November 28, 2006 11:03 AM PST

Supreme Court weighs 'obviousness' of patents

WASHINGTON--U.S. Supreme Court justices on Tuesday appeared to take issue with the current legal standard for granting patents, which many high-tech firms claim is ineffective at weeding out inventions that should be obvious.

During hour-long oral arguments in a case that's closely watched by the business community, Chief Justice John Roberts suggested that an existing federal court test for determining patent obviousness relied too little on common sense. Justice Antonin Scalia went so far as to call the test "gobbledygook" and "meaningless."

"It's worse than meaningless because it complicates the question rather than focusing on the statute," Roberts went on to say of the test, which requires evidence of a past "teaching, suggestion or motivation" that would lead to a particular invention in order for it to be declared "obvious."

The case, rooted in an obscure patent spat about gas pedal designs between the Canadian firm KSR International and Pennsylvania-based Teleflex, has attracted the attention of high-tech, pharmaceutical, biotechnology and other patent-dependent firms because because it addresses one of the fundamental questions in patent law: What makes an invention, particularly a combination of existing parts, too "obvious" to warrant protection?

If the high court decides to rewrite the legal standard of patent "obviousness" to make it more restrictive, it could have wide-ranging effects by reshaping U.S. intellectual property law and reducing the number of marginal patents. Tuesday's arguments are the only ones that will be heard in the case. A decision is expected by July 2007.

The benefit of hindsight
According to federal patent law, an invention must be declared obvious--and thus non-patentable--when a person of "ordinary skill" in the same field could have come up with it. But it's easier to say an invention is obvious in hindsight, so courts have attempted to construct a more objective way to come to that determination.

That's what the U.S. Court of Appeals for the Federal Circuit, the nation's dedicated patent appeals court, was trying to do when it set what is known as the "teaching, suggestion or motivation" standard in 1982, Chief Justice Roberts acknowledged.

"They say obviousness is deceptive in hindsight, that in hindsight, everybody says, I could've thought of that," he said.

But those siding with KSR--including the U.S. government, a number of large Silicon Valley firms, and the open-source and free software movement--contend that the test, however well-meaning it may have been, has made it easier to obtain patents on seemingly obvious combinations of preexisting inventions. They claim that making an obviousness defense is impossibly tough because firms of their nature don't routinely document incremental changes to their technology, which they say are effectively required by the test.

KSR had argued in its brief that the test for obviousness should rely more heavily on what a person of ordinary skill in the field is "capable" of devising. But Thomas Goldstein, the attorney arguing Teleflex's side, argued that if courts give too much weight to capability, they'll miss out on protecting "the most important part of invention," which, he said, is "deciding how to put (different parts) together."

Perhaps the most outspoken skeptic was Justice Stephen Breyer, who repeatedly questioned how courts are supposed to decide whether a "motivation" existed for a person to come up with a particular invention. He suggested that the federal court's test was trying too hard to "absolutely define" a way of settling patent obviousness when perhaps the issue isn't so clear cut. "I seem to think that maybe it isn't well settled, and maybe there's something we should do," he said.

Patent disputes are known for being dry and technical, but in this case, the dark-suited audience erupted into laughter multiple times during the justices' questioning. On one occasion, a deadpan Chief Justice Roberts asked Teleflex's attorney: "Who do you get to be an expert to tell us something's not obvious?"

To a roar of laughter, he added, without missing a beat: "The least insightful person you can find?"

Goldstein argued that if the Supreme Court revises the current standard, "it will create genuine, dramatic instability" because it underlies the hundreds of thousands of patents that have been granted each year for the past quarter century.

Such consequences were not lost on some of the justices. "If we see it your way," Justice David Souter asked U.S. Department of Justice attorney Thomas Hungar, who advocated changes to the system, "are there going to be 100,000 cases filed tomorrow morning?"

If sweeping changes are made to the test, asked Justice Scalia, "does it make sense to assume patents are valid under a test that has been erroneous for 20 years?"

Justice Anthony Kennedy questioned whether scrapping the entire Federal Circuit test was necessary, implying that perhaps a compromise could be reached. "Does it not serve to show us at least one way in which there can be obviousness?" he asked.

It was clear that the current standard brought displeasure to some justices, said Steve Maebius, an intellectual property partner with the law firm Foley & Larder in Washington, D.C.

"One of the themes that came out in the questioning, in particular from Chief Justice Roberts, was the need for flexibility," Maebius, who attended the morning arguments, said during a conference call with reporters. "He felt that perhaps having a test that requires motivation is too rigid and doesn't always give the court or the decision maker the flexibility needed to reach a conclusion of obviousness."

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