[Ip-health] Huffington Post: U.S. Supreme Court on Patent Policy

[James Packard Love]

See the html version on the web for the links. Jamie

http://www.huffingtonpost.com/james-love/a-person-of-ordinary-
skil_b_47343.html
May 1, 2007
The Huffington Post
James Love

A person of ordinary skill not an automaton: U.S. Supreme Court on
Patent Policy

On Monday, the U.S. Supreme Court issued an opinion on an arcane but
important topic. What types of innovations are so "obvious" they do
not deserve a federal monopoly? This decision, which will make it
harder to obtain and enforce patents, is a rebuke to the easy patent
policies of the U.S. Patent and Trademark Office (USPTO) and the 25
year old United States Court of Appeals for the Federal Circuit (the
CAFC).

The CAFC was created in 1982 as a specialized court, and was given
jurisdiction over patent law. Driven by CAFC judges who were true
believers in patents as a instrument for innovation, U.S. patent
policy has dramatically changed during this 25 year period, to the
point where today patents are easy (too easy) to obtain on any
subject matter. There is a growing sense that the patent system is
broken, and built upon outdated ideas regarding innovation policy, a
criticism that was once mostly advanced by a handful of academics,
NGOs and open source activists, but more recently, embraced by a
growing number of corporate players, who find their core businesses
at risk from patent litigation.

The romantic and idealized notion of the independent inventor being
rewarded for a spark of genius still has enormous influence over
patent policy. But today more people are seeing the innovation
process as highly collaborative and incremental, and the problems
posed by the grant of strong government enforced exclusive rights to
inventions as enormous. Many new products and services require the
cooperation of hundreds if not thousand of persons, and the
investment of millions of dollars.

It is often fairly easy to predict where a technological platform is
going, and clever patent lawyers are able to obtain patents on all
sorts of things that can eventually be used to shut down competitors
or extort payments from successful businesses. Ask the makers of the
Blackberry. Ask Vonage. Ask Microsoft, Toyota, Direct TV, and many
other firms that have recently been on the losing side of patent
litigation.

In the past two years, the U.S. Supreme Court has been taking on new
patent cases at a historic clip, and changing the direction of patent
policy. Last years decision eBay Inc v. MercExchange, L.L.C.
essentially eliminated the notion that a valid patent was an
automatic monopoly, by giving a District Court broad discretion to
grant a compulsory license to use a patent, for a royalty, rather
than enforce an injunction preventing someone from using the patent
without permission.

On Monday, the Supreme Court gave two opinions on patent cases. In
KSR International, the court overturned the CAFC, in order to make it
more difficult to obtain and enforce a patent, when the innovation
was something that should have been obvious to a person of ordinary
skills. By raising the standard for the inventive step needed for
patents, the Supreme Court is seeking to eliminate many of the worst
abuses of the current patent system.

I have provided some excerpts from the opinion below, but I will also
tell one simple story to illustrate the problem. Three years ago we
examined the patents on an AIDS drug called ritonavir, which was
invented by Abbott on a government grant, and is subject to royalty
free licensing by the federal government. (A right never used by the
government.) Because of the funding, the U.S. government had rights
in some patents, but not others. One patent the government did not
have rights in was for the use of gel tabs to deliver the medicine. I
asked a patent lawyer, did Abbott invent the gel tab? I see that all
the time in drug stores. I was told, no, but Abbott "invented" the
idea of using gel tabs for ritonavir. This is the type of bogus claim
the KSR opinion was designed to address.

Another typical problem addressed by the KSR opinion concerns fields,
like software, where knowledge is not carefully documented in
journals and other formal literature.

The U.S. Congress is beginning an important debate over patent
policy. It needs to look not only at the new U.S. Supreme Court
decisions, but to really consider the larger framework for supporting
innovation. The Congress might look at the recent European Patent
Office (EPO) scenario planning exercise, which looked down the road
at alternative futures. This was presented at a high level meeting
attended by Dr. Angela Merkel, the physicist who is the Chancellor of
Germany, and included proposals such as this:

<blockquote>    Money instead of monopolies Patents confer to the
holder the right to prevent others from selling, offering or using
the patented invention. While this was seen as the appropriate means
of protection for innovation in the nineteenth and twentieth
centuries, it was felt by many to be unsuitable for the collaborative
innovation processes of the 21st century.

     Patents are considered by some to block the modern innovation
and technological diffusion process. They see the only solution to
this problem in a weakening of patent rights in order to balance the
system. A "license of right" regime in which exclusive patent rights
are transformed into the right to collect license fees - money
instead of monopoly - was specifically addressed.

     Some regarded the introduction of a prize system parallel to or
instead of the patent system as necessary in the pharmaceutical
sector. Such a system, they argued, would create incentives in the
medical field without leading to exaggerated and unaffordable prices
for medication. This view was contradicted by the pharmaceutical
industry. They feel that the strongest possible patent rights are
necessary to compensate the huge investment needed for pharmaceutical
inventions. </blockquote>

KSR INTERNATIONAL CO. v. TELEFLEX INC. ET AL. No. 04-1350. Argued
November 28, 2006--Decided April 30, 2007. The slip opinion is
available here.

Some excepts from the Supreme Court opinion follow:

The obviousness analysis cannot be confined by a formalistic
conception of the words teaching, suggestion, and motivation, or by
over emphasis on the importance of published articles and the
explicit content of issued patents. The diversity of inventive
pursuits and of modern technology counsels against limiting the
analysis in this way. In many fields it may be that there is little
discussion of obvious techniques or combinations, and it often may be
the case that market demand, rather than scientific literature, will
drive design trends. Granting patent protection to advances that
would occur in the ordinary course without real innovation retards
progress and may, in the case of patents combining previously known
elements, deprive prior inventions of their value or utility.

[page 15]

The second error of the Court of Appeals lay in its assumption that a
person of ordinary skill attempting to solve a problem will be led
only to those elements of prior art designed to solve the same
problem. [page 16]

Common sense teaches . . . that familiar items may have obvious uses
beyond their primary purposes, and in many cases a person of ordinary
skill will be able to fit the teachings of multiple patents together
like pieces of a puzzle. [page 16-17]

A person of ordinary skill is also a person of ordinary creativity,
not an automaton. [page 17]


The same constricted analysis led the Court of Appeals to conclude,
in error, that a patent claim cannot be proved obvious merely by
showing that the combination of elements was "obvious to try." Id.,
at 289 (internal quotation marks omitted). When there is a design
need or market pressure to solve a problem and there are a finite
number of identified, predictable solutions, a person of ordinary
skill has good reason to pursue the known options within his or her
technical grasp. If this leads to the anticipated success, it is
likely the product not of innovation but of ordinary skill and common
sense. In that instance the fact that a combination was obvious to
try might show that it was obvious under =A7103. [page 17]

The Court of Appeals, finally, drew the wrong conclusion from the
risk of courts and patent examiners falling prey to hindsight bias. A
fact finder should be aware, of course, of the distortion caused by
hindsight bias and must be cautious of arguments reliant upon ex post
reasoning. See Graham, 383 U. S., at 36 (warning against a
"temptation to read into the prior art the teachings of the invention
in issue" and instructing courts to "'guard against slipping into the
use of hindsight'" (quoting Monroe Auto Equipment Co. v. Heckethorn
Mfg. & Supply Co., 332 F. 2d 406, 412 (CA6 1964))). Rigid
preventative rules that deny fact finders recourse to common sense,
however, are neither necessary under our case law nor consistent with
it. [page17]

We build and create by bringing to the tangible and palpable reality
around us new works based on instinct, simple logic, ordinary
inferences, extraordinary ideas, and sometimes even genius. These
advances, once part of our shared knowledge, define a new threshold
from which innovation starts once more. And 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. See U. S. Const.,
Art. I, =A78, cl. 8. These premises led to the bar on patents claiming
obvious subject matter established in Hotchkiss and codified in =A7103.
Application of the bar must not be confined within a test or
formulation too constrained to serve its purpose. [page 23-24]

---------------------------------
James Packard Love
Knowledge Ecology International
mailto:james.love@keionline.org
tel. +1.202.332.2670 / mobile+1.202.361.3040

"If everyone thinks the same: No one thinks."  Bill Walton"