Intercontinental Great Brands LLC v. Kellogg N. Am. Co., Nos. 2015-2082, 2015-2084, 2017 U.S. App. LEXIS 17258 (Fed. Cir. Sep. 7, 2017) (Before Prost, C.J., Reyna, and Taranto, J.) (Opinion for the court, Taranto, J.) (Dissenting in part, Reyna, J.).
In 2013, Kraft Foods (now Intercontinental Great Brands) filed suit against Kellogg for infringement of U.S. Patent No. 6,918,532, which issued in 2005. The patent claims a combination of two kinds of food packaging. One, commonly used for cookies, has a frame surrounded by a wrapper. The other, commonly used for wet wipes, has a label that is pulled back to access the contents, and then is put back in place, to reseal the package and preserve the remaining items.
In a 2007 ex parte reexamination, the examiner rejected all but two claims of the ?532 patent, which Kraft added. The examiner relied on a short 2011 article published in Packaging News, which displayed and described “Re-Seal It” packaging. The Board reversed the rejections and distinguished the ?532 patent, by relying on a phrase in the article which asserted the conventionality of wrapping film. The reexamination certificate issued with the original claims 1-25 and new claims 26-67.
The district court granted summary judgment to Kellogg, finding the claims of the ?532 invalid for obviousness based on prior art patents showing frame packaging for cookies and two articles in Machinery Update describing and showing a peel-back resealable package with a tray for food items. The court concluded that all claim elements except the “frame” element were shown in the Machinery Update articles and the “frame” element was shown in the prior art cookie packaging. The absence of a “convenient opening and reclosing arrangement” was a “known problem” for cookie packaging and Machinery Update showed a resealable tray that provided a solution to the problem. Thus, a skilled artisan would have been motivated to combine the Machinery Update “tray” with the “frame” taught by the known cookie packaging. The court found that Kraft’s evidence of secondary considerations, though strong, was not sufficient to overcome Kellogg’s prima facie showing of obviousness.
The district court, also on summary judgment, rejected Kellogg’s counterclaim for unenforceability due to inequitable conduct. Kellogg argued that Kraft did not tell the Board that the phrase in Packaging News about the conventionality of the wrapping film, on which the Board principally relied, was actually a misprint. The court concluded that Kraft’s counsel “merely restated the contents of the misprinted article” and there was no evidence that counsel “knowingly failed to identify the inconsistency between the two articles.”
Kraft appealed the district court’s finding of invalidity. Kellogg cross-appealed the court’s decision regarding unenforceability. The Federal Circuit affirmed both findings.
Kraft argued that the district court treated its objective evidence of non-obviousness as an “afterthought.” The Court disagreed, finding that the district court followed the Supreme Court’s instructions in KSR and Graham, and “drew its conclusion of obviousness only after, not before, considering the objective indicia.” Before reviewing the objective indicia, the court concluded only that Kellogg made a strong prima facie showing of obviousness based on the Graham factors, because the artisan would have been motivated to combine “a resealable container and a frame big enough to contain cookies.” Kraft argued that objective indicia must be evaluated before deciding whether a skilled artisan would have been motivated to combine prior art, but did not cite any authority.
Kraft also argued that the district court improperly resolved genuine issues of disputed facts on summary judgment. The Court disagreed. First, the Machinery Update articles disclosed all elements of the claims in combination except the required “frame,” which was taught by cookie packaging patents. Second, the absence of a resealable package was a known problem for cookies. Third, a skilled artisan using ordinary creativity would have been motivated to combine the Machinery Update packaging with the known cookie packaging to find the challenged invention obvious. These were the only reasonable conclusions based on the evidence. The Court rejected several other arguments presented by Kraft, including that Kellogg did not present expert testimony on motivation to combine and that there was more than one reasonable inference about whether a skilled artisan had a motivation to combine the Machinery Update article with cookie packaging prior art.
Finally, Kraft argued that Kellogg had not overcome its “enhanced burden” of proving invalidity based on the same prior art (the Machinery Update articles and the Packaging News article) that was before the Board during reexamination. The Court disagreed, finding that “the showing of obviousness is sufficiently strong that no PTO contrary determination could alter the conclusion about summary judgment.” Additionally, the Court noted that there was no evidence that the Board actually considered the Machinery Update articles during the reexamination, only that it considered and relied upon the Packaging News article.
In its cross-appeal, Kellogg argued that the district court erred in rejecting Kellogg’s claim of inequitable conduct. Kellogg urged again that Kraft’s failure to inform the Board of the misprint constituted inequitable conduct. The Court found no reversible error in the district court’s conclusion. While there was no question that the Board relied on the misprinted sentence, Kellogg did not prove that Kraft had a “specific intent to mislead or deceive the PTO.” Kellogg did not show that Kraft actually knew the sentence was a misprint and, in the face of that knowledge, deliberately failed to inform the Board of the misprint with an intent to deceive the Board.
Judge Reyna dissented regarding the Court’s decision to affirm the summary judgment of obviousness. He believes the district court erred in concluding that Kellogg presented a prima facie case of obviousness before it considered Kraft’s evidence of objective indicia of nonobviousness. Nothing in Graham or KSR requires courts to analyze the first three Graham factors first, make a prima facie determination of obviousness, and only then examine objective indicia. According to Reyna, this approach “excludes objective indicia in the primary analysis and artificially creates a heightened standard of proof for objective indicia.” Judge Reyna would have district courts consider all factual evidence, including objective indicia, and only then draw a conclusion regarding obviousness.
Objective indicia must be evaluated before drawing an ultimate conclusion on obviousness, but are not necessarily part of a prima facie “motivation-to-combine” analysis. To prove inequitable conduct based on failure to correct a misrepresentation, the moving party must show actual knowledge of a material misrepresentation and a deliberate failure to inform the PTO with an intent to deceive.