In a unanimous opinion that will alter the patent landscape, the Supreme Court reaffirmed that the correct criteria for determining whether an invention is unpatentable for being obvious are the Graham factors originally set forth by the Supreme Court back in 1966. KSR International Co. v. Teleflex Inc., No. 04-1350 (Apr. 30, 2007). Overruling a line of Federal Circuit case law, the Supreme Court ruled that a challenging party need not present evidence of a specific teaching, suggestion, or motivation to combine prior art references in order to prove obviousness. The Supreme Court rejected the Federal Circuit’s view that a patent claim is obvious only if there is specific “teaching, suggestion, or motivation” to combine prior art teachings. Rather, it held that the proper inquiry is whether the alleged improvement is more than “the predictable use of prior art elements according to their established functions.” The Supreme Court went on to list various the types of considerations that may be relevant to an obviousness inquiry, but rejected a rigid approach to such an inquiry.

The ramifications of the KSR decision are expected to be far-reaching. The reaffirmation of the Graham factors should facilitate challenges to validity based on obviousness where previously such challenges would have been less likely to succeed because the specific “teaching, suggestion, motivation” evidence was tenuous. Likewise, the KSR decision should limit the scope and breadth of patents granted in the future by the U.S. Patent Office.

In the KSR decision, the alleged infringer KSR was an auto-parts designer that made adjustable accelerator pedals for General Motors. An exclusive licensee of the asserted patent, Teleflex sued KSR claiming that KSR’s device infringed their licensed patent on a similar device. At the District Court, KSR argued that the claimed invention of the patent merely represented an obvious combination of existing devices. These prior art devices were an adjustable-height pedal assembly and an electronic sensor adapted for use with a pedal assembly. Teleflex acknowledged that elements of the invention existed in the prior art. However, Teleflex contended that there was no evidence of a specific teaching, suggestion, or motivation for one skilled in the art to combine the prior art references. The prevailing Federal Circuit case law required a party to demonstrate a specific teaching, suggestion, or motivation to combine reference teachings when alleging obviousness ("the TSM test").

At trial, the District Court granted summary judgment for KSR that the patent claim was obvious. Following the Supreme Court’s 1966 decision in Graham v. John Deere, the District Court compared the teachings of the prior art to the claims at issue and found little difference. The Federal Circuit reversed. It held that KSR did not satisfy the TSM test because unless the prior art addressed the precise problem to be solved by the patentee, one of ordinary skill in the art would not be motivated to combine those references. Thus, the Federal Circuit found that the problem sought to be solved in the prior art cited by KSR did not lead one of ordinary skill to combine the teachings of those references.

In reversing the Federal Circuit, the Supreme Court agreed that while there may be no specific teaching, suggestion, or motivation to combine prior art references, a court following the Graham factors should be able to consider the common sense and creativity of a person of ordinary skill in the art. By insisting on a rigid application of the TSM test, the Federal Circuit had wrongly limited the obviousness inquiry to the point of abandoning common sense: “[a] person of ordinary skill is also a person of ordinary creativity, not an automaton.” Id. at 17. Moreover, the Supreme Court held that in determining obviousness, the focus does not have to be the need or problem the patentee was attempting to solve as required by the Federal Circuit. The focus should rather be the scope and content of the prior art. In fact, the focus can actually be any need or problem in the prior art that would provide a reason for combining prior art references that in turn results in the claimed invention.

While it did not explicitly outline a new standard for obviousness, the Supreme Court clearly requires that the traditional, flexible standard of the Graham factors are to be followed. However, the Supreme Court also stated that the TSM test is not inconsistent with the Graham factors. The TSM test is just not a rigid requirement for establishing obviousness as previously required by the Federal Circuit. In fact, after the Supreme Court granted certiorari in KSR, the Federal Circuit retreated from its prior cases and held that the TSM test is just merely a subtest to be applied within the context of the Graham factors. See, e.g., Dystar Textilfarben GmbH & Co. Deutchland KG v. C. H. Patrick Co., 464 F.3d 1356, 1367 (2006).

What this means for you?

The KSR decision means that all aspects of patent law involving obviousness should be reevaluated. In connection with patent applications, there is likely to be a higher threshold for showing nonobviousness, as patent examiners will now be focusing more on secondary factors of nonobviousness (e.g., unexpected results, failure of others) when determining patentability. Merely pointing out to the examiner that there is no specific teaching, suggestion or motivation in the prior art will no longer suffice in rebutting a prima facie case of obviousness. This will be especially prevalent where inventions are an extrapolation of the prior art (e.g., business methods), as applicants will most likely need to provide some unforeseeable tangible advantage to avoid an obviousness rejection under the Graham factors.

The KSR decision also means that validity challenges of existing patents (via a reexamination, an interference or in litigation) will be more easily met. If your competitors have patents of significance to your business, you may wish to evaluate them to determine whether those patents are more vulnerable to attack in light of KSR. For example, you may wish to consider filing a re-examination based on obviousness. Conversely, you should evaluate your own patent portfolio to determine whether some of your patents are more at risk.