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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`__________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________________
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`FOX Factory, Inc.,
`Petitioner,
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`v.
`
`SRAM, LLC,
`Patent Owner.
`
`__________________
`
`Case IPR2017-00118
`U.S. Patent No. 9,182,027
`__________________
`
`PETITIONER’S SUR-REPLY BRIEF ON REMAND
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`Case IPR2017-00118
`U.S. Patent No. 9,182,027
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`I.
`II.
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`TABLE OF CONTENTS
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`SRAM Has Failed to Meet Its Burden to Prove Nexus. .................................. 1
`SRAM Has Not Proven the Long-Felt Need Was Solved as a “Direct
`Result” of the Claimed Combination, as Opposed to Other X-Sync
`Features. ........................................................................................................... 4
`SRAM Mischaracterizes the Law Regarding Licenses and Nexus ................. 8
`III.
`IV. SRAM Both Ignores and Mischaracterizes Controlling Federal Circuit
`Law Regarding Copying .................................................................................. 9
`The Challenged Claims Should Be Ruled Unpatentable...............................10
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`V.
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`i
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`Case IPR2017-00118
`U.S. Patent No. 9,182,027
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`TABLE OF AUTHORITIES
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` Page(s)
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`Federal Cases
`In re Cree, Inc.,
`818 F.3d 694 (Fed. Cir. 2016) .............................................................................. 6
`In re Cyclobenzaprine Hydrochloride Extended-Release Capsule
`Patent Litig., 676 F.3d 1063 (Fed. Cir. 2012) ...................................................... 7
`FOX Factory, Inc. v. SRAM, LLC,
`944 F.3d 1366 (Fed. Cir. 2019) ...................................................................passim
`In re Huang,
`100 F.3d 135 (Fed. Cir. 1996) ...................................................................... 1, 3, 6
`Iron Grip Barbell Co. v. USA Sports, Inc.,
`392 F.3d 1317 (Fed. Cir. 2004). ..................................................................... 8, 10
`J.T. Eaton & Co. v. Atl. Paste & Glue Co.,
`106 F.3d 1563 (Fed. Cir. 1997) ............................................................................ 1
`Ormco Corp. v. Align Tech., Inc.,
`463 F.3d 1299 (Fed. Cir. 2006) ............................................................................ 2
`Perfect Web Techs., Inc. v. InfoUSA, Inc.,
`587 F.3d 1324 (Fed. Cir. 2009) ........................................................................ 5-6
`In re Piasecki,
`745 F.2d 1468 (Fed. Cir. 1984) ............................................................................ 7
`Shoes by Firebug LLC v. Stride Rite Children’s Grp., LLC,
`962 F.3d 1362 (Fed. Cir. 2020) ............................................................................ 8
`WBIP, LLC v. Kohler Co.,
`829 F.3d 1317 (Fed. Cir. 2016) ............................................................................ 3
`Wm. Wrigley Jr. Co. v. Cadbury Adams USA LLC,
`683 F.3d 1356 (Fed. Cir. 2012) ........................................................................ 1, 9
`
`ii
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`
`
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`Wyers v. Master Lock Co.,
`616 F.3d 1231 (Fed. Cir. 2010) ............................................................................ 2
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`Case IPR2017-00118
`U.S. Patent No. 9,182,027
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`iii
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`I.
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`Case IPR2017-00118
`U.S. Patent No. 9,182,027
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`SRAM Has Failed to Meet Its Burden to Prove Nexus.
`The burden on remand is entirely on SRAM to prove, if it can, “that the
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`evidence of secondary considerations is attributable to the claimed combination of
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`wide and narrow teeth with inboard . . . offset teeth, as opposed to, for example,
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`prior art features in isolation or unclaimed features [in the X-Sync].” FOX Factory,
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`Inc. v. SRAM, LLC, 944 F.3d 1366, 1378 (Fed. Cir. 2019) (bold type added). This
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`means that SRAM must prove that its secondary considerations evidence is the
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`“‘direct result of the unique characteristics of the claimed invention,’” i.e., the
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`combination of inboard offset, narrow-wide teeth, not the X-Sync. Id. at 1373-74
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`(quoting In re Huang, 100 F.3d 135, 140 (Fed. Cir. 1996)) (emphasis added); see
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`also Wm. Wrigley Jr. Co. v. Cadbury Adams USA LLC, 683 F.3d 1356, 1364 (Fed.
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`Cir. 2012) (finding lack of nexus where patentee failed to show the claimed
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`combination “led to” copying); J.T. Eaton & Co. v. Atl. Paste & Glue Co., 106 F.3d
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`1563, 1571 (Fed. Cir. 1997) (requiring patentee to show that the commercial success
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`of the product “results from” the claimed invention).
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`SRAM has not met its burden to prove direct nexus. More specifically, it has
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`not proven that the claimed inboard offset, narrow-wide teeth combination was
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`“directly” responsible for (FOX, 944 F.3d at 1373-74) or “led to” (Wrigley, 683 F.3d
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`at 1364) its secondary considerations evidence. SRAM tries to disguise its failure of
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`proof by devoting most of its papers to rehashing its secondary considerations
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`1
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`evidence. But whether that evidence exists is not the issue on remand. Instead, the
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`U.S. Patent No. 9,182,027
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`issue is whether SRAM has proven a nexus between that evidence and the claimed
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`combination of offset, narrow-wide teeth. See Wyers v. Master Lock Co., 616 F.3d
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`1231, 1246 (Fed. Cir. 2010) (finding secondary considerations evidence not
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`sufficient to demonstrate non-obviousness, and requiring that “the patentee must
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`establish a nexus between the evidence of [secondary considerations] and the
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`patented invention”); Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299, 1311-12
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`(Fed. Cir. 2006) (“Evidence of commercial success, or other secondary
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`considerations, is only significant if there is a nexus between the claimed invention
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`and the commercial success.”). And SRAM has not proven that nexus for inboard
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`offset, narrow-wide teeth and its secondary considerations.
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`SRAM raises a number of other non-issues. First, SRAM repeatedly says the
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`Federal Circuit’s test “only” requires it to “prov[e] the degree to which evidence of
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`secondary considerations tied to a product is attributable to a particular claimed
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`invention.” SRAM Reply (Paper 68) at 1, 8 (quoting FOX, 944 F.3d at 1378). By
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`adding “only” to the Federal Circuit’s statement, SRAM suggests its hurdle on
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`remand is quite low. But the Federal Circuit’s test clearly requires more than SRAM
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`suggests: SRAM must prove its evidence is the “direct result of the unique
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`characteristics of the claimed invention,’” “as opposed to unclaimed features,” such
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`as those claimed in the ’250 patent. FOX, 944 F.3d at 1374, 1378. As explained
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`2
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`below, SRAM fails this test.
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`U.S. Patent No. 9,182,027
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`Second, SRAM argues that FOX failed to present rebuttal evidence (Paper 68
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`at 1, 10)—which FOX disputes—but SRAM’s failure to prove nexus is the end of
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`the inquiry. There is nothing for FOX to rebut. See Huang, 100 F.3d at 140 (ending
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`secondary considerations inquiry because patentee “simply has not carried his
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`burden to prove that a nexus existed between any commercial success and the novel
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`features claimed in the application”).
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`Third, SRAM peppers its reply with the phrase “substantial evidence,” but
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`there is no “substantial evidence” test in this remand. The Federal Circuit reversed
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`the Board’s presumption of nexus and ordered it to “reevaluate the import of the
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`evidence” with the burden of proving nexus on SRAM. FOX, 944 F.3d at 1380.
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`Fourth, SRAM cites WBIP, LLC v. Kohler Co., 829 F.3d 1317 (Fed. Cir. 2016)
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`to argue that it need not prove its secondary considerations evidence is “tied
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`exclusively to claim elements not disclosed in a particular prior art reference.” Paper
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`68 at 2. FOX has neither tried to impose such a requirement on SRAM nor argued
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`SRAM must “prove a negative,” as it contends. Id. Instead, SRAM must prove a
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`direct nexus between the claimed combination and its secondary considerations
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`evidence. FOX, 944 F.3d at 1378. Which SRAM has failed to do.
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`3
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`II.
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`Case IPR2017-00118
`U.S. Patent No. 9,182,027
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`SRAM Has Not Proven the Long-Felt Need Was Solved as a
`“Direct Result” of the Claimed Combination, as Opposed to
`Other X-Sync Features.
`The Federal Circuit specifically ordered that SRAM must show the ’027
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`patent’s claimed inboard offset, narrow-wide combination satisfied the long-felt
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`need. FOX, 944 F.3d at 1378. SRAM cannot, and it sidesteps its burden by conflating
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`the ’027 patent with the X-Sync while entirely ignoring the contribution of what it
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`called the “critical,” “enabling technology” of the ’250 patent. See Paper 66 at 3-4.
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`In its opening brief, FOX challenged SRAM to explain how SRAM’s expert’s
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`conclusory assertion—the “claimed invention of the ’027 patent solves a long-felt
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`need”—satisfied SRAM’s burden to show that the solution to the long-felt need was
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`the “direct result” of the ’027 patent, particularly when SRAM’s expert said the exact
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`same thing about the ’250 patent. See id. at 3-8. SRAM failed to rise to the challenge.
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`SRAM’s reply fails to even mention the ’250 patent or acknowledge its expert’s
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`identical declarations for the ’027 and ’250 IPRs on this point.
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`SRAM instead tries to change the subject by contending that FOX
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`mischaracterized SRAM’s expert declaration by not quoting two sentences from it.
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`Paper 68 at 5-6. SRAM’s argument is meritless. FOX’s opening brief quoted the
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`same excerpts that SRAM emphasized in its opening brief (and more). Compare
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`Paper 65 at 11 with Paper 66 at 5-7. The allegedly omitted sentences change nothing
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`because they do not assert that the combination claimed in the ’027 patent met a
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`4
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`long-felt need. See Ex. 2074 ¶84. But more importantly, SRAM’s accusation ignores
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`that the entirety of the expert’s boilerplate long-felt need opinion focuses on the X-
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`Sync overall, as FOX explained in its opening brief and as reflected in the Board’s
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`decision. Paper 59 (Final Written Decision) at 38 (“We also find that the Patent
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`Owner has demonstrated that the X-Sync met this long-felt need. In particular, Dr.
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`Sturges testified that the X-Sync chainring met this need. Ex. 2074 ¶¶ 80-86.”)
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`(emphasis added). Nor did SRAM’s expert distinguish any contribution from the
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`combination claimed in the ’027 patent from contributions of other X-Sync features
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`(e.g., features claimed in the ’250 patent or shown in the prior art). FOX, 944 F.3d
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`at 1378 (“SRAM will bear the burden of proving that the evidence of secondary
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`considerations is attributable to the claimed combination of wide and narrow teeth
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`with inboard … offset teeth, as opposed to, for example, prior art features in
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`isolation or unclaimed features.”) (bold type added).
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`SRAM’s expert’s conflation of the ’027 patent with the X-Sync itself renders
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`his declaration useless for the task the Federal Circuit assigned to SRAM on remand.
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`But so does its conclusory nature. That is, having an expert testify only that the
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`“claimed invention” or the “challenged claims” of the ’027 patent (and the ’250
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`patent) satisfied the long-felt need, without any explanation or supporting evidence,
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`is inadequate, as a matter of law, to establish nexus. For example, in Perfect Web
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`Techs., Inc. v. InfoUSA, Inc., 587 F.3d 1324, 1332-33 (Fed. Cir. 2009), the Federal
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`5
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`Circuit ruled that an expert’s conclusory assertion that the patent solved a long-felt
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`need was insufficient because it cited no data or other factual support.
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`(“Krishnamurthy made the bare assertion that the patent provided ‘improved
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`efficiency,’ . . . but cited no supporting data to show, for example, that the invention
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`actually reduced marketing costs . . . .”); see also In re Cree, Inc., 818 F.3d 694, 704
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`(Fed. Cir. 2016) (affirming finding of lack of nexus because “the record is
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`completely silent on whether the commercial success was caused by the subject
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`matter of the ’175 patent as distinct from the prior art”); Huang, 100 F.3d at 140
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`(ruling the inventor’s bare opinion insufficient to prove nexus for commercial
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`success without supporting evidence, such as “an affidavit from the purchaser
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`explaining that the product was purchased due to the claimed features”).
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`SRAM further implores the Board to simply restate its prior findings on long-
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`felt need. Paper 68 at 3-5. But the Board’s findings do not address the Federal
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`Circuit’s question on remand because they credit the X-Sync for solving the long-
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`felt need, not the combination claimed in the ’027 patent specifically (Paper 59 at 38
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`(quoted above)), and were made under a presumption of nexus standard (now
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`reversed). Those findings therefore cannot establish that a long-felt need was solved
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`as the “direct result” (FOX, 944 F.3d at 1373-74) of the “claimed combination of
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`wide and narrow teeth with inboard … offset teeth” (id. at 1378).
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`SRAM’s assertion that it has proven failure of others, which it characterizes
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`6
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`as different from (but related to) long-felt need, is also incorrect. Paper 68 at 8.
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`SRAM’s citations to In re Cyclobenzaprine Hydrochloride Extended-Release
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`Capsule Patent Litig., 676 F.3d 1063 (Fed. Cir. 2012) and In re Piasecki, 745 F.2d
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`1468 (Fed. Cir. 1984) are unavailing. In Cyclobezaprine, the evidence showed that
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`a pharmaceutical company (ALZA) had actually “tried but failed to develop [the
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`patented drug]”; that ALZA’s candidate drug failed in clinical trials; and that ALZA
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`lost $10M in its failed attempt. 676 F.3d at 1081. There was similar evidence in
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`Piasecki. 745 F.2d at 1475. But SRAM has no evidence that anyone actually tried
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`but failed to make a chainring that improved chain retention without increasing
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`complexity, weight, and/or drivetrain friction, and the Board made no such finding.
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`Despite SRAM’s speculation about why Shimano chose to not immediately
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`commercialize the invention disclosed in JP-Shimano, SRAM has no evidence that
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`Shimano was even interested at the relevant time in commercializing chainrings for
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`the niche mountain-biking market, or that Shimano tried but failed to develop such
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`a chainring. And even if SRAM had presented such evidence, it still has not met its
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`burden to prove a nexus for the same reasons discussed above for long-felt need, and
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`also because Shimano’s eventual narrow-wide chainring did not include an offset
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`(as explained in FOX’s opening brief, Paper 66 at 9-10).
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`SRAM’s arguments regarding passage of time are similarly unavailing.
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`Absent a showing of nexus for long-felt need or failure of others, the time between
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`7
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`the prior art and the filing of the ’027 patent is not evidence of non-obviousness.
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`Iron Grip Barbell Co. v. USA Sports, Inc., 392 F.3d 1317, 1325 (Fed. Cir. 2004).
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`III. SRAM Mischaracterizes the Law Regarding Licenses and Nexus
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`SRAM argues that because the Board previously gave its licenses “some, but
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`not significant weight” (Paper 59 at 42), SRAM’s licenses should be given at least
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`that minimal weight on remand. Paper 68 at 9. SRAM contends that “[n]othing has
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`changed since the trial.” Id. SRAM could not be more wrong; the Federal Circuit
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`reversed the prior presumption of nexus and ordered the Board to “reevaluate the
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`import of the evidence of secondary considerations” with the burden of establishing
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`direct nexus on SRAM. FOX, 944 F.3d at 1380.
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`
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`SRAM asserts it met its burden by pointing to the text of the licenses
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`themselves. But the licenses cover numerous patents and thus do not establish nexus
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`to the claimed combination of the ’027 patent. See Shoes by Firebug LLC v. Stride
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`Rite Children’s Grp., LLC, 962 F.3d 1362, 1372 (Fed. Cir. 2020) (“[b]ecause the
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`licenses include numerous intellectual property rights in addition to the [patents-at-
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`issue], the agreements on their face do not establish a nexus between the commercial
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`interest in Firebug’s product and the claims”). SRAM attempts to distinguish
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`Firebug on the ground that the licenses in that case were for “unrelated patents,” but
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`SRAM’s licenses are for “related patents.” Paper 68 at 9 n.2. But FOX precludes that
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`attempted distinction because there is no dispute SRAM’s patents “do not cover the
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`8
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`same invention.” 944 F.3d at 1378. At bottom, SRAM has no evidence that the
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`U.S. Patent No. 9,182,027
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`licenses were the “direct result” of the claimed combination in the ’027 patent.
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`IV. SRAM Both Ignores and Mischaracterizes Controlling Federal
`Circuit Law Regarding Copying
`SRAM rehashes its arguments for copying itself, but underscores its failure to
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`prove a nexus for copying by not even mentioning Wrigley, 683 F.3d at 1364, which
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`FOX discussed in detail in its opening brief. Paper 66 at 14-15. To prove a nexus for
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`copying, Wrigley requires SRAM to prove that the allegedly “novel combination”
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`of inboard offset, narrow-wide teeth is what “led to” copying of numerous X-Sync
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`features. See 683 F.3d at 1364 (finding failure to demonstrate nexus for copying
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`because Wrigley “had not shown evidence suggesting that ‘the novel combination
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`of WS-23 and menthol is what led Cadbury to copy Wrigley’s chewing gums.’”)
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`(emphasis added). SRAM has likewise not met that requirement.
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`The Wrigley court also found that the patentee’s attempt to prove nexus was
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`undermined by the defendant’s copying of numerous other product features beyond
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`the novel combination. Id. FOX explained that SRAM’s nexus argument is similarly
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`undermined because SRAM accused FOX of copying several X-Sync features in
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`addition to offset, narrow-wide teeth. Paper 66 at 13-15. Without ever mentioning
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`Wrigley, SRAM argues that “copying more than the patent claims is required to have
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`any significance in the obviousness analysis” (Paper 68 at 10), but that conflicts with
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`9
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`Wrigley. SRAM apparently relies on Iron Grip Barbell’s rule that proof of copying
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`U.S. Patent No. 9,182,027
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`itself requires “proof of replication of a specific product” and not just the patented
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`feature, lest every infringement case become a copying case. 392 F.3d at 1325. But
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`Wrigley addresses a different issue, i.e., a patentee’s burden to prove nexus. There is
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`thus no inconsistency between the rulings in Wrigley and Iron Grip Barbell.
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`V. The Challenged Claims Should Be Ruled Unpatentable
`SRAM mischaracterizes FOX’s combination of Thompson and JP-Shimano
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`as “tenuous.” Paper 68 at 3, 8. It is not. The Board found that “Petitioner has shown
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`a sufficient rationale to combine the teachings of the references.” Paper 59 at 15, 47
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`(“Petitioner has shown there would have been a rationale to combine the
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`references.”). The Board further found that SRAM’s arguments against the
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`motivation to combine, taken together, weaken it only “slightly” (id. at 17), and that
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`FOX’s showing of obviousness was outweighed by SRAM’s “extremely strong”
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`secondary considerations evidence only when a presumption of nexus was applied
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`(id. at 47). But SRAM’s failure to prove nexus for any of its secondary
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`considerations on remand means its evidence is irrelevant; thus, even if the evidence
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`is given any weight, it does not outweigh FOX’s obviousness showing.
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`Dated: July 23, 2020
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`Respectfully submitted,
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` By: /Joshua L. Goldberg/
`Joshua L. Goldberg, Reg. No. 59,369
`Lead Counsel for FOX Factory, Inc.
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`10
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`Case IPR2017-00118
`U.S. Patent No. 9,182,027
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that a copy of the foregoing PETITIONER’S
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`SUR-REPLY BRIEF ON REMAND was served electronically via email on July
`
`23, 2020, in its entirety on the following:
`
`Michael J. Hickey
`Kirk A. Damman
`Benjamin J. Siders
`Richard B. Walsh, Jr.
`Lewis Rice, LLC
`600 Washington Avenue, Suite 2500
`St. Louis, MO 63101
`mhickey@lewisrice.com
`kdamman@lewisrice.com
`bsiders@lewisrice.com
`rwalsh@lewisrice.com
`
`
`
`Patent Owner has consented to service by email.
`
`
`Date: July 23, 2020
`
`
`
`By: /William Esper/
`William Esper
`Legal Assistant
`Finnegan, Henderson, Farabow,
`Garrett & Dunner, LLP
`
`
`
`
`
`
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