Judges: Linn (author), Dyk, Prost
[Appealed from S.D. Fla., Senior Judge Ryskamp]
In Perfect Web Technologies, Inc. v. InfoUSA, Inc., No. 09-1105 (Fed. Cir. Dec. 2, 2009), the Federal Circuit agreed with the district court that the claims of U.S. Patent No. 6,631,400 ("the '400 patent") were obvious, holding that an obviousness analysis may include recourse to logic, judgment, and common sense when its reasoning is sufficiently articulated. Accordingly, the Federal Circuit affirmed the district court's SJ ruling of invalidity.
Perfect Web Technologies, Inc. ("Perfect Web") owns the '400 patent, which claims a four-step method of managing bulk e-mail distribution to groups of targeted consumers. Step (A) matches a target recipient profile with a group of target recipients, step (B) transmits bulk e-mails to the target recipients, and step (C) calculates the number of successfully received e-mails. The final step (D) repeats steps (A)-(C) until a minimum quantity of e-mails is successfully received. Perfect Web sued InfoUSA, Inc. ("InfoUSA") for infringement of the '400 patent. After a Markman hearing, but without issuing a formal claim construction order, the district court granted InfoUSA's SJ motion for invalidity. Using Perfect Web's claim construction, the district court found steps (A)-(C) disclosed in the prior art and step (D) obvious to virtually anyone. Perfect Web appealed.
On appeal, the Federal Circuit found that the district court properly applied common sense in its determination of obviousness. The Court noted that common sense can be a source of reasons to combine or modify prior art references, as observed by the Supreme Court in KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007). The Court explained that in order to invoke common sense, an obviousness analysis requires a factual foundation and a reasoned explanation that avoids conclusory generalizations, and that fact-finders may use common sense in addition to record evidence. The Court held that while an obviousness analysis depends on evidence supporting the required Graham factors, "it also may include recourse to logic, judgment, and common sense available to the person of ordinary skill that do not necessarily require explication in any reference or expert opinion." Slip op. at 9. Finally, the Federal Circuit stressed that when extrapolating a conclusion of obviousness from prior art, the district court must make its analysis explicit, articulating its reasoning with sufficient clarity for review.
"[O]n summary judgment, to invoke 'common sense' or any other basis for extrapolating from prior art to a conclusion of obviousness, a district court must articulate its reasoning with sufficient clarity for review. Slip op. at 9-10.
The Federal Circuit found that the district court had based its reasoning on evidence appearing in the record and had adequately explained its invocation of common sense. The Court explained that Perfect Web conceded that the prior art disclosed steps (A)-(C), that step (D) simply recited repetition of a known procedure until success is achieved, and that the district court correctly pointed out that one could do little else than try again if the first three steps were not successful. The Court posited that if the technology were complex, an expert opinion may be required to appreciate the value of repeating known steps, but that this was not required in the present case.
Although the Federal Circuit found that expert evidence was not necessary in this case, it stated that expert evidence supported the district court's conclusion. The Court cited the opinions of InfoUSA's two experts, each concluding that it would be obvious to repeat the matching, transmitting, and calculating steps until the delivered quantity was achieved. Although Perfect Web's expert stated that the '400 patent was not obvious, the Court found his opinion insufficient to prevent SJ because it was based on irrelevant prior art and did not directly address the nonobviousness of repeating steps (A)-(C).
Next, the Court found that the record supported a conclusion that the invention would have been obvious to try. Noting that the experts identified three potential solutions to the problem, the Court stated that simple logic suggested that repeating the first three steps would produce the most successful solution and there was no evidence to show this method offered unexpected results. The Court held that the finite number of identified, predictable solutions suggested that the claimed methods were obvious to try.
The Federal Circuit then rejected Perfect Web's argument that the district court should have construed the claims before deciding validity. In doing so, the Federal Circuit noted that the district court properly adopted Perfect Web's claim constructions, that none of the claim terms in dispute were relevant to the obviousness of repeating steps (A)-(C), and that Perfect Web failed to identify any construction that would change the obviousness analysis.
Having found the claims obvious, the Federal Circuit rejected Perfect Web's contention that the evidence showed the invention satisfied a long-felt and unmet need. The Court stated that no evidence existed to explain how long the need was felt or when the problem first arose. Although Perfect Web's expert testified that the '400 patent provided improved efficiency, the Court remarked on the lack of supporting data, for example, showing that the invention actually reduced marketing costs, time, or the number of consumers who opted out. Finally, the Court reiterated that evidence of secondary considerations does not always overcome a strong prima facie showing of obviousness.
Because the Court found the '400 patent invalid for obviousness, it declined to address other alternative reasons for holding the '400 patent invalid.
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