Copying by Competitors is Evidence of Nonobviousness of an Invention

by Audrey A. Millemann
The IP Law Blog

The Patent and Trademark Office (PTO) may reject a patent application on several different grounds.  One of those grounds is obviousness.  Under 35 U.S.C. § 103, if an invention is obvious to a person of ordinary skill in the art, then it is not patentable.

In determining whether an invention is obvious, the PTO compares the invention to the “prior art” – all similar inventions that are publicly available at the time the application is filed.  If the PTO rejects the invention as obvious, the applicant can respond by narrowing the invention or arguing that the PTO is wrong.  In addition, the applicant can submit evidence of certain factors that the courts have held are relevant, objective indicia of nonobviousness.  These factors are called “secondary considerations.”  They include evidence of: unexpected results, commercial success, long-felt but unsolved needs, failure of others, skepticism of experts, and copying by competitors.

The courts have held that the secondary considerations are often “the most probative and cogent evidence of nonobviousness” and that they help prevent the PTO from relying on hindsight in determining obviousness.  The PTO is required to consider this evidence, if it is presented, in determining the patentability of the patent application.

The Federal Circuit Court of Appeals has addressed these secondary considerations in the context of a competitor’s challenge to an issued patent.  Liqwd, Inc. v. L’Oreal USA, Inc. (941 F.3d 1133) (Fed. Cir. 2019).  There, L’Oreal challenged Liqwd’s hair treatment patent in a post-grant review – a procedure before the Patent Trial and Appeal Board (PTAB) in which an issued patent can be invalidated.  The PTAB agreed with L’Oreal that most of the patent’s claims were obvious and therefore not valid.  Liqwd presented evidence that L’Oreal had copied the invention in Liqwd’s patent.  The PTAB held that the evidence of copying was not persuasive because Liqwd had not shown that L’Oreal had copied a specific product.  Liqwd appealed the PTAB’s decision.

The Federal Circuit vacated and remanded the case.  The court explained that knowledge of an issued patent plus circumstantial evidence of changes by a competitor to its product to make it the same as the patented invention is sufficient to show copying.  (Id. at 1138.)  The court stated that copying of an issued patent requires access to the invention (or the patent) and evidence of copying.  (Id.)  According to the court, the PTAB improperly ignored Liqwd’s evidence of L’Oreal’s copying.  The court remanded the case to the PTAB to consider the evidence of L’Oreal’s copying in determining the obviousness of Liqwd’s patent.