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`Case: 19-1544|Document:53 Page: 1 Filed: 06/17/2020
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`
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`2019-1544
`
`UNITED STATES COURT OF APPEALS FOR THE FEDERAL
`CIRCUIT
`
`FOX FACTORY,INC.,
`
`Appellant,
`
`Vv.
`
`SRAM, LLC,
`
`Appellee.
`
`Appeal from the United States Patent and Trademark Office,
`Patent Trial and Appeal Board in No. IPR2017-01440.
`
`FOX’S PETITION FOR PANEL REHEARING
`
`Joshua L. Goldberg
`Daniel F. Klodowski
`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
`901 New York Ave., NW
`Washington, DC 20001-4413
`(202) 408-4000
`
`Erik R. Puknys
`Robert F. McCauley
`Arpita Bhattacharyya
`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
`3300 Hillview Avenue
`Palo Alto, CA 94304-1203
`(650) 849-6600
`
`Attorneys for Appellant FOX Factory, Inc.
`
`

`

`
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`Case: 19-1544 Page:2_Filed: 06/17/2020Document:53
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`
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`CERTIFICATE OF INTEREST
`
`1. The full name of every party or amicus represented by meis:
`
`FOX Factory, Inc.
`
`2. The nameofthe real party in interest represented by me1s:
`
`RFE Holding (US) Corp.
`RFE Holding (Canada) Corp.
`
`3. All parent corporations and any publicly held companies that own 10
`percent or moreof the stock of the party represented by meare:
`
`FOX Factory Holding Corp. is the parent corporation of FOX
`Factory, Inc.
`
`BlackRock Fund Advisors owns 10% or more of stock in FOX
`Factory Holding Corp. and is a subsidiary of publicly held BlackRock,
`Inc.
`
`Kayne Anderson Rudnick Investment Management LLC, a
`subsidiary of Virtus Investment Advisors, Inc. owns 10% or more of
`stock in FOX Factory Holding Corp. Virtus Investment Advisors, Inc.
`is a subsidiary of publicly held Virtus Investment Partners, Inc.
`
`4. The names ofall law firms and the partnersor associates that
`appeared for the party or amicus now represented by mein thetrial
`court or agency or are expected to appearin this court (and who have
`not or will not enter an appearance in this case) are:
`
`None.
`
`5. The title and numberof any case knownto counsel to be pending in
`this or any other court or agency that will directly affect or be
`directly affected by this court’s decision in the pending appeal. See
`
`1
`
`

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`Fed. Cir. R. 47.4(a)(5) and 14.5(b). (The parties should attach
`continuation pages as necessary.)
`
`FOX Factory, Inc. v. SRAM, LLC, Case Nos. IPR2017-00118 and
`IPR2017-00472, Inter Partes Review of the parentof the patent-at-issue,
`U.S. Patent No. 9,182,027 (on remand from FOX Factory, Inc. v. SRAM,
`LLC., Nos. 2018-2024-2025, 944 F.3d 1366 (Fed. Cir. 2019)).
`
`SRAM, LLC v. RFE Holding (Canada) Corp., Case No. 1:15-cv-
`11362-JHL (N.D. IIL.) Gnvolving the ’027 patent)
`
`SRAM, LLC v. RFE Holding (Canada) Corp., Case No. 1:16-cv-
`05262-JHL (N.D. Ill.) Gnvolving the ’250 patent)
`
`Ex parte reexamination of the 027 patent, Reexamination Control
`No. 90/013,715
`
`Ex parte reexamination of the ’250 patent, Reexamination Control
`No. 90/013,831
`
`iB
`
`

`

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`Case: 19-1544. Page:4_Filed: 06/17/2020Document:53
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`
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`TABLE OF CONTENTS
`
`CERTIFICATE OF INTEREST ...0.... 0c cccccccccsssececeeneeececeeeneeeeeeneneeeeees i
`
`TABLE OF CONTENTS .........cccccccccecccceececceeeececeneeceeeeceeaeeseuseeeenesceeneeeeas iil
`
`TABLE OF AUTHORITIES ...... 0. cccece ccs esseceeeeceeeeeeeseneeeaeesceeeeeeees iv
`
`I.
`
`OR
`PANEL OVERLOOKED
`THE
`FACT
`THE
`MISAPPREHENDED ........ cece cecccccccenseccceeaeeceereeenseeceeeaereceesaaaeees 1
`
`Il. ARGUMENT FOR REHEARING1... cccececeesseesereeeeenseeeeeeeeeens 3
`
`A.
`
`B.
`
`The secondary-considerations issues in this appeal
`and in FOX I are virtually identical. ...........c cece eeeeeeeeneeeeee 3
`
`As FOX explained in its briefs, SRAM attributed
`great significance to the offset teeth feature claimed
`In the 7027 patent, ......... ccc ccc cccccceeseueeecencecaseeeseecsueenaeesenesenaeeees 6
`
`1.
`
`2.
`
`3.
`
`The record in this appeal reveals that SRAM
`represented to the Board that the ’027 patent
`materially
`contributed
`to
`the X-Sync’s
`PELFOLMANCE...........ceccceesccceenscceneeeccaesececenseeaeeceteesaaeneeeees 7
`
`FOX’s briefs expressly argued that SRAM’s
`assertions attributing the X-Sync’s improved
`performance to the 027 patent precluded a
`presumption of nexus for the ’250 patent..............ee 9
`
`SRAM continues to insist the 027 patent is
`responsible for the secondary considerations
`relating to the X-SYNC. ..........cccceeeeseceeeceeeeeeeeeaeeeeeseeneeees 11
`
`C.
`
`This case should be remanded because the Board’s
`only
`“findings”
`concerning nexus
`involved its
`erroneous decision tO PLESUME ONE. ..........eeeeeeeeceeeeceeeneeseeseere 12
`
`TIT. CONCLUSION ..0.... cece ccceseeeececesseeeceseueuseceeauaneaeceeeaeeeeeeensneeeeenes 15
`
`ill
`
`

`

`Case: 19-1544
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`Document:53
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`TABLE OF AUTHORITIES
`
`CASES
`
`Aqua Products v. Matal,
`872 F.3d 1290 (Fed. Cir. 2017) (em banc) ........cecceceeeceneeceeeeeeeeeeeenneees 15
`
`Fox Factory, Inc. v. SRAM, LLC,
`944 F.3d 1366 (Fed. Cir. 2019) 2.0... ccccceeccccneceeeneeeeeneeeneeeeeees passim
`
`Nike, Inc. v. Adidas AG,
`812 F.3d 1326 (Fed. Cir. 2016) oo... cececccccccccsessseececneeeecaeeececaeeeeeeeeees 15
`
`Standard Havens Products, Inc. v. Gencor Industries, Inc.,
`897 F.2d 511 (Fed. Cir. 1990) 0... ceceeecceceeesteeeeceeeeeeaeeeceeeeeeeenenes 12
`
`1V
`
`

`

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`I
`
`THE
`FACT
`THE
`MISAPPREHENDED
`
`PANEL OVERLOOKED OR
`
`The panel’s decision is based on an assumption that conflicts with
`
`the record. The panel believed that
`
`the facts of
`
`this case are
`
`distinguishable from Fox Factory, Inc. v. SRAM, LLC, 944 F.3d 1366
`
`(Fed. Cir. 2019) (“FOX I’), principally due to the panel’s mistaken belief
`
`that “Fox Factory ...does not attach any particular significance to the
`
`[chainring] teeth offset feature claimed in the 027 patent, and the record
`
`does notreflect that it was significant.” Slip op. at 8.
`
`But the record shows otherwise. SRAM repeatedly asserted that the
`
`027 patent’s claimed offset teeth are not just important features of
`
`SRAM’s X-Sync chainring, but they are critical to the X-Sync’s ability to
`
`retain a bicycle chain. In fact, SRAM called the ’027 patent’s offset,
`
`narrow-wide teeth “the enabling technology” for the X-Sync’s chain-
`
`retention functionality. FOX’s briefs specifically argued that SRAM’s
`
`frequent assertions of the 027 patent’s importance precluded any
`
`presumption of nexus between SRAM’s
`
`secondary-considerations |
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`evidence and the ’250 patent at issue in this appeal. Thus, FOX expressly
`
`made the significance of the ’027 patent’s offset teeth a major issue in
`
`this appeal.
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`

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`Given SRAM’s assertions regarding the importance of the offset
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`teeth—which are claimed in the 027 patent but not in the 250 patent—
`
`the X-Sync cannot be called, as the panel called it, “essentially the
`
`claimed invention” of the ’250 patent. Contra slip op. at 8. It necessarily
`
`follows, therefore, that the Board erred in presuming a nexus between
`
`SRAM’s asserted secondary considerations and the ’250 patent.
`
`And, although the panel opinion is unclear, it appears as if the
`
`panel might be under the mistaken impression that the Board found
`
`there was direct evidence of a nexus between the ’250 patent and the X-
`Sync chainring. Slip op. at 8. It did not. The Board’s decision was based
`
`on the presumption of nexus alone. Therefore, as in FOX I, the Court
`
`should remand this case to the Board to determine whether SRAM can
`
`prove a direct nexusfor the ’250 patent.
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`

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`
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`II. ARGUMENT FOR REHEARING
`
`A.
`
`The secondary-considerations issues in this appeal
`and in FOX IJ are virtually identical.
`
`This case presented the mirror imageof the situation in FOX J. In
`
`this appeal, SRAM’s ’250 patent, which claims a chainring with narrow-
`
`wide teeth having greater than 80% axial fill at the midpoint, was the
`
`patent being challenged. In FOX I, SRAM’s ’027 patent, which claims a
`
`chainring with offset, narrow wide teeth, was being challenged.
`
`It is undisputed that SRAM’s X-Sync chainring incorporates the
`
`features claimed in both patents. FOX I, 944 F.3d at 1374-75. It is also
`
`undisputed that the X-Sync includes many other features that improve
`
`chain retention, and someof those are covered by patents other than the
`027 and ’250.Id. at 1375-76.
`
`Butof all the chain-retention features incorporated into the X-Sync,
`
`SRAM held out the features claimed in the 027 and ’250 patents as the
`
`most important. SRAM hasreferred to each of them as “the enabling
`
`technology’ making the X-Sync’s improved ability to retain a chain
`
`possible. Compare Appx5617 (“The enabling technology [for the X-Sync]
`
`combined teeth that are offset from the center of the ring (asymmetric
`offsets’) with teeth that alternated between teeth having narrow and
`
`3
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`wide tooth tips (narrow and wide teeth’)”) with Appx521 (“Amongother
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`things, the enabling technology of the X-Sync chainring combined teeth
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`that alternated between teeth having narrow and wide tooth tips
`
`(narrow and wide teeth’) with specifically claimed axialfill percentages
`
`for the teeth within the spaces of a bicycle chain (‘gapfilling’).”).
`
`As noted in FOX I, even though the two patents cover different
`
`features, the secondary-considerations evidence was the same in both
`
`cases: the same sales; the same alleged industry skepticism and praise;
`
`the same alleged long-felt need; the samelicenses; and the sameallegedly
`
`copied products. FOX I, 944 F.3d at 1378; compare Appx50-68 with
`
`Appx4874-4890. SRAM’s evidence and arguments were so similar, in
`
`fact, that much of the Board’s explanation for presuming a nexus between
`
`the evidence and the ’250 patent was essentially cut & paste from its
`
`explanation for presuming a nexus between the same evidence and the |
`
`027 patent. Compare Appx36-46 with Appx4862-4873.
`
`Both cases also involved the same issue: whether the Board erred
`
`in granting SRAM a presumption that the challenged patent was
`
`responsible for the secondary-considerations evidence SRAM asserted for
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`the X-Sync despite the presence of several other features in the X-Sync,
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`many of them separately patented, that improvedits ability to retain a
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`bicycle chain. See FOX Blue Briefat 4, 6-7, 31-32, 42-43, 65-66; SRAM
`
`Red Brief at 2; FOX Gray Brief at 25-28; FOX I, 944 F.3d at 1374-76.
`
`Because the secondary-considerations issues in both cases were so
`
`similar, FOX reported in its Blue Brief that whatever this Court decides
`
`in FOX I “will likely resolve the secondary-considerations issues raised
`
`here.” Blue Brief at 7 n.1. SRAM did not dispute FOX’s assertion.
`
`Shortly after the briefing in this case was complete, the FOX I
`
`decision issued. Referring specifically to the features claimed in the 027
`
`and ’250 patents, FOX I ruled that “[t]he same evidence of secondary
`
`considerations cannot be presumed to be attributable to two different
`
`combinationsof features.” Jd. at 1378. In so ruling, the FOX I Court also
`
`noted that “because there are one or more features not claimed by the
`
`027 patent
`
`that materially impact
`
`the functionality of the X-Sync
`
`products,
`
`including the >80% gap filling feature claimed in the ’250
`
`patent, nexus may not be presumed.” Jd. at 1376.
`
`After the FOX I decision issued, FOX filed a Rule 28() letter in this
`
`appeal explaining why “[t]he Board’s decision cannot stand in view of
`
`FOX I.” December 20, 2019, Rule 28G) Letter, Doc. 30. SRAM didnotfile
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`any letter in response or otherwise indicate its disagreement with FOX
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`on this issue. (In contrast, when FOX filed a second Rule 28() letter
`
`addressinga different issue, SRAM quicklyfiled its own letter explaining
`
`its disagreements with FOX. See Docs. 49, 50.)
`
`B. As FOX explained in its briefs, SRAM attributed
`great significance to the offset
`teeth feature
`claimed in the ’027 patent.
`
`This panel distinguished FOX I based primarily on its belief that
`
`“Fox Factory ... does not attach any particular significance to the teeth
`
`offset feature claimed in the 027 patent, and the record does not reflect
`
`that it was significant.” Slip op. at 8. But the record demonstrates the
`
`opposite:
`
`(1) SRAM expressly and repeatedly asserted that the offset
`
`teeth claimed in the ’027 patent are an important feature of the X-Sync,
`
`and (2) FOX expressly argued that these assertions by SRAM necessarily
`
`means that a nexus could not be presumed for the ’250 patent.
`
`Accordingly, and as explained morefully below, the X-Sync cannot
`
`be deemed “essentially the claimed invention”of the ’250 patent. Contra
`
`slip op. at 8. As the Court noted in FOXI, “because there are one or more
`
`features not claimed by the ’027 patent that materially impact the
`
`functionality of the X-Sync products,
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`including the >80% gap filling
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`feature claimed in the ’250 patent, nexus may not be presumed.” 944 F.3d
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`at 1376. For the same reason, there can be no presumption of nexusfor
`
`the ’250 patent because SRAM has insisted that the offset feature
`
`claimed in the ‘027 patent enhances chain retention and thus materially
`
`impacts the functionality of the X-Sync products.
`
`1.
`
`The record in this appeal reveals that SRAM
`represented to the Board that the ’027 patent
`materially contributed to
`the X-Sync’s
`performance.
`
`The Joint Appendix in this appeal includes numerousinstances of
`
`SRAM asserting that the narrow-wide, offset teeth of the 027 patent are
`
`critical to the X-Sync chainring’s chain-retention performance. Among
`
`these is the IPR brief where SRAMcalled the teeth offset feature claimed
`
`in the 027 patent the “enabling technology” that made the X-Sync
`
`chainring’s improved chain retention possible:
`
`This combination of [offset, narrow-wide teeth]
`features, amongst several others disclosed in the
`027 patent, leads to a chainring that will retain a
`chain in even the worst conditions.
`
`Appx5617.}
`
`1 The ’250 patent itself describes the offset feature as significant: “The
`offset feature provides better guiding of the chain to one side of the
`chainring.” Appx102[6:8-14].
`
`7
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`This block-quoted statementis particularly important becauseit is
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`essentially the same as SRAM’s statement regarding the significance of
`
`the ’250 patent invention (.e., the combination of the >80% axialfill and
`
`narrow-wide teeth) in the IPR concerning that patent, which was a
`
`significant factor in the outcome of FOX I:
`
`Moreover, in a separate IPR proceeding pertaining
`to the ’250 patent, SRAM touted this “combination
`of [80% axialfill and narrow-wide teeth] features”
`as, “amongst several others disclosed in the ’250
`patent,” one that “leads to a chainring that will
`retain a chain in even the worst conditions.”
`
`FOX I, 944 F.3d at 1375.
`
`SRAM’s description of the importance of the ’250 patent convinced
`
`the FOX I panel that the X-Sync could not be deemed coextensive with
`
`the ’027 patent. FOX I, 944 F.3d at 1375 (‘A patent claim is not
`
`coextensive with a product that includes a ‘critical’ unclaimed feature
`
`that is claimed by a different patent and that materially impacts the
`
`product’s functionality by ‘lead[ing] to a chainring that will retain a chain
`
`in even the worst conditions.”). Because SRAM made essentially the
`
`same statement explaining the importance of the 027 patent invention
`
`in the IPR for the 027 patent (Appx5617), the X-Sync cannot be deemed
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`coextensive with the ’250 patent either.
`
`8
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`2.
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`FOX’s briefs expressly argued that SRAM’s
`assertions attributing the X-Sync’s improved
`performance to the ’027 patent precluded a
`presumption of nexus for the ’250 patent.
`
`In its briefing for this appeal, FOX argued that the Board had
`
`improperly given SRAM a presumption of nexusfor the ’250 patent. Chief
`
`among FOX’s reasons were SRAM’s assertions that the ’027 patent
`
`invention wasthe “enabling technology” for the X-Sync chainring, so the
`
`X-Sync chainring cannot be considered coextensive with the ’250 patent.
`See FOX Blue Brief at 6-7, 31-32, 42-43, 65-66: FOX GrayBrief at 27.
`
`FOX also pointed out in its reply brief that in FOX I, SRAM
`
`repeatedly represented to this Court that the 027 patent wascritical to
`
`the X-Sync’s success. See FOX GrayBrief at 27 (“in the appealof the ’027
`
`patent IPRs, SRAM repeatedly asserted that its X-Sync chainring was
`
`successful because of those offsets” claimed in the 027 patent) (citing
`
`Corrected Brief of Appellee SRAM, LLC, FOX Factory, Inc. v. SRAM,
`
`LLC, No. 2018-2024, ECF No. 41 (Fed. Cir. Dec. 17, 2018) (SRAM Red
`
`Brief in FOX I’)).
`
`In its Red Brief in FOX IJ, for example, SRAM argued:
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`The claimed asymmetrically offset and narrow and
`wide teeth [of the 027 patent] retain a chain
`without extraneous devices. By moving chain
`retention tasks to portions of the chainring from
`portions of the bicycle frame, the necessity for an
`extraneous device is eliminated. The inventors of
`the ’027 patent succeeded where others repeatedly
`failed.
`
`SRAM Red Brief in FOX I at 41.
`
`In addition, FOX pointed outin this appeal that SRAM insisted that
`
`the articles it produced referencing the X-Sync’s “tooth profile” were
`
`specifically praising the offset teeth claimed in the 027 patent. FOX Gray
`
`Brief at 27, citing SRAM Red Brief in FOX I at 60 (“SRAM produced
`
`multiple
`
`articles
`
`specifically
`
`commenting on the unique
`
`tooth
`
`profile/asymmetrical offset found in the X-Sync chainring products.”)
`
`(emphasis added). This particular statement thus not only contradicts
`
`the panel’s assumption about the insignificance of the 027 patent in this
`
`appeal, but it also contradicts the panel’s finding—which lacks any
`
`support in the record—that the “tooth profile” praised in those articles
`
`“is ‘essentially the claimed invention”of the ’250 patent. Slip op. at8.
`
`As FOX explained in its reply brief, SRAM has argued that “tooth
`
`profile” meansdifferent thingsin the different IPR proceedingsto suit its
`
`purposes. FOX Gray Brief at 31-32 (“The very fact that SRAM would
`
`10
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`argue those terms can coverboth offset teeth and a >80% axial-fill at the
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`tooth midpoint shows they are too vague to mean anythingspecific at
`
`all.”). So any reference to the “tooth profile’ cannot be said to be
`
`essentially the invention claimed in the ’250 patent.
`
`3.
`
`SRAM continues to insist the 027 patent is
`responsible for the secondary considerations
`relating to the X-Sync.
`
`SRAM not only based its patentability arguments on the
`
`significance of the 027 patent’s offset teeth in the past, it continues to
`
`assert they are significant today. Specifically, in the IPRs on remand
`
`from the FOX I decision, SRAM filed two briefs. One of them asserted
`
`that the claimed inboard offsets were responsible for the X-Sync’s
`
`secondary considerations. See SRAM Opening Brief on Remand in
`
`IPR2017-00118 at
`
`2
`
`(asserting the
`
`record includes
`
`“submitted
`
`substantial objective evidence of long-felt need, the failure of others, the
`
`passage of time,
`
`licensing, and copying, all directly tied to the ’027
`
`patent’s claimed combination of wide and narrow teeth with inboard
`
`offset teeth”). The other asserted the samefor the outboardoffset teeth.
`
`See SRAM Opening Brief on Remand in IPR2017-00472 at 2. (asserting
`
`the record includes “substantial objective evidence of long-felt need, the
`
`11
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`failure of others, the passage of time, and licensing, all directly tied to
`
`the ’027 patent’s claimed combination of wide and narrow teeth with
`
`outboard offset teeth”).?
`
`SRAM’s ongoing assertion that the ’027 patent’s claimed offset,
`
`narrow-wide teeth solves the long-felt need of improved chain retention
`
`highlights that SRAM itself attaches great significanceto the offset teeth
`
`feature. In other words, SRAM’scontinuingactions further disprove the
`
`panel’s core assumption that there is no “particular significance to the
`
`[chainring] teeth offset feature claimed in the 027 patent, and the record
`
`does not reflect that it was significant.” Slip op. at8.
`
`C.
`
`This case should be remanded because the Board’s
`only “findings” concerning nexus involved its
`erroneous decision to presume one.
`
`In the opinion’s penultimate paragraph,the panel stated “whether
`
`or not the Board properly allocated the burden of showing or rebutting
`
`nexus,
`
`substantial
`
`evidence
`
`supports
`
`its
`
`findings on secondary
`
`considerations, particularly the skepticism and later praise of industry
`
`and long-felt need.” Slip op. at 8. This statement might be interpreted to
`
`2 It is appropriate to take judicial notice of these filings. See Standard
`Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511, 514 n.3 (Fed.
`Cir. 1990).
`
`12
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`suggest
`
`there were independent
`
`findings of a direct nexus. The
`
`statement, however, is immediately followed by a citation to FOX I and
`
`the “essentially-the-claimed-invention” test for whether a presumptionis
`
`appropriate. Id. (“the X-Sync chainring’s successis largely dueto its teeth
`
`profile, which is ‘essentially the claimed invention, ? see Fox Factory, 944
`
`F.3d at 1374, of the ’250 patent”). This furtherclarification of the panel’s
`
`statement logically suggests that the panel was referring to the Board’s
`
`findings underlying its decision to presume a nexus.
`
`But just in case the panel believed that the Board independently
`
`found that SRAM directly proved a nexus, the record shows that the
`
`Board only presumed a nexus; it never made any independentfindingsof
`
`a direct nexus. As noted supra, the Board’s findings of a nexus in this
`
`case were largely cut & paste from its findings in the 027 patent IPRs.
`
`See supra page 4. And in both cases, the Board found that SRAM’s
`
`asserted secondary-considerationsevidence wasrelevant to patentability
`
`based solely on a presumption of nexus. Compare Appx46 with Appx4873
`
`3 We have already explained that SRAM hascontradicted the panel and
`represented to this Court in FOX I that any reference to the “teeth
`profile” is a reference to the offset teeth claimed in the 027 patent. See
`supra pages 10-11.
`
`.
`
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`(both stating, “considering the evidencein the record as a whole, wefind
`
`that Petitioner has not rebutted Patent Owner’s presumption of a nexus
`
`with respect to evidence of secondary considerations tied to the X-Sync
`
`chainring”); compare Appx54 with Appx4867 (both stating, with regard
`
`to praise, FOX failed to “carry [its] burden of rebutting the presumption
`
`of nexus”). That is, having relied solely on the presumption, the Board
`
`did not make any findings regarding whether SRAM proved a nexus
`
`between the invention claimed in each patent and the alleged secondary
`
`considerations with direct evidence. SRAM’s counsel admitted this at
`
`oral argument in FOX I:
`
`Circuit Judge Hughes: ... The Board based its
`findings on a presumption and that they failed to
`rebut that presumption. They didn’t make the
`alternative finding that you showed by direct
`evidence a nexus.
`
`SRAM’s Counsel: Well, I think they list what is
`direct evidence. I agree with you that they didn’t
`come to a conclusion that says that we presented
`through direct evidence....
`
`Oral argument recording in FOX I, at 27:30-27:50
`
`(http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2018-2024.mp3).
`
`Because the Board erroneously granted a presumption and there
`
`was nofinding of direct nexus, the case needs to be remanded.See, e.g.,
`
`14
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`Ntke, Inc. v. Adidas AG, 812 F.3d 1326, 1340 (Fed. Cir. 2016) (‘Whether
`
`the requisite nexus exists is a question of fact. As such, we cannot resolve
`
`this factual dispute in thefirst instance.”) (citation omitted), overruled on
`
`other grounds by Aqua Prods. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017)
`
`(en banc); FOX I, 944 F.3d at 13878 (“On remand, SRAM will have the
`
`opportunity to prove nexus between the challenged independent claims
`
`and the evidence of secondary considerations.”).
`
`III. CONCLUSION
`
`The basis for the panel’s decision—that the 027 patent is not
`
`significant—indisputably conflicts with the record. SRAM repeatedly
`
`insisted the offset teeth feature claimed in 027 patent wascritical to the
`
`X-Sync’s performance. And FOX pointed out in this appeal that SRAM’s
`
`elevation of the 027 patent’s importance precluded any presumption that
`
`the X-Sync’s success was attributable to the ’250 patent.
`
`Because the Board made no independentfindings of a direct nexus
`
`to the ’250 patent, the Board’s decision,like its decision in FOX J, must
`
`be vacated. And, as in FOX I, the case should be remanded so the Board
`
`can makefindings regarding SRAM’sclaim ofa direct nexus betweenthe
`
`15
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`invention claimed in the ’250 patent and the success of the X-Sync
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`chainring.
`
`Respectfully submitted,
`
`/s/ Erik R. Puknys
`
`Erik R. Puknys
`Robert F. McCauley
`Arpita Bhattacharyya
`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
`3300 Hillview Avenue
`Palo Alto, CA 94304-1203
`(650) 849-6600
`
`Attorneys for Appellant FOX Factory, Inc.
`
`June 17, 2020
`
`Joshua L. Goldberg
`Daniel F. Klodowski
`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
`901 New York Ave., NW
`Washington, DC 20001-4413
`(202) 408-4000
`
`16
`
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`ADDENDUM
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`

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`NOTE: This disposition is nonprecedential.
`
`Anited States Court of Appeals
`for the Federal Circuit
`
`FOX FACTORY,INC.,
`Appellant
`
`Vv.
`
`SRAM, LLC,
`Appellee
`
`2019-1544
`
`Appeal from the United States Patent and Trademark
`Office, Patent Trial and Appeal Board in No. IPR2017-
`01440.
`
`Decided: May 18, 2020
`
`ERIK R. PUKNYS, Finnegan, Henderson, Farabow, Gar-
`rett & Dunner, LLP, Palo Alto, CA, for appellant. Also rep-
`resented
`by
`ARPITA BHATTACHARYYA,
`ROBERT
`F.
`MCCAULEY;
`JOSHUA
`GOLDBERG,
`DANIEL
`FRANCIS
`KLODOWSKI, Washington, DC.
`
`RICHARD BENNETT WALSH, JR., Lewis Rice LLC, St.
`Louis, MO, for appellee. Also represented by MICHAEL
`HENRY DURBIN, MICHAEL JOHN HICKEY.
`
`

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`2
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`FOX FACTORY, INC. v. SRAM, LLC
`
`Before LOURIE, MAYER, and WALLACH, Circuit Judges.
`
`LOURIE, Circuit Judge.
`
`Fox Factory, Inc., appeals from a final written decision
`of the Patent Trial and Appeal Board (the “Board”), holding
`claims 1-26 of U.S. Patent 9,291,250 (the “250 patent”) not
`unpatentable as obvious. Fox Factory, Inc. v. SRAM, LLC,
`No. IPR2017-01440, (P.T.A.B. Dec. 6, 2018), Paper 62 (“De-
`cision”). Because the Board’s fact findings are supported
`by substantial evidence and its conclusion of nonobvious-
`ness is correct, we affirm.
`
`BACKGROUND
`
`The parties to this appeal, Fox Factory and SRAM,
`LLC, are competitors in the bicycle market. Over the past
`decade, SRAM has introduced several improvementsin bi-
`cycle design that have enabled it to market bicycles with a
`solitary chainring (the “X-Sync chainring”), a set-up previ-
`ously thoughtto be too arduousfor all but a few bicyclists.
`The solitary chainring set-up does not require the roller
`chain to switch between chainrings when therider shifts
`gears, so the chainring can be optimized to fit snugly into
`the roller chain. In particular, a conventional roller chain
`has chain links that are alternatingly narrow and wide, so
`SRAM designed a chainring to have a standard set of teeth
`and a widened setto fit into the link spaces. SRAM’s X-
`Sync chainring has been extensively praised for its chain
`retention even in trying conditions. J.A. 5682-83.
`
`SRAM has received numerous patents for its inven-
`tions relating to bicycles. The ’250 patentdiscloses that the
`standard bicycle chain has alternating inner and outer
`links, and the outer links have a much wider space in the
`center. Yet conventional chainrings haveteeth that are the
`samesize; thus, the teeth fit too loosely into the outer link
`spaces. The ’250 patent proposes a single chainring with
`alternating teeth, one conventional set that fits the inner
`
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`FOX FACTORY,INC. v. SRAM, LLC
`
`3
`
`chain links and one widened set that fits the outer chain
`links—specifically disclosing that the widened set should
`fill 75% or moreof the width of the outer chain links. Claim
`1 is illustrative:
`
`1. A bicycle chainring of a bicycle crankset for en-
`gagementwith a drive chain, comprising:
`
`a plurality of teeth extending from a periphery of
`the chainring wherein roots of the plurality of teeth
`are disposed adjacent the periphery of the chain-
`ring;
`the plurality of teeth includinga first group of teeth
`and a second group ofteeth, eachof the first group
`of teeth wider than each of the second group of
`teeth; and
`at least some of the second group of teeth arranged
`alternatingly and adjacently between the first
`group of teeth,
`wherein the drive chain is a roller drive chain in-
`cluding alternating outer and innerchainlinks de-
`fining outer and innerlink spaces, respectively;
`wherein eachofthe first group of teeth is sized and
`shaped to fit within one of the outer link spaces and
`each of the second group of teeth is sized and
`shaped to fit within one of the inner link spaces;
`and
`wherein a maximum axial width about halfway be-
`tween a root circle and a top landof the first group
`of teeth fills at least 80 percent of an axial distance
`defined by the outer link spaces.
`
`250 patent col. 6 1. 50-col. 71. 4.
`
`SRAM asserted the ’250 patent, along with its parent,
`U.S. Patent 9,182,027 (the “027 patent”), against Fox Fac-
`tory and its subsidiary, Race Face Performance Products,
`in the United States District Court for the Northern Dis-
`trict of Illinois. See SRAM, LLC v. Race Face Performance
`
`

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`4
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`FOX FACTORY,INC. v. SRAM, LLC
`
`Prods., No. 1-15-cv-11862 (N.D. Il]. Dec. 17, 2015), ECF No.
`1; SRAM, LLC v. Race Face Performance Prods., No. 1-16-
`cv-05262 (N.D. Ill. Dec. 17, 2015), ECF No. 1. The ’027 pa-
`tent also claimsa bicycle chainring where every other tooth
`is widened, but the claims do not specify the degree to
`which these teeth are widened, and they also require the
`teeth to be offset.
`
`Fox Factory petitioned for inter partes review of the
`°250 and ’027 patents on the groundof obviousness. In the
`250 patent IPR, Fox Factory cited a Japanese patent pub-
`lication, JP S56-42489 (“Shimano”), and U.S. Patent
`3,375,022 (“‘Hattan”). Shimano was laid open in 1981 and
`teaches a bicycle chainring with widenedteeth to fit into
`the outer chain links of a conventional roller chain. J.A.
`951-52. Hattan describes an elliptical chainring and dis-
`closes that the chainring’s teeth should fill between 74.6%
`and 96% of the inner chain link space. Id. col. 7 ll. 52-65.
`Fox Factory contended that the ’250 patent claims would
`have been obvious because a skilled artisan would have
`seen the utility in designing a chainring with widened
`teeth to improve chain retention, as taught by Shimano,
`and he would have looked to Hattan’s teaching that the
`chainring teeth should fill between 74.6% and 96% of the
`chain link space.
`
`In the ’027 patent IPR, the Board held the challenged
`claims not unpatentable as obvious. Fox Factory, Inc. v.
`SRAM, LLC, 2018 WL 1889561, at *21 (P.T.A.B. Apr. 18,
`2018). We vacated the Board’s decision because it applied
`the wrong legal standard for evaluating the relevance of
`secondary considerations to obviousness. Fox Factory, Inc.
`uv. SRAM, LLC, 944 F.3d 1366, 1873-78 (Fed. Cir. 2019).
`Wenoted the inconsistency of SRAM’s arguing,in the ’027
`and ’250 patent IPRs, for the nonobviousness of each pa-
`tent based upon the same secondary considerations evi-
`dence. See id. at 1878 (“The same evidence of secondary
`considerations cannot be presumed to be attributable to
`two different combinationsof features.” (citing Therasense,
`
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`FOX FACTORY, INC. v. SRAM, LLC
`
`5
`
`Inc. v. Becton, Dickinson & Co., 593 F.3d 1289, 1299 (Fed.
`Cir. 2010))).
`
`Meanwhile, in the ’250 patent IPR, the Board rejected
`Fox Factory’s obviousness challenge, finding the claimed
`invention’s “axial fill limitation”’—that the widened teeth
`“fill{] at least 80 percent of [the width of] the outer link
`spaces” at the midpoint of the tooth—unmetby any of Fox
`Factory’s evidence. The Board found instead that Hattan
`only taughtfilling between 74.6% and 96% of the