By Jim Johnson, Nerac Analyst
KSR Int’l Co. v. Teleflex Inc. has now been decided. A case with the potential to be the most important patent decision in decades is likely to be remembered for a long time to come.

At this point, a short overview of KSR should suffice. The gist of this case centered on a patent licensed to Teleflex, the Engelgau patent, US 6,237,565. Claim 4 of the patent describes a combination of an electronic sensor to an adjustable automobile pedal, configured such that a constant force can be maintained when applying the pedal regardless of its adjustment setting. Adjustable pedals were known prior to the ’565 patent. The Court noted US 5,010,782 (to Asano) and US 5,460,061 (to Redding). Likewise, patents for sensors were known prior to the ’565 patent. Here, the Court noted US 5,241,936 and US 5,063,811 (to Smith). Nevertheless, the ’565 patent was granted.

Controversy arose when KSR sought to manufacture a pedal system that Teleflex asserted infringed the ’565 patent. Once in court, the District Court granted summary judgment for KSR. Following direction from Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966), the District Court found claim 4 of the ’565 patent obvious under the Asano and Smith patents. In so ruling, the District Court further applied the “teaching, suggestion and/or motivation” test (the TSM test) of the Federal Circuit (see, Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308, 1323-1324 (CA Fed. 1999).

Teleflex appealed. The Federal Circuit, reversing the District Court, ruled the District Court had not been strict enough in applying the TSM test. In short, the Federal Circuit found the District Court’s interpretation of the TSM test too broad and applied a narrower version of TSM. The District Court, said the Federal Circuit, had failed to make “’finding[s] as to the specific understanding or principle within the knowledge of a skilled artisan that would have motivated one with no knowledge of [the] invention … to attach an electronic control to the support bracket of the Asano assembly.” (19 Fed. Appx., at 228) The Federal Circuit reiterated its position that “obvious to try” was not the same as obviousness under Sec. 103 of the Patent Act. [See, In re Duell, 51 F.3d 1552. (CA Fed. 1995).]

What the Supreme Court Did
The Supreme Court flatly rejected the rigid approach taken by the Federal Circuit. It stated that obviousness analysis should not be formalistic or overly concerned with explicit content in patents. “What matters is the objective reach of the claim. If the claim extends to what is obvious, it is invalid under Sec. 103.” [KSR, 550 U.S. _____, at ______ (2007)].

So, the question arises: Where do we stand now in terms of obviousness? Certainly, the Supreme Court has determined that obviousness is not determined by a strict and formulaic standard, such as the TSM test. Uniformity and definiteness are still requirements of Graham, but a “functional approach” is still appropriate. [Hotchkiss v. Greenwood, 11 How. 248 (1851).]

The Court Gives Good Advice
The Court itself gives excellent advice on how to view the obviousness standard of Sec. 103: “When a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one. If a person of ordinary skill can implement a predictable variation, Sec. 103 likely bars its patentability. [I]f a technique has been used to improve one design, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill.” (Emphasis added.) (KSR, 550 U.S. at ______.)

To my mind, this is just another way of saying “obvious to try is now obviousness under Sec. 103.” The TSM test must be applied in a looser, more flexible way, which gives people and companies trying to invalidate others’ patents a better footing in pressing their attack. It is foreseeable that an upsurge in invalidity actions may follow the decision. Following the evident intent expressed in the Court’s opinion, those seeking to undo a patent have a lower threshold than they did before. If a patent rests upon a combination of art, whether the parts are within the same field of art or not, the real determination will be whether a practitioner of ordinary skill would see the utility of the combination.

The Bar Is Raised For Applicants
For the applicant, contrarily, the bar has been raised. To prosecute an application based on a combination, the applicant must be able to show that ordinary skill in the field would not indicate a utility in combination. I am cautiously curious to see what group of practitioners wants to be the first to tell the USPTO that their field of work is just not very skilled, so that any combination of parts would justify a patent.

I suspect the strongest indication of the long-term effect of KSR will be seen in the way the USPTO implements the decision. As an agency under both time and personnel pressure from an ever-increasing press of business dealing with filed applications, it may well be the opportunity presented by the decision will not be lost on the agency. The USPTO may easily use the case to go on the offensive, rejecting claims and applications wherever combinations appear and presuming ordinary skill as something very ordinary. This is not to suggest the Patent Office intends any inappropriate undertaking. The Court has certainly given them leeway to make significant changes in granting patents that will not run afoul of anything the Court has stated in the opinion.

The Homework Requirements Change
So the clarion call needed here is the obvious one (no pun intended). The USPTO and the courts have always required applicants and challengers of patents to do their homework before proceeding. KSR means, in a real sense, only that the homework requirements have changed somewhat. It eases the load for some. It increases the load for others. But no one is off the hook from preparing adequately. A full understanding of the prior art will remain necessary.

In another decision recently, the Supreme Court seemed to be following a trend in reducing patent protection. In Microsoft Corp. v. AT&T Corp, also decided on April 30, the court ruled that software shipped overseas and copied, with the copies then installed in computers manufactured outside the United States, was outside the protection of Sec. 271 of the Patent Act. That section creates a measure of protection to patent holders for component parts made in the U.S. which are then used to manufacture goods outside the U.S. The Court found that “software” is not a “component” under Sec. 271. While Congress may change this status, the Court (most tellingly) declined to extend the definition.

So patent law remains interesting. Some controversy has been resolved. One side will consider itself better off. The other side will have to scramble to cover itself. But there is no change in the need for a solid understanding of the prior art that presses against all of us.