimed invention may be probative of a nexus between the claimed invention and the licensing activity, the patentee is not necessarily required to establish an independent nexus between those products and the claimed invention for the licensing activity to be relevant. The Board erred in requiring [the patentee] to make this showing here.”