Winning on Objective Indicia of Non-Obviousness in an IPR
| March 11, 2022
Quanergy Systems, Inc.. v. Velodyne Lidar USA, Inc.
Opinion by: O’Malley, Newman, and Lourie
Decided on February 4, 2022
Summary:
The Federal Circuit affirmed the PTAB’s validity decisions in two IPRs for Velodyne’s patent on lidar, relying substantially on Velodyne’s objective evidence of non-obviousness. Quanergy’s appeal attacked the PTAB’s presumption of a nexus between Velodyne’s product and the claimed invention. In particular, Quanergy challenged the nexus presumption by arguing that there were unclaimed features that attributed to the significance of Velodyne’s products, instead of the claimed invention. The Federal Circuit found the PTAB’s reasoning for how each alleged unclaimed feature resulted directly from claim limitations – such that Velodyne’s products are essentially the claimed invention – were found to be both adequate and reasonable.
Procedural History:
Quanergy Systems, Inc. (Quanergy) challenged the validity of Velodyne Lidar USA, Inc. (Velodyne) U.S. Patent 7,969,558 in two inter partes review (IPR) proceedings before the Patent Trial and Appeal Board (PTAB) as being obvious. The PTAB sustained the validity of the ‘558 patent. The Federal Circuit affirmed the PTAB’s decision.
Background:
The ‘558 patent relates to a lidar-based 3-D point cloud measuring system, useful in autonomous vehicles. “Lidar” is an acronym for “Laser Imaging Detection and Ranging.” Lidar technology uses a pulse of light to measure distance to objects. Each pulse of light for measurement results in one “pixel” and a collection of pixels is called a “point cloud.” A 3-D point cloud may be achieved by making measurements with the light pulses in up-down directions, as well as in 360 degrees. Representative claim 1 is as follows:
A lidar-based 3-D point cloud system comprising:
a support structure;
a plurality of laser emitters supported by the support structure;
a plurality of avalanche photodiode detectors supported by the support structure; and
a rotary component configured to rotate the plurality of laser emitters and the plurality of avalanche photodiode detectors at a speed of at least 200 RPM.
Quanergy relied on a Mizuno reference that uses a “triangulation system” measuring the distance to an object by detecting light reflected from the object to image sensors. Quanergy also relied on a Berkovic reference that teaches the triangulation technique, as well as a time-of-flight sensing technique. To win on obviousness, Quanergy relied on a broad interpretation of “lidar” to encompass both triangulation systems and “pulsed time-of-flight (ToF) lidar.”
However, the PTAB construed “lidar” to mean pulsed time-of-flight lidar because the ‘558 specification exclusively focuses on pulsed time-of-flight lidar in which distance is measured by the “time” of travel (i.e., flight) of the laser pulse to and from an object. The PTAB also found that Mizuno does not address a time-of-flight lidar system. Instead, Mizuno’s triangulation system is a short-range measuring device. And, the PTAB held that the skilled artisan would not have had a reasonable expectation of success in modifying Mizuno’s device to use pulsed time-of-flight lidar because Quanergy’s expert did not explain how or why a skilled artisan would have had an expectation of success in overcoming the problems in implementing a pulsed time-of-flight sensor in a short range measurement system such as that of Mizuno’s. Indeed, the Berkovic reference was found to suggest that the accuracy of pulsed time-of-flight lidar measurements degrades in shorter ranges, such as in Mizuno’s system.
But, more importantly, the PTAB relied substantially on Velodyne’s objective evidence of non-obviousness, which “clearly outweighs any presumed showing of obviousness by Quanergy” even if Quanergy satisfied obviousness with respect to the first three of the four Graham v John Deere factors (i.e., (1) scope and content of the prior art, (2) difference between the prior art and the claims at issue, (3) level of ordinary skill in the pertinent art, and (4) any objective indicia of nonobviousness).
Decision:
As for the initial claim construction issue regarding “lidar,” the Federal Circuit agreed with the strength of the intrinsic record focusing exclusively on pulsed time-of-flight lidar, collecting time-of-flight measurements, and taking note of the specification’s boasted ability to “collect approximately 1 million time of flight (ToF) distance points per second, overcoming commercial point cloud systems inability to meet the demands of autonomous vehicle navigation. Indeed, the court found Quanergy’s arguments for a broader construction to be inconsistent with the specification and therefore unreasonable.
Quanergy also challenged the PTAB’s presumption of a nexus between the claimed invention and Velodyne’s evidence of an unresolved long-felt need, industry praise, and commercial success.
To accord substantial weight to Velodyne’s objective evidence, that evidence must have a “nexus” to the claims, i.e., there must be a “legally and factually sufficient connection” between the evidence and the patented invention.
The Federal Circuit may presume a nexus to exist “when the patentee shows that the asserted objective evidence is tied to a specific product and that product ‘embodies the claimed features, and is co-extensive with them.” This co-extensiveness does not require a patentee to prove perfect correspondence between the product and the patent claim. Instead, it is sufficient to demonstrate that “the product is essentially the claimed invention.” In this analysis, “the fact finder must consider the unclaimed features of the stated products to determine their level of significance and their impact on the correspondence between the claim and the products.” “Some unclaimed features ‘amount to nothing more than additional insignificant features,’ such that presuming nexus is still appropriate.” “Other unclaimed features, like a ‘critical’ unclaimed feature that is claimed by a different patent and that materially impacts the product’s functionality, indicate that the claim is not coextensive with the product.”
This presumption of a nexus is rebuttable. However, a patent challenger may not rebut the presumption of nexus with argument alone. The patent challenger may present evidence showing that the proffered objective evidence was “due to extraneous factors other than the patented invention” such as unclaimed features or external factors like improvements in marketing or superior workmanship.
Here, Quanergy argued that the PTAB failed to consider the issue of unclaimed features before presuming a nexus and failed to provide an adequate factual basis or reasoned explanation dismissing the unclaimed features argument. Quanergy argued that Velodyne’s evidence relies on unclaimed features, including high frame-rate, dense 3D point cloud with a wide field of view and collecting measurements in an outward facing lidar for 360 degree azimuth and 26 degree vertical arc. And, such unclaimed features are critical and materially impact the functionality of Velodyne’s products. Therefore, the requisite presumption of a nexus does not exist.
However, the court found that the PTAB considered, and adequately/reasonably did so, the unclaimed features arguments, reasonably finding that Veloydyne’s products embody the full scope of the claimed invention and that the claimed invention is not merely a subcomponent of those products. First, the PTAB credited Velodyne’s expert testimony providing a detailed analysis mapping claim 1 to description of Velodyne’s product literature. Second, the claims call for a 3-D point cloud and the density of the cloud and the 360 degree horizontal field of view (i.e., the ”unclaimed features”) “result directly” from the limitation for “[rotating] the plurality of laser emitters and the plurality of avalanche photodiode detectors at a speed of at least 200 RPM.” The “3-D” feature necessarily infers both horizontal and vertical fields of view. The PTAB also pointed to (1) contemporaneous news articles describing the long-felt need for a lidar sensor that could capture points rapidly in all directions and produce a sufficiently dense 3-D point cloud for autonomous navigation, (2) articles praising Velodyne as the top lidar producer and Velodyne’s products, and (3) financial information and articles reflecting Velodyne’s revenue and market share to show commercial success.
The court also found the PTAB’s analysis of those unclaimed features arguments to be commensurate with Quanergy’s presentation of the issue. Here, the court found Quanergy’s unclaimed features arguments to be merely skeletal, undeveloped arguments. In contrast, the PTAB’s explanation of how each alleged unclaimed feature results directly from claim limitations – such that Velodyne’s products are essentially the claimed invention – were found to be both adequate and reasonable.
Quanergy also presented new arguments (not previously presented to the PTAB) that, to obtain the dense 3-D point cloud, Velodyne’s products require the unclaimed critical features of (1) more than 2 laser emitters, (2) a high pulse rate, (3) vertical angular separation between pairs of emitters and detectors, and (4) a rotation speed significantly greater than 200 RPM. However, the court held that these new arguments, presented only on appeal, were forfeited.
Takeaways:
- This case is a good primer for how to best present or attack objective indicia of non-obviousness.
- One key to success for objective indicia of non-obviousness is expert testimony mapping claimed features to product literature and explaining how and why that description of the product is essentially the claimed invention. Other helpful evidence includes contemporaneous news articles about the long-felt need, praise for the subject product, and financial information/articles showing the company’s commercial success, presumably tied to the subject product.
- If unclaimed features are asserted to attack a presumption of nexus, expert testimony explaining how those alleged unclaimed features are direct results from claimed limitations, so as to side step the attack, is helpful.
- Skeletal arguments are insufficient. If making an unclaimed features argument, it is best to flesh it out before the PTAB in detail, otherwise it will be considered forfeited if newly presented on appeal.
