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Polaris Industries, Inc. v. Arctic Cat, Inc.

United States Court of Appeals, Federal Circuit

February 9, 2018

ARCTIC CAT, INC., Cross-Appellant

         Appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in Nos. IPR2014-01427, IPR2014-01428.

          J. Derek Vandenburgh, Carlson, Caspers, Vanden-burgh, Lindquist & Schuman, P.A., Minneapolis, MN, argued for appellant. Also represented by Alan Gary Carlson, Dennis Bremer.

          Joseph Herriges, Jr., Fish & Richardson P.C., Minneapolis, MN, argued for cross-appellant. Also represented by John Cameron Adkisson, Robert P. Courtney, Conrad Gosen.

          Before Lourie, O'Malley, and Hughes, Circuit Judges.

          O'Malley, Circuit Judge.

         Polaris Industries, Inc. ("Polaris") owns U.S. Patent No. 8, 596, 405 ("the '405 patent"), which is directed to all-terrain vehicles ("ATVs") having at least two seats arranged side-by-side. Polaris's competitor, Arctic Cat, Inc. ("Arctic Cat"), filed two petitions for inter partes review, challenging the patentability of all thirty-eight claims of the '405 patent as obvious under 35 U.S.C. § 103 based on different combinations of prior art references. The Patent Trial and Appeal Board ("Board") found, in two inter partes review proceedings, that the claims are unpatentable over one combination of references, but not the other. See Arctic Cat, Inc. v. Polaris Indus., Inc., No. IPR2014-01427, 2016 WL 498434 (P.T.A.B. Feb. 4, 2016) (1427 Decision); Arctic Cat, Inc. v. Polaris Indus., Inc., No. IPR2014-01428, 2016 WL 498539 (P.T.A.B. Feb. 4, 2016) (1428 Decision). The parties cross-appealed.

         For the reasons below, we affirm in part, vacate in part, and remand for further proceedings in the 1427 Decision. We affirm the Board's determination that the challenged claims were not proven unpatentable in the 1428 Decision.

         I. Background

         A. The '405 Patent

         The '405 patent, titled "Side-by-Side ATV, " issued on December 3, 2013, and was assigned to Polaris. According to the specification, the invention of the '405 patent "relates to [ATVs] having at least a pair of laterally spaced apart seating surfaces." '405 patent, col. 1, ll. 10- 12. At several points, the '405 patent expresses a desire that the ATV have a low center of gravity. The specification, for example, explains that in one "illustrative embodiment, " shown in Figure 2, "the ratio of the wheelbase to the seat height, or distance A to distance B, is about 6.55 to 1." Id. col. 4, ll. 19-21. The specification goes on to state that "the present invention contemplates ATVs having a ratio of wheelbase to seat height greater than about 6.0 to 1, " which "facilitates a relatively low vehicle center of gravity and further provides improved ergonomics, handling, and space utilization." Id. col. 4, ll. 23-28. The specification also provides that, in another embodiment, "various relatively heavy components" such as the battery and fuel tank "are positioned vertically proximate the frame 15 to lower the vehicle's center of gravity, thereby improving balance and stability." Id. col. 5, ll. 23-35

         Each of the thirty-eight claims recites components housed within the ATVs, and specifies the spatial relationship between these components. For example, independent claim 1, at issue on appeal, recites an ATV including:

[a] a frame, comprising a front frame portion, a mid frame portion and a rear frame portion;
[b] a front suspension supported by the front frame portion;
[c] at least two front wheels coupled to the front suspension;
[d] a front axle assembly supported by the front frame portion and drivingly coupled to the front wheels;
[e] a seating area supported by the mid frame portion, comprising side by side seats;
[f] an engine supported by the rear frame portion, the engine positioned rearwardly of the seating area;
[g] a transmission coupled to and extending rearwardly of the engine;
[h] a rear suspension supported by the rear frame portion;
[i] at least two rear wheels coupled to the rear suspension;
[j] a rear axle assembly supported by the rear frame portion and drivingly coupled to the rear wheels;
[k] a front drive shaft extending between the transmission and the front axle assembly for coupling the transmission to the front wheels;
[l] and a rear drive shaft extending between the transmission and the rear axle assembly for coupling the transmission to the rear wheels.

Id. col. 11, ll. 2-25.

         The claims that depend from claim 1-i.e., claims 2-33 and 35-either specify the spatial relationship between the various components or recite additional components, such as "side-by-side bucket seats having a seat back and seat bottom." Id. col. 11, ll. 26-28 (claim 2). Also at issue on appeal are dependent claims 15-19, which include limitations regarding the placement of a "protective panel, " fuel tank, battery, and front driveshaft. Id. col. 11, l. 61-col. 12, l. 6. These five claims all depend from claim 5, which recites "[t]he all-terrain vehicle of claim 1, wherein the rear frame portion comprises a lower rear frame portion and an upper rear frame portion." Id. col. 11, ll. 35-37.

         The only other independent claim, claim 34, differs from claim 1 in two relevant ways. First, while claim 1 requires that the front and rear drive shafts "extend[] between" the transmission and the front and rear axle assemblies, respectively, claim 34 requires that these drive shafts "extend[] forward of the transmission" and "rearward of the transmission, " respectively. Compare id. col. 11, ll. 20-26, with id. col. 13, ll. 6-11. Second, while claim 1 requires that the transmission "extend[] rear-wardly of the engine, " claim 34 requires that the transmission be located "completely rearward of the seating area." Compare id. col. 11, ll. 14-15, with id. col. 12, ll. 66-67.

         B. The Prior Art

         Three prior art references-U.S. Patent Nos. 7, 658, 258 ("Denney"), 5, 327, 989 ("Furuhashi"), and 3, 709, 314 ("Hickey")-are relevant to these appeals. These references are described below.

         1. Denney

         Denney is directed to "an all terrain, four-wheeled vehicle frame for carrying at least two passengers in a side-by-side riding configuration, comprising a rigid, tubular frame body." Denney, at Abstract. The invention of Denney "provides for a forward passenger compartment having structural support members for carrying a pair of seats for the side-by-side passengers" and "a rearward engine compartment configured for receiving an engine, power train, and transmission for driving wheels of the vehicle." Id. The invention in Denney "includes a vertical, load-bearing truss member extending generally along a longitudinal, central axis of the vehicle within the passenger compartment, the truss member forming a load-bearing structural member between the pair of seats." Id.

         Denney's specification describes the state of the art at the time of the invention disclosed therein, and the tradeoffs between certain known vehicle designs. The specification explains that ATVs "typically have a short wheelbase which gives the ATV increased maneuverability and transportability over their counterpart recreational vehicles such as sandrails or a dune buggies [sic]." Id. col. 1, ll. 17-20 (emphasis added). But, "[h]istorically, ATVs with a shorter wheelbase require that the ATV occupancy area be raised to accommodate the decreased amount of space between the wheels. By raising the occupancy area, the center of gravity of the ATV is also raised." Id. col. 1, ll. 22-26 (emphasis added). "The result of a higher center of gravity is a decrease in vehicle stability and subsequent increased risk of rollovers." Id. col. 1, ll. 26-28 (emphasis added).

         On the other hand, recreational vehicles such as dune buggies "with wider wheelbases are able to accommodate vehicle occupants lower in the vehicle plane and hence have a lower center of gravity." Id. col. 1, ll. 30-32 (emphasis added). But "the wider wheelbase decreases the vehicles [sic] maneuverability as well as the ability to transport the recreational vehicle in the back of a standard pick up truck bed." Id. col. 1, ll. 34-36 (emphasis added). Denney therefore explains that "[i]t would be advantageous to combine the attractive features of the lower center of gravity vehicles with the attractive features of the shorter wheelbase . . . vehicles such that the resultant ATV has the increased maneuverability and transportability of a smaller ATV and the lower center of gravity and resultant enhanced stability of the vehicles with the wider wheelbases." Id. col. 1, ll. 37-43.

         The invention described in Denney purports to achieve this desired combination, but purportedly does so in a two-wheel drive system. See id. col. 4, ll. 29-35 (describing the power train giving the rear wheels additional movement through the driving axle). It is undisputed that Denney lacks features claimed in the '405 patent that relate to front-wheel drive. See Cross-Appellant Br. 17. It is also undisputed that Denney does not disclose the additional limitations recited in claims 16-19 of the '405 patent. See id. at 23-25.

         2. Furuhashi

         Furuhashi, by contrast, is directed to a "four-wheeled buggy" that can accommodate a single rider. Furuhashi, at Abstract; id. col. 1, ll. 6-9. Furuhashi's specification explains that, in one embodiment, "a seat S is arranged in front of the engine room 11 and a fuel tank 120 is located within an area defined under a cushion 81 of the seat S." Id. col. 12, ll. 23-26. Moreover, "[a] battery 16" is "arranged at the right side of the engine 12 in such a way that the battery 16 is supported on the right main frame 1 . . . ." Id. col. 5, ll. 39-42. The specification goes on to explain that, "[u]nder a seatback 80 a fixed plate 123 is provided to cover a clearance 122 positioned behind the rider's waist and is formed thereon with air ventilating slots 124." Id. col. 12, ll. 31-34. In addition, Figure 19 depicts a "space 121" running below the fixed plate 123, the "lower part" of which "is provided for ...

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