On April 30, 2007, the US Supreme Court issued its unanimous decision in KSR International Co. v. Teleflex Inc. In it, the Supreme Court reversed the decision of the Court of Appeals for the Federal Circuit and restored the decision of the District Court, which had rejected a claim of patent infringement. The Supreme Court held that the allegedly infringed patent was invalid on the grounds that it was obvious in light of prior art.

McCarthy Tétrault Notes:

Section 103 of the US Patent Act prohibits the issuance of a patent where "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."

The framework for applying section 103 was set out by the Supreme Court in Graham v. John Deere Co. of Kansas City. To paraphrase the test from that case, the differences between the prior art and claims at issue, along with the level of ordinary skill in the pertinent art, must first be resolved. Against this background, the obviousness of the subject matter is determined. To illuminate the origin of the subject matter sought to be patented, secondary considerations may include commercial success, long-felt (but unsolved) needs and failure of others.

Additionally, the Court of Appeals has adopted a test called the ‘teaching, suggestion or motivation’ (TSM) test in an attempt to impose more consistency with respect to the application of the test for obviousness. In the TSM test, a patent claim would only be found obvious where the prior art, the problem’s nature or the knowledge of a person having ordinary skill in the art reveals some motivation to combine the prior art teachings.

In this case, the claim at issue described a mechanism for combining an electronic sensor with an adjustable automobile pedal. At issue was whether affixing this electronic sensor to a fixed point was obvious, given that the device was known in the art to have adjustable automobile pedals with fixed pivot points, and to use electronic sensors with automobile pedals to control acceleration of an automobile. The Supreme Court agreed with KSR that mounting the sensor on a fixed pivot point was a design step well within the grasp of a person skilled in the relevant art. The District Court found that the patent was obvious, but the Court of Appeals overturned this decision, applying the TSM test and concluding that the patent was not obvious.

In the KSR decision, the Supreme Court overturned the Court of Appeals, soundly criticizing the Court of Appeals’ "narrow conception of the obviousness inquiry reflected in its application of the TSM test." As explained in a memo from the Deputy Commissioner for Patent Operations to the Technology Center Directors of the United States Patent and Trademark Office, the Supreme Court did not completely reject the TSM test, but did reject a strict application of the TSM test that would require, for a finding of obviousness, that the prior art show some teaching, suggestion or motivation that would lead one skilled in the art to combine the prior art references.

The Supreme Court explained that "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." Pursuant to KSR, an analysis of prior art need not involve seeking out "precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ." Moreover, if patents are granted with respect to advances that would occur in the ordinary course without real innovation, this may impede progress, and may also, in the case of patents that combine previously known elements, deprive those prior inventions of their value or utility, according to the Supreme Court.

This is an important decision because the test for obviousness has become easier to satisfy. As such, it will likely result in more rejections based on obviousness issuing from the examiners at the USPTO, as well as, potentially, more issued patents being found to be invalid on grounds of obviousness.

The decision may also result in increased difficulty for patent holders in enforcing patent rights in the U.S., because alleged infringers may be able to challenge more effectively the validity of the patents that the patent holders seek to assert.