[A2k] Microsoft's Brief on KSR vs. Teleflex

[Benjamin Krohmal]

In making its decision this week in the KSR v. Teleflex case, the
U.S. Supreme Court considered an amicus brief filed jointly
Microsoft, Cisco, and three other companies.

Readers of this list may be especially interested in the following
excerpt which highlights the reasons these companies support higher
standards of patentability.

REASONS FOR GRANTING THE PETITION
I. THE FEDERAL CIRCUIT=E2=80=99S CURRENT TEST
FOR OBVIOUSNESS HURTS INNOVATION.
The patent laws are premised on a bargain expressed in the
Constitution that is made between an inventor and the public
with respect to inventions not previously known to the public:
in exchange for a grant of a period of exclusivity to the
inventor, the public is thereafter allowed unencumbered use
of the disclosed invention =E2=80=9Cto promote the. . . useful Arts.=E2=80=
=9D
4
U.S. Const. art. I, =C2=A78; seeGrahamv. JohnDeereCo., 383
U.S. 1, 9 (1966) (the patent grant is =E2=80=9Can inducement[] to bring
forth new knowledge.=E2=80=9D). The public must wait for a period of
timefor themonopolytoexpire, but onceit expires, it may
usethepatentedinventionfreely.
Section 103(a) provides the mechanism to police the
bargain. It statesthat noinventionmaybepatented =E2=80=9Cif the
differencesbetweenthesubject matter sought tobepatented
andtheprior 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.=E2=80=9D  35U.S.C. =C2=A7103(a) (2001). This
section as enacted should prevent the patenting of routine
variations of prior art.
The manner in which courts interpret Section103(a)affects
the value of this bargain. If the test for patentability becomes
too lenient and allows routine variations on prior inventions to
be patented anew, the public=E2=80=99s free use of information in the
public domain is clouded by a new monopoly. Moreover, the
public receives no value in the disclosure of minor variations
of inventions already known and disclosed in the prior art.
The Federal Circuit=E2=80=99s motivation test establishes too lenient
a standard for patentability, and it has had a stifling effect on
true innovation because it encumbers ideas well beyond the
limits imposed by Congress for patentable inventions, and
effectively precludes courts from exercising their authority
to decide ultimate questions of patent validity. Under the
motivationtest, instead of a court deciding whether claimed
subject matter is patentable in view of all pertinent prior art, a
trier of fact=E2=80=94typically a jury=E2=80=94is tasked with determining
=E2=80=9Cwhether there is something in the prior art as a whole to
suggest the desirability, and thus the obviousness, of making
the combination.=E2=80=9D  In re Rouffet, 149F.3d1350, 1356(Fed.
Cir. 1998)(citations omitted). To satisfy the test, there must
be some proven =E2=80=9C=E2=80=98suggestion, teaching, or motivation=E2=80=
=99 that
5 would have led a person of ordinary skill in the art to com-
bine the relevant prior art teachings in the manner claimed=E2=80=9D in
a patent. (Pet.App.Aat6a(citationsomitted).)
Amici have experienced first-hand the stifling effect of the
motivation test.  Cisco=E2=80=99s experience with the patent process is
a case in point. Cisco has found that the proliferation of large
numbers of obvious patents hasincreased greatly the potential
for inadvertent infringement, requiring it to take defensive
measures. Inorder to neutralize the effect of these obvious
patents, Cisco has obtained hundreds of patents for defensive
purposes in technology areas in which it develops products.
Microsoft has been sued for allegedly infringing dozens of
questionable patents in the software field. The lack of access
to software prior art, the inability to find the prior art that
does exist, andthe limited resources of the Patent Office,
make searching by the Patent Office particularly ineffective.
Giventhe difficulty inherent infinding software prior art,
proving a software patent invalid by clear and convincing
evidence, especially if a motivation to combine element is
also required, is exceedingly difficult.
Hallmarkisanothercaseinpoint. Itcreatedandbroughtto
market auniquecurledribbonbowthat soonbecameabig
seller. Hallmarkdesignedamachinetomakethebow, and
was thensuedbyacompanywithtwopatents onaribbon
curlingmachine. The patents inquestionhadbeenissued
overa40-year-oldpatent foraribboncurlingmachine, even
thoughtheonlydifferencebetweenthemwasthemanner in
whichtheribbonleft themachine=E2=80=94theolder patent guided
curledribbonthroughatube, andthenewerpatentsblewthe
curled ribbon onto a conveyor belt. After six years of
litigation, thedistrict court in2004invalidatedthepatentsat
the JMOL stage, calling them =E2=80=9Cindubitably obvious.=E2=80=9D  Group
One, Ltd. v. HallmarkCards, Inc., No. 97-1224-CV, slipop.
at 32-33(W.D. Mo. Feb. 20, 2004). The Federal Circuit
reversedlast month, findingonitsownreadingoftherecord
6 that therewas sufficient evidencetosupport the no-motiva-
tion element and the jury=E2=80=99s finding in favor of the patent
holder on obviousness. GroupOne, Ltd. v. HallmarkCards,
Inc., 407F.3d1297(Fed. Cir. 2005). Thus, aftereight years
of litigating an =E2=80=9Cindubitably obvious=E2=80=9D patent where the pat=
ent
holderadmittedthat all elementsofthepatent werefoundin
thepriorart (andall but oneelement foundinthesingle40-
year-old patent), the Federal Circuit refused to affirmon
invalidity because its motivation test was not satisfied.
Since the emergence of the motivationtest inthe mid-
1980=E2=80=99s, V.F.Corporation increasingly has been confronted
with claims of patent infringement on purported inventions
involving technologically trivial subject matter. For example,
the sheer number of patents on apparel items such as bras has
exploded, and many of these patents involve routine varia-
tions on known technology.
Fortune Brands=E2=80=99 experience with its products is similar.  A
simplesearch for golf ball patents issued in 2004 will yield
over 200 entries. This is also true of golf clubs andother
Fortune Brand products. Fortune Brands is also being con-
fronted with claims of infringement and requests for licenses
on purported inventions and must file its own patents as
a defensive measure to prevent others fromfiling patents
that couldaffect its abilitytomarket newproducts without
hindrance.
Amici=E2=80=99s experiences were echoed by other representatives
from industry in hearings held by the Federal TradeCom-
missionin2002. Among the concernsraised:
=EF=82=B7Poor quality patents contribute to an =E2=80=9Canticommons=E2=80=
=9D
effect: a situation where multiple patent owners each
have a right to exclude others from a resource and no
one may have effective use of sufficient resources to
create a product. (Transcript of FTCHearing on
Business Perspectives onPatents: BiotechandPhar-
maceuticals(Feb. 26, 2002) at 241.) This is a partic-
7 ular problem in the software field, where a patent for a
single subroutine could affect software that has a
multitude of patentable ideas. (Transcript of FTC
Hearing on Business Perspectives on Patents: Software
and the Internet (Feb. 27, 2002) at 351-52.);
=EF=82=B7 Defensive, large scale patenting drains resources away
from real innovation: scientists and engineers must
spend time working with lawyers and patent agents to
file patent applications where their time would be better
spent on product development and research. (Trans-
cript of FTC Hearing on Business Perspectives on Pa-
tents: Hardware and Semiconductors (Feb. 28, 2002) at
677-78.);
=EF=82=B7 The proliferation of trivial patents makes product
clearance nearly impossible and leads to costly royalty
stacking. (Transcript of FTC Hearing on Business
Perspectives on Patents: Biotech and Pharmaceuticals
(Feb. 26, 2002) at 310.); and
=EF=82=B7 The multitude of patents creates uncertainty in the legal
rights of the patent holders and heightens the risks
associated with innovation investment decisions, which
leads to decreased industry investment in research and
development. (See Transcript of FTC Hearing on Busi-
ness Perspectives on Patents: Hardware and Semi-
conductors (Feb. 28, 2002) at 696.)
While some of these concerns have been addressed through
market means, e.g., patent pools, cross licensing, etc., in
certain situations there is no practical way to minimize the
detrimental effect of awarding obvious patents. The prolif-
eration of patent portfolio companies illustrates the point.
These patent portfolio companies do not sell products
themselves (and thus have no need for cross licenses); rather,
they generate revenue through licensing other companies
that actually make and sell products. Many of these patent
portfolio companies try to patent incremental changes to a
product-making company=E2=80=99s products so that the product-
8 making company would unintentionally infringe when it suc-
cessfully brings products to the marketplace. The long delays
in the Patent Office work to their benefit by keeping the even-
tual coverage of their patents indefinite until they issue. They
also benefit from the high cost of litigation by demanding
license fees that are often less than the cost of litigation,
hoping that people will pay even if they do not infringe, or, if
they do infringe, it would be too costly to change the product.
The relaxation of the test for patentability under Section
103(a) gives these companies the space in which to siphon off
license royalties from product-making companies.
Whether companies can or cannot mitigate the impact of
obvious patents is really beside the point. The mitigating
transactions into which companies enter=E2=80=94settling disputes on
patents of dubious validity, entering into excessive patent
pooling, creating cross-licensing arrangements=E2=80=94all result in
higher costs to the consuming public. A network router, a
golf club, a software program, a ribbon bow, a bra all become
more expensive as more and more patent holders must be
paid royalties, and unnecessarily so where these obvious
patents contribute no innovation to the product being sold.
Ultimately, it is the public that is the loser when the patent
laws are diluted in favor of obvious patents.
The benefit that the public derives from the bargain with
the inventor=E2=80=94disclosure of inventions that are not already
known=E2=80=94must be safeguarded. Thomas Jefferson expressed
his concern for this bargain between the inventor and the
public when he wrote:
[I]f a new application of our old machines be a ground
of monopoly, the patent law will take from us much
more good than it will give. Perhaps it may mean
another thing, that while every one has a right to the
distinct and separate use of the buckets, the screw, the
hopper-boy, in their old forms, the patent gives you the
exclusive right to combine their uses on the same object.
9 But if we have a right to use three things separately, I
see nothing in reason, or in the patent law, which forbids
our using them all together. A man has a right to use a
saw, an axe, a plane, separately; may he not combine
their uses on the same piece of wood? He has a right to
use his knife to cut his meat, a fork to hold it; may a
patentee take from him the right to combine their use on
the same subject? Such a law, instead of enlarging our
conveniences, as was intended, would most fearfully
abridge them, and crowd us by monopolies out of the
use of the things we have.

Thomas Jefferson, Letter to Oliver Evans (Jan 16, 1814), in
14 Writings of Thomas Jefferson 66 (Andrew A. Lipscomb &
Albert E. Bergh eds., 1903).

This Court in Graham noted that Jefferson was an enemy
of monopolies but ultimately an advocate of the patent
system. 383 U.S. at 7-10. But even at this writing in the later
stages of his life, he was still greatly concerned with the
potential for obvious patents to retake what already is in the
possession of the people.
This Court must reestablish the balance between inventor
and the public because the public is not getting the bene-
fit intended by the Constitution under the current test for
obviousness.

The full brief is available here:
http://patentlaw.typepad.com/KSR%20MicrosoftCisco_Amicus.pdf



Benjamin Krohmal
Coordinator - Project on Medical Innovation
Knowledge Ecology International
Tel: +1-202-332-2670 ex. 14
Fax: +1-202-332-2673
ben.krohmal@keionline.org