In Re: Nuvasive, Inc.

United States Court of Appeals

for the Federal Circuit

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IN RE: NUVASIVE, INC.,

Appellant

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2015-1670

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Appeal from the United States Patent and Trademark

Office, Patent Trial and Appeal Board in No. IPR2013-

00506.

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Decided: December 7, 2016

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MICHAEL T. ROSATO, Wilson, Sonsini, Goodrich &

Rosati, PC, Seattle, WA, argued for appellant. Also repre-

sented by ANDREW SWANSON BROWN; RICHARD TORCZON,

Washington, DC; GRACE J. PAK, PAUL DAVID TRIPODI II,

Los Angeles, CA.

JOSEPH MATAL, Office of the Solicitor, United States

Patent and Trademark Office, Alexandria, VA, argued for

intervenor Michelle K. Lee. Also represented by NATHAN

K. KELLEY, SCOTT WEIDENFELLER.

______________________

Before MOORE, WALLACH, and TARANTO, Circuit Judges.

WALLACH, Circuit Judge.

Appellant NuVasive, Inc. (“NuVasive”) appeals the fi-

nal written decision of the U.S. Patent and Trademark

2 IN RE: NUVASIVE, INC.

Office’s (“USPTO”) Patent Trial and Appeal Board

(“PTAB”), finding claims 1–14, 19–20, and 23–27 of U.S.

Patent No. 8,361,156 (“the ’156 patent”) invalid as obvi-

ous. See Medtronic, Inc. v. NuVasive, Inc., No. IPR2013-

00506, 2015 WL 996352, at *2 (P.T.A.B. Feb. 11, 2015).

We have jurisdiction pursuant to 28 U.S.C.

§ 1295(a)(4)(A) (2012). We vacate and remand.

BACKGROUND

NuVasive is the assignee of the ’156 patent, which

generally relates to “[a] system and method for spinal

fusion comprising a spinal fusion implant of non-bone

construction releasably coupled to an insertion instru-

ment dimensioned to introduce the spinal fusion implant

into any of a variety of spinal target sites.” ’156 patent,

Abstract. The ’156 patent includes one independent claim

(claim 1) and 26 dependent claims (claims 2–27). Illustra-

tive claim 1 recites in relevant part:

A spinal fusion implant of non-bone construction

positionable within an interbody space between a

first vertebra and a second vertebra, said implant

comprising:

...

at least first and second radiopaque mark-

ers oriented generally parallel to a height

of the implant, wherein said first radio-

paque marker extends into said first side-

wall at a position proximate to said medial

plane, and said second radiopaque marker

extends into said second sidewall at a po-

sition proximate to said medial plane.

Id. col. 12 ll. 32–67 (emphases added).

IN RE: NUVASIVE, INC. 3

In response to Medtronic, Inc.’s (“Medtronic”) peti-

tion, 1 the PTAB instituted the subject inter partes review

to determine whether claims 1–14, 19–20, and 23–27

would have been obvious over, inter alia, a Synthes Ver-

tebral Spacer-PR brochure (“SVS-PR brochure”)

(J.A. 769–70), a Telamon Verte-Stack PEEK Vertebral

Body Spacer brochure (“Telamon brochure”) (J.A. 771–72),

a Telamon Posterior Impacted Fusion Devices guide

(“Telamon guide”) (J.A. 773–82), and U.S. Patent Applica-

tion Publication No. 2003/0028249 (“Baccelli”) (J.A. 744–

51). See Medtronic, Inc. v. NuVasive, Inc., No. IPR2013-

00506, 2014 WL 1253040, at *11–12 (P.T.A.B. Feb. 13,

2014). The PTAB later issued the Final Written Decision

concluding the claims would have been obvious over

various combinations of, inter alia, the SVS-PR brochure,

the Telamon brochure and Telamon guide (collectively,

“the Telamon references”), and Baccelli. See Medtronic,

2015 WL 996352, at *14.

DISCUSSION

NuVasive argues that the PTAB’s Final Written Deci-

sion should be reversed for two reasons: (1) “the [PTAB]

erred in concluding that the SVS-PR brochure and Tela-

mon references are printed publication prior art”; and

(2) “the [PTAB] erred in concluding it would have been

obvious to include radiopaque markers proximate to the

medial plane.” Appellant’s Br. 22, 26 (capitalization

omitted). After articulating the applicable standard of

review, we address these arguments in turn.

I. Standard of Review

1 Medtronic initially opposed NuVasive’s appeal,

but later withdrew as Appellee. The USPTO intervened

pursuant to 35 U.S.C. § 143 (2012) and, although it did

not file a brief, participated at oral argument.

4 IN RE: NUVASIVE, INC.

We review the PTAB’s factual determinations for sub-

stantial evidence and its legal determinations de novo.

See In re Gartside, 203 F.3d 1305, 1316 (Fed. Cir. 2000).

“Substantial evidence is something less than the weight of

the evidence but more than a mere scintilla of evidence.”

In re Kotzab, 217 F.3d 1365, 1369 (Fed. Cir. 2000) (cita-

tion omitted). It is “such relevant evidence as a reasona-

ble mind might accept as adequate to support a conclu-

conclusion.” In re Applied Materials, Inc., 692 F.3d 1289,

1294 (Fed. Cir. 2012) (internal quotation marks and

citation omitted).

II. NuVasive Waived Its Arguments as to

the PTAB’s Treatment of the Prior Art References as

Printed Publications

As an initial matter, the court must consider whether

the SVS-PR brochure and Telamon references were pub-

licly accessible such that they qualify as printed publica-

tions pursuant to 35 U.S.C. § 311(b) 2 and 35 U.S.C. § 102

(2006). 3 Pursuant to § 311(b), “[a] petitioner in an inter

partes review may request to cancel as unpatentable [one]

or more claims of a patent only on a ground that could be

2 Congress amended § 311 when it enacted the

Leahy-Smith America Invents Act (“AIA”). Pub. L.

No. 112-29, § 6(a), 125 Stat. 284, 299 (2011). Although

the amendments to § 311 did not take effect until Sep-

tember 16, 2012, the amendments “apply to any patent

issued before, on, or after th[e] effective date” and, thus,

apply to the ’156 patent. See id. § 6(c)(2)(A), 125 Stat.

at 304.

3 Congress amended § 102 when it enacted the AIA.

Pub. L. No. 112-29, § 3(b)(1), 125 Stat. at 285–87. Howev-

er, because the application that led to the ’156 patent was

filed before March 16, 2013, the pre-AIA § 102 applies.

See id. § 3(n)(1), 125 Stat. at 293.

IN RE: NUVASIVE, INC. 5

raised under [§] 102 or [§] 103 and only on the basis of

prior art consisting of patents or printed publications.” 35

U.S.C. § 311(b). Section 102 provides that prior art

includes “printed publication[s]” describing the invention

either “before the invention thereof” or “more than one

year prior to the date of the [patent] application . . . .” 35

U.S.C. § 102(a), (b).

We first must determine whether NuVasive preserved

its public accessibility arguments for appeal. In appeals

from the PTAB, “we have before us a comprehensive

record that contains the arguments and evidence present-

ed by the parties and our review of the [PTAB]’s decision

is confined to the four corners of that record.” In re Watts,

354 F.3d 1362, 1367 (Fed. Cir. 2004) (internal quotation

marks and citation omitted). While the court “retains

case-by-case discretion over whether to apply waiver,”

Harris Corp. v. Ericsson Inc., 417 F.3d 1241, 1251 (Fed.

Cir. 2005) (citations omitted), we have held that a party

waives an argument that it “failed to present to the

[PTAB]” because it deprives the court of “the benefit of the

[PTAB]’s informed judgment,” Watts, 354 F.3d at 1367–

68.

NuVasive waived its public accessibility arguments

before the PTAB and may not raise them on appeal.

NuVasive challenged the public accessibility of the prior

art references during the preliminary proceedings of the

inter partes review, J.A. 159–63 (section of NuVasive’s

Preliminary Response that addresses public accessibility),

but failed to challenge public accessibility during the trial

phase, J.A. 227–93 (NuVasive’s Trial Response that fails

to address public accessibility). In fact, during oral argu-

ment before the PTAB, NuVasive explicitly declined to

make further arguments as to public accessibility of the

Telamon references:

[PTAB Judge]: I take it you no longer are disput-

ing the public availability of the Telamon refer-

ence[s]?

6 IN RE: NUVASIVE, INC.

[NuVasive’s Attorney]: That is correct, we’re leav-

ing that issue aside. We’re focusing entirely on

the obviousness to modify these markers in the

medial plane. We’re not abandoning the other ar-

guments in our Patent Owner response, specifical-

ly with the dependent claims, we’re just not

addressing them right now because they’re al-

ready addressed.

So, we’re going to assume that these are prior

art . . . .

J.A. 527 (emphases added). NuVasive abandoned its

challenge to the public accessibility determination even

though the PTAB had warned NuVasive that this would

result in waiver. J.A. 201–02 (where the PTAB indicated

in a scheduling order that “[t]he patent owner is cau-

tioned that any arguments for patentability not raised

and fully briefed in the response will be deemed waived”).

Because NuVasive no longer contested the public accessi-

bility of the prior art references, the PTAB did not ad-

dress this issue in the Final Written Decision. See

generally Medtronic, 2015 WL 996352. As a result, we do

not have “the benefit of the [PTAB]’s informed judgment”

on the public accessibility issue, Watts, 354 F.3d at 1368,

and NuVasive waived its arguments on this issue.

III. The PTAB Did Not Adequately Explain How Claim 1

of the ’156 Patent Would Have Been Obvious

Over the Prior Art

Having determined that NuVasive waived its argu-

ments that the SVS-PR brochure and Telamon references

were publicly accessible prior art, we examine whether

the PTAB adequately set forth findings and explanations

to support the conclusion that a combination of these

prior art references would have rendered claim 1 of the

’156 patent obvious. It did not.

A. Legal Standard for Obviousness

IN RE: NUVASIVE, INC. 7

A patent claim is invalid as obvious “if the differences

between the subject matter sought to be patented and the

prior art are such that the subject matter as a whole

would have been obvious at the time the invention was

made to a person having ordinary skill in the [relevant]

art [(‘PHOSITA’)] . . . .” 35 U.S.C. § 103(a) (2006). 4 The

ultimate determination of obviousness is a question of

law, but that determination is based on underlying factu-

al findings. See Gartside, 203 F.3d at 1316. The underly-

ing factual findings include (1) “the scope and content of

the prior art,” (2) “differences between the prior art and

the claims at issue,” (3) “the level of ordinary skill in the

pertinent art,” and (4) the presence of secondary consider-

ations of nonobviousness such “as commercial success,

long felt but unsolved needs, failure of others,” and unex-

pected results. Graham v. John Deere Co., 383 U.S. 1,

17–18 (1966); United States v. Adams, 383 U.S. 39, 50–52

(1966).

In assessing the prior art, the PTAB “consider[s]

whether a PHOSITA would have been motivated to

combine the prior art to achieve the claimed invention.”

In re Warsaw Orthopedic, Inc., 832 F.3d 1327, 1333 (Fed.

Cir. 2016) (internal quotation marks, brackets, and cita-

tion omitted); see KSR Int’l Co. v. Teleflex Inc., 550 U.S.

398, 418 (2007) (“[I]t can be important to identify a reason

that would have prompted a [PHOSITA] to combine the

elements in the way the claimed new invention does.”).

Although we review this factual finding for substantial

evidence, “[t]he factual inquiry whether to combine refer-

ences must be thorough and searching,” and “[t]he need

4 Congress amended § 103 when it enacted the AIA.

Pub. L. No. 112-29, § 3(c), 125 Stat. at 287. However,

because the application that led to the ’156 patent was

filed before March 16, 2013, the pre-AIA § 103 applies.

See id. § 3(n)(1), 125 Stat. at 293.

8 IN RE: NUVASIVE, INC.

for specificity pervades [our] authority” on the PTAB’s

findings on motivation to combine. In re Lee, 277 F.3d

1338, 1343 (Fed. Cir. 2002) (internal quotation marks and

citations omitted); see id. (stating that “[t]his precedent

has been reinforced in myriad decisions[] and cannot be

dispensed with” and listing supporting precedent).

B. The PTAB Failed to Articulate a Motivation to

Combine the Prior Art References

NuVasive argues that, inter alia, the PTAB’s Final

Written Decision did not make adequately explained

findings as to why a PHOSITA would have been motivat-

ed to combine the prior art references and place the

radiopaque markers on the medial plane. Appellant’s

Br. 27–28. According to NuVasive, the PTAB relied on

only one conclusory statement by Medtronic’s expert that

the modification would provide “additional information.”

Id. (emphasis omitted). We agree with NuVasive.

Two distinct yet related principles are relevant to our

review. First, the PTAB must make the necessary find-

ings and have an adequate “evidentiary basis for its

findings.” Lee, 277 F.3d at 1344. Second, the PTAB

“must examine the relevant data and articulate a satis-

factory explanation for its action including a rational

connection between the facts found and the choice made.”

Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins.

Co., 463 U.S. 29, 43 (1983) (internal quotation marks and

citation omitted); see Synopsys, Inc. v. Mentor Graphics

Corp., 814 F.3d 1309, 1322 (Fed. Cir. 2016) (stating that,

as an administrative agency, the PTAB “must articulate

logical and rational reasons for [its] decisions” (internal

quotation marks and citation omitted)).

This explanation enables the court to exercise its duty

to review the PTAB’s decisions to assess whether those

decisions are “arbitrary, capricious, an abuse of discretion,

or . . . unsupported by substantial evidence . . . .” 5 U.S.C.

§ 706(2)(A)–(E) (2012); see Dickinson v. Zurko, 527 U.S.

IN RE: NUVASIVE, INC. 9

150, 152 (1999) (holding that § 706 governs our reviews of

the USPTO’s findings of fact and providing the framework

for this review). We “cannot exercise [our] duty of review

unless [we] are advised of the considerations underlying

the action under review.” SEC v. Chenery Corp., 318 U.S.

80, 94 (1943). Indeed, “the orderly functioning of the

process of review requires that the grounds upon which

the [PTAB] acted be clearly disclosed and adequately

sustained.” Id. Although we do not require perfect ex-

planations, we may affirm the PTAB’s findings “if we may

reasonably discern that it followed a proper path, even if

that path is less than perfectly clear.” Ariosa Diagnostics

v. Verinata Health, Inc., 805 F.3d 1359, 1365 (Fed. Cir.

2015) (citation omitted).

The relevant principles apply with equal force to the

PTAB’s motivation to combine analysis. Our precedent

dictates that the PTAB must make a finding of a motiva-

tion to combine when it is disputed. See, e.g., Lee, 277

F.3d at 1343–45; see also KSR, 550 U.S. at 418 (stating

that the PTAB’s motivation to combine “analysis should

be made explicit” (citation omitted)). Although identifying

a motivation to combine “need not become [a] rigid and

mandatory formula[],” KSR, 550 U.S. at 419, the PTAB

must articulate a reason why a PHOSITA would combine

the prior art references.

Our recent decisions demonstrate that the PTAB

knows how to meet this burden. For example, in Nike,

Inc. v. Adidas AG, we affirmed the PTAB’s finding of a

motivation to combine where it determined that a

PHOSITA “interested in Nishida’s preference to minimize

waste in the production process would have logically

consulted the well-known practice of flat-knitting, which

eliminates the cutting process altogether.” 812 F.3d 1326,

1337 (Fed. Cir. 2016) (emphasis added). Thus, a

PHOSITA “would have been motivated to address the

problem identified in Nishida by applying the teachings of

the Schuessler References to arrive at the invention in

10 IN RE: NUVASIVE, INC.

Nike’s proposed substitute claims.” Id. Similarly, in

Allied Erecting & Dismantling Co. v. Genesis Attach-

ments, LLC, we affirmed the PTAB’s explanation that “a

skilled artisan could modify Caterpillar in view of Ogawa

by treating the first jaw like the second” to “allow[] for a

greater degree of movement between the jaws, without

impacting the quick change functionality . . . .” 825 F.3d

1373, 1381 (Fed. Cir. 2016) (emphasis added) (citations

omitted). In each of these cases, the PTAB identified a

reason why a PHOSITA would have combined the prior

art references—i.e., “minimiz[ing] waste” (Nike, 812 F.3d

at 1337) and “allow[ing] for a greater degree of move-

ment” (Allied, 825 F.3d at 1381)—that had a foundation

in the prior art.

The PTAB must provide “a reasoned basis for the

agency’s action,” and “we will uphold a decision of less

than ideal clarity if the agency’s path may reasonably be

discerned.” Bowman Transp., Inc. v. Ark.-Best Freight

Sys., Inc., 419 U.S. 281, 285, 286 (1974). The PTAB’s own

explanation must suffice for us to see that the agency has

done its job and must be capable of being “reasona-

bly . . . discerned” from a relatively concise PTAB discus-

sion. In re Huston, 308 F.3d 1267, 1281 (Fed. Cir. 2002).

We have, however, identified some insufficient articu-

lations of motivation to combine. First, “conclusory

statements” alone are insufficient and, instead, the find-

ing must be supported by a “reasoned explanation.” Lee,

277 F.3d at 1342, 1345. Second, it is not adequate to

summarize and reject arguments without explaining why

the PTAB accepts the prevailing argument. See

Cutsforth, Inc. v. MotivePower, Inc., 636 F. App’x 575, 578

(Fed. Cir. 2016) (“The majority of the [PTAB]’s Final

Written Decision is spent summarizing the parties’ argu-

ments and offers only conclusory analysis of its own.

While the decision does specify when it is rejecting a

party’s argument, the [PTAB] does not explain why it

accepts the remaining arguments as its own analysis.

IN RE: NUVASIVE, INC. 11

This leaves little explanation for why the [PTAB] found

the claimed invention obvious.”). Third, although reliance

on common sense may be appropriate in some circum-

stances, see KSR, 550 U.S. at 421 (“Rigid preventative

rules that deny factfinders recourse to common

sense . . . are neither necessary under our case law nor

consistent with it.”), the PTAB cannot rely solely on

common knowledge or common sense to support its find-

ings, see Arendi S.A.R.L. v. Apple Inc., 832 F.3d 1355,

1362 (Fed. Cir. 2016) (“[R]eferences to ‘common

sense’ . . . cannot be used as a wholesale substitute for

reasoned analysis and evidentiary support . . . .”); see also

In re Rouffet, 149 F.3d 1350, 1357 (Fed. Cir. 1998) (ex-

plaining that the Board of Patent Appeals and Interfer-

ences cannot simply invoke “the high level of skill in the

art” as proof positive of its findings).

With these principles in mind, we turn to the PTAB’s

findings regarding motivation to combine. Here, the

PTAB acknowledged that the key issue was “whether it

would have been obvious to [a PHOSITA] to combine the

cited references,” Medtronic, 2015 WL 996352, at *6, and

then found that independent claim 1 would have been

obvious over a combination of Baccelli and either the SVS-

PR brochure or the Telamon references, see id. at *5–8.

In reaching this conclusion, the PTAB failed to explain

the reason why a PHOSITA would have been motivated to

modify either the SVS-PR or Telamon implants, in light of

Baccelli, to place radiopaque markers “proximate to said

medial plane” (i.e., near the middle of the implant), as the

’156 patent teaches. The majority of the PTAB’s analysis

was limited to summaries of the parties’ arguments, as

the USPTO acknowledged during oral argument. See

Oral Argument at 14:30–15:55, http://oralarguments.cafc.

uscourts.gov/default.aspx?fl=2015-1670.mp3. The PTAB

began by summarizing Medtronic’s and NuVasive’s argu-

ments on whether the “additional information” that could

be obtained from placing radiopaque markers near the

middle of the implant would benefit a PHOSITA. See

12 IN RE: NUVASIVE, INC.

Medtronic, 2015 WL 996352, at *6–7 (citing, inter alia,

J.A. 591 (Medtronic’s expert’s statement that a PHOSITA

“would have considered it to be common sense” to place

radiopaque markers along the medial plane “to provide

additional information regarding the orientation or loca-

tion of an implant”)). The PTAB stated “[w]e are not

persuaded by [NuVasive]’s argument, because the ques-

tion is whether it would have been obvious to [a

PHOSITA] to combine the cited references, and not

whether any specific implants on the market contain a

radiopaque marker in a central region.” Id. at *6. In

addition, the PTAB invoked the high level of skill in the

art when it “agree[d]” with Medtronic’s assertion that “the

addition of markers along the medial plane would not

confuse” a PHOSITA and found that NuVasive’s argu-

ment “vastly underestimates the ordinary skill of sur-

geons in this field.” Id. at *7 (citation omitted). However,

the PTAB never actually made an explanation-supported

finding that the evidence affirmatively proved that the

PHOSITA would have sought this additional information.

The PTAB avers that it “effectively” adopted Medtron-

ic’s arguments, Oral Argument at 14:52–15:11,

http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20

15-1670.mp3, but the PTAB neither expressly did so nor

provided reasoned explanations for crediting the argu-

ments. Medtronic’s arguments amount to nothing more

than conclusory statements that a PHOSITA would have

been motivated to combine the prior art references to

obtain additional information. In its summary of Med-

tronic’s arguments, the PTAB never articulated why the

additional information would benefit a PHOSITA when

implanting a posterior lumbar interbody fusion implant,

such as the implants disclosed by the SVS-PR brochure

and the Telamon references. It also failed to explain the

type of additional information a PHOSITA would obtain

or how the PHOSITA would use that information. Alt-

hough the PTAB did “credit the testimony” of NuVasive’s

expert that placing radiopaque markers along the medial

IN RE: NUVASIVE, INC. 13

plane “would provide . . . better alignment of the implant,”

Medtronic, 2015 WL 996352, at *7 (internal quotation

marks, brackets, and citation omitted), NuVasive’s ex-

pert’s statement was made in reference to benefits recog-

nized after the priority date of the ’156 patent, J.A. 4893

(explaining that these “uses were not disclosed in the

cited prior art references”). This statement addresses

neither the benefits that could have been obtained by

combining the prior art references nor the PHOSITA’s

motivation to combine at the time of the invention.

In sum, the PTAB failed to articulate a reason why

the PHOSITA would have been motivated to modify the

SVS-PR or Telamon implants, in light of Baccelli, to

obtain this additional information. Because we cannot

“reasonably discern” the PTAB’s reasoning as to motiva-

tion to combine, Ariosa, 805 F.3d at 1365 (citation omit-

ted), judicial review cannot “meaningfully [be] achieved,”

Lee, 277 F.3d at 1342. Therefore, the PTAB’s decision is

vacated and the case remanded for additional PTAB

findings and explanations regarding the PHOSITA’s

motivation to combine the prior art references.

CONCLUSION

We have considered the parties’ remaining arguments

and find them unpersuasive. For these reasons, the Final

Written Decision of the U.S. Patent and Trademark

Office’s Patent and Trial Appeal Board is

VACATED AND REMANDED

COSTS

Each party shall bear its own costs.