By Mark Engstrom, J.D.
In a patent infringement suit by Kraft Foods Global Brands (now Intercontinental Great Brands) against Kellogg North America, Keebler Foods, and various affiliates (collectively, Kellogg), the U.S. Court of Appeals for the Federal Circuit has found that a district court did not err in finding that Kraft’s patent on a "resealable food container" was invalid as obvious, as a matter of law, and that Kellogg’s counterclaim of unenforceability due to inequitable conduct was unavailing. The Federal Circuit rejected all three of Kraft’s challenges on appeal. Those challenges included arguments that: (1) the district court had improperly made its obviousness conclusions before considering the objective indicia of non-obviousness; (2) the district court had improperly resolved genuine disputes of fact; and (3) Kellogg’s validity challenge was subject to an "enhanced" evidentiary burden because its invalidity arguments relied on the same prior art that had been previously considered during reexamination. The circuit court also rejected Kellogg’s arguments regarding the sufficiency of evidence regarding the intent element of inequitable conduct. The judgment of the district court was affirmed. Circuit Judge Jimmie V. Reyna dissented in part (Intercontinental Great Brands LLC v. Kellogg North America Company, September 7, 2017, Taranto, R.).
Kraft sued Kellogg for the infringement of U.S. Patent No. 6,918,532. The patent claimed a food container that could be resealed to maintain freshness. A combination of two known types of packaging was disclosed: a package that used a frame surrounded by a wrapper (common for packaging cookies) and a package on which the label could be pulled back to access the contents, and then returned to its original position to reseal the package and preserve the remaining items (common for wet wipes).
The district court granted Kellogg’s motion for summary judgment of invalidity for obviousness on all of the asserted claims. It also granted summary judgment to Kraft with respect to Kellogg’s unenforceability counterclaim based on inequitable conduct. The parties filed cross appeals.
Consideration of objective indicia. Kraft argued that the district court treated the objective indicia of non-obviousness as an afterthought by "writing off the patent before turning to objective indicia" and "repeatedly not[ing] its finding of obviousness before considering the objective indicia." The Federal Circuit disagreed. The district court drew its conclusion of obviousness after, not before, it had considered the objective indicia of non-obviousness, the Federal Circuit concluded. It did not draw an ultimate conclusion regarding obviousness before considering the objective indicia.
Kraft also argued that the objective indicia on non-obviousness had to be evaluated before a conclusion could be drawn on the issue of whether a reasonable jury could find that a skilled artisan had a motivation to combine the prior art. However, it failed to cite any precedent for that argument.
Finally, Kraft could not argue that the district court failed to credit its evidence regarding objective indicia. According to the Federal Circuit, the district court had accepted the facts that Kraft had asserted about commercial success, industry praise, and copying. Therefore, all that remained for the objective indicia analysis was "a weighing to produce a legal conclusion." Kraft, however, did not argue that the objective indicia that the district court had accepted "required a legal conclusion of non-obviousness" if the appellate court agreed with the district court’s analysis regarding the prior art and a motivation to combine.
Resolution of factual disputes. Kraft argued that the district court had improperly resolved genuine disputes of material fact. According to the district court, the only reasonable findings of record were that: (1) the "Machinery Update" articles (published shortly before Kraft’s priority date) disclosed all of the elements of the claims in combination—including a resealable pull-back package for discrete food items and a rigid tray—except for the "frame" that was common for cookies, as shown by "Graham"; (2) the absence of a satisfactory resealable package was a known problem for cookies; and (3) the ordinary creativity of a skilled packaging artisan "motivated and made predictable" the use of the Machinery Update package with a cookie-protecting frame as a solution to that known problem.
The Federal Circuit found that Kraft did not identify any basis for reasonable contrary findings. The lower court’s findings were sufficient to justify the overall legal conclusion of obviousness, the court explained, because no meaningful argument was proffered to show that the objective indicia, when weighed in Kraft’s favor, could change the ultimate conclusion.
The Federal Circuit rejected Kraft’s argument that the district court failed to provide "explicit and clear reasoning" for a "rational underpinning" to its invocation of common sense in the motivation-to-combine analysis. In addition, the appellate court rejected Kraft’s argument that more than one reasonable inference could be drawn regarding a skilled artisan’s motivation to use the "Machinery Update" packaging with a frame for cookies.
In light of those and other findings, the Federal Circuit concluded that the record lacked a reasonable basis for overturning the district court’s conclusion that a reasonable jury would find a motivation to combine.
Enhanced burden. Kraft invoked the Federal Circuit’s "recognition" that a party challenging the validity of a patent shouldered an "enhanced burden" if the invalidity argument relied on the same prior art that had been considered during examination. In Kraft’s view, the enhanced burden was applicable in this case because Graham, the 2002 "Machinery Update" article, and a 2001 "Packaging News" article had all been considered on reexamination. The Federal Circuit disagreed. The application of an enhanced burden did not provide a different result in this case, the court concluded.
Inequitable conduct. Kellogg argued that the district court should not have rejected its counterclaim for inequitable conduct. The only issue on appeal pertained to the arguments that Kraft had made to the Board, during reexamination, regarding the "Packaging News" article. The Federal Circuit found no reversible error in the district court’s conclusion that the evidence was insufficient to find the requisite intent for inequitable conduct based on Kraft’s reexamination arguments.
Kellogg’s argument rested on a single sentence in the "Packaging News" article, which displayed and described "Re-Seal It" packaging, which was made by a Swedish company and marketed by Paramount Packaging, The article stated that Re-Seal It was not using "conventional" wrapping film.
According to Kellogg, the "Packaging News" sentence was a misprint. Further, Kraft’s failure to bring the error to the attention of the Board, which relied on that sentence to reverse the examiner’s rejections of Kraft’s claims, constituted inequitable conduct. To prevail, however, Kellogg had to prove that Kraft possessed a specific intent to mislead or deceive the PTO, something that it failed to do.
This was not a case of withholding documents from the PTO, the Federal Circuit explained, because the "Machinery Update" article was part of the record and available to the Board. Ultimately, the only alleged wrong was Kraft’s omission of a notice that the Packaging News sentence was actually a misprint. In the Federal Circuit’s view, the district court had properly concluded that the record did not support an inference of deceptive intent, even if the sentence was a misprint.
Significantly, Kellogg failed to present an admission or similar evidence to show that a relevant Kraft officer or representative had actually believed, during the reexamination, that the sentence was a misprint. In the Federal Circuit’s view, one could reasonably infer—based on the record and in light of Kellogg’s burden of persuasion—that Kraft did not believe that the sentence was a misprint. In those circumstances, the Federal Circuit found that the district court had properly concluded that the intent standard could not be met.
Dissent. Circuit Judge Jimmie V. Reyna dissented from the majority’s decision to: (1) affirm the district court’s grant of summary judgment of obviousness; and (2) not address a construction error. "For too long," Reyna opined, "this court has turned a blind eye to … a grave concern: the application of a prima facie test that necessarily achieves a legal determination of obviousness prior to full and fair consideration of evidence of objective indicia of non-obviousness."
In Judge Reyna’s view, an obviousness inquiry should not be subject to a prima facie rule or test. Stated differently, the burden of persuasion "should not shift from the challenger to the patent holder" after a legal determination of obviousness has been made.
Judge Reyna agreed with the majority’s decision to affirm the district court’s grant of summary judgment of no inequitable conduct, but he disagreed with the majority’s decision to affirm the district court’s grant of summary judgment of obviousness. "I would find that the district court improperly found a prima facie case of obviousness before considering Kraft’s evidence of objective indicia of nonobviousness," Judge Reyna stated.
Because the majority affirmed the district court’s finding of obviousness, it did not address the finding of no literal infringement. Judge Reyna concluded that the district court had erred on the obviousness issue, so he would have addressed the issue of literal infringement. According to Judge Reyna, the district court had changed its construction of the claim term "sealing layer" between its Markman and summary judgment orders, resulting in a finding of non-infringement. Because that midstream change was dispositive, and because Kraft was not provided an opportunity to address the new claim construction, the district court’s order on summary judgment was erroneous, according to Judge Reyna.
The case is Nos. 2015-2082 and 2015-2084.
Attorneys: Katie Crosby Lehmann (Ciresi Conlin LLP) for Intercontinental Great Brands LLC. Richard Daniel Harris (Greenberg Traurig LLP) for Kellogg North America Company, Kellogg USA Inc., Keebler Company, Keebler Foods Company, and Kellogg Sales Company.
Companies: Intercontinental Great Brands LLC; Kellogg North America Company; Kellogg USA, Inc.; Keebler Company; Keebler Foods Company; Kellogg Sales Company
MainStory: TopStory Patent FedCirNews
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