FOX Factory, Inc. v. SRAM, LLC

SRAM, LLC (defendant) owned a patent, the ’027 patent, that covered a chainring structure for bicycles that made it less likely that a chain would disengage during use. The patent’s independent claims described a chainring with alternating narrow and wide tooth tips offset from the center of the chainring either toward or away from the bicycle. SRAM owned another patent, the ’250 patent, that covered a chainring with alternating narrow and wide teeth, with the wide teeth having more than 80 percent gap filling. SRAM described the gap filling as creating a chainring that could keep the chain engaged even in bad cycling conditions. SRAM sold 13 versions of its X-Sync chainrings, all of which utilized offset wide and narrow teeth and gap filling. FOX Factory, Inc. (FOX) (plaintiff) petitioned for inter partes review of SRAM’s ’027 patent, challenging the patent’s validity on the basis that its claims were obvious and therefore not patentable. FOX relied on a Japanese patent that disclosed narrow and wide teeth and on a US patent that disclosed offset teeth. The Patent Trial and Appeal Board (board) concluded that each of the ’027 patent’s claims was addressed in a combination of the Japanese patent and US patent and that a skilled artisan would have been motivated to combine the two to improve chain retention. Nevertheless, the board ruled against FOX, finding that it had not proved SRAM’s ’027 patent invalid for obviousness because secondary considerations, namely the success of SRAM’s X-Sync chainrings, showed that SRAM’s patent was not obvious. In reaching its conclusion, the board found that SRAM was entitled to a presumption of nexus, or connection, between the secondary considerations and the challenged patent claims, allowing the board to factor the secondary considerations into its obviousness analysis. FOX appealed.