Supreme Court Decision Affects Patents

By David A. Allgeyer and Christopher Russell Smith | January 01, 2008
As is true in all industries, patents and other types of intellectual property are critical to the biodiesel industry. Some owners use their patents to prevent competitors from making certain formulations or using beneficial processes to obtain a competitive advantage. Others earn income by licensing patents.

A recent U.S. Supreme Court decision changes the landscape in a way important to both patent owners and those against whom patents may be asserted. In its farthest-reaching patent decision in decades, KSR v. Teleflex, the Court recalibrated the standard for determining whether an invention is "obvious" and therefore unpatentable or invalid.

Obviousness standards are intended to prevent a patent holder's monopoly on an obvious combination of known elements. The standards are also employed by patent examiners to reject claims and by litigants to attack the validity of opponents' patents. An invention is not patentable if, in view of the "prior art" (earlier inventions, patents and technology), it would have been obvious to a person with ordinary skill in that particular trade or industry.

Before the KSR decision, a "teaching, motivation or suggestion" standard was applied to provide uniformity in obviousness determinations. Under that standard, a patent claim could be proved obvious only if the prior art, the problem's nature, or the knowledge of a person with ordinary skill in the art revealed some motivation or suggestion to combine elements of the prior art. The standard required that when determining obviousness, the prior art had to be directed toward solving the same problem the patentee was trying to solve. KSR changed all that.

KSR involved a patent on an adjustable automobile gas pedal fitted with an electronic, rather than mechanical, means of interacting with the throttle. Prior art had disclosed an adjustable pedal, the utility of placing an electronic sensor on the pedal, and the utility of placing the sensor on the pedal's support structure and not on the footpad. The only improvement in the patent was the placement of the sensor on the pivot point of the pedal assembly.

The lower court found that the claim was not obvious because the elements in the patent incorporated from the prior art did not serve the same purpose there as they did in the new invention. The Supreme Court decided this narrow view of obviousness was wrong, citing "little difference" between the patent and the existing elements in the prior art. The fact that the elements were to be used for a different purpose did not prevent the Court from determining that the patent's invention was obvious. The Supreme Court reversed the lower court's decision and found the asserted patent invalid on the basis of obviousness. In short, the Court rejected the previous rigid rules and required application of common sense to determine whether an invention is really new or just an obvious combination of known technology.

The Supreme Court's ruling is likely to make many issued patents more vulnerable to validity challenges because many existing patents were issued under the standard the Supreme Court has now rejected. A result of this ruling will be increased uncertainty for patent holders about the validity of their patents. In addition, the ruling will make some patents more difficult to obtain. Applicants seeking patents based on incremental improvements over the prior art will have a harder time overcoming obviousness.

The new standard will cause many patent owners to reconsider the value of the patents they hold. They may be less likely to assert patents, fearing that they will be held invalid and that the cost of asserting them in litigation is not justified. Those against whom older patents are asserted are likely to challenge those patents' validity.

Not all patents will be worth less or rendered invalid, but many will be subject to more scrutiny now that it is easier to invalidate patents, which takes away some advantages patent holders once had.

David Allgeyer and Christopher Russell Smith are with Lindquist & Vennum. For more information, visit or contact Allgeyer at (612) 371-3216 or Smith at (612) 371-3533.
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