Icon Health & Fitness, Inc. v. Strava, Inc.

• Decision Date: 27 February 2017
• Docket Number: 2016-1475
• Citation: 849 F.3d 1034
• Parties: ICON HEALTH AND FITNESS, INC., Appellant v. STRAVA, INC., UA Connected Fitness, Inc., Appellees
• Court: U.S. Court of Appeals — Federal Circuit

849 F.3d 1034

ICON HEALTH AND FITNESS, INC., Appellant

v.STRAVA, INC., UA Connected Fitness, Inc., Appellees

2016-1475

United States Court of Appeals, Federal Circuit.

Decided: February 27, 2017

Larry R. Laycock , Maschoff Brennan Laycock Gilmore Israelsen & Wright, Salt Lake City, UT, argued for appellant. Also represented by John T. Gadd ; Mark W. Ford, Robert Parrish Freeman, Jr. , Park City, UT.

Glenn E. Forbis , Harness, Dickey & Pierce, PLC, Troy, MI, argued for appellees. Also represented by Matthew L. Cutler, Douglas Alan Robinson , St. Louis, MO.

Before O'Malley, Reyna, and Wallach, Circuit Judges.

Concurring-in-part and dissenting-in-part opinion filed by Circuit Judge O'Malley.

Wallach, Circuit Judge.

Appellees Strava, Inc. and UA Connected Fitness, Inc. (together, "Strava") sought inter partes reexamination of several claims of U.S. Patent No. 7,789,800 ("the '800 patent"). During the reexamination, certain claims were cancelled, and others (claims 38–100) were added. An examiner at the U.S. Patent and Trademark Office ("USPTO") found certain claims obvious over various prior art references. Appellant Icon Health & Fitness, Inc. ("Icon") appealed the Examiner's findings to the USPTO's Patent Trial and Appeal Board ("PTAB"). In its decision on appeal, the PTAB affirmed the Examiner's rejection of all the pending claims as obvious. See Strava, Inc. v. Icon Health & Fitness, Inc. , No. 95/002359, 2015 WL 5723014, at *1 (P.T.A.B. Sept. 28, 2015).

Icon appeals the PTAB's rejection of claims 43, 46, 57–62, 65, 71, 74, 86, and 98–100 ("the Asserted Claims"). We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A) (2012). We vacate-in-part, affirm-in-part, and remand for additional proceedings consistent with this opinion.

DISCUSSION

Icon presents two arguments on appeal. First, Icon contends that "[t]he principal error affecting all aspects of the reexamination proceedings is Strava's use of an expert to supply legal conclusions of obviousness" and the PTAB's reliance on those conclusions. Appellant's Br. 10. Second, Icon avers that the PTAB erred in affirming the Examiner's rejection of the Asserted Claims, either for lack of substantial evidence or for legal error in the conclusion of obviousness. Id. at 17–35. After summarizing our standard of review and the applicable legal standard, we address these arguments in turn.

I. Standard of Review and Legal Standard for Obviousness

"We review the PTAB's factual findings for substantial evidence and its legal conclusions de novo." Redline Detection, LLC v. Star Envirotech, Inc. , 811 F.3d 435, 449 (Fed. Cir. 2015) (citation omitted). "Substantial evidence is something less than the weight of the evidence but more than a mere scintilla of evidence." In re NuVasive, Inc. , 842 F.3d 1376, 1379–80 (Fed. Cir. 2016) (internal quotation marks and citations omitted).

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).¹ The ultimate determination of obviousness is a question of law, but that determination is based on underlying factual findings. See In re Gartside , 203 F.3d 1305, 1316 (Fed. Cir. 2000). The underlying 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 considerations of nonobviousness such "as commercial success, long felt but unsolved needs, failure of others," and unexpected results. Graham v. John Deere Co. of Kan. City , 383 U.S. 1, 17–18, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966) ; United States v. Adams , 383 U.S. 39, 50–52, 86 S.Ct. 708, 15 L.Ed.2d 572 (1966).

II. The PTAB Did Not Err by Relying Upon Strava's Expert's Declarations

Icon avers that the PTAB erred because it adopted Examiner findings tainted by legal defect. Specifically, Icon contends that the Examiner improperly "affirm[ed] legal conclusions" in the declarations of Strava's expert, Frank Koperda. Appellant's Br. 12; see J.A. 1173–87 ("First Koperda Decl."), 1559–77 ("Second Koperda Decl."). According to Icon, Mr. Koperda's Declarations "go well beyond supplying opinions regarding factual matters" and, "instead[,] venture further, improperly opining as to the legal conclusion of obviousness." Appellant's Br. 12; see id. at 15–16 (listing instances where Mr. Koperda stated something "would have been obvious" or some variant thereof). Because the Examiner cited to large portions of Mr. Koperda's Declarations, Strava argues, Mr. Koperda's legal conclusions "appear[ ] to have supplanted" the Examiner's analysis, id. at 16, mandating reversal, id. at 17. Before we address these arguments on the merits, we first must determine whether we may consider them.

A. Waiver Is Not Appropriate

It is uncontested that Icon failed to raise before the PTAB arguments regarding the Examiner's purported reliance on Mr. Koperda's Declarations. Therefore, we must determine whether Icon waived these arguments on appeal.

While we "retain[ ] case-by-case discretion over whether to apply waiver," Harris Corp. v. Ericsson Inc. , 417 F.3d 1241, 1251 (Fed. Cir. 2005), "[i]t is the general rule ... that a federal appellate court does not consider an issue not passed upon below," Singleton v. Wulff , 428 U.S. 106, 120, 96 S.Ct. 2868, 49 L.Ed.2d 826 (1976). However, "[u]nder certain circumstances, we may consider issues not previously raised...." Automated Merch. Sys., Inc. v. Lee , 782 F.3d 1376, 1379 (Fed. Cir. 2015). Some of the relevant considerations include whether (1) "the issue involves a pure question of law and refusal to consider it would result in a miscarriage of justice"; (2) "the proper resolution is beyond any doubt"; (3) "the appellant had no opportunity to raise the objection" below; (4) "the issue presents significant questions of general impact or of great public concern"; or (5) "the interest of substantial justice is at stake." Id. (citations omitted). We also may consider, inter alia, whether the issue has been fully briefed, a party will be prejudiced by consideration of the issue, or no purpose will be served by remand. See id. at 1380.

Certain considerations weigh in favor of finding waiver: whether Mr. Koperda's Declarations contained legal conclusions is not a pure question of law; Strava had the opportunity to raise its objections to Mr. Koperda's Declarations below; and the interest of substantial justice is not at stake in that neither party will be deprived a legal right or evade judicial review. See id. at 1379. However, other considerations weigh in favor of exercising our discretion and deciding the issue: the proper resolution is clear, and the arguments raise an issue of general impact in that the issue potentially could affect the weight afforded to a large number of expert declarations containing similar statements. Cf. Broad. Innovation, L.L.C. v. Charter Commc'ns, Inc. , 420 F.3d 1364, 1366 (Fed. Cir. 2005) (stating that an "issue presents significant questions of general impact" when it "potentially impacts a large number of patents" (citations omitted)). Because the issue has been fully briefed, the record is complete, there will be no prejudice to any party, and no purpose is served by remand, we will consider Icon's arguments. See Automated Merch. , 782 F.3d at 1379–80 (exercising discretion to review in a case involving similar circumstances).

B. The PTAB Was Permitted to Rely on Mr. Koperda's Declarations in Support of Its Factual Findings

Having found waiver inapplicable, we must answer whether the PTAB (by virtue of its adoption of some of the Examiner's findings) erred because it relied upon certain aspects of Mr. Koperda's Declarations to support its conclusion. Icon acknowledges that "[i]t is not improper for an expert to supply ... factual information or to opine as to factual matters," Appellant's Br. 13, and Icon does not dispute that Mr. Koperda was qualified to supply factual information to the Examiner, Oral Argument 8:09–8:26, http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2016-1475.mp3. Instead, Icon argues that the Examiner erred because he extensively cited to statements in the First and Second Koperda Declarations, one of which Strava submitted with its April 5, 2013 Comments After Non-Final Office Action ("Strava's April 2013 Comments") (J.A. 1204–66) and the other with its November 6, 2013 Comments After Non-Final Action Closing Prosecution ("Strava's November 2013 Comments") (J.A. 1524–57). According to Icon, the Examiner "did not form his own legal conclusions of obviousness" but rather "adopted the legal conclusions provided to him by ... Mr. Koperda." Appellant's Br. 17.

Icon's arguments ignore the standard against which we review PTAB determinations. "We review the PTAB's factual findings for substantial evidence and its legal conclusions de novo." Redline , 811 F.3d at 449 (citation omitted). To the extent Icon challenges the PTAB's factual findings, as adopted from the Examiner, the PTAB is permitted to weigh expert testimony and other record evidence and, in so doing, rely on certain portions of an expert's declaration while disregarding others. See Velander v. Garner , 348 F.3d 1359, 1371 (Fed. Cir. 2003) ("[W]hat the [PTAB] consistently did was accord little weight to broad conclusory statements that it determined were unsupported by corroborating references. It is within the discretion of the trier of fact to give each item of evidence such weight as it feels appropriate." (citation omitted)); see also In re Am. Acad. of Sci. Tech Ctr. , 367 F.3d 1359, 1368 (Fed. Cir. 2004) ("[T]he [PTAB] is entitled to weigh the declarations and conclude that the lack of factual corroboration warrants discounting...