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The Supreme Court's Decision in KSR v. Teleflex
New Concerns for Patents
By William H. Honaker
Whether you are a business owner, corporate officer, or legal counsel, you need to understand how the Supreme Court's decision in KSR v. Teleflex may affect your company's patent portfolio. It is possible that your patent portfolio is at risk of being ignored by your competition and potentially subject to being invalidated by the courts. It is also possible that the patents in your portfolio are not as strong now as you thought, and that your new technology may not be as patentable due to the KSR v. Teleflex decision.

What happened? The Supreme Court recently struck down the Court of Appeals for the Federal Circuit's (CAFC's) standard for determining whether a patent should be issued. If the older standard was applied in obtaining patent protection for your technology, your patents now are suspect. The new standard promulgated by the Supreme Court, which is actually an even older standard resurrected, is a tougher standard.

What if anything can be done? Your patent portfolio needs to be reviewed and a determination made as to whether the older standard was applied in obtaining patent protection. If so, those patents may need to be re-examined by the United States Patent and Trademark Office (USPTO). Although this is a somewhat draconian step, for important patents it may be necessary. When applying for patent protection on new technology, additional preliminary work will need to be done to ensure that the patent being sought will meet the tougher standard that will now be applied.

Overview of the Decision
The KSR v. Teleflex decision has important ramifications for both future and existing patent applications and patents. In many if not most patent applications and patents, the main inquiry is whether the invention would have been obvious to one of ordinary skill in the art under 35 U.S.C. § 103. To obtain a valid patent, the following three basic questions must be answered in the affirmative: (1) Is the invention useful? (2) Is the invention novel? and (3) Is the invention obvious to one of ordinary skill in the art? The answer to this last inquiry--"Is it obvious?"--is the most common basis for refusing patent protection by the USPTO. Typically, a USPTO examiner will search for prior art, published patents, and other published literature to establish that the claimed invention would have been obvious to one of ordinary skill in the art in view of the prior art. "Ordinary skill in the art" is determined by the examiner, and generally said "to be the skill possessed by one normally practicing in a given technology" (for example, engineers, scientists, software programmers, pharmacologists, doctors, etc.). The examiner will typically locate two or more patents or published articles and refuse patent protection arguing that based upon what has been found, a person of ordinary skill in the art would have been able to combine the prior art to arrive at the claimed invention. This would indicate that the invention is obvious and therefore not patentable.

Under the "teaching, suggestion, motivation" (TSM) test, the examiner was constrained as to the prior art that he could use in refusing patent protection. The examiner had to find patents that not only showed the features of the claimed invention, but also showed the solution to the same problem(s) that the inventor was trying to address.

The TSM test was an attempt by the CAFC to develop a rigid rule to make the obviousness inquiry more uniform. Before the KSR case, TSM had become a regular mantra of patent attorneys arguing against obviousness rejections by the USPTO. Many times, by making the argument that the prior art did not meet the requirements of the TSM test, the examiner simply capitulated and allowed the patent. In practice, the TSM test had yielded a shortcut to patent protection.

The recent Supreme Court decision in KSR v. Teleflex, 550 U.S. ____, 1275 S. Ct 1727 (2007) has definite consequences for those interested in obtaining patents, and for those who presently have patents. The Supreme Court, in a unanimous decision, reminded the Court of Appeals for the Federal Circuit that the Supreme Court's 1966 decision in Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966) controls the "obviousness" inquiry. The Supreme Court in KSR rejected the rigid approach of the CAFC in its application of the TSM test, stating:

Helpful insights, however, need not become rigid and mandatory formulas; and when it is so applied, the TSM test is incompatible with our precedents. The obviousness analysis cannot be confined by a formalistic conception of the words teaching, suggestion, and motivation, or by overemphasis on the importance of published articles and the explicit content of issued patents. The diversity of inventive pursuits and of modern technology counsels against limiting the analysis in this way. In many fields it may be that there is little discussion of obvious techniques or combinations, and it often may be the case that market demand, rather than scientific literature, will drive design trends. Granting 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.

Brief Review of the Facts
The KSR dispute involved adjustable pedals for vehicles with electronic control systems where the engine and brake were controlled without traditional cables. Adjustable pedals are pedals that can be moved forward and back with respect to the driver, instead of or in addition to repositioning of the driver's seat. In electronic systems, the brake and gas pedals are depressed and an electronic signal is sent to either the engine or brake. To translate the pedal movement, a sensor is used. The sensor senses the amount of pedal movement and sends a signal to either the engine or the brake.

Teleflex obtained a patent, the "Engelgau patent," to an electronic adjustable pedal assembly with a modular sensor mounted upon a fixed pivot point on the pedal assembly. With a fixed pivot point, the pedals can be moved forward and back with the pivot point staying fixed as well as the sensor. By fixing the sensor, there is reduced wear on the sensor wires and according to Teleflex a simpler, smaller, cheaper system.

The USPTO applied the obviousness standard to the prior art they located. The prior art showed adjustable vehicle pedals as well as modular sensors to determine and translate the pedals' position. What the USPTO did not find was an adjustable pedal assembly having a fixed pivot point. The USPTO felt that this missing feature, a fixed pivot point, would not have been obvious to a person of ordinary skill, so the USPTO allowed the patent. However, the USPTO missed the Asano patent which taught the use of a fixed pivot point in an adjustable pedal assembly.

KSR found the Asano patent and argued successfully to the district court that it would have been obvious to one of ordinary skill in the art to attach a sensor to the fixed pivot point of Asano. The district court agreed and held Teleflex's invention obvious and invalidated the patent.

The CAFC reversed the district court. The CAFC rigidly applied the TSM test and held that Asano was solving a different problem than that being solved by Teleflex. Even though Asano showed adjustable vehicle pedals with a fixed pivot point and that it was known to attach sensors to adjustable pedals for use in electronic adjustable pedals, the CAFC didn't feel it was enough under TSM to make Teleflex's invention obvious. Asano, in the CAFC's view, was solving the problem of ensuring that the force to depress the pedal was the same no matter how the pedal is adjusted and therefore used a fixed pivot point. The fixed pivot point was not used to solve the problem that Teleflex was trying to solve. Teleflex sought to provide a simpler, smaller, cheaper adjustable electronic pedal. The CAFC further found that the sensor prior art was solving different problems and therefore would not have taught, suggested, or motivated one of ordinary skill in the art to attach a sensor to the fixed point of the Asano adjustable pedal. The CAFC also held that it was wrong for the district court to conclude that one of ordinary skill in the art could have found the answer, adding a sensor to the fixed point of an adjustable pedal, through experimentation. The CAFC strictly applied the TSM test and held that the Teleflex patent was valid.

The Supreme Court's Opinion
The Supreme Court found four significant errors with the CAFC's holdings and its application of the TSM test.

  • The first error was the holding that patent examiners should look only to the problem the patentee was trying to solve.

  • The second error was the holding that a person of ordinary skill would only be led to those elements of the prior art designed to solve the same problem.

  • The third error was the holding that the test "obvious to try" was not an appropriate standard.

  • The fourth error was the court's decision to apply rigid rules (the TSM test) to avoid hindsight reconstruction and prevent the use of common sense by the fact finder.
The Effect on Existing Patents
The effect of the Supreme Court's decision on existing patents should be of great concern for patent owners. Many patents in a company's portfolio may now be susceptible to a validity challenge. In dicta, the Supreme Court stated:

We need not reach the question whether the failure to disclose Asano [the prior art that taught adjustable pedals] during the prosecution of Engelgau voids the presumption of validity given to issued patents, for claim 4 is obvious despite the presumption. We nevertheless think it appropriate to note that the rationale underlying the presumption--that the PTO, in its expertise, has approved the claim--seems much diminished here.

The Supreme Court thus is suggesting that the presumption of validity may not be as strong if the best prior art was not considered by the USPTO.

Generally, every issued patent is presumed to be valid, and to invalidate a patent--with a heavy burden of proof— one must show that the patent is invalid by clear and convincing evidence. The fact that the USPTO missed the Asano patent diminished the presumption of validity in the view of the Supreme Court. It is not a great stretch to argue that if the wrong legal test was applied by the USPTO to determine obviousness (i.e., the TSM test), then the presumption of validity would be diminished as well. Therefore, one can expect that a patent challenger will argue that the presumption of validity should not apply or at least not be as strong if the TSM test had been applied by the USPTO in issuing the patent. This will open the door to broad challenges to existing patents.

Regardless of whether the presumption has been diminished, the argument that the wrong test was applied in issuing the patent will be argued (by alleged infringers) if the TSM test had been used in obtaining the patent. And, since TSM was the CAFC's standard test, regularly used by patent applicants when trying to overcome an obviousness rejection by the USPTO, it is likely that many portfolios contain patents that were obtained under the TSM standard, and those patents now are at risk.

It would be prudent to review at least the most important patents in a portfolio to determine whether the TSM standard was relied upon to obtain patent protection. A review of the arguments made before the patent office which are contained in the file history will indicate whether TSM was applied.

The patent owner should ask the question, "Would the patent have issued had the Graham analysis (the correct analysis) been applied?" If the answer is "yes," and the TSM test had been argued before the Patent Office, the patent owner should then ask, "Do I want the judge or jury to apply the correct test, or have the USPTO re-consider the issuance of the patent under the Graham test?" As stated above, although somewhat draconian in the patent world, requested formal reconsideration by the USPTO may be warranted in instances of truly important patents because their validity may be in question and because the presumption of validity that normally attaches may have been affected.

The Effect on Future Patents
What impact will KSR have on obtaining patents in the future? For one thing, it will be more difficult. In effect, we are "back to the future." The Supreme Court has clearly stated that Graham is the correct standard to be applied when determining obviousness. Accordingly, a broader range of prior art is now applicable to the determination of whether a patent should issue because the less-rigid Graham test has replaced the narrower, more-rigid TSM test. Where the TSM test literally constrained the examiner in the application of prior art, the examiner now will be able to apply prior art that may solve a different problem, but arguably be within the realm of prior art that one of ordinary skill in art should have been aware of and considered in developing the claimed invention. Additionally, common sense will once again be available to the examiner in determining whether to issue a patent in view of the Supreme Court's decision. The examiner will be able to opine on what would be common sense to one of ordinary skill in the art without actually having patents or literature to support that opinion. Moreover, in some circumstances, the examiner will be able to refuse patent protection based upon the argument that one of ordinary skill in the art would find it obvious to try a combination asserted by the examiner (i.e., to experiment).

How will an examiner's refusal be overcome? Refusals will once again be overcome by the standard arguments that were common before the TSM rule. The standard arguments provided by the decision in Graham will once again be the arguments for overcoming obvious rejections by the PTO. For example:

  • The combination of prior art asserted by the examiner is hindsight reconstruction.

  • The prior art teaches away from the combination.

  • The invention solves long felt but unresolved needs.

  • The invention is a commercial success.
These are all arguments that Graham and its progeny suggest as the arguments that may overcome a refusal based on obviousness. Overall, it will be more difficult to obtain meaningful patent protection, but patents that are obtained will be stronger and more meaningful to the owner.

Conclusion
The Supreme Court has established that the Graham standard, not the TSM standard, is to be applied in determining whether an invention is obvious. Patents in the future will be tougher to obtain. Existing patents that were obtained under the TSM rule are open to new challenges. Existing patents may well be of questionable validity if the TSM test was used in obtaining the patent because it was the wrong test to use. Further, the presumption of validity may have been weakened if the TSM test was used. Patents that are important to an owner's patent portfolio therefore need to be evaluated in view of the Supreme Court's decision. In some cases, corrective measures will be warranted to obtain reconsideration by the USPTO to strengthen those patents.

In the future, greater care will need to be taken when seeking patent protection. Additional evidence to overcome obviousness rejections by the USPTO may and likely will be required. The pre-TSM arguments will once again be the arguments that are needed to overcome obviousness refusals by the USPTO.
Honaker is a member of Dickinson Wright PLLC at their Bloomfield Hills, Michigan, office. His e-mail is whonaker@dickinsonwright.com.

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