All the KSR activity and discussion of nonobviousness gives me an opportunity to make explicit some considerations that are implicit in much that folk say on all sides.

The framework we use to determine whether an invention would have been obvious will affect the mix of two types of error (as well as two types of success). Any framework will yield wrongful rejections, wrongful allowances, rightful rejections, and rightful allowances. One’s preference for one framework or another will doubtless turn, at least in part, on one’s belief about the harms from large-scale wrongful allowances of patents compared to the harms from large-scale wrongful rejections. (Another important question, of course, is — for any given set of error rates — at what cost?)

In case it weren’t already clear, let me say … I think large-scale wrongful allowances of patents are far more harmful to innovation and efficiency than large-scale wrongful rejections. I’m convinced of this, in part, by the many ways innovators can appropriate the gains from an invention quite apart from patent protection (first mover advantage, sticky consumer preferences supported by trademark, trade secret protection for supporting know-how, etc.). Wrongful rejections, while regrettable, don’t seem to me to threaten innovation itself so long as they are kept infrequent enough to keep the patent system generally attractive to inventors. By comparison, a wrongfully granted patent imposes great costs on the market, and a large number of them impose enormous costs and distortions on the innovation process.

When I make suggestions about patent policy, I focus more on reducing wrongful allowances than wrongful rejections.

In the wake of the SG’s brief supporting review in KSR, Patently-O’s Dennis Crouch poses the core questions:

After the teaching-suggestion-motivation test is gone, what standard will a patent examiner use to decide whether a new combination is non-obvious? To be sure, the current test is formalistic and has been both under– and over-inclusive. However, has anyone proposed a better test — one that can be carried out by the PTO even in light of the high-turnover and young workforce in the agency’s examining corps?

I know I will spend a great deal of time over the next year or two thinking about what standard the PTO and the courts should use. And I know that it’s impossible to say now where my thinking will finally land, if it ever lands at all.

That said, I do have some highly tentative thoughts to which I welcome reactions and comments. My thoughts are after the jump.

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Given the SG’s brief supporting review in KSR, a 1977 article by Mary Helen Sears is more timely now than ever.  In the article, Ms. Sears reviews the central lessons of Graham, Adams, Anderson’s Black-Rock, and Sakraida.  She concludes that these cases adopt a core premise about the ordinary artisan’s basic creative ability to recombine and reconfigure known elements in new ways that take advantage of the elements’ known functions.  As she puts it, “the level of ordinary skill at any given time affords the basis for associating old elements in any manner which merely takes advantage of their known capabilities.”  Mary Helen Sears, Combination Patents and 35 U.S.C. section 103, 1977 Detroit College of Law Review 83, 99.

Food for thought!

It’s hard to improve on Prof. Ed Kitch’s critique of the weak chain of inferences that warrants using commercial success evidence as proof that an invention would have been nonobvious:

But how is commercial success relevant to non-obviousness? … This argument involves four inferences. First, that the commercial success is due to the innovation. Second, that if an improvement has in fact become commercially successful, it is likely that this potential commercial success was perceived before its development. Third, the potential commercial success having been perceived, it is likely that efforts were made to develop the improvement. Fourth, the efforts having been made by men of skill in the art, they failed because the patentee was the first to reduce his development to practice. Since men of skill in the art tried but failed, the improvement is clearly non-obvious.

Each inference is weak. … This seems a fragile thread on which to hang a conclusion of non-obviousness, particularly in a case where the patentee shows only commercial success but does not show that the commercial potential was perceived or that attempts actually were made that failed.

Edmund W. Kitch, Graham v. John Deere Co.: New Standards for Patents, 1966 Sup. Ct. Rev. 293, 331-32.

This Memorial Day, I’ve reread President Lincoln’s November 1863 dedication speech at the Soldiers’ National Cemetery in Gettysburg, Pennsylvania.  If you want to learn more about the speech, check out Wikipedia’s page about it.

As I noted the other day, the Solicitor General has filed a brief urging the Supreme Court to grant review in KSR v. Teleflex, a case about the appropriate test for nonobviousness.  In that brief, the SG quotes several times from the Supreme Court’s unanimous decision in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989).  In Bonito Boats, the Supreme Court struck down a Florida state statute that protected vessel hull designs from copying, on the ground that the Florida law conflicted with, and was thus preempted by, the Patent Act.  What does that have to do with the nonobviousness standard?  Well, before explaining how the state vessel hull statute conflicted with the Patent Act, the Court explained the basic policy commitments embodies in the Patent Act.

First, regarding the right to copy as part of the balance of i.p. law (at p. 146):

From their inception, the federal patent laws have embodies a careful balance between the need to promote innovation and the recognition that imitation and refinement through imitation are both necessary to invention itself and the very lifeblood of a competitive economy.

Second, regarding the role of the nonobviousness requirement in fostering a robust public domain (at p. 150):

The nonobviousness requirement extends the field of unpatentable material beyond that which is known to the public under section 102, to include that which could readily be deduced from publicly available material by a person of ordinary skill in the pertinent field of endeavor.  Taken together, the novelty and nonobviousness requirements express a congressional determination that the purposes behind the Patent Clause are best served by free competition and exploitation of either that which is already available to the public or that which may be readily discerned from publicly available material.

Finally, regarding the relationship of patenting to free competition (at p. 151):

The novelty and nonobviousness requirements of patentability embody a congressional understanding, implicit in the Patent Clause itself, that free exploitation of ideas will be the rule, to which the protection of a federal patent is the exception.

I’m engaged in a set of long-term research projects on the nonobviousness requirement for patentability.  From time to time, I’ll share quotation that I think is especially juicy or interesting.  This post is the first in the series.

From Atlantic Works v. Brady, 107 U.S. 192, 199-200 (1883), a case I’ve recently seen cited quite a bit:

The process of development in manufactures creates a constant demand for new appliances, which the skill of ordinary head-workmen and engineers is generally adequate to devise, and which, indeed, are the natural and proper outgrowth of such development. Each step forward prepares the way for the next, and each is usually taken by spontaneous trials and attempts in a hundred different places. To grant a single party a monopoly of every slight advance made, except where the exercise of invention somewhat above ordinary mechanical or engineering skill is distinctly shown, is unjust in principle and injurious in its consequences.

The design of the patent laws is to reward those who make some substantial discovery or invention, which adds to our knowledge and makes a step in advance in the useful arts. Such inventors are worthy of all favor. It was never the object of those laws to grant a monopoly for every trifling device, every shadow of a shade of an idea, which would naturally and spontaneously occur to any skilled mechanic or operator in the ordinary progress of manufactures. Such an indiscriminate creation of exclusive privileges tends rather to obstruct than to stimulate invention. It creates a class of speculative schemers who make it their business to watch the advancing wave of improvement, and gather its foam in the form of patented monopolies, which enable them to lay a heavy tax upon the industry of the country, without contributing anything to the real advancement of the art. It embarrasses the honest pursuit of business with fears and apprehensions of concealed liens and unknown liabilities to lawsuits and vexatious accountings for profits made in good faith.

The Solicitor General of the United States has been called “the tenth justice,” given the prominent and trusted role the SG has played in the Supreme Court’s history since the SG’s post was created in 1870.

More recently, as I and others have noted, the Supreme Court has called for the views of the Solicitor General in what seems like a larger number of patent cases this term.  (I have no formal statistics on the point).  At the Federal Circuit conference last week, the first panel included current and former SG folk.  I don’t recall precisely who said it, or if no one did and I merely thought it based on something that was said, but the thought lingers … given that, after the Federal Circuit’s formation 1982 there can’t really be a circuit split in patent law anymore, is the SG’s Office coming to function as something like a 14th Circuit for Patent Law that the Court can consult to see if the SG would split with the Federal Circuit on a patent law question (by recommending review in a case)?  If yes, those hoping to persuade the Court to grant review in a patent case may need to begin developing a “persuade the SG’s Office” strategy as part of the overall appellate strategy in a given case.

Today, in response to the Supreme Court’s invitation, the Solicitor General filed a brief expressing the views of the U.S. on the petition in KSR Int’l Co. v. Teleflex Inc., S. Ct. No. 04-1350. (Copy of the brief courtesy of SCOTUSblog.) The brief is signed not only by the SG, but also by both the General Counsel and the Solicitor of the PTO. To put it mildly, it supports the petitioner’s request for review. This contrasts with the large batch of CVSG briefs filed last week: According to SCOTUSblog, “[t]he six invitation briefs previously filed by the Solicitor General this month had all recommended that cert. be denied.”

To put it not-so-mildly, the SG’s brief in support of KSR is HIGHLY critical of the Federal Circuit’s suggestion/motivation requirement in proving an invention would have been obvious. (This continues the critical note the SG struck last week in its merits brief in the MedImmune declaratory judgment jurisdiction / licensee estoppel case, which brief Patently-O discusses in detail.) Having signed on to an amicus brief with 23 other law professors that made many of the same points in favor of KSR’s petition, I am delighted.

The question presented in KSR’s petition, which it filed at the Supreme Court on April 6, 2005, is as follows:

Whether the Federal Circuit has erred in holding that a claimed invention cannot be held “obvious,” and thus unpatentable under 35 U.S.C. sec. 103(a), in the absence of some proven “‘teaching, suggestion, or motivation’ that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed.”

For more background and links to all the petition-stage briefs in KSR, see the indefatigable Patently-O.

The SG’s support for KSR’s petition makes it dramatically more likely that the Court will grant review in the case. The Supreme Court has not engaged in a thoroughgoing assessment of the way to test for obviousness since its 1966 decision in Graham v. John Deere, 383 U.S. 1. If the Supreme Court grants review, the SG will no doubt file an amicus brief on the merits. What will that brief say? We know at least some of what it will say, because the CVSG brief forecasts it.

Below the fold, I quote at length from the SG’s brief and offer comments.

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On January 31, 2006, the Copyright Office provided the Senate Judiciary Committee a report on the orphan works problem. You can download the full report (a lengthy one, at that) here.

The report sparked healthy debate (e.g., at American University Law School’s Glushko-Samuelson IP Clinic, on Feb. 24, 2006) and a number of blog comments (from Eric Goldman, Mike Madison, and Rebecca Tushnet, to mention just three of many).

On Monday, May 22, Rep. Lamar Smith, the chair of the i.p. subcommittee of the House Judiciary Committee, introduced H.R. 5439 to amend the Copyright Act in a manner responsive to the orphan works report. The text of the bill isn’t at Thomas yet, but I’ll add a link later when it is. According to Rep. Smith’s press release, “[t]he Orphan Works Act is the product of over 20 hours of negotiations among various interested parties and the Subcommittee on Courts, the Internet, and Intellectual Property, chaired by Smith. It incorporates language from a year-long study conducted by the United States Copyright Office.” The bill is scheduled to go directly to markup today.

The Chronicle of Higher Ed blog, The Wired Campus, covers the new bill here. (Hat tip to Siva.)

UPDATE: Public Knowledge summarizes the new bill, and links to a pdf copy of the text.