Case: 19-1544
`
`Document:51
`
`Page:1
`
`Filed: 05/18/2020
`
`NoTE: This disposition is nonprecedential.
`
`Gnited 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.
`
`

`

`
`
`Case: 19-1544 Page:2_Filed: 05/18/2020Document:51
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`9
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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 hasintroduced several improvements in bi-
`cycle design that have enabled it to market bicycles with a
`solitary chainring (the “X-Sync chainring”), a set-up previ-
`ously thought to 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 set to 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-
`tionsrelating to bicycles. The ’250 patent discloses 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 have teeth 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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`Case: 19-1544
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`Document:51
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`Page:3
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`FOX FACTORY, INC. v. SRAM, LLC
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`chain links and one widened set that fits the outer chain
`links—specifically disclosing that the widened set should
`fill 75% or more of the width of the outer chain links. Claim
`1 is illustrative:
`
`1. A bicycle chainring of a bicycle crankset for en-
`gagement with a drive chain, comprising:
`
`a plurality of teeth extending from a periphery of
`the chainring wherein rootsof 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 groupof teeth, each of 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 innerchain links de-
`fining outer andinner link spaces, respectively;
`wherein eachofthefirst 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 patentcol. 6 1. 50-col. 7 1. 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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`Case: 19-1544
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`Document:51
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`FOX FACTORY, INC. v. SRAM, LLC
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`Prods., No. 1-15-cv-11362 (N.D. Ill. 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 waslaid 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. Jd. 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 becauseit applied
`the wrong legal standard for evaluating the relevance of
`secondary considerations to obviousness. Fox Factory, Inc.
`v. SRAM, LLC, 944 F.3d 1366, 1373-78 (Fed. Cir. 2019).
`Wenoted the inconsistency of SRAM’s arguing,in the 027
`and ’250 patent IPRs, for the nonobviousnessof each pa-
`tent based upon the same secondary considerations evi-
`dence. See id. at 1378 (“The same evidence of secondary
`considerations cannot be presumedto be attributable to
`two different combinationsof features.” (citing Therasense,
`
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`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 anyof Fox
`Factory’s evidence. The Board found instead that Hattan
`only taught filling between 74.6% and 96% of the width at
`the bottom of the tooth. Decision, slip op. at 34. The Board
`then found, after a thorough review of SRAM’s evidence of
`secondary considerations, that SRAM’s showing rebutted
`Fox Factory’s argumentthat a skilled artisan nevertheless
`would have found it obvious to modify the chainring’s teeth
`to meet the axialfill limitation. Jd., slip op. at 68-71.
`
`Fox Factory timely appealed. We have jurisdiction
`pursuant to 28 U.S.C. § 1295(a)(4)(A).
`
`DISCUSSION
`
`Wereview the Board’s legal determinations de novo, In
`re Elsner, 381 F.3d 1125, 1127 (Fed. Cir. 2004), but we re-
`view the Board’s factual findings underlying those deter-
`minations for substantial evidence, In re Gartside, 203 F.3d
`1305, 1316 (Fed. Cir. 2000). A finding is supported by sub-
`stantial evidence if a reasonable mind might accept the ev-
`idence as adequate to support the finding. Consol. Edison
`Co. v. NLRB, 305 U.S. 197, 229 (1938).
`
`The sole issue presented in this appeal is obviousness.
`Obviousnessis a question of law that “lendsitself to several
`basic factual inquiries,” Graham v. John Deere Co., 383
`U.S. 1, 17-18 (1966) (citing Great Atl. & Pac. Tea Co. v.
`Supermarket Equip. Corp., 340 U.S. 147, 155 (1950)), in-
`cluding the scope and content of the prior art, the level of
`ordinary skill in the art, differences between the prior art
`and the claimed invention, and any relevant secondary con-
`siderations.
`Jd. The Supreme Court has held that “a
`
`

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`FOX FACTORY, INC. v. SRAM, LLC
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`patent composed of several elements is not proved obvious
`merely by demonstrating that each of its elements was,in-
`dependently, knownin the prior art.” KSR Intl Co.v. Te-
`leflex Inc., 550 U.S. 398, 418 (2007).
`Instead, there must
`have been “an apparent reason to combine the knownele-
`ments in the fashion claimed by the patent at issue.” Id. at
`417-18. Such a reason exists if the claimed invention
`“simply arranges old elements with each performing the
`same function it had been knownto perform’ andyields no
`more than one would expect from such an arrangement.”
`Id. (quoting Sakraida v. Ag-Pro, Inc., 425 U.S. 273, 285
`(1976)).
`
`Fox Factory argues that the Board’s conclusionof non-
`obviousnessis in error because the only difference between
`the prior art and the claimed invention is the degree to
`which the widened teeth should fill the outer chain link
`spaces, measured halfway up the tooth. Fox Factory fur-
`ther maintains that the Board misapplied our precedent on
`secondary considerations, erroneously granting SRAM a
`presumption of nexus between the claimed invention and
`evidence of the success of the X-Sync chainring. In partic-
`ular, Fox Factory argues that various unclaimed aspects of
`the X-Sync chainring, such as its tall, asymmetric, and
`hooked teeth, werethe real driver of its success.
`
`SRAM respondsthat Fox Factory failed to provide any
`prior art that rendered the axial fill limitation obvious to a
`skilled artisan.
`It further contends that the Board cor-
`rectly credited its evidence of secondary considerations be-
`cause it found that the X-Sync chainring’s widened teeth
`were responsible for its success, and that is the novel fea-
`ture of the claimed chainring.
`
`We agree with SRAM. While Fox Factory is correct
`that “a mere change in proportion .
`.
`. involve[s] no more
`than mechanicalskill,” rather than the level of invention
`required by 35 U.S.C. § 103, Powers-Kennedy Contracting
`Corp. v. Conveying Co., 282 U.S. 175, 185 (1930), the Board
`
`

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`Case: 19-1544
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`Document:51
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`Page: 7
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`Filed: 05/18/2020
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`FOX FACTORY, INC. v. SRAM, LLC
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`found that SRAM’s optimization of the X-Sync chainring’s
`teeth, as claimed in the ’250 patent, displayed significant
`invention. It based its conclusion on secondary considera-
`tions that strongly indicated that the X-Sync chainring’s
`success surprised skilled artisans. Decision, slip op. at 51-
`59 (discussing industry skepticism and subsequentpraise,
`and long-felt need to solve chain retention problem); see
`also J.A. 5682 (awarding “Innovationof the Year” to SRAM
`for the X-Sync chainring and noting that “the entire con-
`cept can be related in a single phrase—I[t]he chainring’s
`teeth are shaped to match the widthsof the chain links”).
`The Board did not err in concluding that such evidence de-
`feated SRAM’s contentionof routine optimization.
`
`Wefurtherreject Fox Factory’s argumentthat our pre-
`vious decision on the 027 patent necessarily requires vaca-
`tur here.
`In that case, this court held that the Board
`misapplied the legal requirement, incumbent upon patent
`owners, of showing a nexus between evidence of secondary
`considerations and the obviousness of the claims of that
`that patent—in particular, the requirement that the prod-
`uct from which the secondary considerations arose is “co-
`extensive” with the claimed invention. Fox Factory, 944
`F.3d at 1373-78. Contrary to the Board’s view, we reaf-
`firmed in that case that a productis not coextensive with a
`claimed invention simply becauseit falls within the scope
`of the claim.
`
`In this IPR, SRAM argued to the Board that the >80%
`gap-filling aspect of the X-Sync chainring wascrucialto its
`success. Given that concession, we concluded in ourprevi-
`ous Fox Factory opinion—on the 027 patent—that no rea-
`sonable factfinder could decide that the X-Sync chainring
`was coextensive with a claim that made no mention of that
`feature. Id. at 1374 (‘[B]ecause the independent claims of
`the ’027 patent do not recite this >80% gap filling feature,
`the independent claims are not coextensive with the X-
`Sync chainrings.”). Thus, we vacated the Board’s decision
`in the 027 patent IPR and remanded for the Board to
`
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`FOX FACTORY, INC. v. SRAM, LLC
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`address obviousness consistent with the law we have set
`forth on the presumption of nexus. Id. at 1380.
`
`Butthe critical facts differ in this case—most obviously
`in that the ’250 patent claimsrecite the >80% axialfill lim-
`itation. The unclaimed features that Fox Factory alleges
`contributed to the X-Sync chainring’s success—the general
`concept of narrow-wide teeth that existed in the art and the
`hooks and protrusions of the teeth on the X-Sync chain-
`ring—are to some extent incorporated into the >80% axial
`fill limitation. See, e.g., Decision, slip op. at 43-44, 54. Fox
`Factory also 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.
`
`We conclude that, whether or not the Board properly
`allocated the burden of showing or rebutting nexus, sub-
`stantial evidence supportsits findings on secondary consid-
`erations, particularly the skepticism and later praise of
`industry and long-felt need. We also conclude that sub-
`stantial evidence supports the Board’s determination of
`nexus, based onits finding that the X-Sync chainring’s suc-
`cess is largely due to its teeth profile, which is “essentially
`the claimed invention,” see Fox Factory, 944 F.3d at 1374,
`of the ’250 patent.
`Onthis record, it makes no difference
`that the patent ownerchose to claim those innovations in
`terms of how much of the outer chain link spaceis filled by
`the widened teeth. In view of the Board’s findings on sec-
`ondary considerations, we agree with its conclusion that
`the ’250 patent claims would not have been obvious.
`
`CONCLUSION
`
`We have considered the parties’ remaining arguments
`but find them unpersuasive. For the foregoing reasons, the
`decision of the Board is
`
`AFFIRMED
`
`

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`Case: 19-1544
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`Document:52
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`Page:1
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`Filed: 05/18/2020
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`nited States Court of Appeals
`for the federal Circuit
`
`FOX FACTORY, INC.,
`Appellant
`
`SRAM, LLC,
`Appellee
`
`2019-1544
`
`Appeal from the United States Patent and Trademark
`Office, Patent Trial and Appeal Board in No. IPR2017-
`01440.
`
`JUDGMENT
`
`THIS CAUSE having been considered,it is
`
`ORDERED AND ADJUDGED:
`
`AFFIRMED
`
`ENTERED BY ORDER OF THE COURT
`
`May18, 2020
`
`/s/ Peter R. Marksteiner
`Peter R. Marksteiner
`Clerk of Court
`
`

`

`Case: 19-1544
`
`Document:57
`
`Page: 1
`
`Filed: 07/09/2020
`
`Gnited 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.
`
`MANDATE
`
`In accordance with the judgment of this Court, entered
`May18, 2020, and pursuant to Rule 41 of the Federal Rules
`of Appellate Procedure,
`the formal mandate is hereby
`issued.
`
`July 9, 2020
`
`FOR THE COURT
`
`/s/ Peter R. Marksteiner
`Peter R. Marksteiner
`Clerk of Court
`
`