The Supreme Court's unanimous decision on in KSR International Co. v. Teleflex Inc. et al arguably has had a tsunami-like impact in the patent community.
The good news for patent infringement defendants in the post-KSR environment is that issued patents are now easier to invalidate. The bad news for inventors is that it is more difficult than ever to get an issued claim from the United States Patent & Trademark Office.
In KSR, the Supreme Court rejected the long-standing practice of the U.S. Court of Appeals for the Federal Circuit, the final arbiter of patent disputes, of applying what the Supreme Court called a "rigid" test to determine the obviousness of a claimed invention where the invention consisted of a combination of old elements.
While the CAFC had been rigorously requiring some express teaching in the art that would have motivated those of skill in the art to combine the old elements in the way claimed, the Supreme Court relaxed that requirement.
Instead of applying a rigid test in an obviousness analysis, the Supreme Court instructed the courts that various factors such as design incentives, market forces and established functions all may shape the obviousness analysis. In addition, the Supreme Court emphasized that objective evidence of non-obviousness, the so-called "secondary indicia" — for example, unexpected results, long-felt need, rejection and copying — must still be considered in the obviousness analysis.
But what does this all mean in practical terms? For example, what types of patents can we expect to see issuing from the USPTO? What types of patents will the court of appeals invalidate? And, how does KSR affect the Boston area's technology driven businesses, from start-ups to established companies?
The preliminary data from decisions coming out of the patent office and the court of appeals suggest that the obviousness standard of patentability will be a formidable hurdle to overcome, both in getting patent claims issued at the patent office and avoiding having an issued claim invalidated during either reexamination or litigation. Almost 82 percent ofthe decisions issued since KSR and analyzed for this article involved technology generally falling into the high-tech and life sciences sectors — two major components of the Boston-area economy, Thus, any significant impact felt from KSR on the intellectual property of these industries in the U.S, arguably could have a relative impact here in the Boston area as well.
For purposes of this article, 22 published U.S. Court of Appeals decisions and five published USPTO decisions (contested cases) involving obviousness determinations were considered. Of the 27 total cases considered, 19 or almost 71 percent involved a final determination of obviousness.
At the USPTO, obviousness was affirmed in five out of five cases or 100 percent of the time. At the CAFC, obviousness was affirmed in nine cases and five initial non-obvious determinations were reversed. Thus, the CAFC found the invention at issue in 14 of 22 or almost 64 percent of the cases to be obvious.
Secondary considerations of non-obviousness did not appear to be a factor in any USPTO decision analyzed for this article. In contrast, a total of nine federal appeals court cases appeared to involve consideration of objective evidence on non-obviousness. In five of those, the court determined that the objective evidence of non-obviousness presented was insufficient. In four cases involving biotech/pharmaceutical inventions, the court found objective evidence of non-obviousness persuasive.
Of the 22 CAFC cases studied, 50 percent of the inventions determined to be non-obvious involved objective evidence of non-obviousness, and all involved the biotech/pharmaceutical industries, This evidence suggests that success in obtaining or sustaining patent rights can be improved with compelling objective evidence of non-obviousness, and that such evidence tends to be easier to prove in the biotech/pharmaceutical industries.
In summary, combination inventions are given much greater scrutiny post-KSR, and the initial data suggest that anywhere from approximately 64 percent to 71 percent of the cases taken up for consideration result in a finding of obviousness.
As noted, nearly 82 percent of those decisions involve technologies that help drive the local Boston economy, and with $272 billion dollars of the Boston economy potentially affected, it's a safe bet that KSR has not gone unnoticed.