SRAM Corp. v. AD-II Engineering

Case: SRAM Corp. v. AD-II Engineering, 2010 WL 743885 (C.A.Fed. (Ill.))

Facts: SRAM has a patent on a bicycle gear shifting system for multi-speed bicycles. Such gear shifting systems generally include a shift actuator (shifter) that is connected by a control cable to a derailleur that moves a bicycle chain from one sprocket or chain to another. Bicycle gear-shifting systems suffer from “play” caused by looseness or yielding of system parts. Play is also referred to as “cumulative lost motion” and must be eliminated before the rider is able to shift gears. A common method for removing the cumulative lost motion is “overshifting” which consists of moving the shift actuator beyond the desired destination point to take up the slack in the system and move the chain beyond the destination sprocket and then bring the shift actuator back to its destination position thereby allowing the drive chain to move back into alignment with the destination sprocket. SRAM’s patent discloses shift actuators that overcome these drawbacks by providing built-in overshift with the optimum amount of shift programmed into each shifter, which eliminates the need for the rider to manually overshift the bike chain in order to remove cumulative lost motion. With built-in overshift, the rider only has to shift in one direction, which is a substantial improvement. SRAM brought suit against AD-II for infringement of claims of its gear shifting patent which discuss the method of shifting.

Issue: Whether a third party’s patent application anticipated a patent bicycle gear shifting patent claim based on cumulative lost motion thereby making the patent invalid under 35 USC §102.

Holding: A third party patent application that meets the enablement requirement is enough to support an anticipation claim under § 102 even though the inventor never actually created the model. The court finds the distinction of whether the claim discussed the cumulative lost motion problem irrelevant because it was not necessary to describe how to create the invention in the claim and because the invention resulted in the removal of cumulative lost motion regardless of whether the problem was explained in the claim.

Analysis: In the Court of Appeal’s first encounter with this case the court determined that the claim for the gear shift did not recite the more complex “precision indexed downshifting” but merely that the claim covers no more than the method of taking up lost motion and effecting a shift. On remand, AD-II claimed that SRAM’s patent was invalid because two other patent references anticipated the claim. The district court found that neither reference addressed cumulative lost motion and that AD-II failed to show that the problem of cumulative lost motion was inherent to all derailleur systems. It also determined that a rider could shift in one direction with the AD-II gear system rather than having to overshift thus infringing on SRAM’s patent.
The Court of Appeals reversed the district court and found that a Japanese patent reference anticipated the SRAM patent. AD-II argues that the Japanese reference disclosed all the details recited in SRAM’s claim and that it is undisputed that all rotary gear shifters must perform SRAM’s claimed method to shift gears. SRAM argues that the Japanese reference does not mention the problem of cumulative lost motion nor offer a solution therefore all rotary gear shifters are not performing the same steps. SRAM also argues that the Japanese reference is not enabling therefore it cannot anticipate SRAM’s claims. In order to support this SRAM claims that during the patent re-examination process it demonstrated to the PTO that a model of the Japanese device could not perform the method in SRAM’s claim. As such, the Japanese reference was inoperable and not enabling.
For a prior art reference to anticipate a patent, it must disclose each and every limitation of the claimed invention. A patent claim cannot be anticipated by a prior art reference if the allegedly anticipatory disclosures cited as prior art are not enabled. The standard for what constitutes enablement for purpose of anticipation under § 102 differ from enablement under § 112. To serve as anticipatory prior art, utility does not need to be shown under § 102. The court determined that the Japanese reference has every limitation recited in the SRAM claim and expert testimony from both sides stated that a gear shifter must remove cumulative lost motion before shifting gears. SRAM acknowledges that the Japanese reference would have to remove lost motion to shift but argues that there is no recognition of the problem, no attempt to solve the lost motion problem, and no suggested method to compensate for the lost motion. In such prior art, shifters would compensate for lost motion is a clumsy and imprecise way. The court finds this distinction irrelevant because the Japanese reference would have removed any cumulative lost motion before shifting gears therefore it did not need to address the problem in the claim. The court finds that the Japanese reference anticipates SRAM’s patent because it describes shifting gears by rotating a shifter which results in the removal of cumulative lost motion before the rider shifts, this is exactly what the SRAM claim describes. There is also no issue that the Japanese reference met the enablement requirement and could support the anticipation claim under § 102 even though the inventor never actually created the model.

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