Declaratory judgment (DJ) actions are often used by potential defendants to obtain a declaration that a patent is invalid, unenforceable, or not infringed.  Under Federal Circuit law, a licensee cannot challenge a patent without first breaching the license.  The CAFC's reasoning was that a licensee in good standing feels no apprehension of suit since the license is essentially a settlement between the parties. Without an apprehension of suit, the DJ action would not rise to an actual controversy as required by the Constitution.

In a broadly worded opinion, the Supreme Court has scrapped the Federal Circuit's "reasonable-apprehension" test on declaratory judgment standing in favor of a rule that allows licensee's in good-standing to file DJ actions.

We hold that petitioner was not required, insofar as Article III is concerned, to break or terminate its 1997 license agreement before seeking a declaratory judgment in federal court that the underlying patent is invalid, unenforceable, or not infringed.

There are several things to note immediately:

Not Limited to Patents: This case at least extends to all licensing issues and likely to most contracts -- whether or not they involve patents or intellectual property.

Suggested Contractual Work-Around: Reading between the lines, the opinion may indicate that a contractual "prohibition against challenging the validity of the patents." may serve to block challenges by licensee's in good standing. Without the clause, however, the Court found no such prohibition:

To begin with, it is not clear where the prohibition against challenging the validity of the patents is to be found. It can hardly be implied from the mere promise to pay royalties on patents

Regarding apprehension of suit, the Opinion's footnote 11 is a complete divergence from common practice -- finding that a licensee who pays royalties either in fear of an injunctions or for fear of treble damages is being coerced in a way that creates an Article III case or controversy.

Links:

• Download MedImmune.pdf
• Briefs filed in MedImmune v. Genentech;
• CAFC Decision in MedImmune v. Genentech;
• CAFC Decision in MedImmune v. Centocor;
• MedImmune Petition Granted;
• Lear v. Adkins;
• Professor Miller’s comments;
• Supreme Court on the March;
• Supreme Court docket sheet.

Link: Washington Post Article

The doctrine of nonobviousness is the cornerstone of American patent law.  I was reminded today by Phil Swain that our nonobviousness statute, section 103(a) of the Patent Act, was drafted by Judge Giles Rich.  Judge Rich is the most celebrated patent judge of this century.  His statutory masterpiece eliminated the amorphous concept of a “flash of genius” and replaced it with our now ubiquitous objective standard of a person having ordinary skill in the art.  In Graham v. John Deere, the Supreme Court reinforced 103(a) with its concept of case-by-case consideration of secondary indicia of nonobviousness as a way to avoid potential hindsight bias. 

Later, as the Federal Circuit developed its own patent jurisprudence, the court hit upon the teaching-suggestion-motivation test as another anti-hindsight rule.  That test requires evidence of some reason to combine various references that each teach part of an invention.  Thus, if there is no evidenced reason to combine the references, then the invention will be deemed nonobvious. The test, known by acronymists as “TSM,” has been labeled as a poster-child for bad patent behavior.  According to opponents of the test, the bright-line test makes patents too easy to obtain — resulting in a glut of patents covering trivial improvements. Those patents, in turn, hold-up industry research and greatly increase transaction costs and legal fees. 

In KSR v. Teleflex, the Supreme Court is questioning whether the TSM test should exist as the sole determinant of obviousness.  Question presented:

Whether the Federal Circuit has erred in holding that a claimed invention cannot be held ‘obvious’, and thus unpatentable under 35 U.S.C. § 103(a), in the absence of some proven “‘teaching, suggestion, or motivation’ that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed.”

Until a few months ago, the common myth of the TSM test was that it required at least some hard evidence that provided at least a minimal reason to combine various prior art references.  It is that myth that provided the impetus for Supreme Court review. In recent months, however, we have learned that the CAFC’s version of the test allows for evidence that is implicit, based on common knowledge, found generally in the prior art as a whole, based simply on the nature of the problem or simple logic, or concluded by experts. See Kahn, Dystar, Ormco, Alza.  This jitterbug by the CAFC actually gives KSR much of what it wanted and smears the edges of the mythical bright-line rule.  Justice Scalia picked up on transition during oral arguments — noting that the recent cases leave the test “meaningless. [The CAFC] essentially said ‘our test simply reduces to what [KSR seeks] in this litigation.’ . . . this is gobbledygook. It really is, it’s irrational.” Justice Alito had a similar concern with the “new” TSM test:

J. Alito: “But what is the difference between asking whether something is implicit in the, in the prior art and simply asking whether it would have been obvious to a person of ordinary skill in the art?:

As discussed earlier on Patently-O, all the major patent bar associations filed briefs that support the current TSM test.  In a brilliant move, KSR neutralized those briefs by implying bias based on “the enormous fees that litigation of invalid patent claims can generate.” KSR Reply Brf. CJ Roberts appeared to buy-in to that analysis, joking that the filings “just indicate[] that this is profitable for the patent bar.” KSR Oral Arg.

One concern of the Court is whether modification of the obviousness doctrine would spoil long-settled rights.  The Justices, however, mentioned on several occasions that over the past year, the CAFC may have already upset any settled rights.

Mr Goldstein [for Teleflex]: “[The CAFC has had decades to look at this to try and elaborate a standard.”
J Breyer: “And it so quickly modified itself.”

Decision in February: Reports from the hearing noted that Justice who used the term “TSM” spoke with disdain and were highly critical of the test.  Although oral arguments are always full of counterfactuals and wild theory testing, the level of criticism supports the conventional wisdom that the TSM test is likely to be eliminated as “the exclusive” test.  Cases will rather be decided on a case-by-case basis using the standards of Graham v. John Deere. Already issued patents will still be given a presumption of validity, although it will be difficult for some courts to do this with a straight face.  The new key to avoiding invalidity will be secondary indicia of nonobviousness. Look for a 9–0 decision in early February.

TSM is not Dead: Much of the oral argument was filled with an attempt to simply understand the TSM test, and to figure out what is meant by a “motivation.”  If they cannot figure-out the test, they would likely completely trash-it as unworkable. Of course, by the time the opinion is penned, they will understand the current test and the test will not be scrapped as a whole. Rather, they will follow the Government’s suggestion that TSM continue to be used as a “valid means of proving obviousness.” In addition, however, flexibility will be added to allow for other ways of determining nonobviousness.

Here are some quotes from oral arguments:

CJ Roberts: “[T]the Federal Circuit’s approach focuses . . . on prior art — as opposed to, I would say, common sense.” 

J Scalia: “And in the last year or so, after we granted cert in this case after these decades of thinking about [the obviousness doctrine, the CAFC] suddenly decides to polish it up.”

J. Breyer: “I’ve read it about 15 or 20 times now, I just don’t understand what is meant by the term ‘motivation.’”

Mr. Hungar [for US Gov’t]: “Construed as the sole means of proving obviousness the teaching suggestion motivation test is contrary to the Patent Act, irreconcilable with this Court's precedents and bad policy. It asks the wrong question and in cases like this one, it produces the wrong answer. It should be rejected and the judgment of the Court of Appeals should be reversed. . . . It’s just foreign to this Court’s precedents as a mandatory prerequisite for obviousness.”

Mr. Dabney [for KSR]: “[T]here is no legal regime that is a greater generator of patent litigation than the teaching suggestion motivation test that is urged by the respondent.” [DDC: Is this true?].

Documents and Links:

• Oral Argument Transcript;
• Commentary from the Gallery on the Oral Arguments:
• Zura;
• Armstrong;
• Miller;
• Kerr;
• ScotusBlog (Run by Teleflex’s Counsel)
• Gordon Smith;
• Patent Baristas;
• LawFont;
• Hawk;
• Brooks;
• Leo Stoller;
• Ebert;
• Law School Innovation;
• DragonFly
• KSR Shifts Obviousness Debate to "Mere Aggregations" and Presumptions of Non-Obviousness;
• Discussion of Response Briefs;
• Discussion of Petitioner and Supporting Amici’s Briefs on the Merits;
• Discussion of Government's Brief in Support of Certiorari;
• Discussion of Microsoft’s Amicus Brief;
• Discussion of the CAFC decision;
• Discussion of Law Professors Brief;
• Discussion of In re Kahn;
• Discussion of Petition for Certiorari;
• Prediction Certiorari;
• Professor Wagner and Strandburg debate obviousness in Penn’s new online law reivew:PENNumbra;
• Prof Miller: KSR Lift-off!
• Prof Miller: Discussion of Gov’t Brief;
• Patent Hawk: Becoming Less Obvious;
• Patent Hawk: Hindsight Problem;
• Buchanan: "[O]nce again, patent reform has left the Capitol and walked across First Street to the Supreme Court." [Link];
• Petherbridge & Wagner Empirical Article [link]
• Cotropia Article: [link].
• Shane Popp Article on Section 103 background [link]
• Mark Smith, a student at Santa Clara Law has these three posts in SCU’s great new Tech Law Forum:
  • http://www.techlawforum.net/blogs/a-precursor-to-obviousness/
  • http://www.techlawforum.net/blogs/per-se-or-not-per-se/
  • http://www.techlawforum.net/blogs/hey-teacher-leave-our-test-alone/
• The Patent at issue: [link] [link]

Cite as Dennis Crouch, “KSR Gobbledygook,” Patently-O, available at https://patentlyo.com.

Cybor is the much reviled CAFC decision holding that the construction of patent claim language is a question of law that is reviewed de novo — without any regard to the lower court’s reasoning or ruling.  The Cybor rule is believed by many to have dramatically increased uncertainty in patent litigation as well as likelihood of appeal.  Importantly, the associated reversal rate also demoralizes district court judges who already often struggle with the technical and legal complexity of patent cases.

In Amgen, the appellate panel reviewed construction of the term “therapeutically effective amount” of erythropoietin and, in the process illustrated how Cybor gives the court a “capacity for arriving at its own idiosyncratic construction.” (Quoting Prof. Kevin Noonan). Here, the CAFC panel reversed the lower court’s construction based on its interpretation of the specification. 

HMR’s request for rehearing en banc has been denied, but a contingent of six separate dissenting and concurring opinions show the internal conflict.

Chief Judge Michel, who also dissented from the original panel decision, led the charge against Cybor. “I have come to believe that reconsideration is appropriate and revision may be advisable.”  CJ Michel, who was joined in the opinion by J Rader, cited four practical reasons for eliminating de novo review:

1. High reversal rate;
2. Lack of predictability of outcomes — something that decreases settlement and frustrates lower courts;
3. The disregard of time spent by district court judges in understanding the evidence and patent information;
4. The mind-numbing minutia of claim construction decisions faced by the court in “nearly every patent case.”

Claim construction, although similar to statutory construction is different for many reasons and is intertwined with facts that make the foundation for de novo review questionable. The arguments of CJ Michel are further highlighted by Judge Newman’s dissent.

J Newman focuses on how scientific and technological evidence serve as the backdrop for any claim construction and how claim construction should focus on the invention rather than following formalistic requirements that trip over every statement in a patent application. Finally, Newman argues that a Daubert framework is more appropriate for claim construction.

The Federal Circuit's position that patent interpretation requires more rigorous appellate review than other fact/law issues has not well withstood the test of experience. It is time to reopen the question and to rethink, en banc, the optimum approach to accuracy, consistency, and predictability in the resolution of patent disputes, with due attention to judicial structure, litigants' needs, and the national interest in invention and innovation. (Newman dissenting).

Judge Rader agreed with both CJ Michel and J Newman, but filed his own opinion. Rader gave some legal basis for reviewing Cybor — noting the Supreme Court’s opinion that claim construction "falls somewhere between a pristine legal standard and a simple historical fact." (Markman). Rader maintained his long-standing position that district courts should be given deference because they are better versed in the facts and the issues.

“Trial judges can spend hundreds of hours reading and rereading all kinds of source material, receiving tutorials on technology from leading scientists, formally questioning technical experts and testing their understanding against that of various experts, examining on site the operation of the principles of the claimed invention, and deliberating over the meaning of the claim language. If district judges are not satisfied with the proofs proffered by the parties, they are not bound to a prepared record but may compel additional presentations or even employ their own court-appointed expert." (Rader dissenting in Cybor).

Judge Moore: In what appears to be her first patent opinion, New CAFC Judge Moore also set her target on Cybor — stating that the court should “reconsider its position on deference.” 

Judges Gajarsa, Linn, and Dyk all concurred with the decision not to rehear this particular case, but noted that “In an appropriate case we would be willing to reconsider limited aspects of the Cybor decision.”  In particular, those three judges appear to believe that de novo is still appropriate when the intrinsic evidence (written description and prosecution history) on its face resolves “the question of claim interpretation.”

SUPREME COURT NEXT: This leaves us in the situation where at least eight of the twelve Federal Circuit judges believe that Cybor should be revisited if an “appropriate case” arises. This fractured decision is also ripe for Supreme Court review, and along with the Tamoxifen antitrust cases, are the two most likely to be granted certiorari in 2007.

Details: Judges Michel, Newman, Rader, Mayer, and Moore have all bluntly criticized Cybor. Judges Gajarsa, Linn, and Dyk have a more limited criticism.

Documents:

• AMGEN EN BANC DENIED
• Amgen v. HMR (CAFC Decision)

Section 103 of the Patent Act focuses on “differences between the subject matter sought to be patented and the prior art.”  In the 1976 Sakraida case, the Supreme Court held that simply aggregating old elements together does not pass the patentability test if the elements are each performing the same functions that they were already known to perform.

The “mere aggregation” test of Sakraida, however, has not been followed by the Court of Appeals for the Federal Circuit (CAFC). Instead, the CAFC’s approach has allowed mere aggregations to be patented so long as there is no evidence suggesting that the elements be combined.

The pending case of KSR v. Teleflex squarely addresses this debate. KSR recently filed reply brief closes the written arguments in this landmark case, and oral arguments are scheduled for November 28, 2006.

KSR’s attorneys, including GWU Professor John Duffy, argue strongly that 103(a) has been wrongly interpreted as merely a way to challenge patentability rather than a “condition of patentability” as the section is titled. Under the current suggestion test, claims “cannot be held invalid . . . no matter how trivial might be the differences” from the prior art unless evidence suggesting the difference is found in the art.  As noted by Hal Wegner, the Court’s reaction to this argument could shift the strong presumptions of non-obviousness.

KSR has gone beyond its attack on the Federal Circuit suggestion/teaching/motivation test and raised as a further issue the point that it should win under a preponderance of the evidence standard for challenging patent validity.

In the process, KSR takes a shot at the AIPLA’s “balanced” position.

It is by no means clear why patent bar groups would have a systematic interest in a “balanced” standard of patentability, in view of the enormous fees that litigation of invalid patent claims can generate.

Briefs and Documents:

• On the Merits
  • In Support of Petitioner
    • Petitioner's Brief on the Merits;
    • Petitioner's Reply Brief on the Merits;
    • Government's Brief in Support of Petitioner;
    • Law and History Professors (Sarnoff) in Support of Petitioner;
    • Law Professor (Strandburg) in Support of Petitioner;
    • Electronic Frontier Foundation in Support of Petitioner;
    • Judge Colianni in Support of Petitioner;
    • Intel and Micron in Support of Petitioner;
    • Progress and Freedom Foundation in Support of Petitioner;
    • Cisco and GM in Support of Reversal (Petitioner);
    • CCIA in Support of Petitioner;
    • Business Software Alliance in Support of Petitioner;
    • Time Warner, IAC, and VIACOM in Support of Petitioner;
    • AARP.
  • In Support of Neither Party
    • IBM in Support of Neither Party;
    • Ford & DaimlerChrysler in Support of Neither Party;
    • DC Bar Assn (Eccelston);
    • Professor Hollaar.
  • In Support of Respondent
    • Respondent’s Brief on the Merits;
    • Intellectual Property Owners in Support of Respondent;
    • AIPLA in Support of Respondent;
    • ABA in Support of Respondent;
    • Automotive Suppliers in Support of Respondent;
    • Big Innovative Companies (3M, et. al) in Support of Respondent;
    • Technology Properties Limited in Support of Respondents;
    • United Inventors Association in Support of Respondent;
    • Intellectual Ventures and other Small Companies with Large Patent Portfolios in Support of Respondent;
    • Law Professors in Support of Respondent;
    • Professor Tom Field (Franklin Pierce) in Support of Respondent;
    • IPLAC in Support of Respondent;
    • Harold Milton (attorney who drafted the claims in the Teleflex patent) in Support of Respondent;
    • Tessera, Qualcomm, and Amberwave in Support of Respondent;
    • Science Professors in Support of Respondent;
    • Lee Thomason in Support of Respondent.
    • [Briefs also available at SCOTUS BLOG]
• Petitions Stage
  • Party Briefs
    • KSR’s Petition for Cert (Including the CAFC and District Court decisions in Appx. A & B);
    • Teleflex’s Brief in Opposition;
    • KSR Reply Brief (314 KB);
    • Teleflex Supplement.
  • Amici
    • Government in support of petition;
    • 24 Law Professors in support of petition;
    • Progress Freedom Foundation in support of petition;
    • Microsoft, Cisco, Hallmark, et al. in support of petition.

Links:

• Discussion of Response Briefs;
• Discussion of Petitioner and Supporting Amici’s Briefs on the Merits;
• Discussion of Government's Brief in Support of Certiorari;
• Discussion of Microsoft’s Amicus Brief;
• Discussion of the CAFC decision;
• Discussion of Law Professors Brief;
• Discussion of In re Kahn;
• Discussion of Petition for Certiorari;
• Prediction Certiorari;
• Professor Wagner and Strandburg debate obviousness in Penn’s new online law reivew:PENNumbra;
• Prof Miller: KSR Lift-off!
• Prof Miller: Discussion of Gov’t Brief;
• Patent Hawk: Becoming Less Obvious;
• Patent Hawk: Hindsight Problem;
• Buchanan: "[O]nce again, patent reform has left the Capitol and walked across First Street to the Supreme Court." [Link];
• Petherbridge & Wagner Empirical Article [link]
• Cotropia Article: [link].
• Shane Popp Article on Section 103 background [link]
• Mark Smith, a student at Santa Clara Law has these three posts in SCU’s great new Tech Law Forum:
• http://www.techlawforum.net/blogs/a-precursor-to-obviousness/
• http://www.techlawforum.net/blogs/per-se-or-not-per-se/
• http://www.techlawforum.net/blogs/hey-teacher-leave-our-test-alone/
• The Patent at issue: [link]

Cite as Dennis Crouch, “KSR Shifts Obviousness Debate to ‘Mere Aggregations,’ Patently-O, available at https://patentlyo.com.

By Dennis Crouch [dcrouch@gmail.com]

Background: Teleflex and its supporters have now filed their briefs in defense of the Federal Circuit’s methodology for determining whether a patent is “obvious.” [Copies of briefs are provided below]. The doctrine of nonobviousness is fundamental to our patent system.  In order to be eligible for a patent an invention must be both novel and non-obvious.  Novelty is generally narrowly applied to cases where the invention is identical to something already in the public domain.  Obviousness, however, is a more difficult beast and is intended to ensure that patent rights are only granted to inventions that move us a significant distance past the prior art. 

Obviousness has always been a “squishy” term, but over the past twenty-five years, the Court of Appeals for the Federal Circuit has developed a somewhat objective nonobviousness doctrine using a teaching/suggestion/motivation (TSM) test. According to the test, when various pieces of prior art each contain elements of an invention, the prior art can be combined together to invalidate a patent on the invention only when there is some motivation, suggestion, or teaching to combine the prior art. One problem with any obviousness test is hindsight bias. It is all-to-easy to look-back and assert that an invention would have been obvious. One purpose of the objective TSM test is to avoid this type of hindsight bias.

KSR has asked the Supreme Court to rethink that approach and take a fresh look at the obviousness standard for patentability. The petition questions whether obviousness should require any proof of some suggestion or motivation to combine prior art references.

Question Presented: Whether the Federal Circuit erred in holding that a claimed invention cannot be held "obvious," and thus unpatentable under 35 U.S.C. sec. 103(a), in the absence of some proven "'teaching, suggestion or motivation' that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed"?

Interestingly, the Supreme Court has not heard an obviousness since well before the founding of the Federal Circuit. In that case (Sakraida 1976), the Court held that a combination which only unites old elements with no change in their respective functions is precluded from patentability under 103(a).  Under the Sakraida standard, the Teleflex patent is arguably obvious.  In an article several years ago, Professor John Duffy identified this obviousness issue as one that should attract the Supreme Court’s attention.

[The Federal Circuit’s suggestion] test, which tends to make even seemingly trivial developments patentable, is entirely the Federal Circuit’s product.  It has no basis in the Supreme Court’s case law and may, in fact, be inconsistent with the Court’s most recent pronouncement on the subject (though that precedent is now more than a quarter century old).

Duffy, The Festo Decision and the Return of the Supreme Court to the Bar of Patents, 2002 S.Ct. Rev. 273, 340-41 (2003).  Now, Duffy, a former clerk of Justice Scalia, is part of the KSR team that is trying to change the rule of law. The KSR case itself concerns a patent covering a gas pedal for an automobile. KSR makes pedals for GM & Chevy trucks and was sued for infringement of the Teleflex patent.

A discussion of briefs in support of the petitioner are found here: Discussion of Breifs Supporting Petitioner.

What follows is a discussion of briefs in support of the respondent: (i.e., in support of the status quo).

Respondent Teleflex: Brief on the Merits

Settled Law: Respondent begins with a compelling exposition on the power of stare decisis. “Millions of patents” have issued based on the suggestion test, and modifying that test would in Hal Wegner’s words, “threaten the validity of literally hundreds of thousands of existing patents still in force.”

Non-Rigid Test: Respondent defines the suggestion test as a “flexible [test that] looks to any available indication that a practitioner in the art would have had some reason to select the elements of the invention from among the prior art and combine them in the manner claimed by the invention.”  Relying heavily on the CAFC’s very recent obviousness pronouncements of Dystar and Alza, the brief points out that a suggestion does not need to be found in prior art, but rather can be implicit in the nature of the problem, customer demand, similarity between references, knowledge of PHOSITA, wide knowledge of value of feature to be combined, etc.  [DDC: Query whether the broad application of implicit suggestions would constructively eliminate the rule.]

The suggestion test can be contrasted with the “synergy” test proposed by petitioner and the “extraordinary level of innovation” test from the Solicitor General. Those approaches essentially mirror the pre-103 requirement of an “invention.” According to Judge Rich, “The first policy decision underlying Section 103 was to cut loose altogether from the century-old term ‘invention.’”

Intellectual Property Owners Association (IPO) in Support of Respondent:

The IPO is an organizatoin of intellectual property owners. MBHB (where I am of counsel) filed the brief on behalf of IPO. IPO’s brief supports the motivation requirement as an objective but flexible and practical approach to the obviousness problem.  IPO hits on the hindsight problem:

[The test must rely on] objective evidence, not mere unsupported opinion or argument. Otherwise, the inevitable use of hindsight will tend to render meritorious inventions "obvious" by using the inventor’s own teachings as a roadmap to piece together prior art references in ways that would not have been obvious at the time of the invention.

IPO also takes-issue with any “synergy” requirement. Synergy occurs when the "the interaction of elements that when combined produce a total effect that is greater than the sum of the individual elements." There are many patent-worthy inventions, however, that lack true synergy. In addition, the Solicitor General’s proposed "extraordinary level of innovation" requirement goes too far. “Nothing in the patent statute suggests that patents should only be awarded to Nobel laureates.”

Paul Berghoff, Jeremy Noe, and Aaron Barkoff (of OrangeBookBlog) are on the brief.

American Intellectual Property Law Association (AIPLA) in Support of Respondent:

AIPLA’s brief is a fun read — it starts off with quotes from Billy Wilder and King Solomon, both of which give us pause on the question of hindsight.

What has been is what will be,
and what has been done is what will be done;
there is nothing new under the sun.

According to AIPLA, King Solomon wasn’t so wise — perhaps because his vision of the past was colored by hindsight. The CAFC’s test of obviousness is useful because it helps avoid hindsight.

TSM is a well-established, thoughtfully-analytic framework that provides certainty and uniformity in obviousness determinations while allowing proper flexibility. By requiring a showing of why someone of ordinary skill in the relevant art would think the invention obvious, it functions as a critical evidentiary device that prevents arbitrary decisions driven by hindsight.

As is typical of opposition briefs, the AIPLA correctly notes that the CAFC’s suggestion test does not require that the suggestion be explicit or written.

I can concieve of a strong [and thus far unstated] argument that it would be sensible to require that the suggestion be written and explicit.  At this point in history, we have more people writing than ever before and those people are each writing more than earlier writers. At the same time, search costs are dropping dramatically and will continue to drop. In this scenario, why would we need to allow the evidentiary nightmare of giving weight to previously unstated suggestions to find an invention obvious?

Professor Thomas Field of Franklin Pierce in Support of Respondent:

Professor Field looks at the CAFC and its role in the patent process.  Unlike its predecesor CCPA, the CAFC hears both administrative patentability and litigation based cases. That means that the CAFC must “confront the consequences of unwaranted grants.” 

If the problem is the grant of too-many patents, the CAFC has little to say there because the court has no role in granting patents except to occasionally rule that the BPAI’s bases for rejection are unsupported.

Pre- and post-grant opposition proceedings may be the answer, but those decisions are for Congress.

ABA in Support of Respondent:

ABA amicus briefs are always difficult to obtain becauase they need the support of both the IP Section and the entire ABA House of Delegates.  Here, the way to consensus was not to argue that the TSM test is the best test, but rather to note that it is useful, objective, and deeply rooted in the Supreme Court’s John Deere jurisprudence. In addition, the test is well settled, and messing with the test would have a far-reaching and complex impact on the economy and state of innovation.

If some elusive method not based on evidence were to be substituted for the present inquiry, hundreds of thousands of patents granted under the teaching-suggestion-motivation methodology would be immediately placed under a cloud.

Harold Milton in Support of Respondent:

Harold Milton drafted the claims being asserted by Teleflex and has filed a very interesting brief in support of Teleflex.  Interesting because he begins with a statement that the suggestion test is illusory, or at least a misnomer. There is no requirement that there be any specific statement of suggestion in the prior art. Nonetheless, the test is important to maintain an “objective standard of patentability” and “consistent evaluation.”  It also prevents chaos:

Without an objective standard, chaos would be multiplied across thousands of patent examiners, judges, juries, attorneys, etc. and would result in inconsistent decisions on patentability.

According to Milton, the Court should reject the suggestion test and stick to its prior decisions that obvious is found when there is a “mere selection of prior art elements combined to perform the identical function as they did separately in the prior art.”

Lee Thomason in Support of Respondent:

Thomason is a Kentucky-based patent attorney. One interesting aspect of his argument involves the law/equity distinction.  According to Thomason, challenges to validity are equitable in their origins as evidenced both by the recited equitable factors of 103(a) (“as a whole”) and by Blackstone’s recitation of the writ fo scire facias. As such, any changes to the rule should be to review obviousness decisions “according to the standard applied to equitable rulings.” Equitable review requires a full discussion of the record and results in more predictability.

[Please e-mail briefs in support of respondent to me at dcrouch@gmail.com]

Catherine Lacavera is an attorney admitted to practice in New York, Massachusetts, and before the Supreme Court of the United States.  She has litigated patent cases in Federal Courts, drafted patent applications, passed the PTO registration examination, and now is an attorney for Google in California. Unfortunately for Ms. Lacavera, she is Canadian and does not hold a green card.  (Lacavera holds a non-immigrant work visa). 

Under USPTO rules, Lacavera’s “nonimmigrant status is ‘inconsistent’ with [PTO] registration because [the nonimmigrant status] is limited in time and scope whereas registration is not so limited.”  The CAFC agreed with the PTO in denying Lacavera her full registration, and Lacavera has now petitioned the Supreme Court for a writ of certiorari.

The petition presents three questions:

 1. Does the USPTO . . . have the authority to refuse to register nonimmigrant aliens as patent practitioners solely on the basis of their immigration status, where the nonimmigrant aliens are otherwise qualified for registration and authorized by United States Citizenship and Immigration Services ("USCIS") to practice as patent practitioners in the United States?

 2. Did the Federal Circuit, in upholding a USPTO rule denying registration to nonimmigrant aliens, inappropriately apply only a "rational review" standard where it should have applied at least "heightened scrutiny," if not "strict scrutiny," to a federal agency rule that discriminates against nonimmigrant aliens without serving any special national interest?

3. Do bar admission rules, such as the state rule that is before this Court in Leclerc v. Webb and Wallace v. Calogero, and the federal rule that is the basis of this case, that deny aliens lawfully within the United States access to employment opportunities based on the duration and employment restrictions of their current visas, violate the aliens' rights to "equal protection" in the absence of any evidence that the visa restrictions relate to valid state or federal interests in ensuring competency of practitioners?

On the issue of equal protection, Lacavera argues that the CAFC “set a dangerous precedent” by denying equal protection because “the USPTO treats all nonimmigrant alien's the same by refusing to register any of them. Equal discrimination is not equal protection.”

Interestingly, because she is Canadian and a U.S. attorney, Lacavera is the perfect test case.  If she were residing in Canada, the PTO would permit her registration even without any U.S. immigration status.  Additionally, her visa specifically authorizes her to practice as a patent attorney in the U.S.

The Coalition of Service Industries has filed a brief in support of the petition — arguing that we should open our doors to legally admitted temporary residents as a bargaining chip for reciprocity.

The U.S. has for example asked many other nations not to discriminate against American lawyers who provide or wish to provide legal services in foreign countries. Because reciprocity plays a large role in trade negotiations, the USPTO rule adversely affects our legal community in the several important trade negotiations that are currently underway or planned.

The Supreme Court has expressed its interest in the case — requesting that the government file a responsive brief by November 1, 2006.

Notes:

• Interestingly, soon after Lacavera filed her petition for certiorari, her application for permanent residence was granted.  The PTO may end up mooting this issue by granting her full registration.

Documents:

• Discussion of the CAFC case
• Lacavera’s Petition for Certiorari

Oral arguments were held today in this important case. Transcript of the arguments are available here.

Links:

• Discussion and copies of briefs filed in MedImmune v. Genentech;
• CAFC Decision in MedImmune v. Genentech;
• CAFC Decision in MedImmune v. Centocor;
• MedImmune Petition Granted;
• Lear v. Adkins;
• Professor Miller’s comments;
• Supreme Court on the March;
• Supreme Court docket sheet;
• SCOTUS Blog

The DOJ and PTO have given their solid support to Microsoft’s petition for certiorari in its battle over transnational patent infringement. This support makes grant of the petition highly likely.

This case, like Eolas and Pellegrini before, questions the scope of Section 271(f) of the Patent Act.  That statute allows a U.S. patentee to collect damages for foreign sales of a patented invention based on the export of one or more of its components from the U.S.  Recently, the CAFC has expanded the common interpretation of the statute to include the export of software code (AT&T, Eolas) as well as to the export of elements used in a patented method (Union Carbide).  In a case that is difficult to square with AT&T or Eolas, the court held that the “component” does not apply to plans or instructions.

In this case, Microsoft’s software code was generated in the U.S. and then shipped abroad where copies were then generated and distributed.  AT&T claims (and courts have thus far agreed) that sales of those foreign copies infringe the U.S. patent and create liability.  The chart below gives my loose graphical interpretation of the events.

If it stands, this case could have far-reaching effects in the fields of biotechnology (DNA/cell replication) as well as foreign piracy (shipping product from the U.S. to reverse engineer and copy in a foreign country).

From a business perspective, this interpretation of the statute gives business executives another reason to send software jobs overseas.  If the component was not exported from the U.S., there will be no damages under 271(f).

In their brief supporting the petition, Daryl Joseffer and the DOJ crew agree that software can be a component of a patented invention.  They argue, however, that the foreign replicas do not create liability under the act because the replicas themselves were not supplied from the United States (as is required by the statute). According to the brief, the lower court’s interpretation “improperly extends United States patent law to foreign markets and puts United States software companies at a competitive disadvantage vis-a-vis their foreign competitors in foreign markets.”

The Government argues that the extraterritorial nature of U.S. patents should be narrowly construed and that if someone wants rights to stop foreign infringement, then they should get foreign patents.

Just last week, Patently-O highlighted Professor Mossoff’s historical analysis of patent-takings jurisprudence.  That article took the CAFC to task for its continuation of the untrue myth that “patents were never secured as constitutional private property in the nineteenth century.”  In fact, argues Mossoff, “nineteenth-century courts applied the Takings Clause to patents, securing these intangible property rights as constitutional private property.” “It is time to set the historical record straight.”

Mossoff’s article was prompted by the April 2006 decision in Zoltek v. U.S. In that case, the CAFC found itself bound by the 1894 case of Schillinger v. United States where the Supreme Court ruled that a patent holder could not sue the government for patent infringement as a Fifth Amendment taking.

In Schillinger v. United States, 155 U.S. 163 (1894), the Supreme Court rejected an argument that a patentee could sue the government for patent infringement as a Fifth Amendment taking under the Tucker Act. Schillinger remains the law.

 With a petition for rehearing, Zoltek gave the CAFC another shot.

Without opinion (as is usual in denials), the petition for rehearing was denied.  However, two opinions were released.  Judges Dyk and Gajarsa filed a concurring opinion arguing first that there is no need for a taking claim because private parties already have a right to sue the government for unauthorized patent infringement under 28 U.S.C. § 1498. Second, the two judges argue that because patent rights are created by relatively recent federal statute, it is difficult to characterize limitations of those rights as a “taking of established property rights.”  

In dissent, Judge Newman laid out the holding in simple terms:

The panel majority holds that there is no jurisdiction [in any court] of a Takings claim for compensation for unauthorized use by the government of a patented invention. This ruling is contrary to decision, statute, policy, and constitutional right. I must, respectfully, dissent from the court's endorsement of this ruling.

 Judge Newman finds that the majority decision only makes sense if we reject the premise that patents are property.

Supreme Court Next: Judge Newman’s set this case up nicely for Supreme Court review on the issue of takings and more broadly what is meant by intellectual property.

Notes:

• Document: En Banc Denial with Opinions
• Document: Panel Decision
• SSRN: Mossoff Article (87 Boston University Law Review ___ (2007)).  
• Patently-O: Discussing Original Decision
• Patently-O: Discussing Mossoff Article
• Patent Hawk: Discussing En Banc Denial
• How Appealing: Discusses Dissent
• Professor Barros: Introduces Case
• Journal of IP Law & Practice (Oxford): Patents holders are not protected from US Government infringement by the Fifth Amendment
• Foley Attorneys: Explain how to avoid being trapped by Zoltek

In February 2006, the CAFC affirmed a lower court ruling that Ferring’s patent was unenforceable due to inequitable conduct.  During prosecution some 15 years earlier, Ferring had submitted several non-inventor declarations to support patentability, but did not disclose to the PTO that the some of the declarants had been paid consultants for the patentee in the past. Of course, this information was not requested by the PTO. Nonetheless, the CAFC found that the patentee’s non-disclosure created a material potential for bias because the “witness’s interest is always pertinent to his credibility” and that the intent could be inferred from the negligence in failing to disclose.

Judge Newman penned a strong dissent in the case, arguing that the decision revives “reviving the culture of attack on inventor rights and attorney reputations based on inference and innuendo.”

My colleagues, endorsing several novel and unsupportable presumptions of wrongdoing, do injury to the reasonable practice of patent solicitation, even as they defy the rules of summary judgment.

Now, Ferring (along with its co-plaintiff Aventis) has filed a petition for certiorari, requesting that the Supreme Court hear the case — asking whether the CAFC improperly lowered the standards for materiality and intent in its finding of inequitable conduct.

Inequitable conduct jurisprudence is interesting because it is virtually all judge-made law coupled with the rules of Patent Office practice (37 C.F.R. xxx), and the only Supreme Court case on the topic is the 1945 Precision Instrument decision that found inequitable conduct based on a joint-effort of fraud on the PTO and on the courts.  (It was an interference and both parties wanted to make sure that somebody got rights to the patent).  The facts in Precision Instrument involved some seemingly extreme conduct, although the court ruled generally that the doctrine of unclean hands “gives wide range to the equity court's use of discretion in refusing to aid the unclean litigant.” (finding that the lower court is not bound by any formula in exercising its discretion).

If we fast-forward to today, many if not most patent cases involve charges of inequitable conduct. (1998 AIPLA study showed that 80% of cases included such charges).  The charges are thrown in almost every responsive pleading because they just might stick.  In its petition for certiorari, Ferring argues that this permissive environment has been created by the CAFC’s “aggressive use of inherent judicial power.”

Ferring point to a number of failures of the CAFC’s methodology and suggests as an alternative that the test that return to the PTO’s rules under 37 C.F.R. 56 and simply ensure that those rules are followed. A 2004 report by the National Academies of Science (NAS) came to a similar conclusion:

In view of its cost and limited deterrent value the committee recommends the elimination of the inequitable conduct doctrine or changes in its implementation. The latter might include ending the inference of intent from the materiality of the information that was withheld, de novo review by the Federal Circuit of district court findings of inequitable conduct, award of attorney’s fees to a prevailing patentee, or referral to the USPTO for re-examination and disciplinary action. Any of these changes would have the effect of discouraging resort to the inequitable conduct defense and therefore reducing its cost.

I agree that it is time for a change — evidence of fraud should certainly be considered by the courts.  Fraud, however, comes with a higher standard of pleading.  Failure to follow PTO rules should be considered by the PTO in post-grant reviews. 

Links:

• Ferring v Barr Writ of Cert No Appendices.pdf (4005 KB)
• Ferring v Barr Writ of Cert With Appendices.pdf (6738 KB)
• Ferring v. Barr CAFC Opinion;
• Patently-O Discussion of Ferring Newman Dissent;
• Patently-O Discussion of Ferring Majority Decision;
• NAS 2004 Report. [from Promote-the-Progress]

Does Article III’s grant of jurisdiction of "all Cases . . . arising under . . . the Laws of the United States," implemented in the "actual controversy" requirement of the Declaratory Judgment Act, 28 U.S.C. § 2201(a), require a patent licensee to refuse to pay royalties and commit material breach of the license agreement before suing to declare the patent invalid, unenforceable or not infringed?

Briefs are all in and oral arguments are scheduled for October 4, 2006.

The potential impact of this case should not be underestimated. A license agreement is generally thought of as a settlement of a dispute.  If MedImmune is right, however, an ongoing license agreement could actually be a litigation ticket.

DDC's Two comments:

• Although I didn't file a brief, I agree with much of the analysis of the two law professor briefs in support of the Respondent (Hricik & Cotter).  In general, however, what's wrong with Professor Epstein's free-market approach -- allowing validity challenges be a negotiated contract term.  Although the public has a strong interest in mooting invalid patents, it is rare a licensed patent has only one potential licensee and we now have a number of public interest organizations that are becoming experts of challenging bad patents through reexamination and litigation.
• Post Lear decisions are a mess. Hopefully the Court will at least use this case as a vehicle for clarifying the law.

Documents:

Merits:

• Party Briefs:
  • MedImmune Brief
  • Genentech Response
  • City of Hope Response

  • MedImmune Reply

• Amici in Support of Petitioner
  • Solicitor General
  • Law Professors (Dratler, Oddi)
  • Generic Pharma Assn
  • Medtronic
  • NRDC
• Amici in Support of Neither Party
  • Licensing Executives Society
• Amici in Support of Respondent
  • PhRMA
  • Licensing Professionals (Epstein)
  • Law Professors (Hricik)
  • Law Professors (Cotter)
  • Qualcomm Interdigital
  • Stanford_Columbia
  • AIPLA
  • 3M, GE, du Pont
  • BPLA
  • NYIPLA
• Petitions Stage
  • Genentech:
    • MedImmune’s Genentech Petition (6509 KB)
    • Genentech's opposition to certiori
    • MedImmune's Genetech Reply
  • Centocor: (Same Issue, cert denied)
    • MedImmune’s Centocor Petition
    • Centocor’s opposition to certiori
    • MedImmune’s Centocor reply

Links:

• CAFC Decision in MedImmune v. Genentech;
• CAFC Decision in MedImmune v. Centocor;
• MedImmune Petition Granted;
• Lear v. Adkins;
• Professor Miller’s comments;
• Supreme Court on the March;
• Supreme Court docket sheet.

By Dennis Crouch

The first round of briefs have now been filed in the much anticipated KSR case that will address fundamental questions of patentability. [Copies of briefs are found below] The doctrine of nonobviousness ensures that patent rights are not granted on inventions that are simply throw-away modifications of prior technology.  Questions of obviousness are at play in virtually every patent case, in both proceedings before the USPTO and during infringement litigation.

Obviousness has always been a “squishy” term, but over the past twenty-five years, the Court of Appeals for the Federal Circuit has developed a somewhat objective nonobviousness doctrine using a teaching/suggestion/motivation (TSM) test. According to the test, when various pieces of prior art each contain elements of an invention, the prior art can be combined together to invalidate a patent on the invention only when there is some motivation, suggestion, or teaching to combine the prior art.

KSR has asked the Supreme Court to rethink that approach and take a fresh look at the obviousness standard for patentability. The petition questions whether obviousness should require any proof of some suggestion or motivation to combine prior art references.

Question Presented: Whether the Federal Circuit erred in holding that a claimed invention cannot be held "obvious," and thus unpatentable under 35 U.S.C. sec. 103(a), in the absence of some proven "'teaching, suggestion or motivation' that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed"?

Interestingly, the Supreme Court has not heard an obviousness since well before the founding of the Federal Circuit. In that case (Sakraida 1976), the Court held that a combination which only unites old elements with no change in their respective functions is precluded from patentability under 103(a).  Under the Sakraida standard, the Teleflex patent is arguably obvious.  In an article several years ago, Professor John Duffy identified this obviousness issue as one that should attract the Supreme Court’s attention.

[The Federal Circuit’s suggestion] test, which tends to make even seemingly trivial developments patentable, is entirely the Federal Circuit’s product.  It has no basis in the Supreme Court’s case law and may, in fact, be inconsistent with the Court’s most recent pronouncement on the subject (though that precedent is now more than a quarter century old).

Duffy, The Festo Decision and the Return of the Supreme Court to the Bar of Patents, 2002 S.Ct. Rev. 273, 340-41 (2003).  Now, Duffy, a former clerk of Justice Scalia, is part of the KSR team that is trying to change the rule of law.

The case itself concerns a patent covering a gas pedal for an automobile. KSR makes pedals for GM & Chevy trucks and was sued for infringement of the Teleflex patent.

Crouch’s notes: In my view, the question is not correctly presented because it focuses on the aspect of “proof.” Of course any decision on obviousness should be based on some sort of proof. I expect that the Court will, as they often do, ignore this particular question and instead answer the broader question of how “a court should go about deciding whether matter claimed in a patent should be deemed ‘non-obvious' subject matter.”  In fact, in its merits brief, KSR implicitly recognizes this more fundamental question in its summary of the case.

It is very likely that the Federal Circuit’s home-grown TSM test will be eliminated.  This leaves us with a gaping hole — the most likely successor is a return to Sakraida that would require a showing of some functional-shift caused by a combination of old elements. 

Petitioner KSR and a group of amici have recently filed their briefs on the merits.  Looking at the Amici thus far, you can see that KSR’s supporters are primarily law professors and large companies likely to get sued for patent infringement.  They are hoping to lower the obviousness standard — making it easier to invalidate a patent during litigation.  It is not clear, however, that the Sakraida standard is actually a higher patentability bar — that all depends on the meaning of a “functional-shift.”  That said, many of the potential defendants will be happy if the law becomes more unsettled — the result at least gives them more reason to appeal and would thus increase the plaintiff’s litigation costs (marginally lowering the number of infringement suits filed).  Notably, none of the major bar associations support the petitioner.

What follows is a brief review of those documents. The original documents themselves are accessible through links at the bottom of the article.

Petitioner KSR’s Brief

KSR’s strongest case is that the way the courts determine obviousness today (the TSM test) is not based on any statutory language nor is it based on any Supreme Court jurisprudence. Rather, the CAFC has created the TSM test out of whole cloth and crafted it in a way that inappropriately rejects Supreme Court precedent.  The extremely well researched and written brief traces the history of obviousness jurisdiction and uses that history as the primary basis for its conclusions.

One interesting argument is KSR’s position that provides 103(a) a condition for patentability rather than a condition for challenging patentability.  This appears to be an argument directed primarily to patent prosecution — that the applicant should be the one making an up-front showing of non-obviousness to satisfy section 103(a) rather than the PTO being forced to open with its rejection.   

Finally, KSR makes clear that the TSM test sets the patentability bar too low and allows too many technically trivial inventions to receive patent protection.

The only thing lacking here is any strong guidance for what obviousness test should arise to replace the soon to be displaced TSM test. KSR argues for little more than “adherence to [the Court’s] precedents.”  The result will certainly be a number of years of turmoil — especially on the side of patent prosecution.

Bush Administration in Support of Petitioner

The Government argues that the CAFC has “inappropriately broadens the category of nonobvious and therefore patentable inventions” by limiting the obviousness determination to a single rigid test. Rather, the Government would return to the rules of Graham v. John Deere, that try to determine “whether the claimed invention manifests the extraordinary level of innovation, beyond the capabilities of a person having ordinary skill in the art, that warrants the award of a patent.”

In particular, the brief points out that the TSM test is not wrong.  Rather, the problem is that the TSM test should not be the only test available to determine whether an invention is obvious. For instance, the Government argues that PTO Examiners should be able to reject claims based on their “basic knowledge” or “common sense.”

Law and History Professors (Sarnoff) in Support of Petitioner

Professor Sarnoff along with six other professors add to the debate by recognizing that the Supreme Court’s precedent, although “sound,” needs to be clarified: The professors

suggest [as a clarification to Graham] that the Court hold that the obviousness inquiry is designed to prohibit patents on inventions that could have been made by those skilled in the art within a reasonable period of time (following the time that the invention at issue was actually made) and within reasonable budgetary constraints.

The professors also suggest several modifications (clarifications) of the burdens of proof of patentability.  Their first suggestion would be to remove the evidentiary burden on the PTO (or challenger in litigation) to satisfy the TSM test. Thus, even if the TSM test remains in effect, the initial burden would presumably be shifted to the patentee to prove that the test is not satisfied.

Another clarification would relate to the presumption of validity.

[T]he Court should clarify that a clear and convincing burden of proof should not apply to issues for which the relevant evidence was not previously considered by the Patent Office.

Progress and Freedom Foundation in Support of Petitioner

PFF is a think tank that supports free markets and usually strong property rights. (Richard Epstein and John Duffy are both members of PFF advisory counsel).  A strong property regime in the patent system means that issued patents should be valid and should clearly show their scope of coverage.  PFF’s contribution is to explore how improper hindsight can be avoided even without strict evidentiary requirements:

But adopting the correct standard does not require that USPTO or the courts give in to subjective whim, because there are administrative mechanisms that can be used to make the exercise of subjective judgment fair and reasonably consistent over time.

For example, USPTO could adopt the current Federal Circuit test as a first cut, because it does indeed represent a crucial benchmark. Any invention which fails the “teaching-suggestion-motivation” test is clearly not patentable. But this need not end the inquiry. If the examiner thinks he/she has a special case in which this test does not capture the reality of the situation, perhaps the matter could be referred to a multiperson review committee, thus eliminating the influence of a single examiner’s whim. Or perhaps boards of outside experts could be established, or community peer review processes conducted over the Internet.

Documents:

• On the Merits
  • In Support of Petitioner
    • Petitioner's Brief on the Merits; [UPDATED WITH CORRECT VERSION]
    • Government's Brief in Support of Petitioner;
    • Law and History Professors (Sarnoff) in Support of Petitioner;
    • Law Professor (Strandburg) in Support of Petitioner;
    • Electronic Frontier Foundation in Support of Petitioner;
    • Judge Colianni in Support of Petitioner;
    • Intel and Micron in Support of Petitioner;
    • Progress and Freedom Foundation in Support of Petitioner;
    • Cisco and GM in Support of Reversal (Petitioner);
    • CCIA in Support of Petitioner;
    • Business Software Alliance in Support of Petitioner;
    • Time Warner, IAC, and VIACOM in Support of Petitioner;
    • AARP.
  • In Support of Neither Party
    • IBM in Support of Neither Party;
    • Ford & DaimlerChrysler in Support of Neither Party;
    • DC Bar Assn (Eccelston);
    • Professor Hollaar.
• Petitions Stage
  • Party Briefs
    • KSR’s Petition for Cert (Including the CAFC and District Court decisions in Appx. A & B);
    • Teleflex’s Brief in Opposition;
    • KSR Reply Brief (314 KB);
    • Teleflex Supplement.
  • Amicus Briefs
    • Government in support of petition;
    • 24 Law Professors in support of petition;
    • Progress Freedom Foundation in support of petition;
    • Microsoft, Cisco, Hallmark, et al. in support of petition.

Links:

• Discussion of Government's Brief in Support of Certiorari;
• Discussion of Microsoft’s Amicus Brief;
• Discussion of the CAFC decision;
• Discussion of Law Professors Brief;
• Discussion of In re Kahn;
• Discussion of Petition for Certiorari;
• Prediction Certiorari;
• Prof Miller: KSR Lift-off!
• Prof Miller: Discussion of Gov’t Brief;
• Patent Hawk: Becoming Less Obvious;
• Patent Hawk: Hindsight Problem;
• Buchanan: "[O]nce again, patent reform has left the Capitol and walked across First Street to the Supreme Court." [Link];
• Petherbridge & Wagner Empirical Article [link]
• Cotropia Article: [link].
• The Patent at issue: [link]

Cite as Dennis Crouch, “KSR v. Teleflex: Rethinking Obviousness,” Patently-O, available at https://patentlyo.com/patent/2006/08/ksr_v_teleflex_.html

[S]ome patent holders, such as university researchers or self-made inventors, might reasonably prefer to license their patents, rather than undertake efforts to secure the financing necessary to bring their works to market themselves. Such patent holders may be able to satisfy the traditional four-factor test, and we see no basis for categorically denying them the opportunity to do so.

This quote invokes division of labor ideals.  Certain entities simply don’t have the ways, means, or inclination to manufacture, market, and/or sell their inventions.  For those entities, the Supreme Court says that there is no requirement to work the invention. But what about other entities — those with they ways, means, and inclination to work similar inventions?  Doesn’t the Supreme Court’s unanimous opinion imply that there is a basis for denying injunctions to large manufacturers who do not actually practice the inventions in the patents that they assert? 

More notes on the eBay case:

• Patent Validity as a Factor in Determining Injunctive Relief?
• Practice Tip?: Very Good Infringers Avoid Injunctions.
• Patently-O General Discussion of the eBay Decision.
• Patently-O on the Radio.
• Professor Randy Picker on the “unanimous” decision.

The Supreme Court has granted KSR’s writ of certiorari and now will address fundamental questions of patentability that have been raised. The doctrine of nonobviousness ensures that patent rights are not granted on inventions that are simply throw-away modifications of prior technology.  Questions of obviousness are at play in virtually every patent case, in both proceedings before the USPTO and during infringement litigation.

Over the past twenty-five years, the Court of Appeals for the Federal Circuit has developed its nonobviousness doctrine using a motivation/suggestion/teaching test. According to the test, when various pieces of prior art each contain elements of an invention, the prior art can be combined together to invalidate a patent on the invention only when there is some motivation, suggestion, or teaching to combine the prior art.

KSR has asked the Supreme Court to rethink that approach and take a fresh look at the obviousness standard for patentability. The petition questions whether obviousness should require any proof of some suggestion or motivation to combine prior art references.

Question Presented: Whether the Federal Circuit erred in holding that a claimed invention cannot be held "obvious," and thus unpatentable under 35 U.S.C. sec. 103(a), in the absence of some proven "'teaching, suggestion or motivation' that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed"?

Interestingly, the Supreme Court has not heard an obviousness since well before the founding of the Federal Circuit. In that case (Sakraida 1976), the High Court held that a combination which only unites old elements with no change in their respective functions is precluded from patentability under 103(a).  Under the Sakraida standard, the Teleflex patent is arguably obvious.

Professor John Duffy has done a masterful job of shepherding this case through the system.  In an article several years ago, Duffy predicted the current rise of Supreme Court interest in patent case.  In fact, at that time he announced that the very issue now being debated in KSR was ripe for adjudication:

One very good candidate for [Supreme Court] review is the law governing whether an invention is not ‘‘obvious’’ at the time of invention. . . . [The Federal Circuit’s suggestion] test, which tends to make even seemingly trivial developments patentable, is entirely the Federal Circuit’s product.  It has no basis in the Supreme Court’s case law and may, in fact, be inconsistent with the Court’s most recent pronouncement on the subject (though that precedent is now more than a quarter century old). . . . None of this is to say that the Court will necessarily reject the doctrine developed by the Federal Circuit; it is only to suggest the Court is likely to end its long absence from this doctrinal area soon.

The Festo Decision and the Return of the Supreme Court to the Bar of Patents, 2002 S.Ct. Rev. 273, 340-41 (2003).  Robert Brauneis another GWU law professor led a group of 24 law professors in support of the petition. Although he did not file a brief (to my knowledge) Richmond Professor Christopher Cotropia argues that (1) recently, the CAFC has removed some rigidity from the obviousness determination and (2) the requirement for proof of a suggestion to combine should be thought of as a rule of evidence. [link].

According to Professor Duffy, the preliminary amici briefing schedule is as follows:

• Amici supporting petitioner or neither side: August 10, 2006 (45 days after cert granted).
• Amici supporting respondent: September 14, 2006 or 35 days after petitioner brief is filed — whichever is less.

Crouch’s Commentary: For those of you concerned about the potential impact of this case — It is very likely that the CAFC’s motivation test will be changed and briefs simply requesting “no change” are unlikely to to be given much weight.  Proposed solutions, including analogies to other areas of law (and foreign law) may be helpful.  In this case, I also believe that would be useful to provide the Court with a number of real-world examples of how the system works or how it should work.

Documents:

• Party Briefs
  • KSR’s Petition for Cert (Including the CAFC and District Court decisions in Appx. A & B);
  • Teleflex’s Brief in Opposition;
  • KSR Reply Brief (314 KB);
  • Teleflex Supplement.
• Amicus Briefs
  • Government in support of petition;
  • 24 Law Professors in support of petition;
  • Progress Freedom Foundation in support of petition;
  • Microsoft, Cisco, Hallmark, et al. in support of petition.

Links:

• Discussion of Government's Brief in Support of Certiorari;
• Discussion of Microsoft’s Amicus Brief;
• Discussion of the CAFC decision;
• Discussion of Law Professors Brief;
• Discussion of In re Kahn;
• Discussion of Petition for Certiorari;
• Prediction Certiorari;
• Prof Miller: KSR Liftoff!
• Prof Miller: Discussion of Gov’t Brief;
• Patent Hawk: Becoming Less Obvious.
• Buchanan: "[O]nce again, patent reform has left the Capitol and walked across First Street to the Supreme Court." [Link]