Case: 19-1544    Document: 51     Page: 1   Filed: 05/18/2020




        NOTE: This disposition is nonprecedential.


   United States Court of Appeals
       for the Federal Circuit
                  ______________________

                  FOX FACTORY, INC.,
                       Appellant

                             v.

                       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     Document: 51      Page: 2   Filed: 05/18/2020




2                                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 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 arduous for all but a few bicyclists.
 The solitary chainring set-up does not require the roller
 chain to switch between chainrings when the rider 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-
 tions relating 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
 same size; 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 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 roots of the plurality of teeth
     are disposed adjacent the periphery of the chain-
     ring;
     the plurality of teeth including a first group of teeth
     and a second group of 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 inner chain links de-
     fining outer and inner link spaces, respectively;
     wherein each of the 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 land of the first group
     of teeth fills at least 80 percent of an axial distance
     defined by the outer link spaces.
 ’250 patent col. 6 l. 50–col. 7 l. 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                               FOX FACTORY, INC.   v. SRAM, LLC



 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 claims a 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 ground of 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 widened teeth 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.
 v. SRAM, LLC, 944 F.3d 1366, 1373–78 (Fed. Cir. 2019).
 We noted 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 1378 (“The same evidence of secondary
 considerations cannot be presumed to be attributable to
 two different combinations of 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—unmet by any of 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 argument that a skilled artisan nevertheless
 would have found it obvious to modify the chainring’s teeth
 to meet the axial fill limitation. Id., slip op. at 68–71.
    Fox Factory timely appealed. We have jurisdiction
 pursuant to 28 U.S.C. § 1295(a)(4)(A).
                           DISCUSSION
     We review 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.
 Obviousness is a question of law that “lends itself 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. Id. The Supreme Court has held that “a
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6                                FOX FACTORY, INC.   v. SRAM, LLC



 patent composed of several elements is not proved obvious
 merely by demonstrating that each of its elements was, in-
 dependently, known in the prior art.” KSR Int’l Co. v. Te-
 leflex Inc., 550 U.S. 398, 418 (2007). Instead, there must
 have been “an apparent reason to combine the known ele-
 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 known to perform’ and yields 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 conclusion of non-
 obviousness is 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, were the real driver of its success.
     SRAM responds that 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 mechanical skill,” 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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 FOX FACTORY, INC.   v. SRAM, LLC                           7



 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 subsequent praise,
 and long-felt need to solve chain retention problem); see
 also J.A. 5682 (awarding “Innovation of the Year” to SRAM
 for the X-Sync chainring and noting that “the entire con-
 cept can be related in a single phrase—[t]he chainring’s
 teeth are shaped to match the widths of the chain links”).
 The Board did not err in concluding that such evidence de-
 feated SRAM’s contention of routine optimization.
     We further reject Fox Factory’s argument that 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 product is not coextensive with a
 claimed invention simply because it 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 was crucial to its
 success. Given that concession, we concluded in our previ-
 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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8                                FOX FACTORY, INC.   v. SRAM, LLC



 address obviousness consistent with the law we have set
 forth on the presumption of nexus. Id. at 1380.
       But the critical facts differ in this case—most obviously
 in that the ’250 patent claims recite the >80% axial fill 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 supports its 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 on its 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. On this record, it makes no difference
 that the patent owner chose to claim those innovations in
 terms of how much of the outer chain link space is 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
