By Professor Gregory Mandel
Though the Supreme Court’s unanimous reversal in KSR v. Teleflex, No. 04-1350, 550 U.S. ___ (2007), contains some harsh words for the Federal Circuit’s teaching, suggestion, or motivation (TSM) test, the decision itself appears to leave the TSM requirement roughly intact. Justice Kennedy’s opinion emphatically rejects an 'explicit' TSM test—one that would require explicit prior art teachings in order to combine given references in the obviousness analysis. At the same time, the decision appears to essentially recreate the 'implicit' or 'flexible' TSM test—one that would allow implicit suggestions, such as the nature of the problem, to provide the requisite motivation to combine. It is this implicit TSM requirement that represented current Federal Circuit doctrine, pursuant to several decisions published after certiorari was granted in KSR (e.g., In re Kahn, DyStar, & Alza). In fact, the Supreme Court even indicates that the Federal Circuit may have gotten it right in these post-cert cases. The KSR opinion is more a critique of the Circuit's application of the obviousness (and TSM) standard to the specific facts in KSR than a critique of the need to rigorously (and expansively) evaluate what would lead a PHOSITA to combine certain references in the obviousness analysis.
Under KSR, in order to evaluate whether a given combination was obvious, the factfinder must "determine whether there was an apparent reason to combine the known elements in the fashion claimed by the patent at issue." The Supreme Court’s "reason to combine" sounds significantly like "suggestion, teaching, or motivation to combine." It is interesting that the Court used a term as loose as “reason,” given concerns raised during oral argument about the indefiniteness of the term “motivation.” In addition, the Court requires that, "[t]o facilitate review, the analysis should be made explicit," a proposition for which the Court cites Kahn, warning that conclusory statements are not sufficient. The Court goes on to criticize rigid application of TSM, particularly relying solely on published articles and explicit content of issued patents. But, the Court notes, "In the years since the Court of Customs and Patent Appeals set forth the essence of the TSM test, the Court of Appeals no doubt has applied the test in accord with these principles in many cases. There is no necessary inconsistency between the idea underlying the TSM test and the Graham analysis." And, the Court explicitly notes that the post-cert Circuit cases were not before it: "The extent to which [DyStar and Alza] may describe an analysis more consistent with our earlier precedents and our decision here is a matter for the Court of Appeals to consider in its future cases." The opinion also clearly (appropriately in my opinion) invites greater analysis of the PHOSITA and the circumstances surrounding the PHOSITA and the pertinent technology than the Circuit has engaged in in some of its decisions.
The contours of how to apply KSR will have to be worked out by the Patent Office, district courts, and the Federal Circuit. For existing patents, approved under the Circuit’s TSM standard, the decision likely leaves enough of TSM in place that there will not be large shocks to industry or rushes to challenge voluminous numbers of patents. As noted, the decision finds fault in the Circuit’s application of TSM in KSR, as opposed to the doctrine generally. Certainly, some existing patents will be challenged as a result of KSR, at least until the Circuit rules on how KSR should be applied to patents granted under the TSM standard. One would also expect an increase in validity opinion letter requests.
For future patent applications and prosecution, I read KSR to indicate that the non-obvious standard should be applied somewhat more stringently, and the decision gives examiners and others greater leeway in analyzing “reasons to combine,” but the opinion provides little insight for decision-makers concerning how to actually conduct the non-obvious inquiry. After seven Supreme Court cases on obviousness, there still is little guidance (beyond the statutory language itself) concerning how a decision-maker is supposed to measure the level of ingenuity necessary to satisfy the non-obvious requirement.
In this regard, a significant flaw in the KSR opinion is that it appears to misunderstand the hindsight bias and does not take it as seriously as is warranted. The hindsight concern, of course, was the basis for the TSM requirement in the first instance. The Court states that a "factfinder should be aware, of course, of the distortion caused by the hindsight bias and must be cautious of arguments reliant upon ex post reasoning." The hindsight bias, however, does not refer to ex post reasoning, but to the effect that knowledge of the invention itself has on one’s ability to judge whether it was obvious when it was achieved. Experiments on non-obvious decision-making that I have conducted reveal that knowledge of the invention unconsciously and inevitably distorts judgment of the ex ante obviousness of the invention. These studies also reveal that factfinders cannot avoid the hindsight bias simply by being made aware of it and warned to avoid it. The hindsight problem remains unresolved by the Court's latest pronouncements and continues to pose a dilemma for patent law and policy. (Articles reporting the hindsight studies can be found at http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=339760).
The opinion in KSR explicitly notes the concern that granting patents on obvious advances might stifle progress in the useful arts, and cites the Constitution for this proposition. This statement could have significant repercussions in the context of patent thicket and anti-commons arguments, though I would hardly expect it to be actually applied to deny a patent on a constitutional basis as not promoting progress.
Finally, one brief remark in KSR could prove significant. The Court notes that it need not reach the question of whether consideration of a reference that was not before the patent examiner during prosecution should void the presumption of validity. But, the Court states, "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 [in this circumstance]." A strong comment on this issue, clearly inviting the Federal Circuit to reexamine the presumption of validity that adheres to patents when they are challenged based on newly discovered prior art.
Gregory Mandel is the Associate Dean for Research & Scholarship and Professor of Law, Albany Law School. As of July 1, 2007, he will become a Professor of Law at Temple Law School. Professor Mandel was a co-author on the Brief of Business and Law Professors as Amici Curiae in Support of the Respondents in KSR.