[Ip-health] Important US Supreme Court decision on obviousness (inventive step)

[Josh Sarnoff]

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I have reproduced below some comments I made earlier on the ScotusBlog
in regard to today's US Supreme Court decision in KSR v. Teleflex.  Of
particular relevance to this list, the Court reaffirmed its 1970
holdings on combinations of prior art elements, which required the
invention to have an unexpected new function in order to be patentable;
however, the Supreme Court did not apply those precedents when it
nevertheless upheld the District Court decision that the claim at issue
was obvious.  The implications for combination medical products should
be obvious, and US law thus should be understood as more stringent in
this regard even than India's new rules (although India's rules may be
couched as subject matter rather than inventive step restrictions).



In its unanimous decision in KSR Int'l. Co v. Teleflex Inc., No. 04-1350
(April 30, 2007), the Supreme Court expressly overruled the Court of
Appeals for the Federal Circuit's "teaching-suggestion-motivation"
("TSM") test for finding a claimed invention obvious and reaffirmed the
Court's precedents (in light of the 1952 enactment of Section 103 and
its holding in Graham v. John Deere Co. of Kansas City, 383 U.S. 1
(1966)) regarding the obviousness of patents "based on the combination
of elements found in the prior art" where there the combination "does no
more than yield predictable results."  Slip op. at 11-12.  The Court's
decision has therefore called into question the validity of hundreds of
thousands of claims in issued patents, and will likely lead to a
dramatic change to the method by which the Patent Office, the courts,
and the bar conduct their obviousness analyses.



Nevertheless, the Supreme Court's opinion appears self-consciously
narrow and provides little additional guidance for how to apply the
Graham approach.  The Court's decision leaves unclear whether the party
with the burden of proving obviousness must demonstrate that "there was
an apparent reason to combine the known elements in the fashion claimed
by the patent at issue," or only that the claim at issue if patented
would reflect an "advance[] that would occur in the ordinary course
without real innovation[, which] retards progress and may, in the case
of patents combining previously known elements, deprive inventions of
their value or utility."  Slip op. at 14, 15.  As the Court noted, "as
progress beginning from higher levels of achievement is expected in the
normal course, the results of ordinary innovation are not the subject of
exclusive rights under the patent laws.  Were it otherwise patents might
stifle, rather than promote, the progress of useful arts."  Slip op. at
24. Although the Court recited the Constitutional language, it did not
expressly hold that obviousness is a constitutional requirement.
Further, the Court left to later case law any consideration of the
extent to which the Court of Appeals' more recent statements regarding
the flexibility of its TSM test is consistent with Graham and the
Supreme Court's earlier precedents.  Slip op. at 18.



In discussing the proper legal standard to be applied to determine
obviousness, the Supreme Court concluded that the Court of Appeals erred
generally by adopting a "rigid rule" in its TSM test, by failing to
acknowledge that a "person of ordinary skill in the art is also a person
of ordinary creativity, not an automaton," and by adopting "[r]igid
preventative rules that deny factfinders recourse to common sense" in
its efforts to avoid "hindsight bias."  Slip op. at 15, 17.  The Court
noted that "[w]hat matters is the objective reach of the claim," and
whether there was at the time of the invention "an obvious solution" for
a "known problem."  Slip op. at 16.



Specifically, in this case the "first error" of the Court of Appeals was
to look "only to the problem the patentee was trying to solve."  Rather,
"any need or problem known in the field or endeavor at the time of
invention and addressed by the patent can provide a reason for combining
the elements in the manner claimed."  Slip op. at 16 (emphasis added).
Thus, any advantage that the combination may provide may also suggest an
"'implicit[]'" motivation to make the combination, Slip op. at 18
(quoting Alza Corp. v. Mylan Labs, Inc., 464 F.3d 1286, 1291 (2006)),
even if the advantage was not one that the inventor contemplated or that
the patent itself disclosed.



The "second error" of the Court of Appeals was to assume that a person
having ordinary skill in the art "will be led only to those elements of
prior art designed to solve the same problem.... Common sense teaches,
however, that familiar items may have obvious uses beyond their primary
purposes, and in many cases a person having ordinary skill will be able
to fit the teachings of multiple patents together like pieces of a
puzzle."  Slip op. at 16.  The Court thus implicitly rejected a
long-standing line of Federal Circuit cases that required some explicit
disclosure in the prior art of a motivation to combine to avoid using
hindsight when combining multiple disclosures.  See, e.g., Ecolochem,
Inc. v. Southern California Edison Company, 227 F.3d 1361, 1371 (Fed.
Cir. 2000) (("[One] 'cannot use hindsight reconstruction to pick and
choose among isolated disclosures in the prior art to deprecate the
claimed invention.'") (quoting In re Fine, 837 F.2d 1071, 1075 (Fed.
Cir. 1988)).



Applying the law to the facts, the Supreme Court upheld the District
Court's conclusion that it was obvious "to combine Asano [the fixed
pivot pedal assembly] with a pivot-mounted pedal position sensor."  Slip
op. at 20.  The Court rephrased the question as "whether a pedal
designer of ordinary skill, facing the wide range of needs created by
developments in the field of endeavor, would have seen a benefit to
upgrading Asano with a sensor."  Slip op. at 20.  The Court thus focused
on evidence regarding the state of the automotive design art.  Further,
the Court noted that "[f]or a designer starting with Asano, the question
was where to attach the sensor.  The consequent legal question, then, is
whether a pedal designer of ordinary skill starting with Asano would
have found it obvious to put the sensor on a fixed pivot point.  The
prior art discussed above leads us to the conclusion that attaching the
sensor where both KSR and Engelgau [the inventor] put it would have been
obvious to a person or ordinary skill."  Slip op. at 21.  Further, the
Court rejected argument that the prior art "taught away" from combining
Asano with an electronic sensor, arguing that to judge the possibility
of the combination based on its inferior function to a preferred
embodiment of the claimed invention "would be to engage in the very
hindsight bias Teleflex rightly urges must be avoided."  Slip op. at 22.
Finally, the Court rejected the argument that Teleflex had proved any
secondary consideration evidence (which the Court refers to as
"secondary factors") that called the initial determination into
question.  Slip op. at 22.  Although the Court remanded the cases, it
rejected the argument that the existence of Teleflex's expert affidavit
necessarily precluded summary judgment for KSR, noting that the ultimate
judgment of obviousness is a legal one.  Slip op. at 23, 24.  The Court
thus apparently affirmed the District Court's summary judgment of
invalidity of Claim 4.  Slip op. at 22, 23.



In summary, the Court's test focuses on predictability and expected
functions of combinations, rather than the inventive skill required to
achieve them, and the Court's holding relied on evidence regarding the
motivations in the marketplace at the time of invention (but not
regarding subsequent commercial success and other secondary factors).
The Court's focus thus will likely lead to greater Patent Office and
lower court reliance on evidence regarding the nature of the person
having ordinary skill in the art, the general state of the art and
problems in it, and (possibly) secondary considerations that would tend
to show the (un)predictability of the result or the lack of motivation
to solve problems that would lead to the claimed combination.  Thus, the
Court stated that "[w]hen a work is available in one field of endeavor,
design incentives and other market forces can prompt variations of it,
either in the same field or a different one.... [and] 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 his or her skill."  Slip op. at 13.  However, the Court's opinion
does not provide guidance regarding how to define who the person of
ordinary skill in the art is, which will then determine (through
evidence) his or her level of knowledge, creativity, and ability to
recognize benefits of combinations.  We can thus expect that obviousness
determinations will be more complex and more subject to dispute
regarding the nature of the relevant evidence (and particularly
regarding whether and when secondary consideration evidence is
relevant), which will make it harder to resolve obviousness issues in
the Patent Office or the courts or to determine the outcomes in advance.
We can also expect significant short-term litigation (and an increase in
patent validity opinion work) as the validity of issued patents has been
called dramatically into question, at least until the Congress, the
Patent Office, or the courts develop more predictable rules for making
obviousness determinations.



For those who are interested, I filed an amicus brief in support of
Petitioner KSR Int'l. Co. in the Supreme Court on behalf of a group of
economists and legal historians, urging the Supreme Court to repudiate
the Court of Appeals for the Federal Circuit's TSM test, to reaffirm its
precedents, and to provide additional guidance on determining when
inventions would routinely occur and the nature of technological
innovation required for nonobvious subject matter.  The brief is
available at http://www.patentlyo.com/patent/Sarnoff.pdf.





Joshua D. Sarnoff

Assistant Director

Glushko-Samuelson Intellectual Property Law Clinic

Washington College of Law

American University

Room 446A

4801 Massachusetts Avenue, NW

Washington, DC 20016, U.S.A.

011.202.274.4165 phone

011.202.274.0659 fax

jsarnoff@wcl.american.edu email



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