Promote the Progress

A group of five Republican Senators has asked that the Senate Judiciary Committee to hold more hearings on patent reform before approving the Patent Reform Act in its Thursday hearing.

The Senators questioned the substance of the apportionment of damages and post-grant review provisions of the bill:

These changes "need to be more carefully examined to ensure that they do not undermine innovation, increase frivolous litigation, or undermine property rights," the letter said.

Surprisingly, the Senators did not question the appropriateness of the bill in the wake of KSR v. Teleflex. Many proponents of patent reform have cited the low obviousness hurdle as one of the driving needs for patent reform..and the Supreme Court clearly addressed that issue in its recent KSR decision. It seems that, in the wake of KSR, any patent reform motivated by concerns over obviousness should be put on hold until the legacy of that case becomes clear.

Posted by J Matthew Buchanan at 01:22 PM | Permalink

We're working on a special feature for the next issue of The FedCirc.us Reader. We're talking to patent attorneys from all walks of life (solos, big firms, small firms, in-house, pharma, software, yada yada yada...), asking them a simple question:

"KSR v. Teleflex - What are you telling your clients?"

The conversations we've had have been nothing short of fascinating. They've left us wanting more...If you'd like to give us your input, send me an e-mail at jmb@rtipllc.com. Fell free to use the comments, too.

Posted by J Matthew Buchanan at 09:26 AM | Permalink

I've done a lot of thinking about the potential policy implications of the Supreme Court's recent decision in KSR v. Teleflex. Needless to say, I think the decision puts us at a pivot point (pun intended) in the continuing development of our patent law.

Here's my list of the top ten policy implications of the case, presented in no particular order. I'll address each of these topics over the coming weeks here on Promote the Progress. The alternate title listed for each topic should give you an idea of where I'm going...

1. Patent protection is no longer available for incremental - or ordinary - inventions (or "Death - and the potential for rebirth - in Detroit")

2. Legislation and regulations directed at patent reform should immediately be placed on hold (or "now's not the time for silly games")

3. The Patent Office responds (or "383 U.S. 1: Learn it, know it, live it")

4. Patent lawyers respond (or "You've got to know when to hold 'em, know when to fold 'em, know when to walk away and know when to run")

5. In-house counsel and business folks reformulate the file/don't file calculus (or "Did you do something extraordinary today?")

6. Premiums paid for key - read 'extraordinary' - inventive personnel will increase (or "did you hear? Company X is hiring...")

7. Look for industry specific caselaw pronouncements of technologies that constitute mere 'ordinary innovation' (or "Silly rabbit, these tricks are for kids")

8. Patent maintenance fees increase dramatically as grant and maintenance rates drop just as dramatically (or "Hey buddy, can you spare a couple grand?")

9. The backlog disappears (or "Hey...wait just a minute here")

10. The Federal Circuit gets a chance to restablish itself as the court that brings uniformity to our patent laws (or "Let's get going")

Posted by J Matthew Buchanan at 09:58 AM | Permalink

Yesterday, I had the opportunity to participate on a panel discussion about KSR v. Teleflex on the Lawyer 2 Lawyer podcast. Bob Ambrogi and J. Craig Williams - two of the great pioneers in law blogging and podcasting - hosted a discussion between Matthew Kreeger of Morrison & Foerster, Professor Joshua Sarnoff from American University, and myself.

We had a great discussion on all things KSR, touching on everything from nuances of the opinion to its practical effects. We even had a mention of Sarbanes-Oxley. Ouch! As always, Bob and Craig's team did a wonderful production job - you can barely tell I was sitting in a rental car in the Hertz lot at Denver International Airport while taping the show!

It's a quick listen - about half an hour. I definitely recommend it as you look for materials to help you digest the KSR decision.

Listen to the podcast here.

Posted by J Matthew Buchanan at 08:20 AM | Permalink | Comments (3)

My review of the KSR v. Teleflex opinion is now available on FedCirc.us. I've reproduced the summary below.

In KSR v. Teleflex, a unanimous Supreme Court reminded the Court of Appeals for the Federal Circuit that Graham v. John Deere controls the obviousness inquiry and warned that a rigid application of the teaching / suggestion / motivation test as a litmus test for obviousness is inconsistent with the Graham framework. Stopping short of rejecting the TSM test outright, the Supreme Court slapped the test into submission, leaving it gutless and wanting for a purpose. Simply put, the TSM shortcut for an obviousness analysis is no longer available. The Court's decision immediately focuses the obviousness spotlight back onto the framework that has controlled the issue for more than forty years, forcing everyone who has grown comfortable with the TSM litmus test shortcut – including the Federal Circuit, the Patent and Trademark Office, and the patent bar – to return to full and proper Graham analyses when assessing the obviousness of patent claims. Importantly, the Court's opinion touches on several other issues, including the roles of 'hindsight bias' and common sense in an obviousness inquiry, a question about the rationale for affording a presumption of validity to the patent-in-suit – which avoided a Graham analysis during prosecution, and a rejection of the rigid rule that 'obvious to try' is per se insufficient to show obviousness. KSR v. Teleflex is, without doubt, a case of enormous importance that will likely be viewed as a pivot point in United States patent law in years to come.

Posted by J Matthew Buchanan at 01:24 PM | Permalink

I'm finishing my review of the KSR v. Teleflex decision and will post it on FedCirc.us later today. I'm not leaving Promote the Progress out, though. Soon I'll start a multi-part series of posts on the policy impacts of the decision. Stay tuned.

Posted by J Matthew Buchanan at 08:56 AM | Permalink

As the Supreme Court considers the propriety of the teaching suggestion motivation test for determining whether a combination of references is proper in an obviousness analysis, the Federal Circuit has issued a pair of decisions that, taken together, highlight the confusion and lack of clarity that many see as the fundamental problem with the test.

An ironic result, indeed, considering that the first decision – penned by Chief Judge Michel – was clearly written as a resounding defense of the TSM test.

One hand polishes the test…..

As described by Justice Scalia during the KSR oral argument, the Federal Circuit tried to “polish up” the TSM test in Dystar Textilfarben v. C.H. Patrick.  The Dystar panel saw an opportunity, in essence, to write an amicus brief for consideration by the Supreme Court in KSR.  Writing for a unanimous panel, Chief Judge Michel penned a detailed defense of the TSM test and explained that, despite being misunderstood by many, the test is quite flexible and does not require an explicit motivation.

…while the other tarnishes it…

Oddly, six weeks after the decision in Dystar and less than two weeks before oral argument in KSR, a completely different panel of the Federal Circuit summarily dismissed a question of whether a motivation to combine existed in Optivus Technology v. Loma Linda University Medical Center.  The panel gave its motivation analysis in a single sentence:

“Here, there is no question that the CDR establishes that a person having a working familiarity with particle beam technology as it relates to cancer treatment, motivated by the need for more effective and efficient proton therapy facilities, would have been led to combine the University of Washington's neutron therapy facility with the proton beam therapy design outlined in the CDR.”

That’s it.  There is no question.  Now go away.

This substantial omission of an analysis of the motivation issue highlights the arbitrary nature of the test and certainly bolsters the argument for its demise.  The timing of the decision in Optivus Technology in relation to Dystar only magnifies its message.

It’s hard to imagine how these two decisions, taken together, could bode well for maintaining the test in its current form.

Posted by J Matthew Buchanan at 11:03 PM | Permalink | Comments (1)

The San Jose Mercury News is running an interesting editorial that strongly criticizes the current patent system. It's one of the first I've seen that places significant blame for the current situation on the Court of Appeals for the Federal Circuit. Sure, plenty have criticized the Court before, but none have used such strong language.

Clearly timed for the KSR v. Teleflex debate, the piece is chok full of money quotes. Here's two:

"The Court of Appeals for the Federal Circuit, which handles all patent appeals, has contributed mightily to the madness by laying down a set of rigid rules that make it too easy to get a patent, virtually impossible to overturn one after it's granted -- and prohibitively expensive to even try."

"To help decide this, the high court and Congress have, over many decades, issued guidelines that take into account prior inventions and the knowledge that an ordinary person working in the field would have. Unfortunately, the appeals court has concocted a three-part test for obviousness that sets an unreasonably high barrier for anyone seeking to invalidate a patent that simply combines old, established ideas into a new one. (During oral arguments this week, Justice Antonin Scalia, not exactly a dimwit, noted the test amounted to ``gobbledygook.'') Inventors need a more clear and, yes, obvious, standard of obviousness."

Posted by J Matthew Buchanan at 06:51 AM | Permalink | Comments (1)

And now we wait. Yesterday, the much-anticipated oral argument was held in KSR v. Teleflex, the Supreme Court case that questions the propriety of the Federal Circuit's teaching-suggestion-motivation (TSM) test for obviousness. The Court could issue an opinion that amounts to the single biggest patent policy decision in decades. Or not.

And now we wait.

No matter the disposition of the case at hand, the opinion will likely show the frustration the Justices have with the Federal Circuit's TSM test. Based on questions posed of both sides, and the resulting discussions, it is clear that the Justices struggle to understand the basic purpose of the test and its workings. At one point, Justice Scalia referred to the test as "gobbledygook" that is "irrational." Justice Breyer confessed "I just don't understand what is meant by the term 'motivation.'"

Justice Scalia even joked about his inability to understand the test:

Respondent's counsel: "I think you can't understand what motivation means and what the whole test that the Federal Circuit is employing means --"
Justice Scalia: "You're right about that."
Respondent's counsel: "-- without --"
(Laughter.)
Respondent's counsel: "-- without starting from the statute itself."

But frustration with the TSM test isn't the end of the story. The Justices even revealed a bit of contempt for the Federal Circuit and it's recent attempt to explain the TSM test in Dystar Textilfarben v. C.H. Patrick. It's clear that the Justices view that decision simply as an attempt by the Federal Circuit to dress-up the TSM test prior to the Supreme Court's review of KSR.

Respondent's counsel: "There is nothing fundamentally not functional about how the Federal Circuit is approaching this question."
Justice Breyer: "And it so quickly modified itself."
Justice Scalia: "And in the last year or so, after we granted cert in this case after these decades of thinking about it, it suddenly decides to polish it up." (a reference to Dystar)
Respondent's counsel: "Justice Scalia, if you actually believe that, then you just don't believe the judges in the Federal Circuit because in each of these opinions they say quite explicitly we are not changing it."

And now we wait. Perhaps a major shift in patent policy is forthcoming. Perhaps not. No matter the disposition and the holding on the issue, its probably safe to expect a strongly worded opinion that shows both the frustration the Justices have with the TSM test and their contempt for the Federal Circuit and its recent attempts to put a luster on the test.

You can view and/or download the transcript of yesterday's oral argument at the Supreme Court's website.

For more on the case, see Crouch's excellent review and collection of all things KSR at Patently-O.

Posted by J Matthew Buchanan at 06:49 AM | Permalink

In Dystar Textilfarben v. C.H. Patrick, the Court of Appeals for the Federal Circuit recently issued a sternly worded defense of its motivation/suggestion to combine test for determining when references can properly be combined to render a claimed invention obvious. The Court, clearly speaking to the Supremes as they prepare to consider the propriety of the motivation/suggestion test in KSR v. Teleflex, highlighted the flexibility of the test and explained the relationship between the test and the Graham factors.

In defending the test, the Court clearly expressed its frustration with the prevailing belief that the prior art must include an express motivation to combine in order for obviousness to be found. The Court specifically referenced the Federal Trade Commission and National Academies of Sciences reports as examples of inaccurate interpretations of the Court's decisions that have created "much confusion about the law." These reports, you'll remember, are considered to be two of the primary catalysts underlying the patent reform movement.

The Court repeatedly stressed the flexibility of the test, noting that an express suggestion to combine is not required and that the motivation/suggestion to combine can come from several sources, including the prior art references, general knowledge, and the nature of the problem to be solved.

While the Court didn't change the test in any way, its restatement of sorts might just change obviousness law for evermore.

View the PatentFizz display of United States Patent No. 5,586,992.

For more detail on the decision, read Crouch's review of the case.

Posted by J Matthew Buchanan at 07:02 AM | Permalink

Yesterday, the Supreme Court delivered its long-awaited decision on the writ of certiorari in the KSR v. Teleflex case. There was little drama in the answer, as the Solicitor General had recently recommended that the Court hear the case and, usually, those recommendations are followed. There's plenty of drama ahead, though. Expect oral arguments in the fall with a decision in Spring of next year.

With the granting of certiorari, the Supreme Court, for the second time, has agreed to hear a case that touches directly on patent reform. The case deals with the motivation/suggestion/teaching test developed by the Federal Circuit for dealing with questions of obviousness. While a change to the obviousness standard has yet to be included in any legislative proposal for patent reform, one of the two catalytic reports underlying the reform movement recommended a tightening of the standard and many groups have called for such a reform.

So, once again, patent reform has left the Capitol and walked across First Street to the Supreme Court.

Dennis Crouch already has a fantastic collection of documents from the case thus far.

Visit the KSR v. Teleflex archives for more.

Posted by J Matthew Buchanan at 07:25 AM | Permalink | Comments (3)

Yesterday, the House Subcommittee on Courts, the Internet and Intellectual Property held a patent oversight hearing, dubbed "Patent Trolls: Fact or Fiction." Perhaps not surprisingly, the Subcommittee essentially ignored the "fact or fiction" question and focused its efforts on patent reform in the broader sense, including considerable attention to the recent Supreme Court decision in eBay v. MercExchange.

The hearing revealed the true divisive nature of the eBay decision. Ranking member Berman, long a proponent of injunctive relief reform, flatly stated that eBay brings a "return to the standard originally intended" and that "it is not necessary to further legislate on the issue of injunctions." If it wasn't clear before yesterday's hearing, it certainly is now - Representative Berman believes the Supreme Court got it right in eBay and that the law of injunctive relief is now in good order. It is safe to assume that he believes injunctive relief reform is officially off the table.

Rep. Berman clearly believes the Supreme Court got it right and that further injunctive relief reform is not neededDean Kamen, professional inventor and self-professed patent troll, views eBay a bit differently, though. Indeed, it's fairly clear that he believes Congress should accept the challenge and pick up the Supreme Court's eBay gauntlet. Mr. Kamen is in the business of inventing and makes his living by licensing inventions to big companies that, he believes, are better able to produce, deliver and support the products. The eBay decision clearly changes his business environment. He summarized his post-eBay world quite succinctly: "I can't do business with big companies if the injunction provision includes a 'sometimes' modifier."

Patent reform, in Mr. Kamen's eyes, now includes a legislative response to the eBay decision. He shrewdly suggested that he might be willing "to accept a higher standard for patentability in exchange for the certainty I had in the past" (referring to a tightening of the nonobviousness standard balanced against a strengthening of the injunctive relief provision post-eBay).

Mr. Kamen may be signaling the post-eBay shift of patent reform efforts predicted here earlier - the losing side in eBay might be beginning to focus its legislative resources on changing the law of injunctive relief as it stands after eBay. It's very interesting to see the gauntlet used as a bargaining chip.

So what does 'patent reform" mean in Congress now? It's perhaps as muddied as it's ever been. A response to eBay may be involved, but it's still not clear if any Subcommittee member is willing to pick up the eBay gauntlet. Changing the obviousness standard might be involved. We may learn more about this in a proposed oversight hearing that promises to bring us full circle by reviewing the catalytic reports underlying the reform movement, one of which recommends a tightening of the standard. Remember, though, the Supreme Court may steal the spotlight on this issue as well if it grants certiorari in the KSR v. Teleflex case.

What about the troll issue? The definition of the term 'patent troll' was given a bit of lip service in the hearing and everyone assured Mr. Kamen that they wouldn't sign on to a definition that categorizes him as a troll, despite his reaffirmation of his famous "I am a patent troll" pledge and repeated assertions that he meets most of the proposed definitions. Are patent trolls "fact or fiction"? That question was completely ignored.

Several peripheral and very interesting issues were touched upon....more to come on these in future posts.

Posted by J Matthew Buchanan at 10:14 AM | Permalink

The timing of the Supreme Court's decision to hear the eBay v. MercExchange case is somewhat eerie, considering the controversy surrounding the injunctive relief issue in Congress. Now it appears the Court is set to steal the patent reform spotlight from Congress again.

Remember the proposal to reform the obviousness standard for patentability? Don't feel bad if you don't. Many people have forgotten that this reform was once on the table. The Federal Trade Commission recommended a tightening of the standard in its catalytic report, To Promote Innovation, the Proper Balance of Competition and Patent Law and Policy. Congress, so far, hasn't taken that bait, electing to leave a change to the obviousness standard out of even the most comprehensive approach to patent reform, the Patent Act of 2005.

In another example of amazing (and somewhat eerie) timing, the Supreme Court is set to decide soon on a petition for certiorari in KSR v. Teleflex. The issue? A challenge to the Federal Circuit's long-standing "teaching-suggestion-motivation" test for obviousness.

The Solicitor General recently recommended granting certiorari. Dennis Crouch cites some very interesting historical statistics that suggest that the Supremes will follow that recommendation....meaning that patent reform is set, once again, to leave the Capitol and walk across First Street to the Supreme Court.

Posted by J Matthew Buchanan at 10:12 AM | Permalink

The original reports that are viewed by many as catalysts for the patent reform movement in the United States include at least one reform proposal that, to date, has largely been ignored.  In To Promote Innovation, the Proper Balance of Competition and Patent Law and Policy, the Federal Trade Commission recommends a tightening of “certain legal standards used to evaluate whether a patent is obvious.”

This proposed reform of the patent law has so far received little to no attention.  The Patent Act of 2005, as introduced by Representative Lamar Smith, doesn’t address the topic, nor do either of the draft replacement bills.  There has been little, if any, debate on the issue in the various hearings held in the House and Senate.

Has the issue been dropped from the reform agenda?

No chance.  While Congress doesn’t appear too interested in tackling this subject, the Supreme Court is currently considering whether it should do so.

KSR International v. Teleflex, currently on petition for certiorari, involves a challenge to the Federal Circuit’s long-standing “teaching-suggestion-motivation” test for obviousness.  Many, including twenty-four law professors and several corporations, view the current test for obviousness as a hurdle that is too easy to overcome and have filed amicus briefs supporting the petition.

The issue in the case sounds strangely similar to the FTC recommendation.

What’s likely to happen?  At this point, no one knows, but the Solicitor General may hold the key.  The Court asked the Solicitor to file a brief expressing the views of the federal government on whether the petition should be granted (i.e., on whether the obviousness standard should be reviewed).  Some people believe the Court is likely to follow the recommendation made in the forthcoming brief, making it perhaps the most anticipated patent-related amicus brief in some time.  No word yet as to when we can expect to see the views of the government, but the best guesstimate (i.e., Hal Wegner), believes that a March or April hearing is possible if the Solicitor files the brief by early December.

If the petition for certiorari is denied, don’t look for the case to simply disappear.  Indeed, the most interesting angle on this case may just be the aftermath of such a denial.  It seems likely that patent reform lobbying efforts would venture down new paths if the Supreme Court elects not to weigh in on the issue.

Posted by J Matthew Buchanan at 08:36 PM | Permalink