Fox Factory, Inc. v. Sram, LLC

Summary

In *Fox Factory, Inc. v. Sram, LLC*, 944 F.3d 1366 (Fed. Cir. 2019), the Federal Circuit vacated the PTAB’s obviousness determination in an IPR, holding that the Board erred by presuming nexus between secondary considerations evidence and the challenged claims. The court clarified that a presumption of nexus requires the commercial product to be “essentially the claimed invention” and not merely broadly covered by the claims; unclaimed features that materially impact functionality—such as the “critical” >80% gap filling feature claimed in a related continuation patent—prevent coextensiveness. The case establishes that when a product embodies additional patented features beyond the challenged claims, the patentee must prove that the evidence of secondary considerations is attributable specifically to the claimed combination, not to unclaimed or prior art features. The court also remanded for the Board to consider non-instituted grounds under SAS Institute, Inc. v. Iancu.

Holdings

1. The Board erred in presuming nexus because the X-Sync chainrings are not coextensive with the independent claims. The independent claims do not include the critical >80% gap filling feature and other unclaimed features that materially impact functionality, so nexus may not be presumed.
2. Substantial evidence supports the Board's finding that a skilled artisan would have been motivated to combine JP-Shimano and Parachinni because the combination would better address chain drop.
3. FOX did not waive its right to a SAS-based remand because SAS issued after the Board's final decision and FOX filed a motion to remand before its opening brief.

Questions Presented

1. Whether the Board applied the wrong standard for determining whether SRAM was entitled to a presumption of nexus between the challenged claims and evidence of secondary considerations.
2. Whether substantial evidence supports the Board's finding that a skilled artisan would have been motivated to combine the asserted prior art.
3. Whether FOX waived its right to a SAS-based remand.

Disposition

Vacated and Remanded