In Re DBC

United States Court of Appeals for the Federal Circuit

2008-1120
(Reexamination No. 90/007,178)

IN RE DBC

Lawrence M. Jarvis, McAndrews, Held & Malloy, Ltd., of Chicago, Illinois, argued
for appellant. With him on the brief were Yufeng Ma and Consuelo Garcia Erwin.

Thomas V. Shaw, Associate Solicitor, Office of the Solicitor, United States Patent
and Trademark Office, of Arlington, Virginia, and Michel S. Raab, Attorney, Appellate
Staff, Civil Division, United States Department of Justice, of Washington, DC, argued for
the Director of the United States Patent and Trademark Office. With them on the brief
were Sydney O. Johnson, Jr., Acting Solicitor; Mary L. Kelly, Associate Solicitor;
Gregory G. Katsas, Assistant Attorney General; and Kelsi Brown Corkran, Attorney.

Appealed from: United States Patent and Trademark Office
Board of Patent Appeals and Interferences
 United States Court of Appeals for the Federal Circuit
2008-1120
(Reexamination No. 90/007,178)

IN RE DBC

Appeal from the United States Patent and Trademark Office, Board of Patent Appeals
and Interferences.
__________________________

DECIDED: November 3, 2008
__________________________

Before LINN and DYK, Circuit Judges, and STEARNS, District Judge. *

LINN, Circuit Judge.

DBC, LLC (“DBC”) appeals from a final decision of the United States Patent and

Trademark Office Board of Patent Appeals and Interferences (“the Board”), which

affirmed the examiner’s rejection of all pending claims as obvious under 35 U.S.C.

§ 103. Ex parte DBC, No. 2007-1907 (B.P.A.I. Aug. 24, 2007) (“Decision”). Because

substantial evidence supports the Board’s determination that the claims would have

been obvious, and because DBC has waived challenging the appointment of the

administrative patent judges who presided over its appeal, we affirm.

I. BACKGROUND

This case involves juice made from the fruit of the mangosteen tree (known

scientifically as the Garcinia mangostana L. tree), an exotic plant thought to originate

from Southeast Asia. The mangosteen fruit, which is botanically unrelated to the

*
Honorable Richard G. Stearns, District Judge, United States District Court
for the District of Massachusetts, sitting by designation.
mango, is reputed to be one of the best tasting of all tropical fruits. U.S. Patent No.

6,730,333 (“the ’333 patent”), col. 1, ll. 22-23. The ’333 patent states that the pericarp

or rind of the mangosteen fruit—although very bitter—is known in folk medicine to treat

conditions such as intestinal and skin ailments. Id., col. 1, ll. 33-34, 48-53. As a result

of its use in folk medicine, the medicinal properties of the mangosteen tree have been

studied in numerous pharmacological and clinical studies. Id., col. 1, l. 58 – col. 2, l. 18.

According to the patent, these studies have isolated in the mangosteen tree and its fruit

chemical constituents known as xanthones, biologically active compounds that are

receiving increased attention as potentially able to provide a variety of health benefits.

Id.

DBC is the owner of the ’333 patent, which issued on May 4, 2004. The patent is

directed to a “nutraceutical composition[] comprising a mixture of the pulp and pericarp

of the mangosteen fruit.” Id., col. 1, ll. 11-13. A nutraceutical is defined in the patent as

“any compound[] or chemical[] that can provide dietary or health benefits when

consumed by humans or animals.” Id., col. 3, ll. 59-61. Claim 1 is representative of the

invention:

1. A nutraceutical beverage comprising:
pericarp from fruit of a Garcinia mangostana L. tree;
a first juice from fruit of a Garcinia mangostana L. tree; and
at least one second juice selected from the group consisting of fruit
juice and vegetable juice.

On October 14, 2004, the United States Patent and Trademark Office (“PTO”)

granted a third party’s request for ex parte reexamination of the ’333 patent. During

reexamination, the examiner rejected all claims of the ’333 patent as obvious over a

combination of seven prior art references: (1) Japanese Patent 11043442 (“JP ’442”);

(2) Japanese Patent 08208501 (“JP ’501”); (3) James A. Duke & Judith L. duCellier,

2008-1120 2
CRC Handbook of Alternative Cash Crops (1993) (“Duke”); (4) J.F. Caius, The

Medicinal and Poisonous Plants of India (1986); (5) Keigo Nakatani et al., Inhibition of

Cyclooxygenase and Prostaglandin E2 Synthesis by γ-mangostin, a Xanthone

Derivative in Mangosteen, in c6 Rat Glioma Cells, 63 Biochemical Pharmacology 73

(2002); (6) K.R. Kirtikar & B.D. Basu, Indian Medicinal Plants (1999); and (7) Othman

Yaacob & H.D. Tindall, Mangosteen Cultivation (1995) (“Yaacob”). Of these seven

references, JP ’442 was the only reference not before the original examiner who found

the claims of the ’333 patent application patentable.

In response to the examiner’s rejection of the claims during reexamination, DBC

submitted three declarations pursuant to 37 C.F.R. § 1.132 to provide objective

evidence of nonobviousness. These declarations attempted to demonstrate the

success of the commercial embodiment of the patented invention, known commercially

as XanGo™ juice. The examiner was not persuaded by DBC’s evidence, however, and

following a telephonic interview, made the rejection final.

DBC appealed the examiner’s final rejection to the Board. The Board agreed

with the examiner that the seven prior art references in the record rendered obvious all

pending claims. The Board also concluded that DBC’s proffered evidence of

commercial success was not sufficient to overcome the prima facie showing of

obviousness. As a result, the Board affirmed the examiner’s rejection of the pending

claims as obvious under 35 U.S.C. § 103.

DBC timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).

2008-1120 3
 II. DISCUSSION

A. Standard of Review

A claimed invention is unpatentable if the differences between it and the prior art

are such that the subject matter as a whole would have been obvious at the time the

invention was made to a person having ordinary skill in the pertinent art. 35 U.S.C.

§ 103(a); see also generally KSR Int’l Co. v. Teleflex Inc., 550 U.S. ___, 127 S. Ct. 1727

(2007). The ultimate determination of whether an invention would have been obvious is

a legal conclusion based on underlying findings of fact. In re Dembiczak, 175 F.3d 994,

998 (Fed. Cir. 1999), abrogated on other grounds by In re Gartside, 203 F.3d 1305,

1316 (Fed. Cir. 2000). We review the Board’s ultimate determination of obviousness de

novo. Id. We review the Board’s underlying factual findings for substantial evidence.

Gartside, 203 F.3d at 1316.

B. Analysis

DBC challenges the Board’s decision on three primary grounds. 1 First, DBC

contends that the Board erred in finding a prima facie case of obviousness based on a

substantial new question of patentability. Next, it contends that even if the Board

properly found a prima facie case of obviousness, it erred by concluding that the

submitted evidence of commercial success was insufficient to rebut the prima facie

case. Finally, DBC argues that even if the Board correctly affirmed the examiner’s

1
DBC also makes a number of arguments related to its contention that
various aspects of the Board’s decision qualify as new grounds of rejection. We have
considered those arguments but find them unpersuasive. We also observe that DBC
failed to request rehearing or reopening of prosecution pursuant to 37 C.F.R. § 41.77,
which it could have done had it believed that the Board made a new ground of rejection
in affirming the examiner.

2008-1120 4
rejection of the claims as obvious, its decision must nevertheless be vacated because

two members of the panel that heard the appeal were unconstitutionally appointed. We

address each contention in turn, beginning with DBC’s challenge under the

Appointments Clause.

1. Appointments Clause

DBC argues that regardless of the merits of the underlying rejection, the decision

of the Board must be vacated because two of the administrative patent judges on the

panel were appointed unconstitutionally. 2 The government counters that DBC waived

this issue by failing to raise it either before the Board or in its opening brief in this

appeal. 3 We agree with the government that DBC waived the issue by failing to raise it

before the Board.

In an article published in 2007, Professor John F. Duffy of the George

Washington University Law School contended that legislation enacted in 2000 and

delegating the power to appoint administrative patent judges to the Director of the PTO

(“the Director”) instead of the Secretary of Commerce (“Secretary”) was constitutionally

infirm under the Appointments Clause, U.S. Const. art. II, § 2, cl. 2. See John F. Duffy,

Are Administrative Patent Judges Constitutional?, 2007 Patently-O Patent L.J. 21, 21

(2007). Professor Duffy argued that the Director may not constitutionally be delegated

the power to appoint administrative patent judges, who are “inferior Officers” in the

2
DBC first raised this argument in a supplemental brief filed after briefing in
this case was completed.
3
The government contends, alternatively, that Congress has already
remedied the problem by enacting legislation providing a defense to a challenge to the
appointment of an administrative patent judge that the administrative patent judge was
acting as a “de facto officer.” Because we conclude that DBC has waived the argument,
we need not and do not address this contention.

2008-1120 5
words of the Appointments Clause, because the Appointments Clause vests that

authority only to “the President alone, in the Courts of Law, or in the Heads of

Departments.” Id. at 21-25. DBC relies upon Professor Duffy’s theory here in arguing

that because the administrative patent judges were unconstitutionally appointed, the

Board’s decision must be vacated. As noted above, DBC did not raise its objection to

the manner of appointment to the Board itself. The threshold question thus presented is

whether its failure to do so resulted in a waiver of the challenge.

It is well-established that a party generally may not challenge an agency decision

on a basis that was not presented to the agency. See Woodford v. Ngo, 548 U.S. 81,

90 (2006) (“As a general rule . . . courts should not topple over administrative decisions

unless the administrative body not only has erred, but has erred against objection made

at the time appropriate under its practice.” (quoting United States v. L.A. Tucker Truck

Lines, 344 U.S. 33, 37 (1952) (emphasis omitted)). In L.A. Tucker, for example, the

Interstate Commerce Commission approved an application to extend a motor carrier

route. An examiner of the agency recommended that the application be granted, and a

division of the Commission approved the recommendation. L.A. Tucker, which had

opposed the application, requested, but was denied, reconsideration by the full

Commission. L.A. Tucker then petitioned for further relief, which was also denied. It

then filed suit in district court challenging the agency’s grant of the application. Before

the district court, L.A. Tucker raised for the first time the argument that the

Commission’s action was invalid because the examiner had not been properly

appointed pursuant to the Administrative Procedure Act. The district court permitted

L.A. Tucker to make the argument, and invalidated the agency’s action on that basis.

2008-1120 6
 The Supreme Court appeal raised the single question “whether such an

objection, first made at that stage of the proceedings, was not erroneously entertained.”

L.A. Tucker, 344 U.S. at 35. Reversing the district court, the Supreme Court found L.A.

Tucker’s objection untimely, characterizing its challenge to the examiner’s appointment

as “clearly an afterthought, brought forward at the last possible moment to undo the

administrative proceedings without consideration of the merits and [which] can prevail

only from technical compulsion irrespective of considerations of practical justice.” Id. at

36. Finding the objection untimely, the Court reasoned that “orderly procedure and

good administration require that objections to the proceedings of an administrative

agency be made while it has opportunity for correction in order to raise issues

reviewable by the courts.” Id. at 37.

As the Supreme Court later explained in Woodford, the requirement that a party

object to an agency prior to attacking that agency’s action in court serves two primary

purposes. See Woodford, 548 U.S. at 89 (discussing administrative exhaustion vis-à-

vis the Prison Litigation Reform Act of 1995). First, it “gives [the] agency an opportunity

to correct its own mistakes . . . before it is haled into federal court, and [thus]

discourages disregard of [the agency’s] procedures.” Id. at 89 (last modification in

original, internal quotation marks and citation omitted). If DBC had raised this issue in

its appeal before the Board, the Board would have had an opportunity to consider and

cure the alleged constitutional infirmity. Under 35 U.S.C. § 6(b), the Director has

authority to designate the members of Board panels. The Director has delegated that

authority to the Chief Administrative Patent Judge. See Manual of Patent Examining

Procedure § 1002.02(f) (8th ed., rev. 6, Sept. 2007), available at

2008-1120 7
http://www.uspto.gov/web/offices/pac/mpep/mpep_e8r5_1000.pdf. According to the

Board’s standard operating procedures, the Chief Administrative Patent Judge “will

approve a revised designation” of the judges on any particular panel “[w]hen satisfied

that there is good reason to change the panel already designated.” Board of Patent

Appeals and Interferences, Standard Operating Procedure 1 (Revision 12): Assignment

of Judges to Merits Panels, Motions Panels, and Expanded Panels at 6 (Aug. 10, 2005),

available at http://www.uspto.gov/go/dcom/bpai/sop1.pdf. As evidenced by DBC’s

supplemental brief and its attachments, DBC was able to determine, based on the

appointment dates of the administrative patent judges in question, that they were

appointed by the Director and thus subject to an Appointments Clause challenge. Thus,

nothing prevented DBC from taking steps while this case was before the Board to

ascertain the appointment status of the administrative patent judges assigned to its

case. Even if DBC did not learn of the judges assigned to its panel until oral argument

or until a decision was issued, it still had an opportunity to challenge the composition of

the panel in a post-argument submission or in a motion for reconsideration. If DBC had

timely raised this issue before the Board, the Board could have evaluated and corrected

the alleged constitutional infirmity by providing DBC with a panel of administrative

patent judges appointed by the Secretary. Of course, the Board may not have

corrected the problem, or even acknowledged that the problem existed. But in that

case, DBC would have preserved its right to appeal the issue.

The second purpose for requiring that a party make an objection to the agency is

that it promotes judicial efficiency, as “[c]laims generally can be resolved much more

quickly and economically in proceedings before [the] agency than in litigation in federal

2008-1120 8
court.” Woodford, 548 U.S. at 89. The relief DBC seeks with respect to this claim is for

a properly appointed panel of administrative patent judges to review the examiner’s

rejection of its claims. If DBC had objected to the Board, instead of to this court in the

first instance, it could have obtained relief immediately, and thus avoided the

unnecessary expenditure of the administrative resources of the original Board panel, the

judicial resources of this court, and the substantial delay and costs incurred in

prosecuting this appeal.

While the foregoing supports the conclusion that DBC has waived challenging

the appointments, there is one final inquiry that nonetheless remains. Because we

retain discretion to reach issues raised for the first time on appeal, we must consider

whether this is one of those exceptional cases that warrants consideration of the

Appointments Clause issue despite its tardy presentation. See Golden Bridge Tech.,

Inc. v. Nokia, Inc., 527 F.3d 1318, 1322-23 (Fed. Cir. 2008) (“While appellate courts are

given the discretion to decide when to deviate from th[e] general rule of waiver, we have

explained that ‘prudential considerations’ articulated by the Supreme Court counsel

against hearing new arguments for the first time on appeal absent limited

circumstances.”) (internal citations omitted); see also Golden Blount, Inc. v. Robert H.

Peterson Co., 365 F.3d 1054, 1062 (Fed. Cir. 2004).

The Supreme Court itself has, in “rare cases,” exercised its discretion to review a

constitutional challenge not timely raised before the lower tribunal. See, e.g., Freytag v.

Comm’r, 501 U.S. 868, 879 (1991); see also Nguyen v. United States, 539 U.S. 69, 78

(2003); Glidden Co. v. Zdanok, 370 U.S. 530, 536 (1962). Like this case, Freytag,

Nguyen, and Glidden involved constitutional challenges under the Appointments

2008-1120 9
Clause. The Supreme Court has never indicated that such challenges must be heard

regardless of waiver. See Freytag, 501 U.S. at 893 (Scalia, J., concurring in part and

concurring in the judgment) (observing that the court did not create a general rule

excusing waiver). Rather, the Court has proceeded on a case-by-case basis,

determining whether the circumstances of the particular case warrant excusing the

failure to timely object. See id., 501 U.S. at 879 (“We conclude that this is one of those

rare cases in which we should exercise our discretion to hear petitioners’ challenge to

the constitutional authority of the Special Trial Judge.”). DBC has recognized that our

excusal of its waiver is discretionary, see Oral Arg. at 2:20-2:22, available at

http://oralarguments.cafc.uscourts.gov/mp3/2008-1120.mp3, but nevertheless urges us

to consider the merits of its Appointments Clause challenge.

We decline DBC’s invitation to consider a challenge it failed to timely raise, as we

do not view the circumstances of this case to warrant such an exceptional measure.

Primarily, we reemphasize that while this issue could have been raised before the

Board, it was not. Although DBC may not have appreciated the argument until

discovering Professor Duffy’s article, 4 that article was not an intervening change in law

or facts, nor was it based on any legal or factual propositions that were not knowable to

DBC when it was proceeding before the Board. We are not persuaded to overlook

DBC’s lack of diligence to present an issue of which it was, or should have been, aware.

To permit litigants like DBC to raise such issues for the first time on appeal would

4
Professor Duffy’s article was published on July 23, 2007, over one month
before the Board issued the decision from which DBC appeals (and over six months
prior to DBC filing its opening brief here). Although we do not consider the article to
have any effect on DBC’s obligation to raise the issue, we note that even if it somehow
gave DBC a fresh opportunity to present the objection, DBC failed to diligently do so.

2008-1120 10
encourage what Justice Scalia has referred to as sandbagging, i.e., “suggesting or

permitting, for strategic reasons, that the trial court pursue a certain course, and later—if

the outcome is unfavorable—claiming that the course followed was reversible error.”

Freytag, 501 U.S. at 895 (Scalia, J., concurring in part and concurring in the judgment).

We also consider the remedial action taken by Congress to weigh against

considering the waived challenge. On August 12, 2008, the President signed into law

legislation that redelegated the power of appointment to the Secretary, thereby

eliminating the issue of unconstitutional appointments going forward. Pub. L. No. 110-

313, § 1(a)(1)(B), 122 Stat. 3014, 3014 (2008) (codified at 35 U.S.C. § 6(a)). The

legislation also includes a provision attempting retroactive correction of the Director’s

appointments by providing “a defense to a challenge to the appointment of an

administrative patent judge on the basis of the judge’s having been originally appointed

by the Director that the administrative patent judge so appointed was acting as a de

facto officer.” Pub. L. No. 110-313, § 1(a)(1)(C), 122 Stat. 3014, 3014 (2008) (codified

at 35 U.S.C. § 6(d)). While we take no position on the constitutionality of that defense,

Congress’s action in fixing the problem prospectively means that our decision will not

affect cases decided by future panels of the Board. This argues against our exercising

discretion to address the issue.

Finally, DBC has not made any allegation of incompetence or other impropriety

regarding the administrative patent judges who heard its appeal, nor has it alleged that

these judges are somehow unqualified to serve in the position. Indeed, the Secretary,

acting under the new statute, has reappointed the administrative patent judges involved

in DBC’s appeal. Thus, even if we were to exercise our discretion to consider DBC’s

2008-1120 11
constitutional argument, conclude that the judges were improperly appointed, and

remand to the Board for reconsideration by a properly appointed panel, there is nothing

to suggest that the Board would do anything other than simply (and legitimately) assign

the case to the same panel. The fact that we have affirmed the merits of the Board’s

action in this case also speaks against our exercising discretion and needlessly

protracting the reexamination of the present patent.

We conclude that the circumstances presented here do not warrant the exercise

of our discretion to hear DBC’s Appointments Clause challenge.

2. Prima Facie Case of Obviousness

A patent may not issue “if the differences between the subject matter sought to

be patented and the prior art are such that the subject matter as a whole would have

been obvious at the time the invention was made to a person having ordinary skill in the

art to which said subject matter pertains.” 35 U.S.C. § 103(a); see also generally KSR,

550 U.S. ___, 127 S. Ct. 1727. As noted above, obviousness is a question of law

based on underlying facts. Dembiczak, 175 F.3d at 998. The Board concluded that the

prior art relied upon by the examiner established a prima facie case of obviousness:

Of record in the rejection is JP ’442, which discusses the known
medicinal qualities of pericarp. Of particular interest is Example 6, found
on page 16 of the translation, which describes a drink which includes
orange juice, water, and an extract of pericarp.
JP ’442 describes health benefits of its composition; consequently it
is a nutraceutical according to the Appellant’s definition in the
Specification. Example 6 of JP ’443 [sic] includes pericarp from fruit of a
Garcinia mangostana L. tree in the form of a medicinal extract. Example 6
also includes orange juice, which is a juice selected from the group
consisting of fruit juice and vegetable juice.
Thus, the only difference between the single closest piece of prior
art of record and instant claim 1 is the addition of juice from fruit of a
Garcinia mangostana L. tree into the drink.
* * *

2008-1120 12
 Duke describes that Garcinia Mangostana L. is “cultivated for its
fruit, which has a flavor suggestive of strawberry and grape; said to be the
most delicious of all tropical fruits.” Yaacob describes mangosteen fruits
as “one of the finest flavored fruits in the world, outranking all other
tropical fruits; the mangosteen has therefore justly earned the popular title
of ‘Queen of Fruits.’”
We agree with the Examiner that these references provide ample
motivation to combine mangosteen juice, another fruit or vegetable juice,
and mangosteen pericarp in a beverage, to cover up the taste of the
mangosteen rind.

Decision at 11-12 (internal citations omitted).

On appeal, DBC primarily argues that the Board failed to establish a prima facie

case of obviousness based upon a substantial new question of patentability because

the JP ’442 reference is cumulative and non-analogous art. 5 DBC argues that since JP

’442 was the only new prior art reference cited during reexamination, it cannot raise a

substantial new question of patentability. In In re Hiniker Co., we suggested that a

reference that “was not material to the question of obviousness . . . or . . . was

cumulative with any old art” was not sufficient to create a substantial new question of

patentability. 150 F.3d 1362, 1367 (Fed. Cir. 1998). Relying on this passage, DBC

contends that JP ’442 is not material to obviousness and is cumulative over the prior art

references that were before the examiner during the original prosecution. We disagree

with DBC on both points.

The abstract of JP ’442 describes a composition designed to be resistant to

legionella bacteria and which includes one or more extracts from a number of fruits and

5
DBC also argues that the Board’s decision constitutes a new ground of
rejection because the Board cited the English translation of JP ’442, while only the
English translation of the abstract of that document was before the examiner. We
discern no merit in this argument. As we discuss infra, the Board’s use of the example
in the translation goes no farther than, and merely elaborates upon, what is taught by
the abstract.

2008-1120 13
other biological products, one of which is mangosteen rind. The examiner observed, in

his answer before the Board, that “[i]f you want to consume the rind, it was known in the

prior art to mix it with a fruit such as strawberry as taught by JP ’442 (abstract).” J.A. at

3735; see also id. at 3735-36 (“The key piece of art is JP ’442 which clearly teaches

mangosteen rind and raspberry, strawberry and/or blackberry in the same

composition.”). The Board similarly concluded that the reference teaches “a legionella

bacteria disinfection agent and ingestible compositions, e.g., drinks, that contain the

disinfection agent.” Decision at 5. Thus, as both the examiner and the Board

recognized, the abstract teaches mixing the mangosteen rind in a composition with

fruits and fruit juices to obtain a legionella resistant composition (a nutraceutical under

the ’333 patent’s definition of the word). Because it teaches a nutraceutical beverage

combining fruits and fruit juices and mangosteen rind in the same composition, JP ’442

is plainly material to patentability.

DBC also contends that JP ’442 is cumulative over JP ’501, which “describes

the reconstitution of the [mangosteen] extract into a drug and states that the drug can

take any suitable form for administration including as a syrup, solution, or suspension

with a carrier.” Decision at 6. But, as is plain from JP ’501, that reference does not

teach that mangosteen rind (or extract) can be made into a composition with fruits or

fruit juices, only that it can be made into a “syrup, solution, or suspension with a carrier.”

Because JP ’442 is the only reference that teaches that the mangosteen rind can be

combined with fruits and fruit juices to make a nutraceutical composition, it is not

cumulative with respect to any of the prior art references that were before the original

2008-1120 14
examiner. We thus reject DBC’s argument that JP ’442 does not raise a substantial

new question of patentability.

DBC does not appear to challenge the Board’s prima facie case of obviousness

per se, only that it was not based upon a substantial new question of patentability.

Because we have rejected that argument, and because JP ’442, together with the other

references cited, is substantial evidence fully supporting the Board’s finding of a prima

facie case of obviousness, we affirm that portion of the Board’s decision.

3. Secondary Considerations

During reexamination, and in response to the examiner’s rejection of the pending

claims, DBC submitted three declarations pursuant to 37 C.F.R. § 1.132 in an effort to

demonstrate the commercial success of XanGo™ juice. These declarations, made by

Kent Wood, Craig Johanson, and Stephen Bean—officers and employees of XanGo,

LLC (“XanGo”), the exclusive licensee of DBC and marketer of XanGo™ juice—

described, among other things, the ingredients in XanGo™ juice and the process for

making it. Those statements were offered in an attempt to show that the juice is made

according to the claims of the ’333 patent. The submitted declarations also

demonstrated that XanGo™ juice enjoyed $130 million in gross sales during the first

two years it was on the market, and that XanGo’s advertising budget represented only a

small fraction of sales.

The Board was unpersuaded by DBC’s evidence, finding that it was insufficient to

overcome the strong prima facie case of obviousness. Decision at 30. In particular, the

Board found that:

The Appellants have not established with credible and persuasive
evidence what product was marketed and when. The Appellants have not

2008-1120 15
 established that the product which was sold is commensurate in scope
with the scope of the claims for which protection is sought. Finally, the
Appellants have not persuaded us that the sales are a result of anything
other than network marketing, the increasing popularity of mangosteen,
and improved availability of the mangosteen fruit in general.
Accordingly, we find that the evidence of commercial success is
insufficient to persuade us of the unobviousness of the claimed subject
matter, which differs from the prior art only in the addition of a known,
tasty, mangosteen juice.

Id. DBC makes several arguments to support its contention that the Board erred in

finding that its evidence of commercial success did not overcome the prima facie case

of obviousness.

First, DBC argues that the Board erred by concluding that the evidence failed to

show that XanGo™ juice was commensurate with the claims. On this point, we agree

with DBC. The Board concluded that the Bean declaration, which proffered that

XanGo™ juice was commensurate in scope with the claims of the ’333 patent, was not

worthy of credibility:

Mr. Bean’s Declaration provides no persuasive evidence of any real
personal knowledge of the contents of XanGo™ for the relevant time
frame for claimed commercial success. For example, no chemical
analyses, product batch sheets, manufacturing records, sales records, or
the like are provided in support of any specific testimony that the
commercially sold XanGo™ product contains the listed ingredients . . . .
In sum, we do not find paragraph 5 [listing the ingredients] to be
persuasive or credible.

Decision at 27. In his declaration, Bean avers personal knowledge of the contents of

XanGo™ juice, based on discussions with employees, contractors, and officers of DBC.

J.A. at 343. Under the circumstances of this case, no more is required to demonstrate

that the XanGo™ juice falls within the scope of the claims, particularly when the product

label itself demonstrates as much.

2008-1120 16
 The Board also called Bean’s credibility into question because, when stating that

XanGo™ juice was commensurate with the claims, he did not state that it also included

a vegetable juice. Apparently, the Board thought that the commercial embodiment of

the claim must contain both a fruit juice and a vegetable juice since the claim recites “at

least one second juice selected from the group consisting of fruit juice and vegetable

juice.” On this point, the Board also erred. DBC need not sell every conceivable

embodiment of the claims in order to rely upon evidence of commercial success, so

long as what was sold was within the scope of the claims. See Applied Materials, Inc. v.

Adv. Semiconductor Materials Am., Inc., 98 F.3d 1563, 1570 (Fed. Cir. 1996) (“[A]

patentee need not show that all possible embodiments within the claims were

successfully commercialized in order to rely on the success in the marketplace of the

embodiment that was commercialized.”).

Next, DBC argues that the Board erred when it found no nexus between the

claimed invention and the submitted evidence of commercial success. Related to this

argument, DBC also claims the Board erred when it suggested that the commercial

success of XanGo™ juice may be attributable to other factors, such as aggressive

network marketing. The Board concluded that although $130 million in sales in two

years was a substantial figure, there was “no persuasive evidence tying those sales to

the claimed subject matter.” Decision at 29. Elaborating on this point, the Board

observed that the evidence in the record suggested that the success of XanGo™ juice

may be due to other factors—for example, the increasing popularity of the mangosteen

fruit in general. Id. Based on this increasing popularity, it observed that there was “no

evidence comparing the growth in sales of XanGo™ to the growth in sales of

2008-1120 17
mangosteen juice in general.” Id. The Board also highlighted the marketing structure of

XanGo, which is a “network marketing company” that pays substantial commissions for

sales, and noted that “[h]ow much of the commercial success is due to aggressive

network marketing in the form of sales commissions and bonuses is unexplained by the

Appellants.” Id. at 30. In light of these infirmities in DBC’s submitted evidence, the

Board found it insufficient to upset the prima facie case of obviousness.

The Board’s conclusion is supported by substantial evidence. We have held on a

number of occasions that evidence of commercial success alone is not sufficient to

demonstrate nonobviousness of a claimed invention. Rather, the proponent must offer

proof “that the sales were a direct result of the unique characteristics of the claimed

invention—as opposed to other economic and commercial factors unrelated to the

quality of the patented subject matter.” In re Huang, 100 F.3d 135, 140 (Fed. Cir.

1996); see also In re GPAC Inc., 57 F.3d 1573, 1580 (Fed. Cir. 1995) (“For objective

evidence to be accorded substantial weight, its proponent must establish a nexus

between the evidence and the merits of the claimed invention.”). Here, DBC has done

little more than submit evidence of sales. However substantial those sales, that

evidence does not reveal in any way that the driving force behind those sales was the

claimed combination of mangosteen fruit, mangosteen rind extract, and fruit or

vegetable juice. Nor is there any evidence that sales of XanGo™ juice were not merely

attributable to the increasing popularity of mangosteen fruit or the effectiveness of the

marketing efforts employed. For the foregoing reasons, we cannot conclude that the

Board’s decision is unsupported by substantial evidence. We thus affirm that portion of

the Board’s decision.

2008-1120 18
 III. CONCLUSION

For the foregoing reasons, the decision of the Board is

AFFIRMED.

COSTS

No costs.

2008-1120 19