Patent Law Blog (Patently-O)

Appealing BPAI Rejections to the Federal Circuit

In re Baggett (Fed. Cir. 2009) (nonprecedential)

The Board rejected Bagget's patent claims as obvious. On appeal, the Federal Circuit largely affirmed - holding that the the administrative body's factual findings were supported by the requisite "substantial evidence" and that the Board had properly “articulated [its] reasoning with some rational underpinning to support the legal conclusion of obviousness" as required by KSR. (Quoting KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007)).

The only portion vacated involves an error interpreting the term "memoization." The Board had initially misinterpreted the term as memorization. After a petition for rehearing, the Board corrected its mistake - but only as to one of the four claims containing the term. On appeal, PTO Solicitor Chen explained that Baggett had only addressed the one claim in the petition for rehearing, but offered that a remand would still be appropriate.

Notes:

• This case may serve to emphasize the difficulty in appealing an obviousness decision from the Board of Patent Appeals & Interferences. The "substantial evidence" standard is low, i.e., "more than a mere scintilla of evidence." Likewise, the legal conclusion of obviousness now looks merely for "some rational underpinning."
• In a note, Hal Wegner identifies four Federal Circuit appeals up for review that may focus on obviousness: In re Applied Materials Israel Ltd., Fed. Cir. No. 2009-1083 (argument July 7, 2009); In re Mettke, Fed. Cir. No. 2009-1125; In re Roth, Fed. Cir. No. 2009-1223; and In re Rivera, Fed. Cir. No. 2009-1123.
• Although it may have been amended during prosecution, the original claim 1 reads as follows: 1. A method of producing constructed fares that includes an arbitrary added to a published fare, said method executed in a computer system, the method comprising: determining interior cities that appear with gateway cities in arbitraries for the airline; searching for gateway cities corresponding to the determined interior cities appearing in the arbitraries; and applying an arbitrary corresponding to one of the interior cities to a published fare involving one of the gateway cities to produce the constructed fare.
• Read the decision: 09-1029.pdf

Irreparable Harm of Generic Competition: Federal Circuit Affirms Finding that Generic Entry Does not Cause Irreparable Harm

Altana Pharma & Wyeth v. Teva (Fed. Cir. 2009)

Altana's Patent No. 4,758,579 claims the proton pump inhibitor pantoprazole - the active ingredient the anti-ulcer drug Protonix®. Of course, PPI's were known before Altana's patent and even one of Altana's own prior patents discusses a "compound 12" that is structurally similar to those claimed in the '579 patent.

Teva and Sun filed for permission to begin making generic versions of the drug, and Altana subsequently filed this infringement action. (Altana filed separate actions that were consolidated.)

This appeal stems from the New Jersey district court's denial of Altana's motion for a preliminary injunction. The lower court found that the patentee had failed to prove two critical prerequisites of equitable preliminary relief: (1) a likelihood of success on the merits and (2) irreparable harm.

The equitable test for preliminary injunctive relief requires that the requesting party prove:

1. a reasonable likelihood of success on the merits;
2. irreparable harm if an injunction is not granted;
3. a balance of hardships tipping in its favor; and
4. the injunction’s favorable impact on the public interest.

Although the ultimate grant or denial of preliminary relief is within the "sound discretion of the district court," failure to abide by these four factors would be reversible error. Orders to grant or deny a preliminary injunction are immediately appealable.

Likelihood of Success: The Federal Circuit has held that preliminary relief should be denied if the accused infringer raises a "substantial question" of invalidity of the asserted claims. At the PI stage, the court need not consider the ultimate "clear and convincing" standard. Rather, the focus is on "vulnerability."

Obviousness of Chemical Compound: When considering the obviousness of a chemical compound, courts ordinarily first look for a "lead compound" known in the prior art and then consider whether a chemist would have had some reason to modify the known compound in the particular manner to achieve the new compound. Courts are not rigidly bound by this ordinary approach - thus, for instance, a court may look to multiple lead compounds:

Moreover, to the extent Altana suggests that the prior art must point to only a single lead compound for further development efforts, that restrictive view of the lead compound test would present a rigid test similar to the teaching-suggestion-motivation test that the Supreme Court explicitly rejected in KSR.

Here, the appellate panel found "ample evidence" that a chemist would have chosen "compound 12" as a natural choice for further PPI research. The particular modification of compound 12 was then suggested in articles by Sachs and Bryson who were researching properties of effective PPIs.

Considering this evidence as a whole, the Federal Circuit found it sufficient to raise a substantial question of obviousness.

Irreparable Harm: The district court could not find any irreparable harm of allowing infringement during the course of the litigation. Often, money damages are seen as insufficient when the defendant does not have cash-on-hand. Here, however, Teva and Sun both have plenty. The court also found that Altana almost certainly has a business plan to deal with the launch of generics. During the litigation, Nycomed purchased Altana -- seemingly in the lower court's view, that purchase also indicates that money damages are adequate (since a price can be placed on the company & its patent rights).

Perhaps most harmful to Altana was that the lower court found the patentee's statements of harms "exaggerated" and lacking "credibility." A court sitting in equity righty places a dim light on activities suggestive of unclean hands.

On appeal, the Federal Circuit affirmed without significantly commenting on the merits. Rather, the court made this case about equitable discretion: "the law cited by the district court highlights this court’s deference to a district court’s determination whether a movant has sufficiently shown irreparable harm."

Denial of Preliminary Injunction Affirmed

Judge Newman wrote a short concurring opinion.

Although the evidence presented to the district court does not, in my view, establish invalidity of the patent on the pharmaceutical product pantoprazole, see, Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 429 (2006) ("the burdens at the preliminary injunction stage track the burdens at trial.") at this preliminary stage deference is warranted to the district court’s weighing of the conflicting expert opinions interpreting the evidence. On this basis, I concur in sustaining this discretionary action.

BPAI Precedential Opinion: The Nexus for Obviousness and Nonobviousness

Ex parte Jellá (BPAI Precedential Opinion) fd081619-1.pdf

Most modern metal garage doors have four or five panel sections. The older wooden doors often had only one panel. Jella's invention is simple -- have three panels each "substantially twenty-eight inches" in hight. The prior art taught "any number" of panels including one, four, five, or six. Following the examiner's lead, the Board of Patent Appeals and Interferences (BPAI) found the invention obvious.

The BPAI issued a precedential opinion focusing on obviousness. The prima facie case of obviousness is easy under KSR even without any evidence that anyone had previously considered a twenty-eight inch door.

The Court in KSR noted that "[wlhen 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, Section 103 likely bars its patentability." Changing a conventional seven foot high overhead garage door from a four panel section door to a three panel section door is nothing more than a predictable variation sparked by design incentives in the hope that a new look to the door would result in increased sales.

What it looks like here is that the driver for the innovation really was a need for a new ornamental design - motivating PHOSITA to create the obvious variation.

In our minds, this is an example of market demand driving a design trend, and the Supreme Court in KSR warned against granting patent protection to advances such as this that would occur in the ordinary course without real innovation . . . .

We further find that market pressure existed in the garage door industry to create a new design trend by updating the look of garage doors to spur additional sales in the industry.

In addition to allowing ornamental design needs to serve as the motivator to try a new design, the Board did not require any tight nexus between the design motivation and the new design (other than the need for a new design).

I highlight the lax approach on obviousness to contrast the Board's strict approach when considering objective or secondary factors of nonobviousness.

Nexus: The bulk of the Jellá opinion is spent repeatedly shooting down the applicant's arguments on secondary considerations of non-obviousness and the accompanying declarations. The most often repeated point was that any objective evidence must have a clear nexus with the invention as claimed.

"To be given substantial weight in the determination of obviousness or non-obviousness, evidence of secondary considerations must be relevant to the subject matter as claimed, and therefore the examiner must determine whether there is a nexus between the merits of the claimed invention and the evidence of secondary considerations."

The nexus requirement include being "commensurate in scope with the claims."

Ornamental Features in Utility Patents: Additionally, the ornamentality or striking good looks of a design cannot be used as evidence of nonobviousness. Here, the BPAI rejected a declaration discussing the "unique" look of the garage door based on a desire to avoid overlap with design patent law: "Were we to allow secondary considerations of non-obviousness to be based on the industry's reaction to the ornamental appearance of the claimed invention, we would be blurring the distinction between design and utility patent protection. Objective evidence of secondary considerations of non-obviousness should be tied to the functional aspects of the claimed invention for a utility patent application." Oddly enough, the BPAI did allow the PTO to use the ornamental features to prove a "market pressure" -- finding that "market pressure existed in the garage door industry to create a new design trend by updating the look [and appearance] of garage doors to spur additional sales in the industry. ...  In our minds, this is an example of market demand driving a design trend, and the Supreme Court in KSR warned against granting patent protection to advances such as this that would occur in the ordinary course without real innovation."

Rejection Affirmed.

Obviousness-Type Double Patenting and Splitting Ownership (CAFC Says Don't Do It)

In re Fallaux (Fed. Cir. 2009) 08-1545.pdf

The Fallaux family of patents began with a PCT filing in June 1995. The first US patent issued in November 1999. Three more patents issued from continuation applications in 2001, 2003, and and 2006. The application at issue here was filed in 2003.

The PTO's appellate board - the BPAI - rejected the most recent application under the judge-made doctrine of obviousness-type double patenting. Obviousness-type double patenting is equitable in nature and operates as a mechanism to prevent "unjust extension of patent exclusivity beyond the term of a patent." Thus, an obviousness-type double patenting rejection requires a link between the two applications - either in terms of inventorship or ownership. The doctrine is only relevant when a prior patent cannot be considered prior art as defined by Sections 102 and 103(a) of the Patent Act. (If it is prior art, then the reference is applied under those statutory provisions.)

The change in the patent term and publication of pending applications eliminated most of the need for this judge-made regime. Because patent term is calculated from the filing date, it is now difficult to extend the term while claiming priority. Likewise, published applications ordinarily create a statutory bar that operates to prevent an applicant from extending the term by not claiming priority to an earlier filing. Here, the Federal Circuit recognized the significance of the change in the law, but was not prepared at this juncture to eliminate the doctrine.

It is true that the unjustified patent term extension justification for obviousness-type double patenting has limited force in this case. Indeed, this is surely true of many double patenting rejections today, in no small part because of the change in the Patent Act from a patent term of seventeen years from issuance to a term of twenty years from filing. ... Nonetheless, we do not think that we may disregard all of our cases relying on this justification for obviousness-type double patenting. In some cases there may still be the possibility of an unjust time-wise extension of a patent arising from patent term adjustment under § 154 or patent term extension under § 156.   

Furthermore, there is a second justification for obviousness-type double patenting—harassment by multiple assignees. ... The harassment justification for obviousness-type double patenting is particularly pertinent here because the Fallaux application and the Vogels patents are not commonly owned.

Of course, careful Patently-O readers will realize that the Court's use of mismatched patent term extensions as a justification for a double patenting rejection does not sit well with the law. In 2007, the Federal Circuit in Merck v. HI-TECH held that the patent term extension should apply to further extend the patent term despite a terminal disclaimer. Id. (Holding that a patent term extension under the Hatch-Waxman Act, 35 U.S.C. § 156, may be applied to a patent subject to a terminal disclaimer under 35 U.S.C. § 253, filed to overcome an obviousness-type double-patenting rejection.) The dicta of this Fallaux decision will tend to confuse the issue.

Common Inventorship: As the court notes, in this case, the double patenting rejection is based on second patent family. Both families list multiple inventors, and the link between the families is a single common inventor. Originally, the families were commonly owned by IntroGene, but some of the patents were assigned to Crucell and others to Galapagos Genomics.

No Common Ownership: The division of ownership rights here puts the applicant in a bind. Notably, it could not file a terminal disclaimer because the prior patent and the pending application were not commonly owned.

One Way versus Two Way Test: In most obviousness determinations, the examiner applies a "one way test" - asking "whether the application claims are obvious" over the prior art. This same approach is used in obviousness-type double patenting except that the prior patent is generally not considered "prior art." More particularly, because the focus is on extending patent term, the question is whether the pending claims are only obvious variations of the already patented claims. Occasionally, courts have required a more stringent two-way test where the examiner additionally considers "whether the patent claims are obvious over the application claims.”

The two way test can be required if the PTO "is at fault" for a delay that causes an improvement patent to issue prior to the basic patent. Here, the court agreed with the PTO that

Dr. Fallaux was entirely responsible for the delay that caused the Vogels patents to issue prior to the filing of the Fallaux application. . . . there [is no] evidence to suggest—that the PTO shared any responsibility for the delay. . . . Dr. Fallaux elected to prosecute other applications and delay filing the Fallaux application [for] six years after the [original US] application was filed. During this six year period, the Vogels patents were filed for and issued. In view of the Board’s fact findings, we hold that the PTO was not responsible for the delay.

Because the PTO had not caused the delay in prosecution, it could apply the less stringent one-way test of obviousness. And, as a consequence, the Federal Circuit affirmed the rejection.

Notes:

• The Fallaux panel of Judges Schall, Archer, and Moore* have no overlapping authors with the Merck v. HI-TECH panel of Judges Linn*, Friedman, and Plager. The direct contradiction of this case and the dramatic shift in the statutory law opens it to en banc rehearing.
• Patent term adjustments (due to PTO delay) are definitely limited by terminal disclaimers. Meck ("Section 154(b)(2)(B) expressly excludes patents in which a terminal disclaimer was filed from the benefit of a term adjustment for PTO delays.").

Patently-O Bits and Bytes: Economic Downturn and the PTO

Marketers see an economic downturn as a time to emerge with a new business paradigm. Better start working.

• Hearsay: A Patently-O reader paraphrased the PTO's James Toupin who spoke at a recent USC conference: "New patent filings are down 16% so far in 2009." Patents were previously thought to be rather inelastic to price. There is a confluence of issues: (1) downturn in the US economy reducing cash-on-hand and a strong dollar discouraging foreign investment; (2) Increased PTO bureaucracy making it more difficult to obtain a patent with a valuable scope; (3) increased in patentability standards making it more difficult to obtain patent protection; and (4) decreased potential returns in litigation.
• PTO Budget: The falling numbers has the PTO worried about its budget. I would say that the falling numbers are signs of much larger worries than just the PTO budget.
• PTO Cuts: PTO Director Doll was previously reported as saying that the PTO has stopped hiring.
• PTO Cuts: Now, the PTO has announced that all legal and technical studies programs have been suspended because of "budget constraints." One PTO reader noted that the Examiner's Union (POPA) knew about the cuts to this cherished development program for the past week, but remained silent.
• Superduperextraordinary: CCIA calls for further tightening the standard for patentability. (Via Greg Aharonian)
  

Waiving Arguments at the Board of Patent Appeals

Pivonka v. Axelrod (Fed. Cir. 2009)(non-precedential)

In 2003, Axelrod asked the PTO to declare an interference against Pivonka’s patent which had issued the year prior. (Pat. No. 6,408,797). During the interference, the BPAI found Pivonka’s collapsible pet carrier claims to be unpatentable as obvious. [Link] On appeal, the Federal Circuit affirmed.

In reviewing a BPAI obviousness rejection, the Federal Circuit looks for “substantial evidence” to support any factual determinations, but reviews the ultimate question of obviousness de novo.

Here Pivonka pointed to three potential errors: (1) improperly saying that the invention has a “barn-like structure;” (2) failing to consider the patented claims individually; and (3) failing to appreciate the structural differences and functional benefits provided by the claimed invention as compared to the prior art.

The Federal Circuit dismissed these concerns in turn: (1) the reference to the barn was merely shorthand and not reversible error; (2) the applicant waived any right to have claims 2–9 considered separately by failing to make arguments on those claims earlier; and (3) the Board’s conclusion of obviousness was correct.

“Under KSR International Co. v. Teleflex, Inc. “[t]he combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.” 550 U.S. 398, 1739 (2007). According to Dr. Shina’s unrebutted affidavit [Axelrod’s Expert], both the structural benefits and the way in which to build the container claimed by Pivonka were readily apparent to a person of ordinary skill in the art. Accordingly, we find no error in the Board’s conclusion that claims 1-9 are obvious.”

The Court also rejected an argument of improper procedure based on Pivonka’s waiver of the issue before the BPAI. One important take-away from this case is that the Federal Circuit generally treats the BPAI as it would a lower court in the sense that an issue must first be raised with the BPAI in order to be ripe for appeal to the Federal Circuit. If the issue is not raised at the lower level, then any appeal will be deemed waived.

Although not directly related, I enjoyed the following recent anonymous comment to another post:

Whoever said "necessity is the mother of invention" was wrong. According to KSR, "necessity is the mother of obviousness."

Underlying the interference is a patent infringement case between Pivonka and TFH Publications (Axelrod’s assignee). That case is also on appeal but will be heard by a different panel. Interestingly, after this favorable decision, TFH requested that the case be reassigned to the Axelrod panel. The Federal Circuit denied that motion. [Link]

Obviousness; Scope and Content of the Prior Art; Secondary Considerations

Süd-Chemie v. Multisorb Technologies (Fed. Cir. 2009)

Süd-Chemie holds a patent covering a desiccant container for keeping products dry in shipment. In an infringement action, the Kentucky district court found the patent invalid as obvious. On appeal, the Federal Circuit vacated - holding that the lower court had erred in its analysis of the scope and content of the prior art. There are two primary take-away points from Sud-Chemie. First, obviousness jurisprudence continues to require detailed analysis of the claims and the prior art. I.e., KSR did not suddenly allow handwaving as a substitute for evidence and clear argument. Second, well presented secondary indicia of nonobviousness continue to be important in rebutting obviousness allegations.

Here, the claimed patent required the use of "compatible polymeric materials" used in a laminate seal. The prior art disclosed the use of laminate materials taken from the same general class of materials. However, the Federal Circuit recognized that the prior art did not specify that the selected materials be "compatible" in a way to allow for a proper laminate seal.

This is a case where a definition of the claim term in the specification greatly aided the patentee. The specification defined "compatible" materials as those that "mix on a molecular scale and will crystallize homogeneously." The prior art reference did not teach this form of compatibility. In fact, the prior art appeared to teach "incompatible" materials.  

Multisorb ignores the fact that while the ’942 patent requires the inner surfaces of the laminate and microporous films to have similar softening points, Komatsu [the prior art] requires the films to have dissimilar softening points. Komatsu thus does not teach the use of a microporous film that is compatible with the inner surface of the laminate film.

Looking at secondary considerations, the Federal Circuit instructed district courts to "attend carefully to any evidence of ... secondary considerations of nonobviousness." Here, the focus is on the surprising and unexpected result that compatible materials formed stronger bonds even without adhesive.

The Federal Circuit did not apply these findings to form a conclusion on the issue of obviousness. Rather, the court remanded for further development of the facts.

[NOTE- This decision is from January 2009]

Federal Circuit Applies KSR - Finding Combination Claims Obvious

Ball Aerosol v. Limited Brands, Bath & Body Works, etc. (Fed. Cir. 2009)

Ball’s patent covers a candle tin with a removable lid. The lid is designed to fit under the candle to help avoid scorching the underlying surface. According to the claims, the candle tin also has legs or “protrusions” that rest upon the cover.

On summary judgment, a Northern District of Illinois court found Ball’s patent valid as a matter of law. On appeal the Federal Circuit flipped the decision — finding the asserted claims invalid as a matter of law.

Here, it was undisputed that all of the elements of the claims can be found in the combination of two prior art references. In addition, the problem of candle-tin scorching was well known in the art. Finally, it is undisputed that the technology is “simple and easily understandable.”

This case falls squarely under the rule of law expounded by KSR where the Supreme Court held that “[i]f a person of ordinary skill can implement a predictable variation, § 103 likely bars its patentability.” Here, one prior art reference (Marchi) taught the candle with a cover that could be used as a base. The other reference (Wright) taught a candle with “bumps” on the bottom to avoid scorching the surface. In considering these two references, the Federal Circuit determined that the combination was obvious:

“The combination of a cover-stand and feet on the bottom of the candle holder was obvious to try in an effort to minimize scorching, as the combination would further raise the bottom of the candle holder above the supporting surface. The resulting, and desired, decreased heat transfer between the candle holder and the supporting surface from the combination would have been entirely predictable and grounded in common sense.”

Explicit Motivation: In KSR, the Supreme Court indicated that the reasons for combining prior art references “should be made explicit.” Here, the Federal Circuit clarified that statement – holding that the motivation need not be explicit in any prior art. Rather, the Supreme Court is referring “to the court’s analysis.” In other words, a court must explain its motivation in combining two or more references to invalidate a patent for obviousness.

Commercial Success: Even those who believe in objective indicia of nonobviousness admit that commercial success is one of the weakest forms. The problem is the general difficulty in tying the success of the product to the invention itself. Here, the Federal Circuit found that the “minimal indications of commercial success … do not outweigh the clear indication of obviousness apparent from the prior art.”

Holding: Judgment Reversed, Claims are invalid as obvious

Notes: I have pasted figures from the two prior art references. One shows a candle with “protrusions” on the bottom the other shows a candle using the lid as a base. At least one of the references specifically discussed object of creating space between the candle and the surface to avoid scorching problems. Neither reference was cited by the patentee during prosecution.

Federal Split Decision Highlights Unpredictability of Claim Construction (Once Again)

Kinetic Concepts v. Blue Sky Medical Group (Fed. Cir. 2009)

Virtually every theory or defense in patent law requires claim construction before coming to a final conclusion. This case focused on obviousness and considered how the results turn on the construction of the claim term "treating a wound." A two-member majority (Judges Prost and Bryson) narrowly construed the term to only include treatment of surface wounds (instead of internal organs) and affirmed a nonobviousness holding. The dissent (Judge Dyk) saw a broader definition leading him to a conclusion that the claims were obvious in light of the prior art.

Hal Wegner aptly notes that it would be "difficult without an intensive study of the record to determine whether the majority or the dissent has properly construed the claims under Federal Circuit precedent: Indeed, it is possible that both constructions are acceptable. Kinetic Concepts thus once again points to the continued imperative of statutory claim construction reform."

As per usual, Judge Dyk's dissent is sharp - finding that the majority erred first by finding that the term should be limited to the disclosed embodiments and erred again by narrowly misreading the scope of the disclosed embodiments:

"In my view, the majority improperly holds that the claim term “wound” can be limited to the disclosed embodiments in the specification, and, having done so, then misreads the specification as showing only embodiments treating harm to the surface of the body or skin wounds. Under the correct construction of this claim term, the asserted claims of U.S. Patent Nos. 5,636,643 (“’643 Patent”) and 5,645,081 (“’081 Patent”) would have been obvious."

Notes: Read the decision 07-1340.pdf.

Federal Circuit Finds Stent Patent Obvious by Combining Embodiments in a Single Prior Art Reference

Boston Scientific v. Cordis (Fed. Cir. 2009)

In 2003, Boston Scientific sued Cordis for infringement of its drug-eluting, non-thrombogenic, expandable stent. (Patent No. 6,120,536). The stent, thus has a metal core surrounded by a drugged layer that is then surrounded by a non-thrombogenic layer. A jury found the asserted claims infringed and not obvious. The district court accepted the jury verdict and denied the Cordis motions for JMOL and a new trial. On appeal, the Federal Circuit reversed – finding the patent obvious as a matter of law.

Cordis pointed to another Medtronic patent ("Wolff") as prior art that – by itself – renders the claims invalid. Wolff discloses two separate embodiments: (Fig 4) a metallic core with a drug-eluting coating and (Fig 3B) a drug-eluting core with a non-thombogenic coating. Thus, Wolff "teaches all of the [claimed] limitations. . . . The only qualification to this statement of fact is that all of the limitations are found in two separate embodiments pictured side by side in the patent, not in one embodiment."

Applying KSR, the Federal Circuit found that it would have been obvious to combine the two embodiments since the combination was simply a "predictable variation."

"Combining two embodiments disclosed adjacent to each other in a prior art patent does not require a leap of inventiveness."

Holding: The asserted claim "would have been obvious in view of Wolff."

Note: The Cordis brief used a particularly effective strategy of including the two embodiments to be combined followed by a demonstrative drawing of how they would have been combined. Here, they used the same drawing style and also used the same figure numbering.

Federal Circuit Rejects Patent Attorney Expert Testimony; Finds Patent Obvious

Sundance v. Demonte Fabricating (Fed. Cir. 2008)

Sundance sued Demonte for infringing its patent on a retractable truck tarp. A jury found the patent infringed but obvious. In a post-verdict judgment, the Judge vacated the jury's obviousness determination – finding the patent not invalid.

Patent Attorney Expert Testimony: On appeal, the Federal Circuit found that the Michigan district court erred by allowing a patent attorney - Dan Bliss – to testify as an expert witness on the issues of infringement and validity on behalf of Demonte. At least some of his testimony focused on issues "exclusively determined from the perspective of ordinary skill in the art" even though he was not qualified as an expert in the art of tarp-making.

"Mr. Bliss is not "qualified as an expert by knowledge, skill, experience, training, or education" in the pertinent art; we therefore fail to see how he could "assist the trier of fact to understand the evidence or to determine a fact in issue." Fed. R. Evid. 702. …. Admitting testimony from a person such as Mr. Bliss, with no skill in the pertinent art, serves only to cause mischief and confuse the factfinder. Unless a patent lawyer is also a qualified technical expert, his testimony on these kinds of technical issues is improper and thus inadmissible." …. We hold that it is an abuse of discretion to permit a witness to testify as an expert on the issues of noninfringement or invalidity unless that witness is qualified as an expert in the pertinent art. Testimony proffered by a witness lacking the relevant technical expertise fails the standard of admissibility under Fed. R. Evid. 702. Indeed, where an issue calls for consideration of evidence from the perspective of one of ordinary skill in the art, it is contradictory to Rule 702 to allow a witness to testify on the issue who is not qualified as a technical expert in that art. We understand that patent lawyers are often qualified to testify as technical experts, but such a qualification must derive from a lawyer's technical qualifications in the pertinent art.

With Mr. Bliss's testimony excluded, the Federal Circuit was left with no expert testimony supporting the jury's obviousness holding. However, following the Supreme Court's lead in KSR v. Teleflex, the Federal Circuit still felt competent to determine the obviousness on its own. Explaining the appellate court's competence, the opinion noted that the "technology is simple."

Holding: Reversed – Claim 1 is invalid as obvious.

Note:

• Way back when: Peggy Focarino was the primary examiner of the patent at issue. Patent No. 5,026,109.

Rethinking the Scope of Prior Art in Obviousness Cases

In Cohesive Technologies, the Federal Circuit issued a reminder that the novelty analysis of 35 U.S.C. §102 is separate and distinct from the nonobviousness analysis of 35 U.S.C. §103(a). The court notes that some prior art evidence – such as inherent elements of a disclosure – used for anticipation argument may not be used in obviousness analyses. That result is in tension with the traditional understanding that § 102 material may be used for §103(a) analysis.

In a recent e-mail, Professor Isaacs (NKU) saw that tension as a reason to for courts to take a fresh look at the text of §103(a). This is especially timely in light of the recent cases such as eBay, KSR, and MedImmune where the Supreme Court had no trouble altering longstanding precedent.

The most glaring problem with the current interpretation of § 103(a) involves post-invention art and secret prior art that are available as §102(b)/§103(a) and §102(e)/ §103(a) references respectively. These two allowances are contrary to the plain language of §103(a) because the statute focuses on what "would have been obvious at the time the invention was made."

35 U.S.C. 103(a) A patent may not be obtained though the invention is not identically disclosed or described as set forth in §102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that 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. …

Under a plain reading of §103(a), post-invention references cannot negate patentability because they were not available "at the time the invention was made." Similarly, secret prior art – almost by definition – could not be known by one of ordinary skill in the art – especially under the Supreme Court's new "common sense" approach to obviousness.

Of course, these arguments have been tried before – and failed.

• In re Foster, 343 F.2d 980 (C.C.P.A. 1965) (cert denied) (creating §102(b)/§103(a) prior art)
• Hazeltine Research, Inc. v. Brenner, 382 U.S. 252 (1965) (creating §102(e)/ §103(a) prior art)

Perhaps the time is right for a challenge.

Anticipated yet Nonobvious

Cohesive Tech v. Water Corp (Fed. Cir. 2008)

Perhaps the most important portion of this case relates to the notion that novelty and nonobviousness are separate and distinct inquiries. And, that a patent may be found anticipated yet nonobvious.

On summary judgment, the district court Cohesive’s HPLC patent might be obvious, but certainly was not anticipated.  Water appealed — arguing that the judgment was logically incorrect if anticipation truly is the “epitome of obviousness.”  On appeal, however, the Federal Circuit confirmed that novelty and obviousness are separate and distinct — one does not necessarily follow the other.

“While it is commonly understood that prior art references that anticipate a claim will usually render that claim obvious, it is not necessarily true that a verdict of nonobviousness forecloses anticipation. The tests for anticipation and obviousness are different.

The court suggested two circumstances where an anticipated claim might still be nonobvious.  First, secondary considerations of nonobviousness may exist that are not relevant in an anticipation claim. Second, although inherent elements apply in an anticipation, inherency is generally not applicable to nonobviousness. 

“[O]bviousness requires analysis of secondary considerations of nonobviousness, while secondary considerations are not an element of a claim of anticipation. And although anticipation can be proven inherently, proof of inherent anticipation is not the same as proof of obviousness.”

The court also gives an example —

“Consider, for example, a claim directed toward a particular alloy of metal. The claimed metal alloy may have all the hallmarks of a nonobvious invention—there was a long felt but resolved need for an alloy with the properties of the claimed alloy, others may have tried and failed to produce such an alloy, and, once disclosed, the claimed alloy may have received high praise and seen commercial success. Nevertheless, there may be a centuries-old alchemy textbook that, while not describing any metal alloys, describes a method that, if practiced precisely, actually produces the claimed alloy. While the prior art alchemy textbook inherently anticipates the claim under § 102, the claim may not be said to be obvious under § 103.”

Judge Mayer dissented — arguing that anticipation is a subset of nonobviousness. “Although a claimed invention can be obvious but not anticipated, it ‘cannot have been anticipated and not have been obvious.’ In re Fracalossi, 681 F.2d 792, 794 (CCPA 1982).”

“The majority’s assertion that a claim can be anticipated but not obvious, flies in the face of a long line of precedent to the contrary. Not surprisingly, it is unable to cite a case remanding to the district court for consideration of anticipation, while at the same time sustaining a determination that claims at issue are not obvious.”

The practical impact of this case:

1. Anticipation still gets to a jury even when the defense has a credible obviousness argument.
2. The Majority’s example might be seen to narrow the scope of documents available for obviousness arguments along a temporal axis. (References from a long time ago shouldn’t be combined with more recent references.)
3. In some ways, the ‘common sense’ approach of KSR encourages this decision. While anticipation may still be a formal construct, obviousness should focus on what really would have been obvious at the time of the invention.
4. Professor Ochoa (Santa Clara) reminded me about the European rule that does not allow “secret” prior art to be used in obviousness (inventive step) analysis.  If the US so modified its rules, perhaps the distinction between obviousness and anticipation would begin to ring true.

Obviousness of Chemical Compounds; Split over Inequitable Conduct

EISAI v. DR. REDDY’S LABORATORY and TEVA PHARMACEUTICALS (Fed. Cir. 2008)

Eisai’s blockbuster ulcer drug AcipHex boasts over $1 billion in annual worldwide sales.  The company holds a patent covering the active ingredient – rabeprazole – and its salts. Dr. Reddy’s and Teva each filed ANDAs and Eisai filed suit to block generic entry.

Eisai won a summary judgment decision that the patent is infringed and enforceable. The appeal focuses on obviousness and inequitable conduct.

Obviousness of Chemical Compounds: Structural similarity is the touchstone of the obviousness inquiry for patents claiming a novel chemical compound. A looming question for pharmaceutical companies, however, is how the Supreme Court’s decision in KSR v. Teleflex will impact chemical patents.

In KSR, the Supreme Court eased a defendant’s pathway for invalidating a patent as obviousness. KSR’s focus, however was on inventions created by combining known elements.  Here, the individual components of Eisai’s claimed compound were all known. However, the Eisai decision cabins-in KSR’s importance by showing that the assumptions found in KSR often do not apply to chemical compound cases.

“The Supreme Court’s analysis in KSR thus relies on several assumptions about the prior art landscape. First, KSR assumes a starting reference point or points in the art, prior to the time of invention, from which a skilled artisan might identify a problem and pursue potential solutions. Second, KSR presupposes that the record up to the time of invention would give some reasons, available within the knowledge of one of skill in the art, to make particular modifications to achieve the claimed compound. Third, the Supreme Court’s analysis in KSR presumes that the record before the time of invention would supply some reasons for narrowing the prior art universe to a "finite number of identified, predictable solutions." In Ortho-McNeil Pharmaceutical, Inc. v. Mylan Laboratories, Inc., 520 F.3d 1358, 1364 (Fed. Cir. 2008), this court further explained that this "easily traversed, small and finite number of alternatives . . . might support an inference of obviousness." To the extent an art is unpredictable, as the chemical arts often are, KSR’s focus on these "identified, predictable solutions" may present a difficult hurdle because potential solutions are less likely to be genuinely predictable.”

Thus, in chemical compound cases, “a prima facie case for obviousness for a chemical compound still, in general, begins with the reasoned identification of a [prior art] lead compound.”  Obviousness can then based on structural similarity along with some “motivation that would have led one of ordinary skill in the art to select and then modify a known compound (i.e. a lead compound) in a particular way to achieve the claimed compound.”  Although the motivation to modify the prior art can come from many different fields, some motivation is needed. In chemical cases, this motivation may be proved by showing a ‘sufficiently close relationship’ between the prior art and claimed compound that would ‘create an expectation . . . that the new compound will have similar properties to the old.’ (internal quotation marks removed). In other words, an obvious substitution would be ‘predictable.’

In this case, the lead compound – Lansoprazole – is quite similar to the claimed compound Rabeprazole. The difference is only found in a trifluroethoxy substituent at the 4–position (see figure) versus a methoxypropoxy substituent.  Although structurally similar, the CAFC could not find any motivation to substitute the active groups. In particular, the court noted that it would not make sense to drop trifluroethoxy from the prior art — since it is that substituent that activated Lansoprazole.

“The record, however, shows no discernible reason for a skilled artisan to begin with lansoprazole only to drop the very feature, the fluorinated substituent, that gave this advantageous property.”

Nonobviousness affirmed.

A High Bar for Inequitable Conduct: As usual, Judge Rader took a hard stance against inequitable conduct. He writes:

“Inequitable conduct in prosecuting a patent application before the United States Patent & Trademark Office may take the form of an affirmative misrepresentation of material fact, a failure to disclose material information, or the submission of false material information, but in every case this false or misleading material communication or failure to communicate must be coupled with an intent to deceive.  Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363, 1378 (Fed. Cir. 2008).  Materiality, defined as "what a reasonable examiner would have considered important in deciding whether to allow a patent application," and intent are both questions of fact, and require proof by clear and convincing evidence.  Id.  To satisfy the "intent" prong for unenforceability, "the involved conduct, viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive."  Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 (Fed. Cir. 1988) (en banc) (citing Norton v. Curtiss, 433 F.2d 779 (CCPA 1970)).  Gross negligence is not sufficient.  Id.  This is a high bar.”

This opinion along with Judge Rader’s recent dissent in the Aventis case may show a growing split within the court on the issue of inequitable conduct.

Notes:

• I updated this report to add a squishy word: “often.” The modified sentence now reads: “However, the Eisai decision cabins-in KSR’s importance by showing that the assumptions found in KSR often do not apply to chemical compound cases.”

Obvious to Try? BIO Challenges Ex Parte Kubin

In re Kubin (Fed. Cir. 2008)

Immunex (a subsidiary of Amgen) is hoping to patent its a DNA sequence coding for a NK (Natural Killer) cell regulator protein. The BPAI rejected the “nucleic acid molecule” claim — finding it obvious over the prior art. [BPAI Decision]. This decision is one of only three precedential BPAI decisions in 2007.

Just looking at the claimed sequence, it would not seem obvious — its structure is not overly similar to other regulator proteins, and the unpredictable nature of protein folding makes it virtually impossible to predict whether a particular sequence would code for an appropriate protein.

Despite the structural uniqueness, the BPAI found the claim obvious because it could have been isolated and verified simply by following conventional laboratory techniques — thus, making it obvious to try.

Although the CAFC has previously warned the BPAI away from using “obvious to try” analysis in its 1995 In re Deuel case. There, the appellate court held that obviousness analysis of a structure should focus on the structure itself as compared to prior art structures.

In Kubin, the BPAI rejected Deuel as limited by the Supreme Court’s KSR decision. That case focused on combination claims, but included the stray quote that “the fact that a combination was obvious to try might show that it was obvious under Section 103.”

Here, the BPAI argued, the inventor wanted to isolate the NK Regulator and simply used known methods to do so. “Thus, isolating NAIL cDNA was ‘the product not of innovation but of ordinary skill and common sense.’” (again quoting KSR).

The case is now on appeal at the the CAFC. On June 10, the Biotechnology Industry Organization filed an amicus brief asking the court to cabin in the scope of KSR and hold that its obvious to try dicta does not abrogate the Deuel standard. Briefing is ongoing and a decision is not expected until the end of the year.

• Download kubin.amicus.pdf
• The PTO's Obviousness Guidelines have the following rules for making an obviousness rejection based on the obvious to try reasoning:
  • (1) a finding that at the time of the invention, there had been a recognized problem or need in the art, which may include a design need or market pressure to solve a problem;
  • (2) a finding that there had been a finite number of identified, predictable potential solutions to the recognized need or problem;
  • (3) a finding that one of ordinary skill in the art could have pursued the known potential solutions with a reasonable expectation of success; and
  • (4) whatever additional findings based on the Graham factual inquiries may be necessary, in view of the facts of the case under consideration, to explain a conclusion of obviousness.The BPAI decision is notable for a few reasons, including the following two: (1) It was written by Nancy Linck, former PTO Solicitor, Newman law clerk, & PhD Chemist. Soon after authoring the decision, Linck left the firm to join the Rothwell Figg firm. (2) It is a unanimous opinion.
• Thanks to Hal Wegner for providing a copy of the brief which his firm filed on behalf of BIO.

Invention Obvious in Part Because Inventors Were Experts

Daiichi Sankyo v. Apotex (Fed. Cir. 2007).

Apotex filed an ANDA to begin making a generic version of Daiichi’s patented ear infection medication method – FLOXIN Otic. Daiichi sued and won a bench trial. On appeal, the CAFC reversed — finding the patented invention obvious.

Level of Skill: The nonobvousness doctrine requires an examination of what would be available to a person having ordinary skill in the art (PHOSITA). That inquiry is premised on a definition of the mythical PHOSITA.  The general theory is that highly educated and trained PHOSITA know more and tend to think more inventions are obvious. On the other hand, a PHOSITA with little education or training would have more difficulty in making connections and finding obviousness.

The 1983 Orthopedic Equipment decision outlines factors for determining a PHOSITA – including education level of the inventor.

Here, the CAFC found that the lower court erred by picking a pediatrician as the PHOSITA in creation of compounds to treat ear infections without damaging a patient’s hearing. Rather, the skill level should be an otologist who is engaged in developing pharmaceutical formulations. The court primarily based its PHOSITA Skill Level on the inventors’ skill level and the skill level of their peers (which, almost by definition will be the same).

Obviousness: Based on the high level of skill in the art, the CAFC concluded that an otologist would have found the patented method obvious.

Reversed — Patented Invention is Obvious

DDC Comment: Although the education level of the inventor appears to be relevant to determining the PHOSITA skill level, there are a few reasons why that data point should be excluded from the list of factors. The common major mistake here is to search for a PHOSITA capable of making the invention rather than simply searching for the level of a skilled worker in the area. The PHOSITA skill level inquiry is not a search for what it takes to be a successful inventor. Rather, the PHOSITA is merely a skilled worker.  The inventor’s biographical information may be indicative of a skill level for invention, but that is not the PHOSITA inquiry. 

Under 35 USC 103(a), patentability of an invention “shall not be negatived by the manner in which the invention was made.” Of course, the process of inventing is intimately tied-in with the inventor’s skill and education level. In essence, use of the inventor’s biographical information in determing the PHOSITA skill level allows the court to ask whether the invention would have been obvious to someone standing in the shoes of the inventor. That methodology nothing more than a backdoor approach to asking whether any steps that the inventor took included non-obvous leaps — a legally impermissible question.

Notes:

• This case was originally decided in July 2007, but was recently republished as a precedential decision. The OrangeBookBlog covered the original release.

KSR Extended to Obviate Component Purified from Known Mixture

Aventis Pharma & King Pharma v. Lupin Ltd. (Fed. Cir. 2007).

Altace is the King/Aventis brand of ramipril – a top-selling ACE inhibitor.  The patent claims ramipril formulated “substantially free of other isomers.” The district court found the patent not invalid, but only by a slim margin. On appeal the CAFC reversed – finding the patent invalid as obvious.

Prior Art: One reference (‘944 patent) was filed as a continuation-in-part of an already abandoned patent application. That application was eventually revived, but Aventis argued on appeal that the ‘944 patent should not be awarded the filing date of the parent.  The CAFC found this a potentially interesting argument, but refused to hear the argument because Aventis had failed to make the argument at the district court level.

The appellate panel also agreed that the experimental results of a Shering Doctor constituted 102(g)/103(a) prior art because the Doctor had not abandoned, suppressed, or concealed her prior invention.

Obviousness of a Purified Form: The district court, ruling pre-KSR, found the patent nonobvious. On appeal, the CAFC took a different view – finding that the purified form of a known mixture is prima facie obvious if a PHOSITA would have some reason to believe that the mixture derives properties from particular components.

However, if it is known that some desirable property of a mixture derives in whole or in part from a particular one of its components, or if the prior art would provide a person of ordinary skill in the art with reason to believe that this is so, the purified compound is prima facie obvious over the mixture even without an explicit teaching that the ingredient should be concentrated or purified.

The prima facie case of obviousness is especially difficult to rebut where, as here, the potency of the mixture varies directly with the amount of isomer in the mixture.

The court implicitly distinguished this case from Forest Labs — noting that obviousness may be rebutted by showing difficulty in purifying the mixture.

[A] purified compound is not always prima facie obvious over the mixture; for example, it may not be known that the purified compound is present in or an active ingredient of the mixture, or the state of the art may be such that discovering how to perform the purification is an invention of patentable

Reversed, Patent Invalid as Obvious

Reasonable Pertinence may be Sufficient to Combine References in Obviousness Rejection

In re Icon Health and Fitness (Fed. Cir. 2007).

ICON has been a party in more than 50 patent infringement lawsuits and has asserted its treadmill patent (5,676,624) against at least six defendants.  In the midst of litigation, ICON also filed for reexamination, and now appeals the PTO’s final rejection of its patent to the CAFC.

ICON admits that all but one of the claimed elements are disclosed in a Danmark International advertisement.  The remaining element, a gas stabilizing spring, is found in Teague where it is used to assist in opening and closing of a Murphy style bed.

Reasonably Pertinent Art: To be used in an obviousness rejection, prior art must be “reasonably pertinent to the problem addressed” by the patent applicant. Usually this is satisfied by references in the same field of technology or that address the same problem. Here, the CAFC saw enough similarity to find the bed art pertinent:

“Nothing about Icon’s folding mechanism requires any particular focus on treadmills; it generally addresses problems of supporting the weight of such a mechanism and providing a stable resting position. Analogous art to Icon’s application, when considering the folding mechanism and gas spring limitation, may come from any area describing hinges, springs, latches, counterweights, or other similar mechanisms—such as the folding bed in Teague.”

Although the patent applicant lost this argument, this portion of the case is good news for applicants – because of what the opinion did not say. Specifically, the court could have begun with the announcement that “In KSR, the Supreme Court expanded the notion of pertinent obviousness-type prior art when it announced that ‘patent examiners should look [beyond] the problem the patentee was trying to solve.’ . . .”  Instead, the CAFC decided to stick to its narrower jurisprudence.

All elements = Obvious: Under KSR, once the elements are shown in reasonably pertinent art, then an obviousness determination is as simple as connecting the dots. The court says as much:

[W]hile perhaps not dispositive of the issue, the finding that Teague, by addressing a similar problem, provides analogous art to Icon’s application goes a long way towards demonstrating a reason to combine the two references.

Here, the Court explained a connection be tween Teague and the claimed invention by showing that both used the spring in similar ways.

Notes:

• A report from Steve Sereboff indicates that the PTO has already taken this decision to heart in its new examiner training: “Basically, the examiners can make a prima facie case of obviousness simply by showing that all of the elements in the claim were known.”

Procedure: Expert Testimony Deserves Weight on Summary Judgment

Omegaflex v. Parker-Hannifin Corp (Fed. Cir. 2007) (nonprecedential)

On summary judgment, the Massachusetts District Court found the Omegaflex pipe-fitting patents novel, nonobvious and infringed. Parker appealed.

Respect the Expert: On several points of contention, the district court gave no probative weight to Parker’s expert’s testimony.  On summary judgment, the evidence should be weighed in the “light most favorable” to the non-movant (Parker). Because the expert testimony creates issues of material fact, the CAFC reversed and remanded.

In dicta, the three-member panel (Judges Michel, Dyk, and Garbis) probed the Supreme Court’s recent KSR decision — noting that it will continue to look for some reason to combine prior art references in an obviousness rejection.

Quoting KSR: “a patent composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art.”

Reversed and remanded.

Zyprexa Patent Upheld on Appeal

Eli Lilly v. Zenith Goldline (Fed. Cir. 2006)

Lilly’s patent covers olanzapine (Zyprexa®) and its use for the treatment of schizophrenia. Three generic manufacturers (Zenith (IVAX), Dr. Reddy’s, and Teva) filed an ANDA and Lilly responded with a complaint in the Southern District of Indiana.  After a bench trial, the district court agreed with Lilly that the patent was valid, infringed, and enforceable.  The defendants appealed to the Court of Appeals of the Federal Circuit.

Anticipation: To anticipate the invention, a prior art reference “must disclose each and every feature of the claimed invention, either explicitly or inherently.”  However, in both Petering and Schaumann, prior art references that disclosed the family of the claimed compound were found to anticipate the claimed compound — even though the claimed compounds were not specifically discussed.

Here, the CAFC found that those cases were not applicable because the closest reference to olanzapine did not spell out “a definite and limited class of compounds that enabled a person of ordinary skill in the art to at once envisage each member in this limited class.”

Obviousness: The CAFC agreed that the prior art references did not suggest a the compound. In addition, Lilly provided strong evidence of secondary considerations, including: “(1) a long-felt and unmet need; (2) failure of others; (3) industry acclaim; and (4) unexpected results.”

The record shows a long-felt need for a safer, less toxic, and more effective clozapine-like drug; a decade (or more) of failure to find a replacement for clozapine; a reasonable amount of commercial success for olanzapine; and a number of awards for olanzapine as indicators of industry acclaim.

Public Use: Prior to filing the patent application, Lilly conducted Phase I clinical safety trials. The court found, however, that the trials were well within the experimental use exception:

In this case, Lilly tailored its tests to their experimental drug safety and efficacy purpose, adequately monitored for results, and maintained confidentiality throughout the duration of the study. The trial court did not err in finding no public use.

 

Scalia's Hint on KSR

As you read this, keep in mind Michael Slonecker’s recent remark that “predictions are the musings of fools.” In late November, the Supreme Court heard oral arguments in KSR v. Teleflex — the case that will determine what constitutes a “nonobvious” invention. Then, last week, Justice Scalia briefly discussed the case at a meeting of technology business group and was quoted as saying: “I know how that one comes out, but I'm not going to tell you.”  What does Scalia’s quote mean? Perhaps nothing, but it might mean that the court has already come to a unanimous consensus on the case.

Link: Washington Post Article

Supreme Court: Current Test of Obviousness is "Gobbledygook"

KSR v. Teleflex (Supreme Court 2006, Oral Arguments).

The doctrine of nonobviousness is the cornerstone of American patent law.  I was reminded today by Phil Swain that our nonobviousness statute, section 103(a) of the Patent Act, was drafted by Judge Giles Rich.  Judge Rich is the most celebrated patent judge of this century.  His statutory masterpiece eliminated the amorphous concept of a “flash of genius” and replaced it with our now ubiquitous objective standard of a person having ordinary skill in the art.  In Graham v. John Deere, the Supreme Court reinforced 103(a) with its concept of case-by-case consideration of secondary indicia of nonobviousness as a way to avoid potential hindsight bias. 

Later, as the Federal Circuit developed its own patent jurisprudence, the court hit upon the teaching-suggestion-motivation test as another anti-hindsight rule.  That test requires evidence of some reason to combine various references that each teach part of an invention.  Thus, if there is no evidenced reason to combine the references, then the invention will be deemed nonobvious. The test, known by acronymists as “TSM,” has been labeled as a poster-child for bad patent behavior.  According to opponents of the test, the bright-line test makes patents too easy to obtain — resulting in a glut of patents covering trivial improvements. Those patents, in turn, hold-up industry research and greatly increase transaction costs and legal fees. 

In KSR v. Teleflex, the Supreme Court is questioning whether the TSM test should exist as the sole determinant of obviousness.  Question presented:

Whether the Federal Circuit has erred in holding that a claimed invention cannot be held ‘obvious’, and thus unpatentable under 35 U.S.C. § 103(a), in the absence of some proven “‘teaching, suggestion, or motivation’ that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed.”

Until a few months ago, the common myth of the TSM test was that it required at least some hard evidence that provided at least a minimal reason to combine various prior art references.  It is that myth that provided the impetus for Supreme Court review. In recent months, however, we have learned that the CAFC’s version of the test allows for evidence that is implicit, based on common knowledge, found generally in the prior art as a whole, based simply on the nature of the problem or simple logic, or concluded by experts. See Kahn, Dystar, Ormco, Alza.  This jitterbug by the CAFC actually gives KSR much of what it wanted and smears the edges of the mythical bright-line rule.  Justice Scalia picked up on transition during oral arguments — noting that the recent cases leave the test “meaningless. [The CAFC] essentially said ‘our test simply reduces to what [KSR seeks] in this litigation.’ . . . this is gobbledygook. It really is, it’s irrational.” Justice Alito had a similar concern with the “new” TSM test:

J. Alito: “But what is the difference between asking whether something is implicit in the, in the prior art and simply asking whether it would have been obvious to a person of ordinary skill in the art?:

As discussed earlier on Patently-O, all the major patent bar associations filed briefs that support the current TSM test.  In a brilliant move, KSR neutralized those briefs by implying bias based on “the enormous fees that litigation of invalid patent claims can generate.” KSR Reply Brf. CJ Roberts appeared to buy-in to that analysis, joking that the filings “just indicate[] that this is profitable for the patent bar.” KSR Oral Arg.

One concern of the Court is whether modification of the obviousness doctrine would spoil long-settled rights.  The Justices, however, mentioned on several occasions that over the past year, the CAFC may have already upset any settled rights.

Mr Goldstein [for Teleflex]: “[The CAFC has had decades to look at this to try and elaborate a standard.”
J Breyer: “And it so quickly modified itself.”

Decision in February: Reports from the hearing noted that Justice who used the term “TSM” spoke with disdain and were highly critical of the test.  Although oral arguments are always full of counterfactuals and wild theory testing, the level of criticism supports the conventional wisdom that the TSM test is likely to be eliminated as “the exclusive” test.  Cases will rather be decided on a case-by-case basis using the standards of Graham v. John Deere. Already issued patents will still be given a presumption of validity, although it will be difficult for some courts to do this with a straight face.  The new key to avoiding invalidity will be secondary indicia of nonobviousness. Look for a 9–0 decision in early February.

TSM is not Dead: Much of the oral argument was filled with an attempt to simply understand the TSM test, and to figure out what is meant by a “motivation.”  If they cannot figure-out the test, they would likely completely trash-it as unworkable. Of course, by the time the opinion is penned, they will understand the current test and the test will not be scrapped as a whole. Rather, they will follow the Government’s suggestion that TSM continue to be used as a “valid means of proving obviousness.” In addition, however, flexibility will be added to allow for other ways of determining nonobviousness.

Here are some quotes from oral arguments:

CJ Roberts: “[T]the Federal Circuit’s approach focuses . . . on prior art — as opposed to, I would say, common sense.” 

J Scalia: “And in the last year or so, after we granted cert in this case after these decades of thinking about [the obviousness doctrine, the CAFC] suddenly decides to polish it up.”

J. Breyer: “I’ve read it about 15 or 20 times now, I just don’t understand what is meant by the term ‘motivation.’”

Mr. Hungar [for US Gov’t]: “Construed as the sole means of proving obviousness the teaching suggestion motivation test is contrary to the Patent Act, irreconcilable with this Court's precedents and bad policy. It asks the wrong question and in cases like this one, it produces the wrong answer. It should be rejected and the judgment of the Court of Appeals should be reversed. . . . It’s just foreign to this Court’s precedents as a mandatory prerequisite for obviousness.”

Mr. Dabney [for KSR]: “[T]here is no legal regime that is a greater generator of patent litigation than the teaching suggestion motivation test that is urged by the respondent.” [DDC: Is this true?].

Documents and Links:

• Oral Argument Transcript;
• Commentary from the Gallery on the Oral Arguments:
• Zura;
• Armstrong;
• Miller;
• Kerr;
• ScotusBlog (Run by Teleflex’s Counsel)
• Gordon Smith;
• Patent Baristas;
• LawFont;
• Hawk;
• Brooks;
• Leo Stoller;
• Ebert;
• Law School Innovation;
• DragonFly
• KSR Shifts Obviousness Debate to "Mere Aggregations" and Presumptions of Non-Obviousness;
• Discussion of Response Briefs;
• Discussion of Petitioner and Supporting Amici’s Briefs on the Merits;
• Discussion of Government's Brief in Support of Certiorari;
• Discussion of Microsoft’s Amicus Brief;
• Discussion of the CAFC decision;
• Discussion of Law Professors Brief;
• Discussion of In re Kahn;
• Discussion of Petition for Certiorari;
• Prediction Certiorari;
• Professor Wagner and Strandburg debate obviousness in Penn’s new online law reivew:PENNumbra;
• Prof Miller: KSR Lift-off!
• Prof Miller: Discussion of Gov’t Brief;
• Patent Hawk: Becoming Less Obvious;
• Patent Hawk: Hindsight Problem;
• Buchanan: "[O]nce again, patent reform has left the Capitol and walked across First Street to the Supreme Court." [Link];
• Petherbridge & Wagner Empirical Article [link]
• Cotropia Article: [link].
• Shane Popp Article on Section 103 background [link]
• Mark Smith, a student at Santa Clara Law has these three posts in SCU’s great new Tech Law Forum:
  • http://www.techlawforum.net/blogs/a-precursor-to-obviousness/
  • http://www.techlawforum.net/blogs/per-se-or-not-per-se/
  • http://www.techlawforum.net/blogs/hey-teacher-leave-our-test-alone/
• The Patent at issue: [link] [link]

Cite as Dennis Crouch, “KSR Gobbledygook,” Patently-O, available at http://www.patentlyo.com.