Obviousness is Reviewed De Novo

Muniauction, Inc. v. Thomson Corp. and I-Deal (Fed. Cir. 2008) (Part II)

[Read Part I discussing joint infringement]

Muniauction’s patent relates to municipal bond auctions. During cross examination at trial, Muni’s expert admitted that two of the claims were identical to the prior art except for the patentee’s use of a web browser to access the auction. Despite that admission, the Pittsburgh jury refused to invalidate the patent leading to an award of $77 million for willful infringement. On appeal, the CAFC reversed – finding the claimed invention obvious.

No Obvious Deference: Like claim construction, obviousness is a question of law that is reviewed de novo on appeal. Despite that similarity, obviousness is normally decided by a jury. This difference is justified by the relatively small number of “underlying facts” in contention during claim construction as compared with plethora of factual issues that build up to a conclusion of obviousness. As the CAFC explained in the 2007 Dippin’ Dots opinion, “[t]hose factual underpinnings include the scope and content of the prior art, differences between the prior art and the claims at issue, and the level of ordinary skill in the art.”

Here, the court cited KSR to hold – as a matter of law – that the Muniauction improvement was nothing “more than the predictable use of prior art elements according to their established function.”

Broad Claims Create Trouble for Secondary Factors: Broadly written claims increase the chance that some prior art will be found to invalidate the claimed property right. Here, the CAFC also found that broad claims make it difficult to use secondary factors of patentability to establish nonobviousness. The particular issue here is that a tight nexus must link the claimed invention to the secondary factors (such as long felt need & market success).

“[C]ommercial success or other secondary considerations may presumptively be attributed to the patented invention only where ‘the marketed product embodies the claimed features, and is coextensive with them.’” Quoting Ormco v. Align.

Muni showed success of its products. However, the reports of success focused only on one portion of the invention as claimed. The appellate panel compared those narrow reports of success with the broad claims – finding that the success “lacks the required nexus with the scope of the claims.”

66 thoughts on “Obviousness is Reviewed De Novo

  1. Yep. T939 it is. Amazing how many typo’s creep in, when one is having fun. Now you mention the EPO Caselaw book, my eye was caught by 8.2.2 “Partial Problems” and then I thought of Lord Hoffmann’s two Different Inventions, both obvious, in SABAF. As between London and Munich, sometimes the terminology is different, even when the underlying thinking is near identical. Guess we’re done now, on this thread. On to the Prof. Duffy line, eh?

  2. Cheers Max – likewise.

    PS I think you meant T0939/92 – yes, that’s the kind of thing, as well as issues of “technically arbitrary” combinations/agregations of features etc., as discussed in the BoA case law commentary, I.D.8.2-8.5.

  3. Well, that’s a relief. Difficult to find anything more to argue with you about. This exchange has shown me how easy it is, in a blog, to “get the wrong end of the stick”. Contributers are looking for fun. Some are maybe a bit too keen to “have a go”, I suppose. As to looking forwards, not back, that might be the area where we agree most strongly, despite the “joke” word precipitating my most unfortunate responses, upthread. I look forward to our respective future contributions; in very close harmony, I now have very little doubt.

    PS. Might Agrevo T0929/92 (the Norman Wells case) be the one at the back of your mind, that you wanted to look up?

  4. Max, thanks for your reply.

    >> “You write that the OTP must be evident from the art. Does that statement cover the “problem invention” patentable under PSA, where the inventive step lies in formulating the OTP?”

    Yes, I think so. For Y+D to be obvious, the skilled person needs a reason to make the combination. If no OTP that is solved by Y+D is evident from the prior art, then the implication must be that Y+D is non-obvious. If Y+D is an arbitrary combination that might be non-obvious but also of no technical value, EP practice has ways of dealing with that (I don’t have time to look it up right now…). However, if Y+D solves a problem that it wasn’t obvious existed in the first place, then an inventive step can lie in recognising the existence of the problem, even if D is itself obvious once the problem has been identified.

    >> “As to what the application announces as the problem, in one sense it is relevant, on the other not.”

    Agreed, I think. A lot depends on how the “actual” closest prior art compares with what the app presents as the prior art, and what else the app says about problems solved by the invention etc.

    >> “Do we agree, that the D1 reference is to be confined to one that is “realistic” having regard to what the inventor, subjectively, announced in his app as his technical field and performance characteristic that his invention has enhanced?”

    I wouldn’t put it quite that way myself. Certainly, D1 has to be an “appropriate” starting point, given what is disclosed in the app in terms of the technical field and the purpose/effect of the invention.

    >> “Do we agree that the “squeeze” between obviousness and sufficiency depends on the designated notional reader.”

    Yes. I had a classic case of this in oral proceedings before the examining division not so long ago. The subject matter was in the area of computerised automation of human skill-based manufacturing. The disclosure was heavy on the practicalities of the traditional skills (which are not well documented in published literature) and relatively light on specific detail of the specialised mathematical methods by which automation is achieved. I successfully argued that the skilled person would have a high degree of expertise and knowledge relating to the relevant mathematical methods (which ARE well documented and for which numerous references were also given in the app), but would have to be educated in detail about the traditional skills in order to implement the invention. Given the detailed teaching about the traditional skills, the addressee would need only quite general pointers as regards the mathematical methods. The starting position of the examining division was that if the level of disclosure of the maths was sufficient then the invention must be “technically” obvious.

    >> “I had thought (from perhaps imperfect recollection of English Decisions) that inventor himself sets the balance between sufficiency and obviousness, with the “level” of his disclosure in his app. But, on reflection, I see now that a court is free to substitute its own judgement, about the level of sophistication of the notional addressee, to a level incompatible with the level set by the inventor.”

    For me, the sufficiency/obviousness question is very much tied up with the characterisation of the skilled person, and in UK patent litigation that characterisation is usually determined in light of expert evidence relating to the relevant industry and the kind of person that would be working at a level of expertise appropriate in light of the subject matter of the app. So, yes, the content of the app is certainly relevant to the characterisation of the skilled person, but you need to look at its substance objectively, rather than simply taking it at face value.

    >> “Indeed, for an objective determination of obviousness, I suppose the EPO must do exactly that.”

    One of my bugbears – the EPO tends to take a rather superficial view of the issue and not to be receptive to external evidence of the type that would be of central importance in litigation (in the UK at least). This is understandable to some extent in examination (if they give the applicant the benefit of any reasonable doubt) but much less acceptable in opposition.

    >> ”Then there’s that Lord Hoffmann, in Angiotech, telling us we must treat obviousness scrupulously separate from sufficiency.”

    I agree with his Lordship that they are questions that must be decided quite separately, but there is definitely a connection, in some circumstances at least.

    >> “Disnae, I still don’t understand your saying that formulating the problem in the light of the claim is a joke. With your X,Y,D terminology, that’s what you are doing, isn’t it?”

    I think there’s a communication gap here. Of course the content, X, of the claim is the starting point, but having identified the closest prior art, Y, and hence the difference, D, the claim itself (and indeed, generally, the content of the app as a whole) should play no part in the analysis in formulating the problem and then determining whether Y+D is obvious, which is a question to be judged as at the priority date of the app. The original point that I agreed with was that formulating the problem with hindsight knowledge of the solution is a “joke” (what I would call working backwards from the claim to the prior art and then forwards again). That point may have got lost along the way.

  5. Thanks Disnae, having read that, I can see that we agree on much, but there remain some communication imperfections. You write that the OTP must be evident from the art. Does that statement cover the “problem invention” patentable under PSA, where the inventive step lies in formulating the OTP? As to what the application announces as the problem, in one sense it is relevant, on the other not. I think we are somehow both right. Do we agree, that the D1 reference is to be confined to one that is “realistic” having regard to what the inventor, subjectively, announced in his app as his technical field and performance characteristic that his invention has enhanced? Do we agree that the “squeeze” between obviousness and sufficiency depends on the designated notional reader. I had thought (from perhaps imperfect recollection of English Decisions) that inventor himself sets the balance between sufficiency and obviousness, with the “level” of his disclosure in his app. But, on reflection, I see now that a court is free to substitute its own judgement, about the level of sophistication of the notional addressee, to a level incompatible with the level set by the inventor. Indeed, for an objective determination of obviousness, I suppose the EPO must do exactly that. Then there’s that Lord Hoffmann, in Angiotech, telling us we must treat obviousness scrupulously separate from sufficiency. I like this blog, because one learns something new from it, most every day. I like PSA, because I think it has enough in it to deliver consistent results, in every country and at every judicial level, and to reduce obviousness to a YES/NO answer (which is not to say that getting to the big Y/N question does not justify blockbuster evidence preparation, in cases of high commercial value). The way I see it, the EPO is not getting more dogmatic with PSA, but rather with 123(2), which allows them to kill a case without ever having to address Art 56.

    Disnae, I still don’t understand your saying that formulating the problem in the light of the claim is a joke. With your X,Y,D terminology, that’s what you are doing, isn’t it? Finally, I apologise for any insinuation, that you got in under the grandfather clause. You at least have passed the EPO exam. I have never even sat it.

  6. Max

    First let me say that for the most part I respect and value your contributions on Pat-O, and I probably “get” your sense of humour to a greater extent than many here.

    Much can get lost in transmission in a blog post (between thought and expression…) – which goes for me as much as it goes for you/everyone – but heads-up: “you say you are having more success these days/practice makes perfect” = patronising.

    You said: “Objectively, “it” emerges involuntarily, every time, from the examination of the app and of D1.” – well yes, that’s a point I made myself…

    You then said: “As to the level of skill of the notional addressee, inventor sets that too, I had thought. We can divine from the content of the app what level of sophistication the inventor thinks the notional addressee possesses, and we argue validity accordingly.” Um, no… what the inventor thinks/says is mostly irrelevant.

    Case law of the Boards of Appeal, I.D-4.3.2
    “According to T 422/93 (OJ 1997, 25), when examining for inventive step using the “problem and solution approach”, the starting point for defining the appropriate skilled person was the technical problem to be solved on the basis of what the prior art disclosed, irrespective of any other definition of the skilled person suggested in the contested patent.”

    Next:
    “I am fascinated, that you are an old hand at the EPO, but nevertheless still think that “formulating the problem in the light of the claim” is a joke. For you, EPO prosecution must be somewhat distressing, every time obviousness comes up.”

    Well, no, not really. I enjoy arguing obviousness, as long as the other party knows what s/he is talking about also.

    Case law of the Boards of Appeal, I.D-7.1.1
    “T 800/91 emphasised that in any event the formulated problem should be one which the skilled person knowing only the prior art would wish to solve.”

    Here’s the claim, X, here’s the closest prior art, Y, here’s the difference, X-Y=D. What problem, P, is solved by Y+D to arrive at X? For Y+D to be obvious, P must firstly be evident to the skilled person FROM THE PRIOR ART, then D must provide an obvious solution to P when added to Y, none of which analysis should make any reference to X other than in determining D in the first instance.

    (BTW, I did qualify as EPA by examination, although the EPO was a lot less dogmatic about PSA in those days…)

  7. SF: one more point, that I should have made earlier: in the EPO, all examinations are performed by a troika of 3 Exrs, all of whom must sign the Decision to grant or refuse. So, even if the lead horse is inclined to run off the path, the horses on each side won’t let him. Thus, if the lead horse is inclined to define the objective technical problem in a way forbidden by PSA theory, that is, impermissibly using hindsight knowledge of the solution to define the problem, your attorney should point it out, clearly enough for the other two horses to “get it”, to enable them to bring the lead horse back on track. With competent representation, parties get a just result, in the EPO.

  8. SF, my compliments. The crux of PSA in the EPO way is correct definition of the objective technical problem. If the EPO Exr has formulated it with impermissible use of hindsight, call him/her out, for they are wrong and will back off when you explain why. But you need an EPO representative who has grasped PSA, EPO style.

    The EPO sets the qualifying examination. You fail, if you haven’t “got” PSA, EPO style. But there are plenty of “old hands” still practising before the EPO, who got on to the EPO Register of Practitioners at the beginning, before they had to qualify by examination. Some of them are by now senior “rain-makers”, travelling the USA. Beware of them. Try a younger guy (or gal. They are often even better). Remember, old scientific theories never get destroyed. Instead, younger scientists find newer theories persuasive, and the stubborn adherents to the old theories eventually die out.

    Maybe it’s because I am myself an old hand, yet perversely am convinced by EPO-PSA, that I am so irritatingly proselytising. Perhaps I also irritate, by my choice of a German-sounding Nom de Plume. My Scottish adversary (Europe dis’nae Work) might be another old hand, but more jaundiced than me. Since changing pseudonyms is now all the rage, I’m thinking of changing my pseudonym to “MacDry”.

  9. “This approach to PSA” was not directed to EPO-PSA with which I am only marginally familiar.

    My issue is with using an advantage of the claimed invention to characterize the prior art as problematic (even though one of ordinary skill would not necessarily have seen the prior art as problematic) and then use that non-existent “problem” to show that one of ordinary skill would have been motivated to alter the prior art to reach the claimed invention. USPTO examiners too often use this approach to PSA, which is a joke in my opinion. This leads to the strange result that, where an invention is better that the prior art, you’re less likely to get a patent.

    I understand (at least as instructed from the EPO examination guidelines) that the EPO-PSA does rely in some sense to compare the claimed invention to the prior art to identify the “problem.” I have to think, if any abuse/subjectivity occured in the EPO-PSA, it would happen in the definition of the problem. That said, EPO guidelines counsel against creating suggestive problems, i.e., problems that suggest the claimed invention’s solution. While that sounds good, perhaps you can shed some light on whether that counsel is heeded by EPO examiners.

  10. Sorry, Eurodisnae, that you found my response extremely patronising. I was thinking that EPO-PSA gives the inventor full faith and credit for what he/she wrote in the app. Inventor announces the technical field and the contribution to the art. Objectively, “it” emerges involuntarily, every time, from the examination of the app and of D1. As to the level of skill of the notional addressee, inventor sets that too, I had thought. We can divine from the content of the app what level of sophistication the inventor thinks the notional addressee possesses, and we argue validity accordingly. The usual obviousness/sufficiency squeeze applies.

    I am fascinated, that you are an old hand at the EPO, but nevertheless still think that “formulating the problem in the light of the claim” is a joke. For you, EPO prosecution must be somewhat distressing, every time obviousness comes up.

    As to SF, I am grateful for your observation. I was using “PSA” to identify not just any “problem/solution” way of arguing obviousness (as done in the USA) but, rather, precisely the EPO “approach”. I had thought that you were using “PSA” generically, and when you wrote “this approach to PSA” you meant “EPO style PSA”. But Eurodisnae sees it different. Maybe you can clarify?

  11. Actually, SF didn’t say that PSA is a joke, s/he said that “this approach to PSA is a joke” – i.e. formulating the problem in light of the claim, rather than on the basis of the prior art itself. I would agree.

    And Max, contrary to what is suggested by your rather (read: “extremely”) patronising comment, I am no PSA novice. In addressing the question “is it obvious?”, PSA is a valuable tool for identifying what “it” is. If the prior art provides a very clear pointer to “it”, the question answers itself (subject to “secondary considerations”). If there is no clear pointer, the question remains and the answer depends crucially on the characteristics/assumed knowledge of the skilled person, and PSA provides no further help at all.

  12. heh: either “struck a nerve” or I’m just painfully slow to find my best response. As I get older, I find that to be increasingly the case. It’s not a problem for me, and it’s a pleasure for you, so we’re all smiling. SF: Wish I knew who “Seinfeld”, “Newman” and “Cosmo Kramer” were. Much more fun for you to talk about TV characters, I guess, rather than about different approaches to obviousness. Come on you guys, it can’t be that hard, can it, for you to find the last word on EPO-PSA.

  13. “Next time someone argues to me that “x doesn’t show how to do y” I guess I should just respond that yes, they don’t show that, and neither does your disclosure, 112′ed.”

    I saw an application and that’s exactly what happened. The applicant said, “Reference doesn’t disclose X” and the examiner said, “It discloses as much as your application does.” Result? Interview and then the Applicant quickly filed a CIP. LOL

  14. heh: And the funny thing is that Max’s response was strikingly similar to those of JAOI, who is Newman to Max’s Seinfeld.

  15. Multiple replies from the same person to the same post within a short period of time is a sure sign that Someone Has Struck A Nerve. Particularly funny is that MaxDrei’s replies are 30 minutes apart, suggesting that he fumed over SF’s comment for at least that long and was so riled that he thought a second reply would be necessary.

    Good to know I can always turn to this blog for cheap amusement. The regular cast of characters rarely disappoints.

  16. SF, a tip for you. Sit down quietly. Put your hand on your knee (to stop it jerking involuntarily). Ponder why our thing in Europe is the OBJECTIVE (as opposed to “subjective”) problem, when it comes to deciding obviousness, objectively.

  17. “Nor is the fact that from the second day that I used the internet I was driven to add every last thing that I could to there. Needless to say I grew out of that.”

    I’m not sure that was needless to say, judging from your prodigious performance on this blog.

  18. SF writes that EPO PSA is “a joke”. Well, it’s a long running one then. It was put into practice soon after 1978, and it just goes on getting more weary of ignorant “joke” attacks, with every year that goes by. Nobody else is laughing, SF.

  19. “What is all this talk of unexpected results? This irks me to no end. In the mechanical arts, for example, NOTHING is unexpected. If you put a combination of gears, levers, wedges, etc. together in a certain way, you can predict exactly what it will do and how it will work, mathematically.

    A mechanical invention can be a novel and non-obvious creation, as in one of skill in the art would NOT have sought to make that combination to perform function X, but it will never, ever give unexpected results.”

    Lowly, I come from a semi mechanical background myself. What you’re saying simply isn’t true. Let’s take the example of a piece of wood being glued to another piece of wood. You can know exactly what the supposed adhesion factor of the glue is but you will not be able to predict when and where the specific parts start to come apart unless it’s catastrophic failure. There’s a million things like this in mechanics. Even with metal there is many times some play in certain factors. Why do you think mechanical research still goes on? I guess we know it all already.

  20. “In a footnote on page 13, the CAFC remarks that “Because the ’099 patent is itself silent regarding how to actually implement the methods claimed therein with a web browser, Muniauction’s argument therefore might suggest that the claims present an enablement issue, rather than support a conclusion of nonobviousness.”

    Oops! LOL.”

    “It’s a difficult line to walk where you need a level of ordinary skill that was just smart enough to implement the invention from their description, but just dumb enough not to find it obvious from the prior art. ”

    I know guys, that might have been the funniest thing about this decision. Next time someone argues to me that “x doesn’t show how to do y” I guess I should just respond that yes, they don’t show that, and neither does your disclosure, 112′ed.

    But, for me to ever get that argument in a valid argument it would imply that the prior art in fact did not show how to do y. Hasn’t happened yet :(

  21. “e6k, your age (and hindsight bias) are showing. Chances are that there were several people on the jury who had not used the Internet as of the date of the invention. That said, can you explain the relevance of the jury’s personal experience?”

    Could have been a few on that jury I will admit. The fact that I’d been surfing for years isn’t especially relevant. Nor is the fact that from the second day that I used the internet I was driven to add every last thing that I could to there. Needless to say I grew out of that. But anyway, to answer you, the relevance is that if a majority of the jurors find the invention obvious or not novel then it usually isn’t. Further, the more specific relevance of particularly the jury’s personal experience is that if they’re already used something just like it, or sufficiently similar to convince them it is obvious then they would judge thus. Let me ask you something, if someone claimed “A broom comprising straw” and the patent was allowed do you think that a jury made up of old women would or would not find the invention to be obvious/not novel even if there was 0 art cited?

  22. “Oops! LOL.”

    It’s a difficult line to walk where you need a level of ordinary skill that was just smart enough to implement the invention from their description, but just dumb enough not to find it obvious from the prior art.

  23. By the way, the funniest part of the opinion and the part which shows how much dust Muniauction kicked up during the trial is on page 12 where it is revealed that Muniauction had asserted that “a person of ordinary skill would not have known how to use a web browser to implement certain steps of methods claimed in the [the prior art] patent.”

    In a footnote on page 13, the CAFC remarks that “Because the ’099 patent is itself silent regarding how to actually implement the methods claimed therein with a web browser, Muniauction’s argument therefore might suggest that the claims present an enablement issue, rather than support a conclusion of nonobviousness.”

    Oops! LOL.

  24. Dennis wrote: “the CAFC also found that broad claims make it difficult to use secondary factors of patentability to establish nonobviousness”

    I was curious as to what language the CAFC used in the decision because it seemed unlikely to me that they would make a general observation about “broad claims” (raising the question “how do you define broad”).

    The only use of the term “broad” in the decision is a footnote on the bottom of page 14: “We further note that our conclusion as to the nexus between this award and the claims is consistent with the long-established rule that “[c]laims which are broad enough to read on obvious subject matter are unpatentable even though they also read on nonobvious subject matter.” In re Lintner, 458 F.2d 1013, 1007 (CCPA 1972) (citing
    In re Mraz, 455 F.2d 1069, 1073 (CCPA 1972)).”

    As someone noted upthread, the claims at issue here read on “maturity-by-maturity” bidding as well as “all or none” bidding. Muni’s evidence for non-obviousness included an “Innovations in American Government” award to the City of Pittsburgh for its use of the
    Muniauction system” but the CAFC found that the press coverage “focused only on the maturity-by-maturity bidding” system. Hence the conclusion that the “nexus” between the evidence and the claims was lacking, and the quotation of the In re Lintner passage.

    That’s all very nice, I suppose, but it strikes me as an overly “legal” argument when there is much bigger problem: why in hell should a court considering patent validity care what some group called Innovations in American Government thinks about anything?!?!? Remember that the District Court actually found the award relevant. While the selection criteria for the award (described here: link to innovationsaward.harvard.edu) appears to take “novelty” into account, I think we can rest assured that a team of experienced attorneys weren’t reviewing the claims. More likely is that the application or granted patent was submitted to the “selection committee” as evidence of its novelty. And round and round we go.

  25. lowly wrote, “My problem with PSA is that the examiners can define the problem in such a manner as to make your solution obvious.”

    And too often, there isn’t any known problem at all. They merely define the “problem” in view of the invention’s advantages. For example, if the invention is faster, they perceive a hindsight problem in “slow” prior art. In the absence of evidence (outside of the patent application) to suggest that the prior art was slow, this approach to PSA is a joke.

  26. The leading recent English case on commercial success is Haberman v Jackel. Laddie J. explains why, once in a blue moon, it can be relevant. What can be done to stop the wheels of justice getting clogged by issues that consume huge legal resources, and are trotted out by litigants for good fighting reasons, yet are relevant to justice only one time in a thousand. Active case management, perhaps, by judges that are wise seasoned patent litigators?

  27. “So for the commercial success argument, the plaintiff is arguing that despite the fact that billions of dollars could be made by doing what the inventor did, nobody else was able to combine the pieces the defendant is offering to make the invention until shown how to do so by the inventor.”

    It seems then that the “commmercial success” could only be measured in the period before the application was published or the patent was granted, otherwise the best explanation is that competitors were blocked from marketing a similar product, not that “nobody else was able to combine the pieces the defendant was offering.”

    Similarly, the idea that a patentee or applicant has obtained licensees also strikes me as a ridiculous measure of obviousness. It doesn’t show non-obviousness. It just shows that the patentee or applicant has a patent or an application.

    What the “commercial factor” has historically done, I think, is weigh patentability in favor of entities who are adept at marketing and/or cooking their books, e.g., large companies.

    I, for one, am glad to see the CAFC begin marching down the road to erasing this particular factor from the obviousness equation.

  28. Eurodisnae, The PSA tool is your servant, and loves cgm. It is not the PSA approach that is your problem but, rather, the “EPO approach” to it. Please, blame the worker, not his tool. Educate all those over-academic, high-handed EPO Examiners, by deploying PSA more skilfully than them. They will recognise your skill in using their tool, and you will win the argument (You say you are getting more success these days). Practice makes perfect.

  29. OK Lionel. So, that’s not the reason why Lowly thinks TSM “better” than PSA. I wonder what is the sense in which TSM is “better”.

    And PSA is, to my mind, extremely exacting, not woolly at all. That’s its value. Examiners, or opponents, who waver from its strict path of analysis you should be able to blow away every time, provided you know how to trot out your PSA Rules.

    Where have I gone wrong? Maybe my “rigid” was a poor choice of word. How come my earlier scribblings left you with the impression that PSA was not dauntingly strict?

  30. Ironic, n’est-ce pas, that my learned friends here are spending so much time re-inventing the wheel of obviousness.

    If the prior art/common knowledge provides some T/S/M towards the claimed subject matter, the burden of proof of non-obviousness must fall on the patentee. Secondary considerations such as long felt want and commercial success MIGHT help the patentee to discharge that burden. In the absence of any relevant TSM in the documentary evidence, the burden lies with the party challenging the claim to establish that the T/S/M can be inferred somehow from the common general knowledge. I don’t think any of this is inconsistent with KSR.

    Given a competent tribunal, presented with good quality evidence from both sides, it should only be “close calls” that present any difficulty.

    No matter how good PSA or any other analytical test/method might be in principle, there will always be cases in which the result depends ultimately on an arbitrary or prejudiced judgement call.

    (BTW, when talking of “inventive step”, “inventive” just means “non-obvious”. Identifying an inventive step just means identifying what the inventor did that would not have been obvious to the PHOSITA)

    In my experience at the EPO, PSA breaks down when there is no clear TSM to bridge the gap between the closest prior art and the claim, but the examining division/opposition division/board of appeal doesn’t like the claim and manufactures a PSA argument out of whole cloth. Recently, to be fair, I see less of that. Now the EPO is more likely to argue that the disclosure doesn’t support the breadth of the claim as a way of forcing the applicant to narrow its scope.

    In the UK courts, the current state of the art test for obviousness
    [Pozzoli SPA v BDMO SA [2007] EWCA Civ 588 link to bailii.org
    is:
    (1)(a) Identify the notional “person skilled in the art”
    (1)(b) Identify the relevant common general knowledge of that person;
    (2) Identify the inventive concept of the claim in question or if that cannot readily be done, construe it;
    (3) Identify what, if any, differences exist between the matter cited as forming part of the “state of the art” and the inventive concept of the claim or the claim as construed;
    (4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?

    PSA is one way of approaching steps 2/3 and 4, and does not in itself deal with 1(a)/(b). (Personally, I’ve never been very sure how 2 can be distinct from 3, if it isn’t simply about construing the claim).

    The UKIPO takes the view that “One cannot overstate the importance of the notion of common general knowledge. It is central to everything that is required of the hypothetical skilled person, for example in reading and understanding the patent for the purposes of purposive construction, or in understanding and reacting to the cited prior art. Common general knowledge can, perhaps, be summarized as a part of the mental equipment or mental toolkit needed so as to be competent in the art concerned. It is what makes the skilled person skilled.”

    It seems to me that this is where there is a hole in PSA – the identity and knowledge of the skilled person must be central to the questions of the “objective technical problem” and whether its solution is obvious. The EPO approach to this often seems high-handed and overly academic. Before you can answer the question “is it obvious?”, you need to determine “is what obvious?” and “obvious to who?”. For too many EPO examiners, the answer to the second is “obvious to me”.

    … and you might like this nugget from the UK practice manual:

    “The substantive examiner should not raise an [obviousness] objection when he has no good reason to suppose that there is no invention just to fish for a weakness in the applicant’s position. As in any other area of examination it is thoroughly bad practice for an examiner to raise an objection which, with thought, he would see was not justified, merely to pass the burden of thinking about the matter to the applicant.”

    When it comes to the nub of the question, obviousness is not determined one way or the other by any single test (e.g. “unexpected result”). There are no silver bullets. Each case has to be considered on its own merits – you have to think about who the skilled person is/what he knew and what the actual differences are between the claim and the prior art, and choose your ammunition accordingly.

    Greg Aharonian thinks “obvious to the PHOSITA” is unconstitutionally vague. Wrong. Its meaning is clear enough and relevant tests are well established for a wide range of circumstances. Is it unconstitutional to require the application of human intelligence in the service of justice?

    All well and good, if the tribunals are in fact competent.

  31. “I want to understand your “better”, Lowly. May I ask, “better” in what way? PSA is a precisely defined species of the TSM genus. Is PSA’s stern rigidity your criticism?”

    My problem with PSA is that the examiners can define the problem in such a manner as to make your solution obvious. With TSM, you’re pretty much limited to the wording of the references. It’s less subjective, in my opinion.

    That said, I still prefer PSA to the USA’s current lack of standard for obviousness.

  32. “What’s with the QQ’ing, as E6K would say, about TSM?”

    No crying. Just pointing out the obvious, which is that the plaintiff was likely to succeed only with TSM or enough distraction.

  33. “TSM + presumption of validity = patentee wins at trial on obviousness … KSR = whole new ballgame”

    Do you really think this makes a real difference with this case? Electronic auctions of municipal bonds were known, albeit without web browser inputs and outputs. Other electronic auctions are known, with web browser inputs and outputs. A speech includes an exhortation to apply “World Wide Web” technology, which clearly includes the use of web browsers, to the auctioning of bonds. What more do you need?

    This claim didn’t need a lower bar to be killed. The district court dropped the ball, and the CAFC picked it up. Nicely done.

  34. I want to understand your “better”, Lowly. May I ask, “better” in what way? PSA is a precisely defined species of the TSM genus. Is PSA’s stern rigidity your criticism?

  35. Anonymous,

    What’s with the QQ’ing, as E6K would say, about TSM? TSM actually worked and was a pretty objective standard for obviousness. I’d wager to say it was better than PSA.

    Now, exactly what is the objective standard in the US? Does anybody actually know? I could live with the bar in favor of obviousness being set high, if only there was some real objective standard.

  36. “I have a hard time understanding how a lawyer could argue with a straight face (or an expert could swear under oath) that the claim quoted by Dennis was not obvious.”

    I think it might have gone down like this: “There is no teaching, suggestion, motivation … ummm … Look shiny keys!”

  37. Ignorant question from Europe: If the claim delivers no more than the sum of its parts, why didn’t the court simply dismiss it as defining a mere collocation (obvious) as opposed to a combination (potentially patentable). That would have finessed the court out of the need to use the loaded word “predictable”. BTW, how do I pronounce “Muniauction” Would it be something like Mooney-auction?

  38. “That’s quite an assertion, Lowly. I guess we shouldn’t expect to see any more exploding rocket ships, failing transmissions, etc. Or will we just know when it’s about to explode or fail?”

    I was speaking of operation rather than failure. However, even when it comes to failure, IF all conditions of said rocket shop or transmission are known, it’s failure could be predicted fairly accurately.

    As far as I know, only the chemical and medical/biological arts are truly unpredictable. And even then, that’s probably not true; they’re just unpredictable to our current level of knowledge. A good example, I think, is excedrin/midol. For some (i think still) unknown reason, asprin/acetomeniphin are a heck of a lot more effective in treating pain if taken in conjunction with caffeine. I guess that would be ‘unexpected results.’ However, that’s only due to our imperfect knowledge of the body.

  39. Big Hairy Rat wrote: “In this case however, I have a hard time understanding how a lawyer could argue with a straight face (or an expert could swear under oath) that the claim quoted by Dennis was not obvious.”

    TSM + presumption of validity = patentee wins at trial on obviousness

    KSR = whole new ballgame

  40. “In the mechanical arts, for example, NOTHING is unexpected.”

    That’s quite an assertion, Lowly. I guess we shouldn’t expect to see any more exploding rocket ships, failing transmissions, etc. Or will we just know when it’s about to explode or fail?

    I agree that given a certain result, and a certain apparatus, we can always explain why it occurred. But is that the same?

    I share your unease with the court’s repitition of the “unexpected results” mantra. In the electrical arts as well, in hindsight everything looks predictable.

  41. What is all this talk of unexpected results? This irks me to no end. In the mechanical arts, for example, NOTHING is unexpected. If you put a combination of gears, levers, wedges, etc. together in a certain way, you can predict exactly what it will do and how it will work, mathematically.

    A mechanical invention can be a novel and non-obvious creation, as in one of skill in the art would NOT have sought to make that combination to perform function X, but it will never, ever give unexpected results.

    For the love of god, we need some judges with proper technical backgrounds on the CAFC.

  42. With most of the secondary consideration arguments, the point is that despite strong motivation to do so, and with the components lying around for all to see, nobody made the purportedly obvious combination.

    So for the commercial success argument, the plaintiff is arguing that despite the fact that billions of dollars could be made by doing what the inventor did, nobody else was able to combine the pieces the defendant is offering to make the invention until shown how to do so by the inventor.

    I wouldn’t expect the secondary consideration arguments to overcome a particularly strong prima facie case of obviousness, and the plaintiff arguments in this particular case are not the strongest, but I don’t believe the rationale behind them is as hard to see as some people pretend here.

  43. I agree with Matt. The title “Obviousness is Reviewed De Novo” is misleading. The appeal involves a JMOL motion. The standard for JMOL is the same as SJ – i.e. de novo review.

  44. Paul, you say “technical” evidence of “inventive step”, which might strike readers as unpleasantly EPO-centric. Looking at the pre-EPC 1949 UK Statute, Section 32(1)(f), however, we find the ground of revocation to be that “the invention, so far as claimed, is obvious”. So I suppose that also the 1803 petitioner for revocation in England needed a preponderance of (objective) evidence of “obviousness”, to overcome the English presumption of validity.

  45. If you look at the Graham test for inventive step, what it says, essentially, is that the case is decided according to the evidence, the earlier steps of the test being a structured preparation for that task. In the UK, our Windsurfing test is very similar. The court is entasked with certain preliminary steps, but having completed those steps it has to decide according to the evidence as in any civil dispute.

    There are two kinds of evidence. The first, and most important, is technical evidence as to inventive step, usually that there is some advantage that cannot be predicted according to the prior art. The first (1875) edition of Terrell, one of our standard works on patent law, refers to a case in 1803 in the UK when this point was made by the court and was considered to be nothing new. So in calling for objective evidence of new advantage, the courts are not calling for anything that was not already understood when Thomas Jefferson was president and Nelson was trying to catch Napoleon’s fleet. The second kind of evidence is circumstantial evidence, including evidence of commercial success, failure of others etc. Every lawyer knows that in some cases circumstantial evidence can tip the decision one way or the other but in general it is not as persuasive as direct evidence.

    If the inventor cannot point to some new advantage that he has achieved, and that does not flow naturally from the prior art, then he can expect difficulty in obtaining and supporting his patent. If he cannot point to anything whatsoever that he can represent as unexpected and his own discovery, then secondary evidence is unlikely to help him. Simply carrying out a known method using a web borwser arguably falls into this category.

  46. What do you mean Alan? I don’t get it either. Unless you refer to the sometime squeeze between sufficiency and obviousness (most likely to occur in biotech).

  47. Any time I start thinking about jury trials and juries, I always flash back to the image of J. Cochran showing a tinkertoy to the jury to help them to understand DNA.

    And then, after I think of that, and I think of how technically complicated my applications are, from the perspective of your average HS grad, I start to laugh and cry at the realization that it’s all a sad game.

  48. Mooney wrote, “What possible relevance could the commercial success of an invention have to whether it is non-obvious?”

    Not much. I think the idea is that, if there’s money to be made from practicing an invention (commercial success with a nexus shows this), why wasn’t it done before if it was obvious to do so?

    Of course, most of the time you can’t show the nexus, so you don’t even have to get to the question as to why wasn’t it done before.

    And even if you get to that question, there are lots of reasons persons of ordinary skill in the market would not have practiced the invention beforehand. First, they might not have recognized that the commercial success would have been achieved. Second, they might not have believed the commercial success would be sufficiently large to adopt the invention.

    In the end, commecial success is difficult to prove and, even if proven, isn’t that persuasive.

  49. AllSeeingEye: “”improper hindsight” rationale is not something that is applied to secondary factor analysis.”

    That’s nice. Did someone assert otherwise or are you just in the mood for spouting non-sequiturs?

  50. Just because the jurors may have used the Internet does not mean that they know how it works or even what a browser is.

  51. News Flash, Mooney is officially smarter than Learned Hand… eeyeah right.

    Clearly Mooney knows nothing of commercial success, or any other kind of success for that matter.

    And “improper hindsight” rationale is not something that is applied to secondary factor analysis.

    Mooney, please go away now, those shrimp aren’t going to serve themselves.

  52. “Chances are that there were several people on the jury who had not used the Internet as of the date of the invention.”

    John McCain only started using it recently.

  53. “That said, can you explain the relevance of the jury’s personal experience?”

    The lack of personal experience with the Internet held them back from laughing out loud during the experts testimony.

  54. ” I think it rather presumptuous to state plainly that ‘obviousness is a question of law’.”

    Hmmm. Compare this with what the CAFC (presumptuously?) said – “… a jury’s conclusions on obviousness, a question of law …” They’ve been pretty clear that non-obviousness is a question of law, with underyling issues of fact. I don’t think Dennis’ assertion is presumptuous at all.

    “Here, the CAFC also found that broad claims make it difficult to use secondary factors of patentability to establish nonobviousness. … [R[eports of success focused only on one portion of the invention as claimed.”

    I’m not sure that the CAFC “found” this at all. The reports of success focused on a feature of Muniauction’s actual product (availability of maturity-by-maturity bidding) that had absolutely nothing to do with any of the claimed elements. I don’t think the overall breadth of the claim was really the problem.

    “I suppose their jury was made up of people who had never used the internet before.”

    e6k, your age (and hindsight bias) are showing. Chances are that there were several people on the jury who had not used the Internet as of the date of the invention. That said, can you explain the relevance of the jury’s personal experience?

  55. “I suppose one could argue that if there was such a good market waiting for the product, if it were obvious, it would have been done sooner.”

    I agree that you could say that with a straight face and probably people would scratch their heads for a couple minutes wondering if there is a logical connection between the “good market” and non-obviousness.

    But how is “such a good market” defined for this purpose? Does the term “commercial success” require a certain level of sales within a certain period of time? Or does it just have to profitable (a feature which would qualify as a success for most businesses)?

    But more importantly, I think the test fails miserably for many (most? nearly all?) inventions that require technology that is entirely independent of the inventors. For example, take a web-based method of hosting a game of cards (for gambling purposes) where the card game was old but newly discovered by an ethnogeologist in Peru and had never been played on the web before. Showing commercial success (in the form of profits) would likely be trivial. It’s also totally irrelevent to the obviousness of the web-based game.

    The idea that a “long felt need” could be demonstrated in retrospect by showing commercial success is a form of hindsight analysis. To the extent that it is not, it’s yet another example of a “secondary factor” merely recapitulating a “primary factor” for rebutting obviousness, i.e., a showing that there was no reasonable expectation of success in the field at the time of the invention.

  56. “What possible relevance could the commercial success of an invention have to whether it is non-obvious?”

    I suppose one could argue that if there was such a good market waiting for the product, if it were obvious, it would have been done sooner. I suppose a lawyer could make that argument with a straight face.

    In this case however, I have a hard time understanding how a lawyer could argue with a straight face (or an expert could swear under oath) that the claim quoted by Dennis was not obvious.

  57. “”[C]ommercial success or other secondary considerations may presumptively be attributed to the patented invention only where ‘the marketed product embodies the claimed features, and is coextensive with them.’” Quoting Ormco v. Align.”

    This cautionary note doesn’t go far enough to crushing the worthlessness of this so-called “secondary factor.” PEOPLE DO NOT BUY THINGS BECAUSE THEY ARE NON-OBVIOUS. People buy things because they work as advertised or because they are advertised very well and because they can afford to buy them or must buy them.

    What possible relevance could the commercial success of an invention have to whether it is non-obvious?

  58. e6k “Lol, guess “solely” just dropped out of his vocabulary for this argument, maybe he missed the primary reference.”

    That’s what happens when you have nothing and the client won’t take no for an answer (because … the client has money to burn? the client contact is a peon who has some quota of allowed patents he/she needs to achieve so the earth must be scorched regardless of the fact that money is wasted? the licensee paying the bills is totally clueless about patent law? the client is banking on the examiner feeling generous and having to run out to make dinner for his girlfriend on the day the claims are examined? ONLY THE SHADOW KNOWS …)

  59. JD, I might have a winner of an official notice case. He’s amending the ind. with other deps though so it looks like I might have to go “hero” on this examination to get down to the officially noticed claim.

    He’s got balls on him though, check this out:

    “The examiner relying on “common knowledge” is not appropriate, See MPEP 2144.03A “It is never appropriate to rely solely on “common knowledge” …”

    Lol, guess “solely” just dropped out of his vocabulary for this argument, maybe he missed the primary reference.

    Carry on, obvious is as obvious does, Niro should appeal blah blah etc. etc.

  60. “Broad Claims Create Trouble for Secondary Factors: Broadly written claims increase the chance that some prior art will be found to invalidate the claimed property right. Here, the CAFC also found that broad claims make it difficult to use secondary factors of patentability to establish nonobviousness. The particular issue here is that a tight nexus must link the claimed invention to the secondary factors (such as long felt need & market success). ”

    That has been my problem with those for a long time and even have had some cases that involved it.

    I love how someone predicted you’d get to this D.

    Overall, I’m surprised that things like this could have gotten a jury to hold it non-obvious. I suppose their jury was made up of people who had never used the internet before.

  61. “Like claim construction, obviousness is a question of law that is reviewed de novo on appeal.”

    I think you are drawing your conclusion rather broad. There are times when the facts are so overwhelming that a Judgment as a Matter of Law is warranted. Likewise, review of such a JMOL is de novo.

    However, I think it rather presumptuous to state plainly that “obviousness is a question of law”.

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