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Intercontinental Great Brands LLC v. Kellogg North America Co.

United States Court of Appeals, Federal Circuit

September 7, 2017


         Appeals from the United States District Court for the Northern District of Illinois in No. 1:13-cv-00321, Judge Matthew F. Kennelly.

          Katie Crosby Lehmann, Ciresi Conlin LLP, Minneapolis, MN, argued for plaintiff-appellant. Also represented by Michael V. Ciresi.

          Richard Daniel Harris, Greenberg Traurig LLP, Chicago, IL, argued for defendants-cross-appellants. Also represented by Matthew J. Levinstein, James J. Lukas, Jr.

          Before Prost, Chief Judge, Reyna and Taranto, Circuit Judges.



         Kraft Foods Global Brands LLC (now called Intercontinental Great Brands) owns U.S. Patent No. 6, 918, 532, which issued in 2005 and was supplemented with additional claims on reexamination in 2011. The '532 patent describes and claims a food package that, after opening, can be resealed to maintain the freshness of the food items inside. Kraft brought this patent-infringement suit against Kellogg North America Co., Keebler Foods Co., and affiliates (collectively, Kellogg) in the Northern District of Illinois. The district court held that Kellogg was entitled to summary judgment of invalidity for obviousness of the asserted claims of the '532 patent. Intercontinental Great Brands LLC v. Kellogg N. Am. Co., 118 F.Supp.3d 1022, 1027-42 (N.D. Ill. 2015). The court also held that Kraft was entitled to summary judgment rejecting Kellogg's counterclaim of unenforceability of the patent due to alleged inequitable conduct by Kraft, chiefly in an ex parte reexamination proceeding. Id. at 1044-45. We affirm.


         The '532 patent describes a combination of two known kinds of packaging. One, common for cookies, uses a frame surrounded by a wrapper. The other, common for wet wipes, uses a package on which the label may be pulled back to access the contents, then put back in place to reseal the package to preserve the items remaining inside.

         Thus, the background section of the patent begins: "Containers for food products such as cookies and other snacks typically include a frame surrounded by an outer wrapper. The frame acts as a tray to hold the food product and to protect the food product from damage." '532 patent, col. 1, lines 12-15. A person wanting to consume some but not all of the items in the package "normally" does so "by opening one end of the wrapper, withdrawing the tray from the inside thereof, and then removing the food product from the tray." Id., col. 1, lines 15-18. "[T]hese containers, " however, "generally do not provide a convenient opening and reclosing arrangement. For example, reclosing of the wrapper, once opened, generally includes simply folding or rolling the end down and clipping the end to keep the wrapper closed." Id., col. 1, lines 19-23.

         At the same time, "[r]eclosable seals have been used for dispensing bags for wet tissue or disposable cleaning wipes." Id., col. 1, lines 24-25. "The label on these bags can be pulled back thereby exposing an opening, allowing access to the wet tissues or wipes inside." Id., col. 1, lines 25-27. "Typically, " however, "these dispensing bags" lack a rigid internal structure, i.e., "are completely flexible, formed exclusively of a plastic or other suitable flexible material which closely surrounds the pack of wet tissues or wipes." Id., col. 1, lines 27-30. Lacking an internal rigid structure, "such known dispensing bags are not well suited for containing food products as these containers fail to provide adequate protection for storing food products." Id., col. 1, lines 34-36.

         The patent then introduces the invention:

The purpose of the present invention is to provide a new and improved container for food products such as rigid food articles, for example cookies and the like, which container provides adequate protection for the contents thereof, while concurrent- ly facilitating opening of the container wrapper and resealing the seal to protect the contents thereof until the contents are fully consumed.

Id., col. 1, lines 39-46.

         Claim 1, which is largely representative for purposes of this appeal, recites as follows:

1. A polygonal shaped food container comprising:
a frame defining the polygonal shape of the container, said container having a top, a bottom[, ] and sides connecting the top and bottom, the frame containing a food product comprised of discrete food articles;
a wrapper surrounding said frame, said wrapper forming the top[, ] sides[, ] and bottom of the container;
said top having an access opening sufficiently large to provide hand access to substantially all of the discrete food articles contained within the frame, such that substantially any one of the discrete food articles can be accessed and removed individually through said access opening; and
a sealing layer, adhesively sealed to said top around said opening, said sealing layer including a starter portion located near a side of the top which can be grasped by a user, said sealing layer being releasable when said starter portion is pulled in a direction away from said side to in turn pull and thereby release at least a portion of said sealing layer to provide the hand access to said top access opening and reclosable against said top to seal said opening when said sealing layer is moved back against the said top.

Id., col. 5, lines 29-51.

         In October 2007, about two years after the '532 patent issued, a Swedish company that produces resealable packages sought an ex parte reexamination of that patent from the U.S. Patent and Trademark Office. Intercontinental, 118 F.Supp.3d at 1026. The Office initiated the reexamination, and in April 2010, the examiner (in the central reexamination unit) rejected all claims except two of the claims that Kraft added (to which the examiner objected), relying centrally on a short 2001 article in Packaging News that displayed and described Re-Seal It packaging made by a Swedish firm and marketed by Paramount Packaging. In August 2011, however, the Patent Trial and Appeal Board reversed all of the rejections. It relied critically on a particular phrase in the Packaging News article asserting the conventionality of the wrapping film to distinguish the Kraft patent claims-a phrase that does not appear in the descriptions of Paramount Re-Seal It packaging in the distinct prior-art articles that became central in the present litigation. Ex Parte Kraft Foods Global Brands LLC., No. 2011-005770, 2011 WL 3754634 (P.T.A.B. Aug. 19, 2011). The resulting reexamination certificate contained the original claims 1-25 and new claims 26-67.

         In 2013, Kraft sued Kellogg for infringement of a number of claims of the '532 patent. In particular, Kraft alleged that Kellogg infringed by making, using, selling, and offering certain cookies in resealable packages that a Kellogg document suggested were designed to "'circumvent[] the Kraft patent while maintaining similar properties.'" Intercontinental, 118 F.Supp.3d at 1026 (alteration in original). Kellogg responded by, among other things, alleging that the asserted claims of the '532 patent were invalid for obviousness and that the patent was unenforceable due to inequitable conduct by Kraft before the Board in securing reversal of the examiner's rejections during reexamination. Kellogg eventually moved for summary judgment of invalidity, and Kraft moved for summary judgment on Kellogg's counterclaim of unenforceability due to inequitable conduct.[1]

         The district court granted Kellogg's motion for summary judgment of invalidity of all of the asserted claims (1, 3, 4, 6, 26, 32, 33, 34, 35, 36, 37, 39, and 42) under 35 U.S.C. § 103 (2006).[2] As the patent itself makes clear, the "frame" element is shown by prior art, such as U.S. Patent No. 3, 740, 238 issued to Graham, which discloses a traditional cookie package with a frame to hold the cookies, described as prior art in the '532 patent. And while the patent makes clear that non-food prior art showed a peel-back resealable package without a rigid structure (packaging for wet wipes), what the patent does not show, but the record in this litigation reveals, is prior art showing a peel-back resealable package with a rigid tray for food items ("such as" discrete items like sushi and canapés)-namely, two related articles in the Machinery Update publication describing and showing a Re-Seal It package marketed in Britain by Paramount Packaging as an agent for Real-Seal It Sweden. See Machinery Update, March/April 2002 at 59-60 (J.A. 4423-24); Machinery Update, September/October 2001 at 46-47 (J.A. 4708-09).

         First, considering independent claims 1 and 34, the district court concluded that the record put beyond reasonable dispute that all claim elements except the "frame" element were shown in the Machinery Update articles and the "frame" element was shown in the prior art of cookie packaging, such as the Graham patent. Intercontinental, 118 F.Supp.3d at 1030-34. The court then determined that the only reasonable inference on the record was that a relevant skilled artisan would have been motivated to combine those prior-art references. The court specifically stressed that the absence of a "convenient opening and reclosing arrangement" was a "known problem" for cookie packaging and that the Machinery Update resealable, tray-included packaging for foods offered a skilled artisan a solution to the problem simply by replacing the Machinery Update "tray" with a frame, i.e., a tray with higher sides. More generally, the court considered the simple and clear teachings of the art, the importance of common sense and ordinary creativity, and the conclusory character of Kraft's expert's assertions of nonobviousness. Id. at 1034-38. The court next analyzed the various dependent claims, finding no basis for a different conclusion about the art-based portion of the obviousness analysis. Id. at 1038-41.

         Finally, the court concluded that Kraft's evidence of certain objective indicia, though substantial, was simply not entitled to such weight in the ultimate legal assessment of obviousness as to produce a bottom-line conclusion of anything but invalidity. Id. at 1041-42. In particular, the court determined that Kraft had strong evidence of commercial success tied to the patent-claimed packaging, industry praise, and copying by Kellogg. Id. at 1041. Nevertheless, the court concluded, "this is a case in which the secondary considerations do not overcome Kellogg's extremely strong prima facie showing that the invention was obvious in light of Machinery Update." Id. The court explained:

In this case, the prior art references teach all of the claim limitations-all of the elements could be found in existing food packaging technology. In fact, nearly all of the elements were found in one Machinery Update article, and the rest already existed in cookie packages. Additionally, the technology is relatively simple. Based on these considerations, a person skilled in the art would have a reason to combine the elements to create the invention. In sum, the primary considerations lead to a conclusion that the invention was obvious in light of the prior art, and [Intercontinental's] strong showing of secondary considerations does not outweigh this determination.
In sum, based on the undisputed facts, all of the asserted claims are invalid as obvious in light of Machinery Update when combined with existing cookie packages.

Id. at 1042.

         With regard to Kellogg's unenforceability challenge to the '532 patent, based chiefly on alleged inequitable conduct by Kraft in the reexamination proceeding, the court granted Kraft's motion for summary judgment rejecting the challenge. Id. at 1044-45. The court explained that the charge of inequitable conduct during reexamination did not and could not rest on withholding by Kraft of material prior art; in particular, "[i]t is undisputed that [the 2002] Machinery Update [article] . . . [was] presented during reexamination." Id. at 1044. The court then addressed Kellogg's key charge-that Kraft's counsel did not tell the Patent and Trademark Office (PTO) that the phrase in the Packaging News article about the conventionality of the wrapping film, on which the Board came to rely in upholding Kraft's claims, was actually a misprint, as allegedly made evident by the opposite characterization of the film used in Re-Seal It packaging in the 2002 Machinery Update article. The district court, while agreeing that the phrase in Packaging News likely was a misprint, concluded that Kraft's counsel "merely restated the contents of the misprinted article" and "[t]here is no evidence that the attorney knowingly failed to identify the inconsistency between the two articles." Intercontinental, 118 F.Supp.3d at 1045. Kellogg thus had not presented evidence that could meet the standard for intent to deceive established in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290-91 (Fed. Cir. 2011) (en banc). Intercontinental, 118 F.Supp.3d at 1045.[3]

         Kraft appeals regarding invalidity. Kellogg cross-appeals regarding unenforceability. We have jurisdiction under 28 U.S.C. § 1295(a)(1).


         We review the district court's grant of summary judgment de novo. See Blow v. Bijora, Inc., 855 F.3d 793, 797 (7th Cir. 2017); Innovention Toys, LLC v. MGA Entm't, Inc., 637 F.3d 1314, 1318 (Fed. Cir. 2011). "The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). A "material fact" is one that "might affect the outcome" of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Williams v. Brooks, 809 F.3d 936, 941-42 (7th Cir. 2016); Crown Operations Int'l, Ltd. v. Solutia Inc., 289 F.3d 1367, 1375 (Fed. Cir. 2002). A "genuine" dispute over a material fact exists only if it is "reasonable" on the summary-judgment record to find that fact, and therefore to reach a verdict, against the movant, taking into account the governing burden of persuasion. Anderson, 477 U.S. at 248 ("[A] material fact is 'genuine' . . . if the evidence is such that a reasonable jury could return a verdict for the nonmoving party."); id. at 250-57 (reiterating reasonableness inquiry and role of who has burden of persuasion and whether "clear and convincing evidence" or other standard applies); see Scott v. Harris, 550 U.S. 372, 378 (2007) (On summary judgment, "courts are required to view the facts and draw reasonable inferences in the light most favorable to the party opposing" the motion. (emphasis added) (internal quotation marks omitted)); Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000) ("[T]he court must draw all reasonable inferences in favor of the nonmoving party."); U.S. Water Servs., Inc. v. Novozymes A/S, 843 F.3d 1345, 1350 (Fed. Cir. 2016); Laskin v. Siegel, 728 F.3d 731, 734 (7th Cir. 2013).


         A claimed invention is unpatentable "if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious" to one of ordinary skill in the relevant art. 35 U.S.C. § 103. Obviousness is a legal question based on underlying factual determinations. KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007); Graham v. John Deere Co. of Kan. City, 383 U.S. 1, 17-18 (1966); Randall Mfg. v. Rea, 733 F.3d 1355, 1362 (Fed. Cir. 2013). Among the factual determinations are "the scope and content of the prior art, differences between the prior art and the claims at issue, the level of ordinary skill in the pertinent art, and any objective indicia of non-obviousness." Randall, 733 F.3d at 1362 (citing KSR, 550 U.S. at 406; Graham, 383 U.S. at 17-18). Also a fact question, of significance here, is whether the relevant skilled artisan had a motivation to combine pieces of prior art in the way eventually claimed in the patent at issue. Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034, 1047-48, 1051 (Fed. Cir. 2016) (en banc); PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1196 (Fed. Cir. 2014); Wyers v. Master Lock Co., 616 F.3d 1231, 1237-39 (Fed. Cir. 2010); see also, e.g., Skky, Inc. v. MindGeek, s.a.r.l., 859 F.3d 1014, 1021 (Fed. Cir. 2017) (applying the same standards to the Patent Trial and Appeal Board's determination of obviousness in an inter partes review).[4] Once the relevant fact issues are resolved, "[t]he ultimate judgment of obviousness is a legal determination" for the court. KSR, 550 U.S. at 427.

         "In KSR, the Supreme Court criticized a rigid approach to determining obviousness based on the disclosures of individual prior-art references, with little recourse to the knowledge, creativity, and common sense that an ordinarily skilled artisan would have brought to bear when considering combinations or modifications." Randall, 733 F.3d at 1362. "[T]he Court required an analysis that reads the prior art in context, taking account of 'demands known to the design community, ' 'the background knowledge possessed by a person having ordinary skill in the art, ' and 'the inferences and creative steps that a person of ordinary skill in the art would employ.'" Id. (quoting KSR, 550 U.S. at 418). A "court must ask whether the [claimed] improvement is more than the predictable use"-a "predictable variation"-"of prior art elements according to their established functions, " considering whether more is involved than "the simple substitution of one known element for another or the mere application of a known technique to a piece of prior art ready for the improvement." KSR, 550 U.S. at 417. "[I]f a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill." Id. at 417. The court should consider a range of real-world facts to determine "whether there was an apparent reason to combine the known elements in the fashion claimed by the patent at issue." Id. at 418; see id. ("[I]t can be important to identify a reason that would have prompted a person of ordinary skill in the relevant field to combine the elements in the way the claimed new invention does."). "One of the ways in which a patent's subject matter can be proved obvious is by noting that there existed at the time of invention a known problem for which there was an obvious solution encompassed by the patent's claims." Id. at 419-20.

         Depending on the record, summary judgment of invalidity for obviousness may be appropriate. The Supreme Court ordered summary judgment in KSR after a careful determination of the facts put beyond genuine dispute by the record, and it explained that "a conclusory affidavit addressing the question of obviousness" does not "exclude the possibility of summary judgment." Id. at 426. Rather:

In considering summary judgment on that question the district court can and should take into account expert testimony, which may resolve or keep open certain questions of fact. That is not the end of the issue, however. The ultimate judgment of obviousness is a legal determination. Graham, 383 U.S. at 17. Where, as here, the content of the prior art, the scope of the patent claim, and the level of ordinary skill in the art are not in material dispute, and the obviousness of the claim is apparent in light of these factors, summary judgment is appropriate.

Id. at 427. Based on the required close examinations of case-specific records, this court, since KSR, has sometimes held summary judgment of obviousness unwarranted[5] and sometimes found it warranted.[6]

         In this case, we conclude, the district court correctly determined that summary judgment was warranted on the record, for the reasons we have summarized in describing the district court's opinion. Kraft's arguments to the contrary are unpersuasive.


         Kraft turns first to the objective indicia (secondary considerations) bearing on obviousness. Kraft's Opening Br. 38-42. It contends that the district court treated the objective indicia as an "afterthought, " "writing off the patent before turning to objective indicia, " and "repeatedly not[ing] its finding of obviousness before considering the objective indicia." Id. at 38, 40, 41. That contention mischaracterizes the district court's ...

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