[Random-bits] Huffington Post: U.S. Supreme Court on Patent Policy

[James Love]

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

http://www.huffingtonpost.com/james-love/a-person-of-ordinary-=20
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 =20
Patent Policy

On Monday, the U.S. Supreme Court issued an opinion on an arcane but =20
important topic. What types of innovations are so "obvious" they do =20
not deserve a federal monopoly? This decision, which will make it =20
harder to obtain and enforce patents, is a rebuke to the easy patent =20
policies of the U.S. Patent and Trademark Office (USPTO) and the 25 =20
year old United States Court of Appeals for the Federal Circuit (the =20
CAFC).

The CAFC was created in 1982 as a specialized court, and was given =20
jurisdiction over patent law. Driven by CAFC judges who were true =20
believers in patents as a instrument for innovation, U.S. patent =20
policy has dramatically changed during this 25 year period, to the =20
point where today patents are easy (too easy) to obtain on any =20
subject matter. There is a growing sense that the patent system is =20
broken, and built upon outdated ideas regarding innovation policy, a =20
criticism that was once mostly advanced by a handful of academics, =20
NGOs and open source activists, but more recently, embraced by a =20
growing number of corporate players, who find their core businesses =20
at risk from patent litigation.

The romantic and idealized notion of the independent inventor being =20
rewarded for a spark of genius still has enormous influence over =20
patent policy. But today more people are seeing the innovation =20
process as highly collaborative and incremental, and the problems =20
posed by the grant of strong government enforced exclusive rights to =20
inventions as enormous. Many new products and services require the =20
cooperation of hundreds if not thousand of persons, and the =20
investment of millions of dollars.

It is often fairly easy to predict where a technological platform is =20
going, and clever patent lawyers are able to obtain patents on all =20
sorts of things that can eventually be used to shut down competitors =20
or extort payments from successful businesses. Ask the makers of the =20
Blackberry. Ask Vonage. Ask Microsoft, Toyota, Direct TV, and many =20
other firms that have recently been on the losing side of patent =20
litigation.

In the past two years, the U.S. Supreme Court has been taking on new =20
patent cases at a historic clip, and changing the direction of patent =20=

policy. Last years decision eBay Inc v. MercExchange, L.L.C. =20
essentially eliminated the notion that a valid patent was an =20
automatic monopoly, by giving a District Court broad discretion to =20
grant a compulsory license to use a patent, for a royalty, rather =20
than enforce an injunction preventing someone from using the patent =20
without permission.

On Monday, the Supreme Court gave two opinions on patent cases. In =20
KSR International, the court overturned the CAFC, in order to make it =20=

more difficult to obtain and enforce a patent, when the innovation =20
was something that should have been obvious to a person of ordinary =20
skills. By raising the standard for the inventive step needed for =20
patents, the Supreme Court is seeking to eliminate many of the worst =20
abuses of the current patent system.

I have provided some excerpts from the opinion below, but I will also =20=

tell one simple story to illustrate the problem. Three years ago we =20
examined the patents on an AIDS drug called ritonavir, which was =20
invented by Abbott on a government grant, and is subject to royalty =20
free licensing by the federal government. (A right never used by the =20
government.) Because of the funding, the U.S. government had rights =20
in some patents, but not others. One patent the government did not =20
have rights in was for the use of gel tabs to deliver the medicines. =20
I asked a patent lawyer, did Abbott invent the gel tab? I see that =20
all the time in drug stores. I was told, no, but Abbott "invented" =20
the idea of using gel tabs for ritonavir. This is the type of bogus =20
claim the KSR opinion was designed to address.

Another typical problem addressed by the KSR opinion concerns fields, =20=

like software, where knowledge is not carefully documented in =20
journals and other formal literature.

The U.S. Congress is beginning an important debate over patent =20
policy. It needs to look not only at the new U.S. Supreme Court =20
decisions, but to really consider the larger framework for supporting =20=

innovation. The Congress might look at the recent European Patent =20
Office (EPO) scenario planning exercise, which looked down the road =20
at alternative futures. This was presented at a high level meeting =20
attended by Dr. Angela Merkel, the physicist who is the Chancellor of =20=

Germany, and included proposals such as this:

<blockquote>    Money instead of monopolies Patents confer to the =20
holder the right to prevent others from selling, offering or using =20
the patented invention. While this was seen as the appropriate means =20
of protection for innovation in the nineteenth and twentieth =20
centuries, it was felt by many to be unsuitable for the collaborative =20=

innovation processes of the 21st century.

     Patents are considered by some to block the modern innovation =20
and technological diffusion process. They see the only solution to =20
this problem in a weakening of patent rights in order to balance the =20
system. A "license of right" regime in which exclusive patent rights =20
are transformed into the right to collect license fees - money =20
instead of monopoly - was specifically addressed.

     Some regarded the introduction of a prize system parallel to or =20
instead of the patent system as necessary in the pharmaceutical =20
sector. Such a system, they argued, would create incentives in the =20
medical field without leading to exaggerated and unaffordable prices =20
for medication. This view was contradicted by the pharmaceutical =20
industry. They feel that the strongest possible patent rights are =20
necessary to compensate the huge investment needed for pharmaceutical =20=

inventions. </blockquote>

KSR INTERNATIONAL CO. v. TELEFLEX INC. ET AL. No. 04-1350. Argued =20
November 28, 2006--Decided April 30, 2007. The slip opinion is =20
available here.

Some excepts from the Supreme Court opinion follow:

The obviousness analysis cannot be confined by a formalistic =20
conception of the words teaching, suggestion, and motivation, or by =20
over emphasis on the importance of published articles and the =20
explicit content of issued patents. The diversity of inventive =20
pursuits and of modern technology counsels against limiting the =20
analysis in this way. In many fields it may be that there is little =20
discussion of obvious techniques or combinations, and it often may be =20=

the case that market demand, rather than scientific literature, will =20
drive design trends. Granting patent protection to advances that =20
would occur in the ordinary course without real innovation retards =20
progress and may, in the case of patents combining previously known =20
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 =20=

person of ordinary skill attempting to solve a problem will be led =20
only to those elements of prior art designed to solve the same =20
problem. [page 16]

Common sense teaches . . . that familiar items may have obvious uses =20
beyond their primary purposes, and in many cases a person of ordinary =20=

skill will be able to fit the teachings of multiple patents together =20
like pieces of a puzzle. [page 16-17]

A person of ordinary skill is also a person of ordinary creativity, =20
not an automaton. [page 17]


The same constricted analysis led the Court of Appeals to conclude, =20
in error, that a patent claim cannot be proved obvious merely by =20
showing that the combination of elements was "obvious to try." Id., =20
at 289 (internal quotation marks omitted). When there is a design =20
need or market pressure to solve a problem and there are a finite =20
number of identified, predictable solutions, a person of ordinary =20
skill has good reason to pursue the known options within his or her =20
technical grasp. If this leads to the anticipated success, it is =20
likely the product not of innovation but of ordinary skill and common =20=

sense. In that instance the fact that a combination was obvious to =20
try might show that it was obvious under =A7103. [page 17]

The Court of Appeals, finally, drew the wrong conclusion from the =20
risk of courts and patent examiners falling prey to hindsight bias. A =20=

fact finder should be aware, of course, of the distortion caused by =20
hindsight bias and must be cautious of arguments reliant upon ex post =20=

reasoning. See Graham, 383 U. S., at 36 (warning against a =20
"temptation to read into the prior art the teachings of the invention =20=

in issue" and instructing courts to "'guard against slipping into the =20=

use of hindsight'" (quoting Monroe Auto Equipment Co. v. Heckethorn =20
Mfg. & Supply Co., 332 F. 2d 406, 412 (CA6 1964))). Rigid =20
preventative rules that deny fact finders recourse to common sense, =20
however, are neither necessary under our case law nor consistent with =20=

it. [page17]

We build and create by bringing to the tangible and palpable reality =20
around us new works based on instinct, simple logic, ordinary =20
inferences, extraordinary ideas, and sometimes even genius. These =20
advances, once part of our shared knowledge, define a new threshold =20
from which innovation starts once more. And as progress beginning =20
from higher levels of achievement is expected in the normal course, =20
the results of ordinary innovation are not the subject of exclusive =20
rights under the patent laws. Were it otherwise patents might stifle, =20=

rather than promote, the progress of useful arts. See U. S. Const., =20
Art. I, =A78, cl. 8. These premises led to the bar on patents claiming =20=

obvious subject matter established in Hotchkiss and codified in =A7103. =20=

Application of the bar must not be confined within a test or =20
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"