The U.S. Supreme Court gave tech businesses what they wanted — more defense against patent suits. The Court made it easier to get a patent declared invalid for failing to show “real innovation” in development. Technology companies, especially software developers, have been beating a never-ending drumbeat that they are the victims of patent suits, therefore the system must be broken.
In KSR Int’l Co. v. Teleflex Inc. (Opinion 04-1350; Decided April 30, 2007), the Court looked at whether the Federal Circuit has erred in holding that a claimed invention cannot be held “obvious”, and thus unpatentable under 35 U.S.C. § 103(a), in the absence of some proven “‘teaching, suggestion, or motivation’ that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed.”
The District Court had granted KSR summary judgment after holding that KSR satisfied the TSM test, reasoning the state of the industry would lead inevitably to combinations of electronic sensors and adjustable pedals. Reversing, the Federal Circuit ruled the District Court had not applied the TSM test strictly enough, having failed to make findings as to the specific understanding or principle within a skilled artisan’s knowledge that would have motivated one with no knowledge of the invention to attach an electronic control to the support bracket as was the case at hand.
The Supreme Court has now decided that the Federal Circuit addressed the obviousness question in a narrow, rigid manner that is inconsistent with §103 and the Supreme Court’s precedents.
The Court set out the original factors for determining obviousness over 40 years ago in Graham v. John Deere Co., which set out an objective analysis for applying §103: “[T]he scope and content of the prior art are . . . determined; differences between the prior art and the claims at issue are . . . ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented.”
The Federal Circuit has employed a “teaching, suggestion, or motivation” (TSM) test, under which a patent claim is only proved obvious if the prior art, the problem’s nature, or the knowledge of a person having ordinary skill in the art reveals some motivation or suggestion to combine the prior art teachings.
In a suit by Teleflex Inc. that accused KSR International Inc. of using a patented invention for adjustable gas pedals, the Court held that:
(a) When a work is available in one field, design incentives and other market forces can prompt variations of it, either in the same field or in another. If a person of ordinary skill in the art can implement a predictable variation, and would see the benefit of doing so, §103 likely bars its patentability. Moreover, if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond that person’s skill. A court must ask whether the improvement is more than the predictable use of prior-art elements according to their established functions.
(b) Inventions usually rely upon building blocks long since uncovered, and claimed discoveries almost necessarily will be combinations of what, in some sense, is already known. Helpful insights, however, need not become rigid and mandatory formulas. If it is so applied, the TSM test is incompatible with this Court’s precedents. The diversity of inventive pursuits and of modern technology counsels against confining the obviousness analysis by a formalistic conception of the words teaching, suggestion, and motivation, or by overemphasizing the importance of published articles and the explicit content of issued patents. In many fields there may be little discussion of obvious techniques or combinations, and market demand, rather than scientific literature, may often drive design trends. Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may, for patents combining previously known elements, deprive prior inventions of their value or utility.
(c) Under the correct analysis, any need or problem known in the field and addressed by the patent can provide a reason for combining the elements in the manner claimed. Second, the appeals court erred in assuming that a person of ordinary skill in the art attempting to solve a problem will be led only to those prior art elements designed to solve the same problem.
It will now be more difficult (read: more expensive than ever) to prosecute and obtain patents and easier to invalidate them. Whether or not this is good or bad depends on which side of the lawsuit you fall. The ruling is a victory for technology companies but a defeat for pharmaceutical and biotech industries as well as many other companies that highly value patent protection, e.g., Procter & Gamble Co., GE, DuPont Co. and Johnson & Johnson.
It is clear that the Supreme Court bought into the public sentiment of late that the patent system is somehow broken and needs a fixin’ or all these tech companies (read: campaign contributors) would not be so upset.
Unfortunately, any way you slice it, the Supreme Court took one amorphous, hard-to-define test and replaced it with another amorphous, hard-to-define test. It remains to be seen how advances with “real innovation” are to be determined.
[…] -La décision -Commentaires de Patently-o -Commentaire de Professeur Joshua Sarnoff -Commentaire de Patent Baristas (”It will now be more difficult (read: more expensive than ever) to prosecute and obtain patents and easier to invalidate them.”) -Commentaire de InventBlog -Commentaire de Patent Prospector […]
The precedent that had developed over the past 40 years was based on a thoughtful reading and interpretation of the Graham v. Deere factors. The TSM test arose logically therefrom.
What the district courts and the CCPA and the CAFC had been willing to do – interpret & apply Graham v. Deere – the Supreme Court was unwilling or unable to do. There is a surprising lack of discussion of Graham v. Deere in the KSR decision. They reaffirm that it states the rule and the law, but do practically nothing to establish a workable, predictable approach for applying Graham.
Nice summary, but with a seeming bias against the decision. First, the title could have more accurately and descriptively (less judgmentally) been worded, “Supreme Court Makes Obtaining Patents More Difficult”, or “Supreme Court Makes It More Difficult to Prevail in an Infringement Suit Based on an Obvious Patent”
The post also stated: “Whether or not this is good or bad depends on which side of the lawsuit you fall.” This is arguably a very relativistic and cynical way to look at it, as it implies there is no objective right or wrong here–only interests on both sides. It could be that one of the two sides’ viewpoints is actually superior to the other. For example, it could be that tech companies fearful of being shut down or having to pay exhorbitant damage awards (e.g., BlackBerry’s maker, or Vonage) are justified in believing patents should be more difficult to obtain.
The post also stated: “Technology companies, especially software developers, have been beating a never-ending drumbeat that they are the victims of patent suits, therefore the system must be broken.” This “beating a never-ending drumbeat” seems almost to diminish the complaints of victims of patent suits and make them seem like petty whining. RIM paid $612M to settle a suit for patents that may not even survive reexamination. Vonage may go out of business because of patents that are too obvious to have been granted. Their complaints are not trivial.
“It is clear that the Supreme Court bought into the public sentiment of late that the patent system is somehow broken and needs a fixin’ or all these tech companies (read: campaign contributors) would not be so upset.”
Yes, but there is also an almost daily parade of horrible excesses and absurdities resulting from copyright and patent law.
“Unfortunately, any way you slice it, the Supreme Court took one amorphous, hard-to-define test and replaced it with another amorphous, hard-to-define test. It remains to be seen how advances with “real innovation†are to be determined.”
This is true, but even if so, this is not necessarily “unfortunate”. It could be that given the inherent arbitrariness and non-objectivity of the patent statute’s standards, it’s impossible for the courts to formulate a non-amorphous test. I.e., its the fault of Congress, not the courts. But given this inherent “amorphousness,” it may arguably be a good thing that someone seeking to obtain a patent under these laws has a higher standard of proof.
Stephan,
Thanks for your comments and, yes, I have to agree with you. I was in a rather irritable mood when I wrote the article and it shows.
Having said that, I think that this case will present more problems in the pharmaceutical and biotech industries than the high-tech industries. The fundamental issues are just different. (My mechanical colleagues can’t understand how I could ever have 60 claims in a patent or a laundry list of substitution groups for a chemical compound)
The biosciences are already pummeled by obviousness rejections on a daily basis and this could lead to more difficulties in terms of some of the smaller advances, such as controlled-release drugs, enantiomers, etc., that are extremely important advances but might now prove more difficult in overcoming an obviousness rejection with a new, higher standard.
It’s also true that the high-tech industries have really been hit hard with suits predicated on very weak, if not completely invalid, patents that have caused a lot of harm and expense. I agree that, especially in the case of RIM and Vonage, their complaints are not trivial in any way.
Finally, I agree that Congress has not helped. They set out obviousness as a standard in 1952 without any guidance. It took the Supreme Court in Graham to set out a test and the CAFC to later define what all that means.
My biggest beef with the KSR opinion is that it sets us back a bit and it will now take years for cases to make their way to the CAFC for better definition of how to determine obviousness.
Stephen,
I don’t think there is anything wrong with having a bias or an opinion. I simply think biases should be made clear and if one is arguing normatively or prescriptively then one’s normative presumptions should be made clear rather than it sort being hidden, thus implying your normative assumptions are shared by others or uncontroversial.
“Having said that, I think that this case will present more problems in the pharmaceutical and biotech industries than the high-tech industries. The fundamental issues are just different.”
I am curious what you mean by “more problems.” It won’t present more problems for patent attorneys–our job is to navigate whatever the positive law happens to be. In fact complicating it and changing it and making it more murky probably only benefits lawyers. Which is sad, since it is a demonstrable net loss to society since it represents a shift of capital and resources away from productive activities towards legal maneuvering of the federal legislative thicket.
But to say it will “cause problems” for a given industry again, it seems to me, smuggles in a normative assumption–and one that not everyone shares. If you are saying pharma/biotech will now have more difficulty enforcing patents, and obtaining them, you may be right. But why you assume this will give them “problems” I am not sure–if companies are harmed to some extent by having a less valuable patent portfolio (because it’s harder to enforce it, or it’s smaller b/c you can now obtain fewer patents), they are benefited as well–fewer patent costs will be expended on prosecutions and applications of the patents that are not now filed or granted; and there is a reduced risk of being sued by competitors, or of losing. Who can say the benefits are less than the costs you implicitly point to? I am really curious why you make this assumption.
“The biosciences are already pummeled by obviousness rejections on a daily basis and this could lead to more difficulties in terms of some of the smaller advances, such as controlled-release drugs, enantiomers, etc., that are extremely important advances but might now prove more difficult in overcoming an obviousness rejection with a new, higher standard.”
Yes, but on the other hand, if the patents they file or obtain drops by, say, 10%, then they save filing, maintenance, prosecution fees on that 10%, which is not trivial; and competitors are also losing 10% so the chance of a lawsuit–especially a meritless one–now decreases, right? So that means insurance costs, defense costs, entry barriers, etc. all fall. Again, you seem to look at only the costs, but ignore any benefits. If you want to argue that this change in the law is a net cost to a given industry you have to do the net–subtract benefits from the costs, to see how great the net is. It could be that it is negative (i.e. a net benefit).
“My biggest beef with the KSR opinion is that it sets us back a bit and it will now take years for cases to make their way to the CAFC for better definition of how to determine obviousness.”
Again, I think that *given* the inherently arbitrariness of standards for patentabiltiy mandated in the patent statute, you cannot but expect “amorphous” and even occasionally evolving standards to be issued by the courts as they grapple with trying to apply these inherently non-objective standards.
In my view, IP law is necessarily and inherently vague and non-objective; it is nothing more than a positive law grant of monopoly power. It is not akin to real property law. So long as we have IP law, we will have decisions like those of the Court.
The SC decision showed a real lack of appreciation for the entire process of determining patentability. The TSM test evolved in response to the PTO’s routine employment of hindsight in rejecting claims. The SC rejected the rigid application of the test but offered nothing but fodder for future litigation. The inevitable result will be the denial of countless patent claims through the use of now permissible hindsight. They should have broadened the analysis rather than throwing it out. They couldn’t come up with a better test so they simply told everyone involved to fight it out in the hopes that something better might emerge. I’m dissapointed to think that this is the best they could have done.
The CAFC and Board have been monkeying around with motivation (which itself was thrown into the mix after the original TS to add flexibility) for years and the Court could have enlarged motivation or otherwise gave guidance to interpret obviousness to ensure that patents don’t get granted to the first person who runs to the patent office after a major technological breakthrough provides newly emerging technology that can be applied to existing products and processes. If the new combination arises because a new component appears in the art, that combination is much more likely to have been motivated by the appearance of the new technology.
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