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Fox Factory v. SRAM – According to CAFC, No Presumption of Nexus for Bicycle Chainring Patents; IPR Decision Reversed and Remanded

On December 18, 2019, the United States Court of Appeals for the Federal Circuit, in Fox Factory v. SRAM, Nos. 2018-2024 and 2018-2025, reversed the Board’s Final Written Decision in a pair of inter partes reviews (“IPRs”) that the challenged claims of U.S. Patent No. 9,182,027 (the "’027 patent") were not invalid as obvious, and remanded for further proceedings. The Federal Circuit panel held on appeal that the Patent Trial and Appeals Board (“PTAB”) applied an incorrect standard when evaluating the commercial success secondary consideration of nonobviousness, and improperly presumed a nexus between the challenged claims and SRAM’s commercial embodiment (its “X-Sync” bicycle chainring), which included “critical” features other than those claimed in the ’027 patent.

The ’027 patent generally covers a bicycle chainring designed to better prevent the bicycle chain from slipping off the chainring when in use. The challenged independent claims describe alternating narrow and wide tooth tips and chainring teeth offset from the center of the chainring towards or away from the frame of the bicycle. In addition to these claimed features, the ’027 patent specification discloses other features of a chainring to keep the chain engaged, such as forwardly protruding tooth tips, a hook feature of the rear portion of each tooth, and a requirement that the narrow and wide teeth fill at least 80% of the corresponding distance in the engaged bicycle chain. This last feature, which the court called ">80% gap filling," was specifically claimed by U.S. Patent No. 9,291,250 (the "’250 patent"), a continuation of the challenged ’027 patent.

Heavily relying on evidence of secondary indicia of nonobviousness, the ’027 patent was not invalid as obvious because of the commercial success of SRAM’s X-Sync line of chainrings—all claimed elements of the challenged claims were disclosed in the prior art. The PTAB determined that SRAM was entitled to a presumption of nexus between the X-Sync products and the challenged claims, even though SRAM’s X-Sync chainrings include numerous features to keep the chain engaged on the chainring; features that were not claimed in the ’027 patent.

On appeal, the Federal Circuit held that the PTAB applied an incorrect standard and that SRAM was not entitled to a presumption of nexus between the commercial success of the X-Sync chainrings and the challenged claims. Such a nexus may be presumed when the secondary considerations evidence is tied to a product that embodies and is coextensive with the claimed features. But where a patented invention is only a component of a commercially successful machine or process, like the X-Sync products at issue, secondary indicia of commercial success is not coextensive and nexus may not be presumed.

The Federal Circuit, therefore, held that SRAM was not entitled to a presumption of nexus because its X-Sync chainrings included a number of features to keep chains engaged, in addition to those claimed by the ’027 patent. While nexus may still be presumed if the unclaimed features are insignificant, SRAM itself described one of the unclaimed features (the >80% gap filling) as the “heart” of the continuation ’250 patent and “critical” to X-Sync’s ability to retain the chain. Indeed, SRAM’s ability to subsequently patent the additional features unclaimed in the ’027 patent indicated to the court that those additional features are not insignificant. Thus, where SRAM’s X-Sync commercial embodiment had the >80% gap filling and other unclaimed features, the Federal Circuit panel held that PTAB erred in presuming a nexus between X-Sync and the challenged claims. As a result, the court remanded back to the PTAB where SRAM will not have a presumption of nexus, but instead will have the burden to prove that its evidence of secondary considerations is attributable to only the challenged claimed features.

Note: The authors are all avid cyclists, and while they are no strangers to dropped chains, they currently ride Campagnolo and/or Shimano drivetrains.

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About this Author

Adam Samansky IP Attorney Mintz Law Firm

Adam is an experienced IP litigator who primarily serves pharmaceutical, medical, high tech, and defense industry clients. He handles patent, trademark, and trade secret matters for innovators and investors. Adam has a strong record of success in multiparty, highly contested Hatch-Waxman litigation, in addition to other litigations involving advanced biochemistry, polymers, optics, manufacturing processes, and electronics. He has tried cases before multiple US district courts, briefed and argued cases before the US Court of Appeals for the Federal Circuit, and briefed bet-the-company...

 Andrew H. DeVoogd Member Boston Mintz Patent Litigation Licensing & Technology Transactions International Trade Commission Strategic IP Monetization & Licensing Federal District Court IP Due Diligence

Drew is an experienced patent litigator and trial attorney whose work encompasses a broad range of technologies. He regularly represents clients in high stakes International Trade Commission investigations involving some of the world's largest technology companies. He also litigates patent matters and other business disputes in federal district courts around the country, and advises clients in complex IP licensing and related transactions. Drew excels at helping clients make sense of nuanced legal issues while developing effective strategies to protect and leverage their intellectual property. 

Drew focuses his intellectual property practice in patent litigation, with an emphasis on Section 337 investigations in the International Trade Commission. Drew has participated in all phases of numerous ITC investigations involving some of the largest technology companies in the world. He has first-chair trial and strategy experience during multiple ITC evidentiary hearings, and regularly leads large litigation teams through fast-paced ITC investigations. Drew has also litigated patent infringement and trade secret cases and other complex business disputes in federal district courts across the country.  He has successfully argued on behalf of his clients during multiple Markman claim construction hearings, as well as on all manner of discovery, pretrial, and other motions, before the ITC and federal district courts.

In addition, Drew provides strategic counseling to help clients protect and leverage IP rights to maximize their value. Drew has participated in negotiating and closing numerous complex IP licensing and sale transactions, including elaborate multiparty agreements involving thousands of patents, as well as conducting pre-suit and transactional diligence relating to large portfolios of U.S. and foreign intellectual property assets. He also advises clients on trademark protection and related disputes.

Drew has worked in diverse technology areas such as embedded microprocessors, liquid crystal displays, graphics processors, consumer telecommunications systems, converged devices and related software and operating systems, mobile communications infrastructure, DDR4-compliant memory modules and their components, memory controllers, LED-based lighting systems, thermoplastics, electrical motors, and biochemical assays.

Drew is a member of the firm’s Pro Bono Committee. His own pro bono work includes representing asylum-seekers, as well as clients of the Mintz Domestic Violence Program in obtaining and extending 209A abuse prevention orders on behalf of victims of domestic violence and sexual assault, including on appeal.

Joseph Rutowski IP Attorney Mintz

Joseph’s practice focuses on intellectual property litigation and counseling on issues related to intellectual property rights. Joseph’s primary focus is in patent litigation, including the intricacies of Hatch-Waxman pharmaceutical litigation. He has extensive experience in every stage of litigation, from pre-suit investigations through appeal – including case initiation, fact and expert discovery, motion practice, and successful preparation for and participation in trials involving patent infringement allegations.

Joseph has represented...