There have been several interesting and thoughtful posts in the blogosphere recently in the wake of the Supreme Court KSR International Co. v. Teleflex Inc. et al. decision of April 30. This is a very interesting ruling with many potential implications that have yet to play out. The assessment of whether this decision is good or bad for innovation is a very subjective one which rests on your personal objectives and whether you feel constrained or protected by the current intellectual property status quo.
Personally, I am still sorting out the reasonably foreseeable impact this ruling will have on innovation. Here are some initial thoughts on the topic. I’d love to hear what you think.
It is quite clear that this case and the decision in particular highlight the business value of innovation and patents. The opinion speaks to the very nature of innovation and classifies levels of novelty by defining a concept of ordinary innovation. This classification has been underlying the discussion of how patents help or hinder progress.
The patent system was designed to help foster innovation. It accomplishes this goal in two ways. By granting a restricted monopoly to the patent holder, the patent system helps mitigate some of the risk of invention by giving the inventor a window of protected opportunity in which to reap the benefit of their investments in the development of the protected invention. The patent process also accelerates innovation by exposing, through the publication process, new knowledge to the public which would be presumably otherwise withheld. Through this exposure, the sharing of this knowledge “defines a new threshold from which innovation starts once more”, as the Court has so elegantly stated.
Of course, the temporary monopolies granted by patents are seen by many as creating the undesirable effect of curtailing innovation. This is particularly the case for patents which are very broad in scope and for patents that are deemed by interested parties as being obvious in nature.
The resolution of conflicts generated by the temporary monopolies and new inventions is the domain of patent litigation. But along with being very costly, the system of resolution is far from perfect—so much so as to be fundamentally flawed. This is to a great degree because the judges presiding over such cases usually do not have the qualifications to assess the technical merits of the arguments presented. This puts these arbiters in a very uncomfortable position.
In practice as a case moves through the system, each side will trot out its expert witnesses to present the conclusive evidence that their respective side of the argument is valid. How is the judge to make a decision? In most cases, the judge doesn’t. Judges typically exert substantial pressure on litigants to reach a settlement. This creates a condition that highly favors the holder of a patent.
What is interesting about the KSR International Co. v. Teleflex Inc. et al. decision is that it potentially shifts the balance in the equation. Companies accused of infringement now have a stronger tool with which to defend against the action by directly attacking the validity of the patent on the grounds that it did not properly meet the non-obviousness requirement of patentability. This is the element that makes this decision both very important and potentially alarming.
In the opinion, the Court refines the guidance for what constitutes obviousness. The conventional interpretation of the obviousness has long hinged upon the notion that if the invention would have been obvious to a person of ordinary skill in the art attempting to solve the problem then the invention does not meet the non-obviousness requirement. This meant that in order to invalidate a patent, it would need to be shown that there existed a teaching or motivation that would have made the invention obvious. The Court has now made clear that the application of this yardstick has been too narrow. In particular, the decision states the elements outside of the prior art must be considered in the determination of the existence of motivation—including market forces.
While this does acknowledge a reality of the inventive environment where it is certainly true that sometimes the market points toward a particular evolution of a technology, this creates a potentially dangerous situation in so far as the obviousness of an evolution in the context of market demand is not easily objectively measured. We can all see that the current market conditions suggest the obvious inevitability of a new class of automobile that uses no petro-fuels but sacrifices none of the perceived benefits of conventional technologies. However, this does not mean that the instantiation of a technology that satisfies this market need is neither trivial nor obvious.
Similarly, the Court has expanded the notion of relevant prior art. The decision rejects the notion that prior art relevance is established based on the prior art being directly targeted at the problem that the current invention is intended to solve. From a practical perspective this means that the level of inventiveness require to clear the non-obviousness hurdle has been raised. Clever and novel application of out-of-domain knowledge, which has often been the hallmark of truly novel solutions, may now be argued as being within the reasonable grasp of the practitioner of ordinary skill.
The water is further muddied by the Court’s statement that the results of ordinary innovation are not the subject of exclusive rights under the patent laws. This is being interpreted by some as a distinction between incremental and radical innovation. The problem here is again that this distinction is highly subjective. All innovations build upon the past and are therefore incremental to some degree. So we have a need to define the level of innovative achievement that goes beyond the notion of ordinary innovation and the clear method to recognize that achievement.
From the facts of the case as they are presented in the decision, it does appear that the Court arrived at the correct outcome for the case at hand. However, the Justices have at the same time created some instability in the system as the scope of the decision will only be clear after the body of case law develops to establish the standard of interpretation.
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