A validly issued, well-crafted patent is a great good thing.  An erroneously issued, overbroad patent is a terrible, anticompetitive thing.  “Getting it right” is important, and there are many reasonable arguments on all sides of the complex implementation questions.

Is there a tie breaker in some of these policy debates, a default position to which we can return when we’re not precisely sure how best to proceed?  Like it or not, the Supreme Court has clearly used competition (and a right to copy) as our default.  To take a few examples:

Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 33 (2003): “‘In general, unless an intellectual property right such as a patent or copyright protects an item, it will be subject to copying.’ TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 29 (2001).”

TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 29 (2001): “Trade dress protection must subsist with the recognition that in many instances there is no prohibition against copying goods and products. In general, unless an intellectual property right such as a patent or copyright protects an item, it will be subject to copying. As the Court has explained, copying is not always discouraged or disfavored by the laws which preserve our competitive economy. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 160 (1989). Allowing competitors to copy will have salutary effects in many instances. ‘Reverse engineering of chemical and mechanical articles in the public domain often leads to significant advances in technology.’ Id.”

Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 213 (2000): “The fact that product design almost invariably serves purposes other than source identification not only renders inherent distinctiveness problematic; it also renders application of an inherent-distinctiveness principle more harmful to other consumer interests. Consumers should not be deprived of the benefits of competition with regard to the utilitarian and esthetic purposes that product design ordinarily serves by a rule of law that facilitates plausible threats of suit against new entrants based upon alleged inherent distinctiveness.”

Pfaff v. Wells Electronics, Inc., 525 U.S. 55, 63 (1998): “As we have often explained, most recently in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 151 (1989), the patent system represents a carefully crafted bargain that encourages both the creation and the public disclosure of new and useful advances in technology, in return for an exclusive monopoly for a limited period of time. The balance between the interest in motivating innovation and enlightenment by rewarding invention with patent protection on the one hand, and the interest in avoiding monopolies that unnecessarily stifle competition on the other, has been a feature of the federal patent laws since their inception.”

Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 156-57 (1989): “Both the novelty and the nonobviousness requirements of federal patent law are grounded in the notion that concepts within the public grasp, or those so obvious that they readily could be, are the tools of creation available to all. They provide the baseline of free competition upon which the patent system’s incentive to creative effort depends. A state law that substantially interferes with the enjoyment of an unpatented utilitarian or design conception which has been freely disclosed by its author to the public at large impermissibly contravenes the ultimate goal of public disclosure and use which is the centerpiece of federal patent policy.”

I first posted the below item in November 2006.  I’m reposting it now in response to a comment made to a recent post.

So … here’s what I wrote in Nov 2006:

You file a patent application at the Patent & Trademark Office. Are you entitled to receive the patent unless the PTO can show you’re not entitled to it? Put another way, who gets the benefit of the doubt on patentability or not … you, or the PTO? Structural rules like this play a large role in driving outcomes, as any lawyer will tell you.

The case law says that, at least so far as novelty (sec 102) and nonobviousness (sec 103) are concerned, the applicant is entitled to the claim unless the PTO proves the contrary. The current approach is stated in, e.g., In re Piasecki, 745 F.2d 1468, 1472 (Fed. Cir. 1984). But the current disregard for any textual difference between sections 102 and 103 traces to In re Warner, 379 F.2d 1011, 1016-17 (CCPA 1967). Warner makes no effort to root in the text of section 103 the burden it places on the PTO to show obviousness (rather than placing on the applicant the burden to show nonobviousness).

Is the case law right? The issue comes to the fore now because, as PFF’s IPcentral has noted, petitioner KSR has filed its Reply Brief at the Supreme Court. (You can pull the brief at IPcentral.) Oral argument is Tuesday, November 28.

There’s a strong argument from statutory text that the case law is wrong. Here it is:

Section 102 begins, “A person shall be entitled to a patent unless … ,” and continues with a variety of scenarios that, if proved, would negate the applicant’s entitlement. This mandate, “shall be entitled … unless,” is quite clear.

How does section 103(a), the core nonobviousness requirement, compare? Well, it’s phrased quite differently: “A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if … .” Unlike section 102, which expressly mandates the applicant’s entitlement unless a negating condition is proved, section 103 commands that a patent can’t be obtained if a particular condition - obviousness - exists. Given that Congress knows how to put the burden on the PTO to show lack of entitlement (as in section 102), the fair reading of section 103’s quite different text is that it puts the burden on the applicant to show nonobviousness.

Petitioner KSR points out that this structural question plays an important role in its case. In doing so, it urges a rejection of the common, undefended (and indefensible?) (mis)reading of the statute. According to KSR, which calls the common reading “an upside down view of sec 103(a),”

[t]he key to understanding [Teleflex’s] argument is the radical, unstated premise on which it is based: that sec 103 purportedly does not state a “condition for patentability” that a patent applicant must satisfy before a patent can properly be granted, but rather purportedly states a condition for challenges to patentability that the PTO or an accused infringer must satisfy before a claim to patent protection can properly be denied.”

KSR Reply Brief at 10 (emphases in original). Strong stuff.

So, we have another issue to watch for in the KSR case … will the Supreme Court state that an applicant has the burden to show nonobviousness, or that the PTO has the burden to show obviousness?

The Supreme Court granted review today in a patent exhaustion case, Quanta Computer, Inc. v. LG Electronics, Inc., S. Ct. Docket No. 06-937.

The Federal Circuit denied the exhaustion defense in the case. LG Electronics, Inc. v. Bizcom Electronics, Inc., 453 F.3d 1364 (Fed. Cir. 2006).

In late August, the SG’s office filed an amicus brief recommending that the Supreme Court grant review in the case. SCOTUSblog reports on and links to this amicus brief here.

More to follow, no doubt …

UPDATE: SCOTUSblog links to the petition and opp here.

Peter Lattman, in today’s Wall Street Journal, reviews KSR’s aftermath in nonobviousness cases.

[ Hat tip to The Patent Prospector ]

On May 10, 2007, the Board of Patent Appeals & Interferences issued two “unpublished” decisions in appeals from obviousness rejections. In one appeal, the Board affirmed the rejections. In the other, the Board reversed the rejections. The Board panels applied aspects of KSR in their respective decisions.

The cases are listed on my resource page for tracking post-KSR opinions about nonobviousness.

Today, the Federal Circuit issued its first precedential post-KSR decision on the question of obviousness. In the case, Leapfrog Enterprises, Inc. v. Fisher-Price, Inc., No. 06-1402 (Fed. Cir. May 9, 2007), the Federal Circuit (Judge Lourie, writing for himself and Judges Mayer and Dyk) affirms a trial court’s bench trial determination that the claimed invention would have been obvious.

The case is a “must read.” The Federal Circuit embraces the KSR Court’s cautious attitude toward combination claims. The following paragraph is indicative:

We agree with Fisher-Price that the district court correctly concluded that the subject matter of claim 25 of the ’861 patent would have been obvious in view of the combination of Bevan, the SSR, and the knowledge of one of ordinary skill in the art. An obviousness determination is not the result of a rigid formula disassociated from the consideration of the facts of a case. Indeed, the common sense of those skilled in the art demonstrates why some combinations would have been obvious where others would not. See KSR Int’l Co. v. Teleflex Inc., 550 U.S. __, 2007 WL 1237837, at *12 (2007) (“The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.”). Thus, we bear in mind that the goal of the claim 25 device was to allow a child to press a switch associated with a single letter in a word and hear the sound of the letter as it is used in that word. In this way, the child would both associate the sound of the letter with the letter itself and be able to sound out the word one letter at a time to learn to read phonetically. Accommodating a prior art mechanical device that accomplishes that goal to modern electronics would have been reasonably obvious to one of ordinary skill in designing children’s learning devices. Applying modern electronics to older mechanical devices has been commonplace in recent years.

Slip op. at 8.

The following two paragraphs are also, to me, especially striking:

We agree with the district court that one of ordinary skill in the art of children’s learning toys would have found it obvious to combine the Bevan device with the SSR to update it using modern electronic components in order to gain the commonly understood benefits of such adaptation, such as decreased size, increased reliability, simplified operation, and reduced cost. While the SSR only permits generation of a sound corresponding to the first letter of a word, it does so using electronic means. The combination is thus the adaptation of an old idea or invention (Bevan) using newer technology that is commonly available and understood in the art (the SSR). We therefore also find no clear error in the finding of the district court that one of ordinary skill in the art could have utilized the electronics of the SSR device, with the method of operation taught by Bevan, to allow a child to press each individual letter in a word and hear the individual phonemes associated with each letter to sound out the words.

This combination of Bevan and the SSR lacks only the “reader” of claim 25 of the ’861 patent. The district court found that readers were well-known in the art at the time of the invention. As there is ample evidence in the record to support that finding, we find no clear error in the court’s determination. Furthermore, the reasons for adding a reader to the Bevan/SSR combination are the same as those for using readers in other children’s toys — namely, providing an added benefit and simplified use of the toy for the child in order to increase its marketability. Leapfrog presents no evidence that the inclusion of a reader in this type of device was uniquely challenging or difficult for one of ordinary skill in the art. See KSR, 2007 WL 1237837, at *15. Nor does Leapfrog present any evidence that the inclusion of a device commonly used in the field of electronics (a reader), and even in the narrower art of electronic children’s toys, represented an unobvious step over the prior art. Our conclusion is further reinforced by testimony from the sole inventor at trial that he did not have a technical background, could not have actually built the prototype himself, and relied on the assistance of an electrical engineer and Sandia National Laboratory to build a prototype of his invention.

Slip op. at 10-11.

The only time the Federal Circuit refers to the question whether the prior art provided a motivation to combine the prior art references is in describing Leapfrog’s rejected contentions. The words “suggest” and “suggestion” do not appear anywhere in the court’s opinion.

UPDATE: Here’s Patent Prospector’s take on the case, with extended excerpts.

UPDATE 2: And Dennis Crouch’s take at PatentlyO.

In KSR, the Supreme Court emphatically reaffirms its commitment to a principle that long predates section 103 and the Graham framework:

Neither the enactment of §103 nor the analysis in Graham disturbed this Court’s earlier instructions concerning the need for caution in granting a patent based on the combination of elements found in the prior art. For over a half century, the Court has held that a “patent for a combination which only unites old elements with no change in their respective functions . . . obviously withdraws what is already known into the field of its monopoly and diminishes the resources available to skillful men.” Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U. S. 147,152 (1950). This is a principal reason for declining to allow patents for what is obvious. The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.

Compare this from Great Atlantic & Pacific Tea Co.:

Courts should scrutinize combination patent claims with a care proportioned to the difficulty and improbability of finding invention in an assembly of old elements.

340 U.S. at 152.

In May 2006, I proposed that we use a presumption framework in analyzing nonobviousness.  In my proposed framework,

[a] If the pertinent prior art contains all the elements in the claim serving their prior art functions, the examiner should make an initial rejection of the claim. [b] At this point, the burden of production and persuasion would shift to the applicant to overcome the presumptive obviousness of the claim. [c] The only evidence the Patent Office should accept in rebuttal is clear proof that the prior art expressly taught away from making the combination in the claim under review, or that identifiable others had tried and failed to solve the problem the applicant has successfully solved.

This is close to exactly what the KSR Court requires through its demand for “caution in granting a patent based on the combination of elements found in the prior art.”

In March 2007, I posted a reference to Tim Holbrook’s presumption framework proposal.  It, too, gets at a great deal of what the KSR Court requires.

I’ll collect links to other analyses of KSR that I find helpful or interesting. And I’ll update the post throughout the next day or two.

1. Michael Barclay (of Wilson Sonsini), at SCOTUSblog
2. Dennis Crouch, at PatentlyO
3. The Wikipedia page about the case
4. Dan Bromberg (of Quin Emanuel), at SCOTUSblog
5. Peter Zura, at 271 Blog
6. Stephen Albainy-Jenei, at Patent Baristas
7. Greg Mandel, at PatentlyO
8. Fred Yen, at Madisonian
9. Shubha Ghosh, at PatentlyO
10. Jim Rapoza, at eWeek
11. Kevin Noonan, at Patent Docs
12. [ … ]

Margaret Focarino, Deputy Commissioner for Patent Operations, has issued a memo today to Technology Center Directors. The memo discusses the KSR case.

The Patent Office has long had the power to promulgate procedural rules for patent prosecution. Specifically, 35 U.S.C. 2(b)(2)(A) gives the Office the power to “establish regulations, not inconsistent with law, which … shall govern the conduct of proceedings in the Office.” (The Patent Office has had this power since the mid-1800s.)

The main proceeding of interest here is, of course, patent examination. The Office has, to date, made far too little of its power over procedure. It could, for example, conduct a comprehensive review of the best way to structure the process of proof to yield reliable, efficient determinations about nonobviousness … and issue binding regulations that create the proof process for all applications. If a series of presumptions makes sense, so be it; if different approaches are better for different types of art, that’s fine too. The key point is this: The Patent Office should make full use of its plenary power over prosecution procedure to make the most of the Supreme Court’s guidance about nonobviousness in KSR. Don’t wait for the Federal Circuit to sort through a few hundred cases; you, PTO, can take a systemic view to rationalize prosecution in tens of thousands of cases.