Assessing the Obviousness of Inventions

Organizations should evaluate their innovation processes in light of the evolving meaning of obviousness. In KSR Int'l Co. v. Teleflex Inc., 127 S.Ct. 1727 (April 30, 2007), the Supreme Court changed the obviousness standard. The new standard weakens patents and makes obtaining patent protection more challenging. Organizations can anticipate the need for rebuttal evidence and proactively capture evidence of unpredictability as innovations progress from concept to commercialization. To show non-obviousness, such evidence, or the lack thereof, can be used to decide whether to apply for a patent or maintain the potentially patentable technology as a trade secret, and, also, whether to continue development efforts or redirect investments to alternative ideas. Organizations that use an innovation process to capture evidence of unpredictability can preserve the strongest evidence of non-obviousness and, as a result, increase certainty in business decisions and, ultimately, profits.

Obviousness Analysis

Obviousness analysis consists of a framework, a test, and rebuttal evidence. A patent claim is analyzed according to the framework and the test to make a preliminary determination of obviousness. The preliminary determination can be rebutted with objective evidence of non-obviousness. KSR changed the test that had been known and applied for more than 40 years.

In the seminal case of Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966), the Supreme Court defined the analysis framework. The legal conclusion of obviousness must be based on factual findings of: 1) the scope and content of the prior art, 2) the differences between the claimed invention and the prior art, 3) the level of ordinary skill in the pertinent art, and 4) the extent of objective indicia of non-obviousness. The Court of Customs and Patent Appeals, the predecessor to the Federal Circuit, established in 1961 the requirement of demonstrating 'a teaching, suggestion, or motivation to combine known elements in order to show that the combination is obvious.' The requirement is known as the TSM test. The teaching, suggestion, or motivation can come from the prior art references, the nature of the problem to be solved, or the knowledge of a hypothetical person of ordinary skill in the art.

After KSR, the TSM test is no longer a requirement. In KSR, the Supreme Court reversed the Federal Circuit, holding that it had applied the TSM test too narrowly. According to the Supreme Court, if a person of ordinary skill in the art at the time of the invention can combine known elements according to their established functions to obtain a predictable result, the combination is probably obvious. Further, the Court admonished that it is important to identify reasons to combine the elements in the manner claimed and provided several examples, which the USPTO summarized as follows:

(A) Combining prior art elements according to known methods to yield predictable results;

(B) Simple substitution of one known element for another to obtain predictable results;

(C) Use of known technique to improve similar devices (methods, or products) in the same way;

(D) Applying a known technique to a known device (method, or product) ready for improvement to yield predictable results;

(E) 'Obvious to try' ' choosing from a finite number of identified, predictable solutions, with a reasonable expectation of success;

(F) Known work in one field of endeavor may prompt variations of it for use in either the same field or a different one based on design incentives or other market forces if the variations are predictable to one of ordinary skill in the art; and

(G) Some teaching, suggestion, or motivation in the prior art that would have led one of ordinary skill to modify the prior art reference or to combine prior art reference teachings to arrive at the claimed invention.

Manual of Patent Examination Procedure, '2143 (2007) (emphasis added). Notably, the TSM test is the last of seven non-exhaustive examples.

Leapfrog Enterprises, Inc. v. Fisher-Price, Inc., 485 F.3d 1157 (Fed. Cir. May 9, 2007) exemplifies the new standard. In Leapfrog, the lower court held that a patent for an electronic learning toy was obvious in view of two prior art references and well-known IBM punch cards and a card reader. The first prior art reference, a patent for a mechanical learning toy, provided the functionality of the Leapfrog patent. The second prior art reference taught updating mechanical components with electronic components. Neither reference disclosed a reader, but an expert witness testified that IBM readers were well known. On appeal, the patentee argued that the lower court erred because there was not enough evidence of motivation to combine. Citing KSR, the Federal Circuit affirmed, finding that common sense and commonly understood benefits, such as decreased size, increased reliability, simplified operation, and reduced cost, provided motivation to combine.

Rebutting the Preliminary Case of Obviousness

Given the ease with which a preliminary case of obviousness can be made under the new standard, producing rebuttal evidence is even more important than before. The preliminary determination of obviousness can be attacked in several ways. An attack can be directed to the prior art references to show that they were not interpreted correctly. An analysis of decisions reached between October 2007 and March 2008 by the Board of Patent Appeals and Interferences ('BPAI'), the administrative court responsible for reviewing decisions of patent examiners, shows that the board affirmed or partially affirmed examiner decisions in more than 65% of obviousness cases. When the BPAI reversed an examiner's finding of obviousness, the principal cause of reversal was the board's disagreement with the examiner's characterization of the prior art.

Moreover, an applicant can raise secondary considerations to show that the invention is not obvious. Whether secondary considerations will prevail depends on the strength of the examiner's preliminary determination of obviousness and the type of evidence presented by the applicant. Evidence of unexpected results is generally considered strong evidence of non-obviousness. Other evidence, such as commercial success, copying, long-felt but unresolved need, and the failure of others to develop the invention, is not as strong and might not be sufficient
to overcome a strong preliminary determination of obviousness. The Leapfrog case is a good example. In Leapfrog, the patentee presented substantial evidence of commercial success and long-felt but unresolved needs. Nonetheless, the court held that the invention was obvious.

Unpredictability and the Innovation Process

The stage-gate process is a popular innovation process. The process typically includes four stages and four gates. The four stages may be called concept, feasibility, development, and commercialization. Each stage represents an investment made during a period of time for the purpose of reducing risk. Risk categories include technical feasibility, consumer acceptance, product cost, regulatory approval, and others. Sophisticated companies also include patent protection and non-infringement evaluations in the risk categories. Gates represent performance criteria for each stage. A project must cross a gate ' i.e., meet performance criteria ' to continue to the next stage. An innovation project may pass a given gate or be terminated based on the results of research and development obtained in the corresponding stage.

Documentation of the development path of an innovation project can be the key to proving non-obviousness later. Organizations can add documentation of the development path to requirements for passing a given gate. Unpredictability represents risk. The starting point of the path is the problem to be solved. If the problem is new, it is less likely that market forces will address it or that persons of skill in the art will know about it. Identification of the problem can sometimes be the invention. See Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 381 F.3d 1371 (Fed. Cir. 2004). Other evidence includes the choices available for each risk category and the reasons why a specific choice was made. A multitude of alternative choices may show unpredictability. The reason for making a specific choice may reflect the understanding of a person of ordinary skill in the art. If the choice turns out to be wrong, the wrong choice may support the non-obviousness of the subsequent choice. Synergistic results may be observed, which, while not the subject of a patent claim, may support the non-obviousness of a decision that does lead to a patent claim. This sort of evidence, captured years before the need to defend a patent application or patent arises, may prove to be invaluable.

The development path of an invention was the subject of a recent Federal Circuit decision. On March 31, 2008, the Federal Circuit in Ortho-McNeil Pharmaceuticals, Inc. v. Mylan Labs, Inc. affirmed a district court's summary judgment decision on non-obviousness. The Federal Circuit stated that 'the challenges of this inventive process would have prevented one of ordinary skill in this art from traversing the multiple obstacles to easily produce the invention in light of the evidence available at the time of invention.' (emphasis added). The inventors sought to control blood sugar in diabetic patients but, instead, discovered how to control epilepsy. The development process included the steps of: 1) choosing to synthesize an FBPase inhibitor from 2,3:4,5 di-isopropylidene fructose, 2) choosing topiramate, 3) selecting a path to produce topiramate, and 4) testing topiramate for anticonvulsing properties. According to the Federal Circuit, these steps do not present 'a finite (and small in the context of the art) number of options easily traversed to show obviousness.' The court also relied on other secondary evidence, such as unexpected results (the anticonvulsive properties of topiramate), skepticism of experts, copying, and commercial success.

Conclusion

The new obviousness standard established by KSR weakens patents and increases the difficulty of obtaining patent protection. Patent applicants can rebut a preliminary conclusion that a patent claim is obvious by presenting evidence of unpredictability. Such evidence is often unavailable by the time a patent application is prosecuted or a patent is litigated. Patent applicants can proactively capture evidence of unpredictability during the innovation process to preserve the strongest evidence of non-obviousness and, as a result, increase their likelihood of obtaining a patent or defending a patent during litigation. Additionally, organizations can use evidence of unpredictability, or the lack thereof, as a filter to improve the results of their innovation processes.

Marcelo S. Copat is an associate with Baker & Daniels LLP. He concentrates his practice on the preparation and prosecution of patent applications.

Organizations should evaluate their innovation processes in light of the evolving meaning of obviousness. In KSR Int'l Co. v. Teleflex Inc. , 127 S.Ct. 1727 (April 30, 2007), the Supreme Court changed the obviousness standard. The new standard weakens patents and makes obtaining patent protection more challenging. Organizations can anticipate the need for rebuttal evidence and proactively capture evidence of unpredictability as innovations progress from concept to commercialization. To show non-obviousness, such evidence, or the lack thereof, can be used to decide whether to apply for a patent or maintain the potentially patentable technology as a trade secret, and, also, whether to continue development efforts or redirect investments to alternative ideas. Organizations that use an innovation process to capture evidence of unpredictability can preserve the strongest evidence of non-obviousness and, as a result, increase certainty in business decisions and, ultimately, profits.

Obviousness Analysis

Obviousness analysis consists of a framework, a test, and rebuttal evidence. A patent claim is analyzed according to the framework and the test to make a preliminary determination of obviousness. The preliminary determination can be rebutted with objective evidence of non-obviousness. KSR changed the test that had been known and applied for more than 40 years.

In the seminal case of Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966), the Supreme Court defined the analysis framework. The legal conclusion of obviousness must be based on factual findings of: 1) the scope and content of the prior art, 2) the differences between the claimed invention and the prior art, 3) the level of ordinary skill in the pertinent art, and 4) the extent of objective indicia of non-obviousness. The Court of Customs and Patent Appeals, the predecessor to the Federal Circuit, established in 1961 the requirement of demonstrating 'a teaching, suggestion, or motivation to combine known elements in order to show that the combination is obvious.' The requirement is known as the TSM test. The teaching, suggestion, or motivation can come from the prior art references, the nature of the problem to be solved, or the knowledge of a hypothetical person of ordinary skill in the art.

After KSR, the TSM test is no longer a requirement. In KSR, the Supreme Court reversed the Federal Circuit, holding that it had applied the TSM test too narrowly. According to the Supreme Court, if a person of ordinary skill in the art at the time of the invention can combine known elements according to their established functions to obtain a predictable result, the combination is probably obvious. Further, the Court admonished that it is important to identify reasons to combine the elements in the manner claimed and provided several examples, which the USPTO summarized as follows:

(A) Combining prior art elements according to known methods to yield predictable results;

(B) Simple substitution of one known element for another to obtain predictable results;

(C) Use of known technique to improve similar devices (methods, or products) in the same way;

(D) Applying a known technique to a known device (method, or product) ready for improvement to yield predictable results;

(E) 'Obvious to try' ' choosing from a finite number of identified, predictable solutions, with a reasonable expectation of success;

(F) Known work in one field of endeavor may prompt variations of it for use in either the same field or a different one based on design incentives or other market forces if the variations are predictable to one of ordinary skill in the art; and

(G) Some teaching, suggestion, or motivation in the prior art that would have led one of ordinary skill to modify the prior art reference or to combine prior art reference teachings to arrive at the claimed invention.

Manual of Patent Examination Procedure, '2143 (2007) (emphasis added). Notably, the TSM test is the last of seven non-exhaustive examples.

Leapfrog Enterprises, Inc. v. Fisher-Price, Inc. , 485 F.3d 1157 (Fed. Cir. May 9, 2007) exemplifies the new standard. In Leapfrog, the lower court held that a patent for an electronic learning toy was obvious in view of two prior art references and well-known IBM punch cards and a card reader. The first prior art reference, a patent for a mechanical learning toy, provided the functionality of the Leapfrog patent. The second prior art reference taught updating mechanical components with electronic components. Neither reference disclosed a reader, but an expert witness testified that IBM readers were well known. On appeal, the patentee argued that the lower court erred because there was not enough evidence of motivation to combine. Citing KSR, the Federal Circuit affirmed, finding that common sense and commonly understood benefits, such as decreased size, increased reliability, simplified operation, and reduced cost, provided motivation to combine.

Rebutting the Preliminary Case of Obviousness

Given the ease with which a preliminary case of obviousness can be made under the new standard, producing rebuttal evidence is even more important than before. The preliminary determination of obviousness can be attacked in several ways. An attack can be directed to the prior art references to show that they were not interpreted correctly. An analysis of decisions reached between October 2007 and March 2008 by the Board of Patent Appeals and Interferences ('BPAI'), the administrative court responsible for reviewing decisions of patent examiners, shows that the board affirmed or partially affirmed examiner decisions in more than 65% of obviousness cases. When the BPAI reversed an examiner's finding of obviousness, the principal cause of reversal was the board's disagreement with the examiner's characterization of the prior art.

Moreover, an applicant can raise secondary considerations to show that the invention is not obvious. Whether secondary considerations will prevail depends on the strength of the examiner's preliminary determination of obviousness and the type of evidence presented by the applicant. Evidence of unexpected results is generally considered strong evidence of non-obviousness. Other evidence, such as commercial success, copying, long-felt but unresolved need, and the failure of others to develop the invention, is not as strong and might not be sufficient
to overcome a strong preliminary determination of obviousness. The Leapfrog case is a good example. In Leapfrog, the patentee presented substantial evidence of commercial success and long-felt but unresolved needs. Nonetheless, the court held that the invention was obvious.

Unpredictability and the Innovation Process

The stage-gate process is a popular innovation process. The process typically includes four stages and four gates. The four stages may be called concept, feasibility, development, and commercialization. Each stage represents an investment made during a period of time for the purpose of reducing risk. Risk categories include technical feasibility, consumer acceptance, product cost, regulatory approval, and others. Sophisticated companies also include patent protection and non-infringement evaluations in the risk categories. Gates represent performance criteria for each stage. A project must cross a gate ' i.e., meet performance criteria ' to continue to the next stage. An innovation project may pass a given gate or be terminated based on the results of research and development obtained in the corresponding stage.

Documentation of the development path of an innovation project can be the key to proving non-obviousness later. Organizations can add documentation of the development path to requirements for passing a given gate. Unpredictability represents risk. The starting point of the path is the problem to be solved. If the problem is new, it is less likely that market forces will address it or that persons of skill in the art will know about it. Identification of the problem can sometimes be the invention. See Cardiac Pacemakers, Inc. v. St. Jude Med., Inc. , 381 F.3d 1371 (Fed. Cir. 2004). Other evidence includes the choices available for each risk category and the reasons why a specific choice was made. A multitude of alternative choices may show unpredictability. The reason for making a specific choice may reflect the understanding of a person of ordinary skill in the art. If the choice turns out to be wrong, the wrong choice may support the non-obviousness of the subsequent choice. Synergistic results may be observed, which, while not the subject of a patent claim, may support the non-obviousness of a decision that does lead to a patent claim. This sort of evidence, captured years before the need to defend a patent application or patent arises, may prove to be invaluable.

The development path of an invention was the subject of a recent Federal Circuit decision. On March 31, 2008, the Federal Circuit in Ortho-McNeil Pharmaceuticals, Inc. v. Mylan Labs, Inc. affirmed a district court's summary judgment decision on non-obviousness. The Federal Circuit stated that 'the challenges of this inventive process would have prevented one of ordinary skill in this art from traversing the multiple obstacles to easily produce the invention in light of the evidence available at the time of invention.' (emphasis added). The inventors sought to control blood sugar in diabetic patients but, instead, discovered how to control epilepsy. The development process included the steps of: 1) choosing to synthesize an FBPase inhibitor from 2,3:4,5 di-isopropylidene fructose, 2) choosing topiramate, 3) selecting a path to produce topiramate, and 4) testing topiramate for anticonvulsing properties. According to the Federal Circuit, these steps do not present 'a finite (and small in the context of the art) number of options easily traversed to show obviousness.' The court also relied on other secondary evidence, such as unexpected results (the anticonvulsive properties of topiramate), skepticism of experts, copying, and commercial success.

Conclusion

The new obviousness standard established by KSR weakens patents and increases the difficulty of obtaining patent protection. Patent applicants can rebut a preliminary conclusion that a patent claim is obvious by presenting evidence of unpredictability. Such evidence is often unavailable by the time a patent application is prosecuted or a patent is litigated. Patent applicants can proactively capture evidence of unpredictability during the innovation process to preserve the strongest evidence of non-obviousness and, as a result, increase their likelihood of obtaining a patent or defending a patent during litigation. Additionally, organizations can use evidence of unpredictability, or the lack thereof, as a filter to improve the results of their innovation processes.

Marcelo S. Copat is an associate with Baker & Daniels LLP. He concentrates his practice on the preparation and prosecution of patent applications.