High court puts patent standard to the test
The Supreme Court is wrestling with an abstract case involving automobile gas pedals that could apply the brakes to the dramatic growth in patents issued nationwide.
Frustrated justices Tuesday flipped through engineering diagrams as they pondered a question at the heart of many patent disputes: Is the invention truly unique or just an “obvious” recombination of existing components?
The answer has significant implications for California’s technology, entertainment and biotechnology industries. Tech and media companies want patents to be harder to win; drug makers want them easier.
For the last two decades, a key federal court has used a test that makes it relatively easy to uphold patent protections for minor innovations. The number of annual patents issued each year more than doubled from 1985 to 2005 -- to 165,485.
Chief Justice John G. Roberts Jr. and several colleagues sharply criticized the lower court’s test. They called it too hard to prove, leaving patents in place for inventions that fall short of real innovations.
But during oral arguments, some of those same justices pondered how to loosen the standard without making it too vague and what effect a change would have on existing patents that underpin many businesses.
Justice David H. Souter wondered whether 100,000 new patent lawsuits would be filed the morning after a court decision altering the standard. And Justice Antonin Scalia, who derided the existing “obviousness” test as “gobbledygook,” at the same time asked, “Does it make sense to assume patents are valid that have been issued under an erroneous test for 20 years?”
The case involves a patented adjustable gas pedal with electronic sensors made by Teleflex Inc. of Limerick, Pa. When Canadian rival KSR International Co. developed a similar pedal, Teleflex sued, claiming patent infringement.
A Michigan court tossed out the suit in 2002, saying Teleflex’s pedal was an obvious combination of existing patented components. But the U.S. Court of Appeals for the Federal Circuit, which handles all patent appeals, reversed the decision, saying the Michigan court did not follow its strict test.
The case is the most significant of several the Supreme Court has considered recently that involve the U.S. patent system, which has strained to handle a flood of applications from new fields such as personal computing and biotechnology. A decision is expected next year.
“Clearly it is a ruling that will have the potential to cut across all industry,” said Steve Maebius, an intellectual property attorney and partner at Foley & Lardner.
If the justices loosen the standard for invalidating a patent because it is simply an obvious improvement over existing products, it could cut the number of patents issued and open the door to new lawsuits, said Thomas C. Goldstein, who represents Teleflex.
“This test underlies 160,000 patents issued every year,” Goldstein told the justices. “It will create genuine, dramatic instability” if it’s changed.
Several major companies and trade associations filed briefs in the case, with some California industries taking opposing sides.
Microsoft Corp., Intel Corp. and other technology companies back KSR. Many of their products are built from hundreds of patented components, and fast-moving development cycles make the 20-year patent protection less important.
Increasingly dogged by lawsuits from patent holders of minor component parts, those companies would like to see higher-quality patents issued in the first place and rules that would make it easier for courts to invalidate obvious patents, said Roger Kennedy, chief patent counsel at Oracle Corp.
Those firms were backed by major entertainment companies, including Time Warner Inc. and Viacom Inc., which depend on high-tech products to deliver their content. The Bush administration also supports KSR.
Pharmaceutical and biotechnology companies are on the other side. They want patents to be easier to obtain and harder to invalidate, because new drugs are often unique, requiring lengthy and costly research and development.
“Patent certainty is so much more important to us, so we know that’s something we can rely on as we invest hundreds of millions of dollars, if not a billion dollars, to make a product,” said Tom DiLenge, vice president and general counsel of the Biotechnology Industry Organization.
To receive a patent, an invention must be new and useful but not simply obvious. The third part is the most difficult to determine, patent experts said.
Because many inventions seem obvious after the fact, the Federal Circuit court, formed in 1982 to handle patent appeals, created a separate test for it. The court determined that the only acceptable proof that an idea was obvious was that some “teaching, suggestion or motivation” existed at the time of the invention that would lead an average person skilled in that field to come up with it.
Government patent examiners use the standard to make their original decisions on applications as well.
“It’s my estimate that obviousness is the issue probably in 85% to 95% of the cases at the U.S. Patent and Trademark Office,” said Gerald J. Mossinghoff, who headed the office from 1981 to 1985 and believes that the test is better than anything proposed.
But several justices criticized the test Tuesday as too difficult to prove. Roberts called it “jargon that lawyers can bandy back and forth.” And Justice Stephen G. Breyer said it allowed any obvious improvement to a product to earn and retain patent protection. He wondered why his decision to move his garage door sensor out of the reach of curious raccoons wouldn’t qualify.
“How can I get a patent for it?” he asked.