Plasmart v. Kappos & Wang (Fed. Cir. 2012)
Jar Chen Wang's company Wincell sells the TwistCar and owns patent No. 6,722,674. PlaSmart sells the similar product – PlasmaCar. The toy cars look virtually identical to one another and operate the same way – twisting the handlebars make them go.
Wang threatened, PlaSmart sued for DJ and then filed for inter partes reexamination in 2008. As with all reexaminations, the issue is whether the prior art renders the claimed invention unpatentable. The BPAI found several of the claims patentable. On appeal, however, the Federal Circuit has reversed.
USPTO Board factual findings are reviewed for substantial evidence. This is a low standard that results in an affirmance so long as more than a scintilla of evidence supports the Board's conclusions. Legal conclusions made by the Board are reviewed de novo. Thus, as you might imagine,
Obviousness is somewhat tricky – the ultimate conclusion of obviousness is a question of law. However, that conclusion must be based upon factual predicates outlined in Graham v. John Deere Co., 383 U.S. 1 (1966). In KSR, the Supreme Court wrote that "[t]he combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results." KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398 (2007). That statement seems to be one applied as part of the final question of obviousness that would also be reviewed de novo on appeal.
Factual versus Legal Conclusions: The language of the opinion here is somewhat unclear, but the Federal Circuit appears to have accepted all of the BPAI's factual findings regarding the scope and content of the prior art; the level of skill in the art; and the differences between the claimed invention and the prior art. However, the court rejected the BPAI's ultimate conclusion obvious – holding that the "minor distinctions" identified by the Board were insufficient to distinguish the claimed invention from the prior art. Another way to look at the case is that the court rejected the Board's factual conclusion that the differences between the claimed invention and the prior art were major.
This case highlights the trouble that I have in our obviousness jurisprudence. In most cases, the Graham analysis does not do a very good job of leading to an answer of the obviousness question. Thus, even after determining the scope and content of the prior art; the differences between the claimed invention and the prior art; the level of ordinary skill in the prior art; and any secondary factors, the court (or PTO) still has a large amount of analysis/discretion in determining whether those factors lead to a conclusion of obviousness.