17 Oct Patent applicants beware of KSR's impact on patent prosecution
Editor’s note: This commentary was written by Jeffrey McIntyre and Jonathan Fritz, both attorneys with Whyte Hirschboeck Dudek.
The Supreme Court’s decision earlier this year in KSR International Co. v. Teleflex Inc., in which the Court rejected a rigid analytical approach to the question of a patent’s obviousness, roiled patent law and practice. Many commentators concluded that KSR signified the Court’s own attempt at patent reform, by making certain subject matter more difficult to patent and by making it easier for challengers to invalidate patents.
KSR and decisions interpreting KSR are required reading for patent prosecutors and litigators. This article briefly reviews the KSR decision and its recent application by the Federal Circuit and a lower court, and provides some considerations for patent applicants and owners in the post-KSR world.
Patentability and obviousness
The United States Patent and Trademark Office requires that every patent application claim an invention that is useful, novel and non-obvious. When analyzing obviousness in view of the prior art, if “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 said subject matter pertains,” the invention is not patentable. An examiner may look to multiple prior art references in determining whether an invention would have been obvious to a person of ordinary skill in the art at the time of the claimed invention. Put another way, a patent application may be rejected if the elements of a claimed invention are disclosed in different prior art sources.
The teaching, suggestion, and motivation test
A party seeking to invalidate patent claims based on obviousness must meet a burden of “clear and convincing evidence.” To guard against “hindsight analysis” in determining whether a patent would have been obvious to a person of ordinary skill in the art at the time of the claimed invention, the Court of Appeals for the Federal Circuit, over time, developed the Teaching-Suggestion-Motivation (TSM) test. The TSM test required a patent challenger to show that “some motivation or suggestion to combine the prior art teachings can be found in the prior art, the nature of the problem or the knowledge of a person having ordinary skill in the art.” Prior to the Supreme Court’s acceptance of KSR for review, the Federal Circuit rigidly enforced the TSM test.
KSR International developed (and patented) an adjustable mechanical pedal for use in motor vehicles and later added a previously known modular sensor to the pedal. After licensing discussions between KSR and Teleflex, Inc. ceased, Teleflex sued KSR in the U.S. District Court for the Eastern District of Michigan for infringement of Patent No. 6,237,565 (the “565 Patent”), a patent on which Teleflex held an exclusive license. The district court granted KSR’s motion for summary judgment of invalidity, finding that claim 4 of the 565 Patent was obvious in light of the prior art in existence when the claimed subject matter was invented.
The Federal Circuit reversed the district court’s judgment of invalidity, ruling that the lower court erred in its obviousness analysis because it did not strictly apply the TSM test and failed to make specific findings as to the skilled artisan’s knowledge or motivation to combine an electronic control to a prior art support bracket. KSR appealed the Federal Circuit’s decision to the Supreme Court.
The Supreme Court found that there is “no necessary inconsistency” between the TSM test and its prior decision in Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966), but nonetheless rejected a “rigid” application of the TSM test. Although the Court appeared not to eviscerate the TSM test completely, it endorsed a more “expansive and flexible approach” as provided by Graham and other precedent, particularly for patents “based on the combination of elements found in the prior art.” According to the Supreme Court, “when a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one. If a person of ordinary skill can implement a predictable variation, § 103 likely bars its patentability.”
While promoting a flexible approach, the Supreme Court may have obscured the obviousness analysis by stating that “[o]ne of the ways in which a patent’s subject matter can be proved obvious is by noting that there existed at the time of invention a known problem for which there was an obvious solution encompassed by the patent’s claims.” The Court further noted that “the analysis need not seek out precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that [the hypothetical] person of ordinary skill in the art would employ,” thereby injecting subjectivity into the analysis.
Application of KSR in the federal circuit and lower courts
The Federal Circuit applied KSR nine days later in Leapfrog Enterprises, Inc. v. Fisher-Price, Inc. Before the Federal Circuit, Leapfrog argued that the district court improperly used “hindsight analysis” in finding its patent claim obvious because Fisher-Price did not offer sufficient evidence of a motivation to combine various prior art references and did not consider “strong” evidence of secondary considerations of non-obviousness. Relying on KSR, the Federal Circuit affirmed the district court’s finding that Leapfrog’s patent claim directed toward an interactive learning device was obvious on the basis that “[a]ccommodating a prior art mechanical device that accomplishes [a certain goal] to modern electronics would have been obvious to one of ordinary skill in designing children’s learning devices. Applying modern electronics to older mechanical devices has been commonplace in recent years.” The Federal Circuit stated that “[a]n obviousness determination is not the result of a rigid formula disassociated from the facts of a case. Indeed, the common sense of those skilled in the art demonstrates why some combinations would have been obvious where others would not.”
Exactly two months after Leapfrog, the Federal Circuit invalidated patent claims reciting compositions and methods for treating immuno-compromised individuals using hematopoietic stem cells, despite a jury’s finding of validity, the district court’s finding of validity on post-trial motions and evidence that the accused infringers had characterized the inventors’ work as “pioneering.” (See Pharmastem Therapeutics, Inc. v. Viacell, Inc.)
Citing KSR, the Federal Circuit found that the “inventors merely used routine research methods to prove what was already believed to be the case. Scientific confirmation of what was already believed to be true may be a valuable contribution, but it does not give rise to a patentable invention. The evidence at trial demonstrated that the patentees did not invent a new procedure or a new composition; instead, they simply provided experimental proof that cord blood could be used to effect hematopoietic reconstitution of mice and, by extrapolation, could be expected to work in humans as well.”
KSR’s teaching has reached the trial courts. Just a few weeks ago, a district court judge in the Eastern District of Texas invalidated a patent claiming a computerized method for securing debt with future credit card receivables based on obviousness. (See AdvanceMe, Inc. v. RapidPay, LLC). Pointing to KSR, Judge Leonard Davis held that, while the embodiment of the inventor’s method achieved widespread commercial use, the claimed business method was not the result of true innovation, but based on long-established prior art merely “packaged” in a new way and marketed aggressively.
“Johnson merely implemented a predictable variation of existing methods in establishing her invention. While Johnson’s work exhibits excellent entrepreneurship, it does not entitle AdvanceMe to a legal monopoly on this method of provided financing to small businesses.”
KSR’s impact on patent prosecution
Is a U.S. patent more difficult to obtain post-KSR? Some technologies, particularly those in the mechanical arts, may be more difficult to patent. Obviousness rejections will be more prevalent given KSR’s endorsement of a “flexible” approach to obviousness. The USPTO recently drafted obviousness examination guidelines for review by an internal USPTO office. Once finalized, the guidelines will be used by patent examiners in determining whether a claimed invention is obvious in view of KSR. Unfortunately, the draft guidelines were not published for review and, it is therefore difficult to determine how KSR will be cited by the examiners. The ultimate impact of KSR on patent prosecution will not be realized until after patent examiners begin applying the USPTO’s new obviousness rules.
What can inventors do in response to KSR? When considering patent protection, inventors should consider analyzing the prior art landscape. Searching the prior art and understanding how an invention’s elements are described in the prior art is crucial and will enable the applicant to anticipate future obviousness rejections and focus on patentably distinct aspects of the invention. Performing a prior art search and listing the references “on the record” can strengthen a later-issued patent because a patent’s presumption of validity is more easily overcome if an examiner never considered an important reference.
The Supreme Court reaffirmed the importance of secondary considerations when reviewing an application for patentablilty. Secondary considerations include evidence of a long-felt need, failure to solve a problem by others and commercial success of an embodiment of the patent. Patent owners will be well advised to carefully document evidence of secondary considerations from the very beginning. In certain circumstances, even if an invention is complete, the filing of a provisional patent application can provide an additional year for the inventor to gather evidence of secondary considerations. Such evidence is of particular importance where all the elements of the claims can be found in the prior art, as in many mechanical-related inventions.
KSR’s impact on patent litigation
Are existing patents easier to invalidate based on obviousness post-KSR? For mechanical or business method patents clearly based on a combination of elements found in existing prior art, the answer is probably “yes,” particularly where a claimed improvement or function would have been predictable to one skilled in the particular art at the relevant time. Because a litigant challenging the validity of patent claims based obviousness need no longer point to a specific teaching, suggestion or motivation to combine elements found in multiple prior art references, but can presumably rely on the skilled artisan’s “common sense or knowledge” to combine elements, more litigation emphasis will be placed on defining the “person of ordinary skill” and the body of knowledge the ordinary person possessed at the time of the claimed invention. As Pharmastem demonstrates, patents in the life sciences are not “immune” to KSR. A scientist’s work may be eligible for the Nobel Prize, but may be deemed unpatentable.
What should patent owners consider prior to initiating litigation to enforce their patents? As discussed above, patent owners, particularly those seeking to enforce mechanical or business method patents, should consider conducting extensive prior art searches and obtaining solid validity opinions from independent consulting experts, who can account for the reasonable inferences and creativity of the ordinarily skilled artisan in the field, prior to initiating litigation. While seasoned patent litigators routinely perform this work before filing a patent infringement complaint, particularly in high-stakes patent litigation, many patent owners and litigators simply rely on the “presumption of validity” that attaches (and still attaches) to issued patents to satisfy a pre-filing investigation. In the post-KSR world, patent owners risk resources and the loss of patent rights by foregoing an honest and critical pre-filing evaluation of their patent claims.
The opinions expressed herein or statements made in the above column are solely those of the author and do not necessarily reflect the views of Wisconsin Technology Network, LLC.
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