On April 30, the U.S. Supreme Court issued an opinion with far-reaching consequences on existing patents, new patents, patent infringement litigation and, ultimately, the value of patent portfolios.

As a result of the opinion, the ability to obtain new patents and to withstand challenges to the validity of existing patents has been seriously eroded. Under the Supreme Court’s ruling, it is no exaggeration to say that the asset value of many companies that conduct business in the United States has been significantly reduced, while the level of competition has risen dramatically. Companies that relied on patents to insulate themselves from competition – particularly low-cost foreign competition – need to re-evaluate that strategy. Conversely, those whose competitive edge was curtailed due to their competitors’ patents may want to take a fresh look at the validity of those patents.


To obtain a patent, an invention must be novel, useful and nonobvious. The Supreme Court set the ground rules for nonobvious determinations in 1966 in the Graham v. John Deere case, reducing the analysis to three main questions: the scope and content of the prior art; the differences between the prior art and the claims; and the level of skill in the art. Furthermore, Graham introduced “secondary considerations,” into the analysis, adding concepts such as “commercial success”, “long felt but un-solved needs”, and “failure of others” to the patent lexicon.

The problem with the Graham test and nonobviousness determinations generally, is that they are susceptible to the so-called “hindsight bias.” That is, once an inventor’s elegant solution has been laid bare, the natural human tendency is to say to one’s self, “that’s so simple, I could have done that!” The danger posed by the hindsight bias is especially acute for inventions in well understood fields, such as the mechanical arts, where each new invention will necessarily build upon commonly understood principals of basic mechanical engineering. In order to avoid this hindsight bias, the Court of Appeals for the Federal Circuit (“CAFC”) took a page from its predecessor court, the Court of Customs and Patent Appeals, and employed a disciplined approach known as the teaching-suggestion- motivation, or TSM, test.

The gist of the TSM test is that a patent claim that combines known elements in a new way is obvious only if the prior art, the nature of the problem to be solved by the invention, or the knowledge of a person of ordinary skill in the art reveals a “teaching, suggestion or motivation” to combine the prior art teachings to achieve the invention. The TSM test has been heavily criticized as setting too low a bar to patentability. In recent years, legal and business commentators have accused the Patent Office of issuing hundreds of thousands of undeserved patents, which they argue have created a significant barrier to competition. Against this backdrop, the Supreme Court granted certiorari in the KSR case.

The KSR Decision

The patent at issue in KSR was an improvement upon an automobile accelerator pedal, which traditionally used a mechanical linkage between the pedal and the throttle. The patent covered the use of an electronic sensor for use with computer-controlled throttles. The district court had found the TSM test to be satisfied. The CAFC reversed, holding that the district court had not applied the test strictly enough.

The Supreme Court reversed the CAFC, reinstating the trial court’s finding that the claims at issue were obvious. The Court articulated several related errors in the CAFC’s decision. First, it held that the CAFC’s focus on the problem that the inventor was attempting to solve by reference to issued patents and scientific literature was too narrow. Any need or problem known in the field and addressed by the patent can provide a reason for combining elements. Second, the Court held that the CAFC erred in assuming that a person of ordinary skill in the art attempting to solve a problem will be led only to those prior art elements designed to solve the same problem.

Common sense, the Court observed, dictated that “familiar items may have obvious uses beyond their primary purposes, and a person of ordinary skill often will be able to fit the teachings of multiple patents together like pieces of a puzzle.” As the Court noted, a person of ordinary skill is also a person of ordinary creativity.

The Court also found error in the CAFC’s conclusion that a patent claim cannot be found obvious merely by showing that the combination of elements was obvious to try. The proper focus recognizes the diversity of inventive pursuits and modern technology and that design trends are often driven by market demand. Thus, the Court reasoned, when a design need or market pressure to solve a problem with a finite number of identified, predictable solutions occurs, a person of ordinary skill in the art will have good reason to pursue the known options within his or her technical grasp. If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense. To grant patent protection to advances that would occur in the ordinary course without real innovation hinders progress and may deprive prior inventions of their value.

Finally, the Court dismissed the CAFC’s concern about hindsight bias. Neither the courts nor the PTO should be applying rigid preventive rules that deny recourse to common sense. This, the Court said, is neither necessary under, nor consistent with, the Court’s own prior case law.

The KSR opinion emphasized several points that will likely prove important in future obviousness determinations. First, the Court replaced the CAFC’s “teaching, suggestion, or motivation” test with a less rigid test that considers any “reason to combine.” The Court noted that the uniting of only old elements with no change in their respective functions is likely to be obvious. The Court reaffirmed that when the prior art teaches away from a combination of known elements, combining them is more likely to be nonobvious. But the Court emphasized that a major key to nonobviousness is when known elements work together in unexpected ways. “A court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions.”

The Court directed that trial courts and the PTO conduct explicit analysis of the interrelated teachings of multiple patents, the effects of demands known to the design community or present in the marketplace, and the background knowledge possessed by a person of ordinary skill in the art.

Second, this “reason to combine” need not be limited to 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.” Rather, if a new combination of known elements would be “obvious to try” then it may be found unpatent-able due to obviousness. The Court suggested that the proper question to ask is whether a designer of ordinary skill, facing the wide range of needs created by developments in the field of endeavor, would have seen a benefit to upgrading an existing device or process by combining it with another existing device or process as set forth in the claim at issue.

With respect to litigation issues, perhaps the most significant change that the Court imposed was the lowering of the summary judgment standard. The Court ruled that the question of combining prior art references was one of law. The only material issues of fact that might prevent a finding of summary judgment on the obviousness issue are the content of the prior art, which generally will not be disputed, the scope of the patent claims, which will likely have been decided in a Markman claim construction hearing, and the level of ordinary skill in the art, which goes to the issue of what a person of ordinary skill in the art would have known about the relevant technologies. Prior to this opinion, summary judgment of obviousness was often avoided because of the absence of any motivation to combine references. Since that issue is no longer one of fact, it will no longer play a limiting role in summary judgment jurisprudence.


Because this decision is likely to have wide-ranging implications, we offer several thoughts for the reader’s consideration.

  • Before filing a patent application, give serious consideration to performing a bona fide search for prior art. It is much easier to overcome prior art that you know about in advance, particularly when you can emphasize the differences and the unexpected improvements in the application itself. 
  • Patent applications should focus on what the invention accomplishes that the prior art does not. Claim drafting should emphasize the new function by linking elements together in a novel way.
  • Important patents – the ones that protect markets from competition – should be reviewed for obviousness. This is true irrespective of who owns the patent. You may want to attack the patent or you may want to consider strengthening the patent. Re-examination can accomplish either. 
  • Important licenses should be reviewed, whether you are the licensor or the licensee.

The Supreme Court’s recent Medimmune decision opened the door to attacks on patents by licensees. So whether you depend on licensing income or you pay it, the continued validity of the patent is something that you should at least check.

  • Existing patents in the electrical and mechanical arts are likely to be weakened the most by the KSR decision. Likewise, new applications in these arts will encounter more problems than previously.