The Software IP Report

Secondary Considerations Succeed at the PTAB

In a rare instance of relying on secondary considerations to overcome an allegation of obviousness, the Patent Trial and Appeals Board refused to institute an Inter Partes Review of U.S. Patent No. 8,550,271, directed to a crimp-on style metal crown cap for a glass bottle. World Bottling Cap, LLC v. Crown Packaging Tech., Inc., Case 2015-01651 (PTAB January 19, 2017).  The differences between the prior art and the claimed invention were minimal, namely the hardness of the steel used to make the cap. The PTAB’s determination of non-obviousness relied on a rarely successful arguments based on secondary factors of commercial success and industry praise.

Claim 1 of the ’271 patent reads:

A lightweight crown cap for application to a glass beverage bottle, comprising:

a shell formed of a material comprising steel having an average hardness of greater than 62 on the 30T scale, the shell including:

a peripheral skirt having, flutes downwardly depending therefrom, the flutes are capable of being crimped to affix the crown cap to a bottle; and

around panel integrally formed with the skirt, the panel including at least one recessed circular groove that has its center approximately at the longitudinal center of the panel; and

a liner located on the underside of the panel.

When analyzing the prior art, the PTAB found that U.S. Patent No. 2,233,904 to Wagner disclosed “a crown cap having the claimed physical shape and features of the claimed cap.” The only element of claim 1 not disclosed by Wagner was “the hardness of its steel.”  However, “the trend in the crown cap industry …  is to use progressively harder materials,” and the harder materials of claim 1 were known.  Accordingly, the ultimate question was whether making the Wagner cap out of known harder materials would have been obvious to one of ordinary skill in the art.

The Patent Owner disputed the obviousness of such modification, asserting that Wagner cap, and crown caps in general, were not made of the harder claimed material because spring back of the harder material inhibited proper crimping of the cap onto the bottle.  The Patent Owner additionally argued that secondary factors supported the conclusion of non-obviousness, namely, the commercial success and industrial praise received by the patented product.

To show commercial success, the Patent Owner presented evidence of an increase in market share in Peru from 88.7% to 95.5% over a five-year period.  When the patented cap was released to market, Peru lifted significant trade restrictions, thereby increasing market competition during this time period.  Petitioner argued that the Peru sales should not be considered because the market, i.e. Peru, was too narrowly defined and failed to include sales in the United States, Canada, Mexico, and/or the European Union. However, the PTAB did not find such argument compelling, as Petitioner did not provide sufficient evidence showing why such a distinction in the market scope was relevant.

The industry praise was broadly accepted by the PTAB as praise for benefits related to “cost and environmental impact” of the patented cap.  Such praise, they found, evidenced an “unexpected and welcome development” in the cap industry.

The PTAB, although unconvinced by Patent Owner’s arguments relating to the inoperability of Wagner with harder steels, nonetheless found in favor of the Patent Owner, relying on the commercial success and industry praise.

Lessons for Practice

Unfortunately, the PTAB’s decision does not provide any significant new insight on how to make a successful argument of non-obviousness based on the secondary considerations of commercial success and industry praise. However, it does give additional factual guideposts, e.g., a market share increase of 7%, for making such argument. It also provides a point of optimism for patent owners making similar arguments, and a reference when counseling clients, that the Board is open to persuasion based on the secondary factors.

Before and after this decision, the main focuses of making an argument based on commercial success and industry praise remain the same, namely, establishing a nexus between the patent claim and the sales and/or praise of the product, defining a relevant market, and showing success in that market based on an increase in market share.