[co-author: Scott Findley]*

On July 9, 2024, Director Vidal reversed and remanded a denial of institution of inter partes review (IPR) relating to three Spin Master patents.  See Prime Time Toys LLC v. Spin Master, Inc., IPR Nos. 2023-01339, 2023-01348, 2023-01461, Paper 12 (PTAB July 9, 2024).  Director Vidal found that the PTAB erred in its motivation-to-combine analysis and effectively required an expectation of “absolute success” for prior art combinations.  Paper 12 at 7, 9.

In late 2023, Prime Time Toys LLC, Prime Time Toys Ltd., and Easebon Services Ltd. (“Petitioners”) requested IPR of certain claims in three Spin Master, Inc. (“Patent Owner”) patents for toys that “launch super absorbent polymer projectiles”: U.S. Patent Nos. 8,371,282, 8,596,255, and 8,640,683 (“the ’683 patent”).  Id. at 3.  Specifically, Petitioners argued that claim 4 of the ’683 patent (representative of the subject-matter at issue), which describes a “launching system” for “soft-projectiles formed from hydrated super absorbent polymer,” was rendered obvious by “Peev,” a Bulgarian patent publication disclosing an electric airsoft gun, and “Spitballs,” an archived webpage disclosing soft, liquid-absorbent projectiles.  Id. at 4.  At institution, the primary dispute was whether the dangers of airsoft guns’ standard hard plastic ammunition would motivate a person of ordinary skill in the art (“POSA”) to combine Peev with Spitballs to create a safer toy, with a reasonable expectation of success in doing so.

The PTAB found that Petitioners failed to establish motivation to combine Peev and Spitballs and that Petitioners did not show that the combination of prior art would eliminate injury risk.  Notably, the PTAB determined that, despite a recognized risk of eye injury from the hard ammunition, Petitioners did not establish that this risk would motivate a POSA to find a safer projectile or that a softer projectile “would solve any injury problem.”  Id.  The PTAB thus denied institution.  Petitioners then filed a request for Director Review, arguing that the PTAB abused its discretion by failing to properly consider its obviousness evidence.

On review, Director Vidal agreed with Petitioners that the PTAB relied on certain improper obviousness evidence that was contrary to other record evidence and found that the PTAB placed too high a burden on the Petitioners at the IPR institution stage.  Specifically, Director Vidal admonished the PTAB for relying on anecdotal expert testimony about a lack of safety concerns for airsoft guns to motivate the asserted combination, which contradicted more competent evidence of demand in the record, including significant evidence of simultaneous invention.  Director Vidal’s analysis emphasized the “expansive and flexible approach” required in obviousness assessments, especially when considering a motivation to combine inquiry.  Id. at 8-9.  Director Vidal also rejected the PTAB’s expectation of success analysis, which had required “absolute success” rather than a reasonable expectation.  After also disposing of Petitioners’ discretionary denial arguments, Director Vidal reversed and remanded to the PTAB to institute trial.

Takeaway: Director Vidal’s review decision provides a clear reminder that assessing obviousness requires an expansive and flexible approach that is grounded in the perspective of the POSA and that requires only a reasonable expectation of success.

*Summer Associate