When Is An Invention Obvious?

A Canadian company persuaded the U.S. Supreme Court to hand down a ruling that some legal specialists call the most significant patent ruling in decades. Observers say the decision will make it more difficult to get a U.S. patent and may send many current patented inventions into the public domain.

The case addressed one of the foundations of patent law: How to determine whether an invention is obvious
and as a result ineligible for a patent. (KSR International Co. v.Teleflex Inc.).

In other words, should patents be given for ideas that are basically a variation on well-known concepts?

The ruling, combined with another decision handed down the same day involving infringement overseas, (Microsoft Corp. v. AT&T Corp.) suggests that the U.S. Supreme Court believes patent holders have been receiving too much protection.

The case began when Teleflex Inc of Pennsylvania sued Ontario-based KSR International, claiming the Canadian company was infringing a patent for an adjustable accelerator pedal with an electronic throttle control. Teleflex wanted royalties on its invention.

For its part, KSR claimed that the patent was invalid because Teleflex had combined existing elements in an obvious manner.

A federal district court agreed with KSR, but the U.S. Court of Appeals for the Federal Circuit, which specializes in patent cases, overturned that decision.

KSR then appealed to the Supreme Court arguing that the Federal Circuit has been improperly interpreting patent law for years in deciding whether an invention is obvious.

The Canadian company had some heavy-weight technology companies backing its cause. Microsoft and Cisco both wrote supporting briefs arguing that the standards for obviousness applied by the Federal Circuit have been hurting innovation by allowing too many patents on inventions that combine existing technology.

The U.S. Supreme Court apparently found the arguments and evidence compelling and determined that the combination of existing technologies for an electronic sensor and an accelerator pedal was a design step well within the grasp of engineers familiar with throttle pedals. As a result, the court ruled, the Federal Circuit was being too narrow in its definition of obvious.

In a decision written by Justice Anthony Kennedy, the U.S. Supreme Court said that the "teaching, suggestion or motivation" (TSM) test, by which the U.S. Patent Office gauges the obviousness of a potential patent, is meant to be a general principle, not a rigid rule. Justice Kennedy wrote that a court is wrong when it transforms such a general principle into a rigid rule that limits the obviousness inquiry.

Under the TSM test, an invention is deemed obvious and unworthy of a patent, if some motivation or suggestion to combine elements comes from:

• Prior art, or previous literature on the subject.
• The nature of the problem.
• The knowledge of an ordinary person with skill in the art, for example those engineers familiar with throttle pedals.

The court rejected the Federal Circuit's rigid approach partly because it rests on literature and other evidence that may not keep pace with fast-developing technologies. The justices concluded: "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."

Consequently, the opinion added, "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."

The ruling further said that evaluating patents should take into account such factors as pressures in the marketplace and ever-widening bodies of knowledge.

There are several practical consequences of the Supreme Court's ruling that will affect companies both with and without patents. Among other things, the ruling generally will:

1. Make it harder and more expensive to persuade the U.S. Patent Office to grant a patent application, particularly if the invention combines existing technologies.
2. Call into question the value and validity of many patents.
3. Be easier for defendants to prove that patents are invalid because they are obvious;
4. Lower the cost of patent litigation, as the court said "prior art" was a legal determination that could be resolved in pretrial motions for summary judgment. This may motivate patent holders to settle out of court rather than risk a complete invalidation of their patent.
5. Result in more patents being invalidated and thus entering the public domain because they were granted under a standard that has now been rejected;
6. Motivate patent holders to settle disputes rather than risk invalidation in the courts.
7. Minimize patent trolling, a practice whereby investors buy up patents with the sole purpose of suing for royalties from alleged infringers. Observers say this means high-tech businesses will spend less money defending unfounded patent suits and have more money to spend on innovation.

The bottom line, say some patent specialists, is that the U.S. Supreme Court is setting the foundation for a patent system that can accommodate a more open and collaborative system of invention.