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Campbell’s “Hot” Soup Sales Throws Cold Water on Its Commercial Success Arguments

June 28, 2018
Patent Office Trials Blog

In Campbell Soup Company, et al. v. Gamon Plus, Inc., IPR2017-00087, Paper 75 (PTAB 2018) (Final Written Decision), the Patent Trial and Appeal Board (“PTAB”) found that “an appreciable amount of Campbell’s increased commercial success of soup” was attributable to Gamon’s product covered by the claims and, thus, found claim 27 of U.S. Patent 8,827,111 B2 (“’111 patent”) patentable in view of this commercial success.

Campbell purchased from Gamon approximately $31 million of its iQ Maximizer gravity feed display racks over a seven-year period.  The parties agreed that these display racks fell within the scope of at least claim 27 of the ‘111 patent, of which Gamon was the owner.  During this seven-year period, Campbell noted a year-over-year positive sales lift in its condensed-soup brand by maintaining the same level of productivity while reducing inventory in stores of the products by 15%, thereby cutting costs to the stores.  In a 2005 report to its investors, Campbell touted the benefits of the iQ Maximizer, reporting increased sales of soup by 8% by using gravity-feed shelving systems such as the iQ Maximizer.  Campbell’s investor reports in subsequent years showed further sales increases and attributed these sales increases, at least partially, on gravity feed shelving display racks.

In an attempt to invalidate the claims of the patent, Campbell set forth several grounds of unpatentability, alleging the claims were invalid under 35 U.S.C. § 103(a).  Ultimately, the Board relied on the Graham factors, in particular the commercial success factor, in determining that the claims were not obvious over the combination of references set forth by Campbell.

In asserting that the claims were nonobvious based on commercial success, Gamon relied on both its sales of the iQ Maximizer gravity feed display racks and Campbell’s increased sale of soup that was displayed using the iQ Maximizer racks.  Campbell argued, however, that Gamon was required to show a nexus “directly attributable” to one or more limitations of claim 27 that were allegedly novel to succeed on its commercial success argument.  The Board did not find Campbell’s argument persuasive, citing the Federal Circuit’s holding in WBIP, LLC v. Kohler Co. that “there is a presumption of nexus for objective considerations when the patentee shows that the asserted objective evidence is tied to a specific product and that product ‘is the invention disclosed and claimed in the patent.’”  829 F.3d 1317, 1329 (Fed. Cir. 2016).  The Board found that Gamon tied the objective evidence to a specific product, i.e., the iQ Maximizer gravity feed display racks, and Campbell failed to rebut the presumption of a nexus.

Notably, the Board relied on Campbell’s expert that at least some of the increased soup sales were attributable to the iQ Maximizer gravity feed display racks.  While it agreed that other factors impacted the commercial sales of the soup, the Board found that Gamon’s sales of the iQ Maximizer gravity feed display racks to Campbell and Campbell’s attribution of some increased soup sales to these gravity feed display racks provided a strong showing of commercial success, thereby finding claim 27 of the ‘111 nonobvious.

In view of the Board’s decision, it is clear that the commercial success is not limited to commercial success of the product within the scope of the claim at issue. Rather, if a patent owner can show that increased sales of another product are attributable to the product within the scope of the claim at issue, this may be sufficient to show commercial success of the product.  Further, to rebut a patent owner’s “nexus” argument, a petitioner must show that the objective considerations are not tied to the entire product, not certain limitations within the claim(s) at issue.