US Supreme Court Rules on Issue of Obviousness in Patent Law

The United States Supreme Court (Court) has overturned a decision of the US Court of Appeals for the Federal Circuit (Federal Circuit Court) on the issue of obviousness: KSR International v Teleflex Inc, US Supreme Court No 04-1350 (2007). In a unanimous opinion delivered by Justice Anthony Kennedy on April 30, the Court rejected the Federal Circuit Court's narrower application of the long-standing obviousness test, known as the "teaching-suggestion-motivation" or TSM test, as inconsistent with the Patent Act and the Court's precedents. Under the Patent Act, 35 USC §103, a patent cannot be issued when "the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which [the] subject matter pertains." The Court had earlier set out an objective analysis for the application of the Section 103 language in Graham v John Deere Co of Kansas City, 383 US 1 (1966), which was decided before the creation of the Court of Appeals for the Federal Circuit. In an effort to resolve the obviousness question with uniformity and consistency, and to avoid invalidating patents based on a hindsight analysis, the Federal Circuit Court had adopted the TSM test, under which "a patent claim is only proved obvious if the prior art, the problem's nature, or the knowledge of a person having ordinary skill in the art reveals some motivation or suggestion to combine the prior art teachings." As reported in an earlier issue of E-TIPS® (Vol 5, No 12, December 6, 2006), the primary issue for the Court was whether or not Teleflex's US Patent No 6,237,565 was obvious, as held by the District Court, a decision overturned by the Federal Circuit Court. The Court held that the Federal Circuit Court had made a number of "fundamental misunderstandings", relating to its narrow application of the TSM test and its holding that the patent was not obvious. The Federal Circuit Court erred in:

1. "[H]olding that courts and patent examiners should look only to the problem the patentee was trying to solve." The problem motivating the patentee may be only one of many addressed by the patent's subject matter;
2. Assuming that "a person of ordinary skill attempting to solve a problem will be led only to those elements of prior art designed to solve the same problem";
3. Concluding that "a patent claim cannot be proved obvious merely by showing that the combination of elements was obvious to try"; and
4. Drawing "the wrong conclusion from the risk of courts and patent examiners falling prey to hindsight bias…Rigid preventative rules that deny recourse to common sense are neither necessary under [the Court's] case law, nor consistent with it."
The Court conceded that the TSM test captured a helpful insight and that "[t]here is no necessary inconsistency between the idea underlying the TSM test and the Graham analysis." However, held the Court, it is an error to transform a general principle into a rigid rule that limits the obviousness inquiry, as the Federal Circuit Court did. According to the Court, if a person of ordinary skill can implement a predictable variation, section 103 likely bars its patentability. Furthermore, "a court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions." The Court also held that "[G]ranting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may, in the case of patents combining previously known elements, deprive prior inventions of their value or utility." This decision is likely to have wide-ranging effects on both patent prosecution and patent litigation in the United States. The ruling appears to have created a common sense standard of obviousness which could have broad impact on granted patents and pending applications. Some are hopeful that the change in the obviousness doctrine will limit the "junk patent" lawsuits that have affected the high-tech industry, the decision could also affect other sectors such as the pharmaceuticals industry. In the wake of the decision, the USPTO has released a guidance memo for patent examiners. Full text of the decision USPTO guidance memo Summary by: Clare McCurley