Obviousness Post KSR

On April 30, 2007 in KSR v Teleflex1, the Supreme Court reaffirmed its view expressed many years ago that patents should not be granted for inventions that had too low a level of inventivity. As Justice Kennedy in a unanimous decision of the Supreme Court put it:

… as progress … is expected in the normal course [of events], the results of ordinary innovation are not the subject of exclusive rights under the patent laws. Were it otherwise, patents might stifle rather than promote the progress of the useful arts.

The invention claimed in the patent that was before the Court was a position-adjustable pedal assembly with an electronic pedal position sensor for use in vehicles with computer-controlled engines arranged on a support member of the pedal assembly. By attaching the sensor to the support the sensor remained in a fixed position while the driver adjusts the pedal.

The claim in suit reads as follows:

A vehicle control pedal apparatus comprising

a support …

an adjustable pedal assembly having a pedal arm moveable in fore and aft directions … a pivot for pivotally supporting said adjustable pedal assembly;

and an electronic control attached to said support for controlling a vehicle system; …said electronic control being responsive to said pivot for providing a signal that corresponds to pedal arm position … wherein the position of said pivot remains constant while said pedal arm moves in fore and aft directions with respect to said pivot

The Supreme Court applied the methodology it had set out in Graham v. John Deere2, where it had stated:

While the ultimate question of patent validity is one of law, the section 103 condition, … lends itself to several basic factual inquiries. Under section 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined.”

and had gone on to state that

Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject mater sought to be patented. As indicia of obviousness or nonobviousness, these inquiries may have relevancy

The prior art in KSR showed that adjustable pedals had been developed in the 1970’s to deal with height variations in drivers in vehicles with deep foot wells (e.g. Asano patent and Redding patent). In the 1990’s: computer controlled engines started to become common. The Smith patent of 1990 taught one that to avoid chafing of wires connecting a sensor to a computer one should put sensor on fixed part of pedal assembly and the Rixon patent of 1995 taught an adjustable pedal assembly with sensor in its footpad.

During prosecution of the application giving rise to the patent in suit, the PTO had rejected a claim that was similar to that in suit but did not require the sensor to be in a fixed position over a combination of Smith and Redding but had allowed the narrower claim requiring the sensor to be in a fixed position.

The district court had found in a summary judgment that the claim in suit invalid as being obvious. The Court of Appeals for the Federal Circuit had reversed on the basis that the district court had carried out an incomplete analysis of the issues involved before deciding that the prior art provided a teaching, motivation or suggestion to produce the claimed combination and in particular, the district court had ignored the fact that the Asano patent on which it relied had aimed at solving a different problem from that solved by Teleflex. Asano was concerned with maintenance of maintenance of a constant force to the vehicle operation system irrespective of the position of the adjustable pedal. The problem solved by the patent in suit was, according to the Federal Circuit, to design a smaller, less complex, and less expensive electronic pedal assembly.

The Supreme Court unanimously held that Federal Circuit had wrongly reversed district court’s decision that claim was obvious because the Federal Circuit in adopting a rigid teaching, suggestion, motivation (TSM) test had “addressed the question of obviousness in a manner contrary to S 103 and our precedent”.

The Supreme Court noted that

a patent for a combination which only unites old elements with no change of their respective functions … obviously withdraws what is already known into the field of its monopoly and diminishes the resources available to skillful men. That is the 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 yields predictable results.

The Supreme Court summarized its earlier decisions in U.S. v. Adams3 (1966), Anderson Black Rock v Permanent Salvage4
(1969) and Sakraida v. AG Pro5 (1976) as follows:

1. If a person of ordinary skill can implement a predictable variation (either from the same field or a different one) § 103 likely bars its patentability

2. If there is an improvement brought about by the patented invention, the court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions.

3. However, if the elements worked together in an unexpected and fruitful manner this could support a conclusion that an invention was not obvious.

The Supreme Court noted that

Following these principles may be more difficult in other cases than it is here because the claimed subject matter may involve more than the simple substitution of one known element for another or the mere application of a known technique to a piece of prior art ready for the improvement. Often, it will be necessary for a court to look to interrelated teachings of multiple patents; the effects of demands known to the design community or present in the marketplace; and the background knowledge possessed by a person having ordinary skill in the art, all in order to determine whether there was an apparent reason to combine the known elements in the fashion claimed by the patent at issue. To facilitate review, this analysis should be made explicit.

The court further noted that its precedents made it clear that an obviousness analysis need not seek out precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ

The Supreme Court recognized that, the Court of Customs and Patent Appeals (the predecessor to the Court of Appeal for the Federal Circuit had had a useful insight in In re Bergel6 (1961) where it had said that in considering obviousness a teaching suggestion or motivation to combine known elements was relevant to determining obviousness. However the Federal Circuit had wrongly converted that helpful insight into a rigid rule.

The Federal Circuit Court of Appeals had made three errors in reaching its decision in the present case:

1. Failure to recognize that the problem motivating the patentee may be only one of many addressed by the patent’s subject matter. … any need or problem known in a field of endeavor at the time of the invention and addressed by the patent can provide reason for combining elements in the manner claimed.

2. Assuming that a person of ordinary skill attempting to solve a problem will be led ONLY to those elements of those elements of prior art designed to solve the same problem; The court noted that “[i]t is common sense … that familiar items may have obvious uses beyond their primary purposes and in many cases a person of ordinary skill will be able to fit the teachings of multiple patents together like pieces of a puzzle.” (Emphasis added.)

3. Improperly dismissing the possibility that if something was obvious to try this could lead to a conclusion of obviousness under 35 USC § 103. The Supreme Court noted, “[w]hen there is a design need or market pressure to solve a problem and there are a finite number of identified predictable solutions, a person of ordinary skill in the art has good reason to pursue known options within his or her technical grasp. If this leads to the anticipated success, it is likely the product [is] not of innovation but of ordinary skill and common sense. In that instance the fact that a combination was obvious to try might show that it was obvious under S 103.”

Having set out the law to be applied, the Supreme Court held that one skilled in the art would have combined the teaching of the Ansano patent with a pedal position sensor to produce a structure falling with the scope of the claim in suit.

The Supreme Court noted that recent Federal Circuit decisions such as DyStar Textilfarben v. C. H. Patrick Co.7 (2006) and Alza Corp v. Mylan Labs8 (2006) had accepted that the TSM test needed to be applied flexibly and that general knowledge and common sense should be taken into account and that teachings could be implicit rather than explicit. The Supreme Court commented: “The extent to which they may describe an analysis more consistent with our earlier precedents and our decision here is a matter for the Court of Appeals to consider in future cases.”

The Supreme Court has therefore left it to the Federal Circuit to set out new rules for determining whether a claimed invention is obvious. It seems clear, however, that the Supreme Court believes that the current level of ingenuity required to justify the grant of a patent is too low and needs to be raised. Additionally in some cases at least if something is obvious to try it may be unpatentable even without a reasonable expectation of success as is required by the current law.

Federal Circuit Decisions Since KSR

In the first month after the Supreme Court’s decision, the Federal Circuit Court of Appeals issued only one decision on obviousness, Leapfrog Enterprises v. Fisher Price,9 a case which is factually quite similar to the KSR case. This time, the appeal court upheld a district court determination that the claimed invention (an interactive learning device in which the key feature was that selection of a letter in a depiction of a sequence of letters activates a switch to cause processor to cause a sound device to produce a sound associated with that letter, the device including a reader configured to communicate the identity of the depiction to the processor) was obvious.

After noting that the KSR decision required that a flexible test be used to assess obviousness,10 the court stated:

… Accommodating a prior art mechanical device that accomplishes [the] goal [of allowing a child to press a switch associated with a single letter and hear the sound of the letter] to modern electronics would have been reasonably obvious to any one of ordinary skill in designing children’s learning devices. Applying modern electronics to older mechanical devices has been commonplace in recent years.

But the court did not rely on this broad brush approach. It looked at two specific pieces of prior art. One was a 1973 patent relating to a puzzle having a board with a plurality of varied shaped openings each of which had a word, sound or phrase associated with it. When a puzzle piece of the correct shape was placed in the opening, a pressure-activated link caused a pre-recorded voice to ‘say’ a word associated with the shape. The other was Texas Instrument’s “Super Speak and Read” device which contains switches that can detect when a child presses on different areas of a book page and uses a processor to produce sounds associated with whatever the child has pressed. The combination of the prior art did not include a reader that as noted above was an essential element of what was claimed. However, the appeal court agreed with the district court that

readers were well known in the art at the time of the invention. … furthermore the reasons for adding a reader to the … 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 … to increase its marketability. [The patent owner] presents no evidence that the inclusion of a reader of this type was uniquely challenging or difficult for one of ordinary skill in the art.

Hence the invention claimed was obvious.

The Supreme Court’s decision in KSR was also commented on in a denial of rehearing of Pfizer v. Apotex.11 In this case in a decision issued before the Supreme Court’s KSR decision but at a time when the Federal Circuit Court of Appeals was trying to show that it was tough on obviousness, the court held a claim to the besylate salt of the known drug amlodipine was obvious. At date of invention besylate was on FDA’s list of 53 approved anions but was rarely used. A Pfizer witness admitted that the FDA list was a logical thing to use to produce a drug formulation. The prior art showed besylate salts normally had properties useful for drug formulation, although the effect of salt on active portion of a drug was unpredictable. Nevertheless and contrary to district court finding, the Court Appeals for the Federal Circuit held there was a reasonable expectation of success and that the claimed invention was therefore obvious. Pfizer sought reconsideration of the finding of obviousness. In a decision following the KSR decision, the Federal Circuit denied this request. Judges Newman, Lourie and Rader dissented from the refusal to rehear the case. The reason given by Judge Lourie is of interest in the present context. In his view the case should have been reheard because in view of KSR many more chemical and pharmaceutical inventions are likely to be found prima facie obvious. The case should, in his view, have been reconsidered to provide guidance as to exactly what properties could be used to rebut such prima facie findings.

At the end of June, the Court of Appeals for the Federal Circuit decided Takeda Chemical Industries v. Alphapharm Pty. Ltd.12 The claim in question covered pioglitazone, a drug widely used for treatment of Type 2 diabetes. The defendants alleged that the compound was obvious over a structurally similar prior art compound which was mentioned in a prior patent covering a very large class of compounds that were said to be useful inter alia for treating diabetes. In affirming the district court’s finding that the compound was not obvious, the Court of Appeals for the Federal Circuit reviewed its case law on the question of what constitutes prima facie obviousness for chemical compounds and found this case law “consistent with the legal principles enunciated in KSR.” The Federal Circuit noted that the Supreme Court had “indicated that there is ‘no necessary inconsistency between the idea underlying the TSM test and the Graham analysis’” and that as long as it was not applied as a rigid and mandatory formula, the TSM could be a helpful insight to an obviousness inquiry. Thus, said the Federal Circuit:

in cases involving new chemical compounds, it remains necessary to identify some reason that would have led a chemist to modify a known compound in a particular manner to establish prima facie obviousness of a new chemical compound.

Of course under its existing case law structural similarity between a claimed compound and the prior art may in itself provide a motivation or reason to make a claimed compound and so establish a prima facie case of obviousness.13 This is because a known compound may suggest its homolog, analog or isomer because such compounds often have similar properties and therefore chemists of ordinary skill would ordinarily contemplate making them to try to obtain compounds with improved properties. There is, however, a need for the prior art to have suggested making the specific molecular modification necessary to achieve the claimed invention.14 In the case before it, the Court of Appeals found that there was no clear and convincing evidence that one skilled in the art would have chosen the particular compound noted by the defendants as the starting point for making modifications to its structure. Indeed that compound was noted as having defects in causing gains in body weight and brown fat.

Returning to the impact of KSR, the Federal Circuit Court of Appeals noted that the Supreme Court had indicated that when there are a finite number of identified predictable solutions to a problem, this gives a person of ordinary skill a good reason to pursue the known options within his or her technical grasp and so in such cases the fact that a combination was obvious to try might show that it was obvious under 35 USC § 103. The Federal Circuit held that this was not the situation before it because “rather than identify predictable solutions for antidiabetic treatment, the prior art disclosed a broad selection of compounds any one of which could have been selected as the lead compound for further investigation. Therefore

the case fails to present the type of situation contemplated by the [Supreme] Court when it stated that an invention may be deemed obvious if it was “obvious to try”.

In PharmaStem Therapeutics Inc v. ViaCell Inc.15 the Federal Circuit by a 2-1 majority over-turned a jury verdict on nonobviousness, holding that the trial court should have granted a motion for judgment as a matter of law that the claims in question were invalid on the ground that there was a lack of substantial evidence to support the jury’s verdict. The invention provided broadly defined compositions and methods for isolating human neonatal or fetal blood (typically umbilical cord blood) components containing hematopoietic stem cells, cryopreserving them and later thawing them and introducing them into a suitable human host. The inventors were the first to achieve this and had attained commercial success. Nevertheless, the Federal Circuit found the claims obvious over prior art references that showed that had shown that cord blood could be cryopreserved without loss of cells and suggested the idea of cryopreserving cord blood for later use to effect hematopoietic reconstitution. Noting that in KSR, the Supreme Court had emphasized that a combination of elements “must do more than yield a predictable result” for their combination to be nonobvious and that there was patentable invention in combining elements to work together “in an unexpected and fruitful way”, the Federal Circuit framed the question to be answered in the present case as:

whether the prior art would have given rise to a reasonable expectation of success.

The plaintiff’s main argument was that it was not known that cord blood contained stem cells until their experiments showed this. Based on its own interpretation of the experts testimony at trial the Court concluded that at the time of the invention although there had been no definite proof that cord blood (the normal form of neonatal blood) contained stem cells, the evidence that was available at that time made it appropriate to infer their presence. This being the case, the court concluded that no reasonable jury could have found it unreasonable to expect that one could cryopreserve cord blood components to cryopreserve stem cells. Judge Newman dissented arguing that there was sufficient evidence for a reasonable jury to have come to the conclusion that it did. She also feared that the majority’s view would confine patent protection to the serendipitous and the unexpected and was a misconception of the scientific process and the patent purpose.

In In re Icon Health and Fitness Inc.16 the Federal Circuit Court of Appeals was faced with an appeal from a finding of obviousness by the Board of Patent Appeals and Interferences in a patent that had undergone re-examination. The invention was a folding treadmill in which a gas spring was used to assist in maintaining stability when the treadmill was folded. The prior art showed a treadmill having all of the claimed features except the gas spring. Other prior art showed gas springs in folding beds to assist in opening and closing them. Noting that in KSR, the Supreme Court had noted that “familiar items may have obvious uses beyond their primary purposes” and that “the combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results”, the Federal Circuit affirmed the Board’s decision. In doing so, it rejected the appellants arguments that beds were not analogous art to treadmills and an argument that the specific type of spring used in the bed was inapplicable to the problem it had solved. On the first point, the Court of Appeal held that teaching in any area describing hinges, springs, latches counterweights or similar mechanisms was relevant. There was nothing peculiar to treadmills about the folding mechanism required. On the appellants second issue, the claim defined the spring in very broad terms and so, although there might have been some force in the appellants arguments had the spring been defined more narrowly, for example as a single action spring, one skilled in the art could view the folding bed spring (a double action spring) as assisting in providing stability in the same way that it did for the bed. Therefore it was obvious to employ it on the treadmill.

The U.S. PTO Since KSR

In the meantime, the Deputy Commissioner for patent Operation in the United States Patent and Trademark Office has issued a memorandum noting that examiners must continue to identify reasons as to why a person of skill in the art would have combined prior art elements in the manner claimed in order to reject a claimed invention as being obvious.

The Board of Patent Appeals and Interferences has issued three decisions which are specifically stated to be precedential dealing with obviousness in the post KSR world,

In Ex parte Mary Smith17 the invention was for a pocket insert enabling a CD-ROM or something similar to be incorporated into a book. The Board of Appeals upheld the examiner’s rejection that this was obvious , focusing in particular on the Supreme Court’s view that there is a “need for caution in granting a patent based on the combination of elements found in the prior art” and that “the combination of familiar elements according to known methods is likely to be obvious when it does no more that yield predictable results. The Board specifically noted that the Supreme Court had commented that

if a technique has been used to improve one device, 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 hie or her skill.

The Board went on to note that in applying KSR, the Federal Circuit in Leapfrog v Fisher Price had relied in part on the fact that Leapfrog had presented no evidence that the inclusion of a reader was “uniquely challenging or difficult for one of ordinary skill in the art”.

In Ex parte Carolyn Ramsey Catan18 the Board focused on the same passages of the Supreme Court’s KSR decision as in Ex parte Smith to uphold an obviousness rejection for a consumer electronics device using bioauthentication to authorize sub-users of an authorized credit account to place orders over a communication network. However, it also emphasized the Supreme Court’s holding that one had

to look to interrelated teachings of multiple patents, the effects of demands known to the design community or present in the market place and the background knowledge possessed by a person having ordinary skill in the art to determine whether there was an apparent reason to combine known elements in the fashion claimed.

One also had to look to see whether, as had been the case in U.S. v. Adams, the combination worked together in an unexpected manner, in which case the combination would be non-obvious. However, this was not so in the present case.

The final Board of Appeals decision was in Ex parte Marek Z. Kubin et al.19 In this case the issue was whether an isolated polynucleotide molecule encoding a polypeptide at least 80% identical with a defined amino acid sequence in polypeptide a defined polypeptide wherein the polypeptide binds to a particular membrane glycoprotein found on cells of hematopoietic origin. In upholding the rejection made by the examiner, the Board noted,

Under KSR, it is now apparent that “obvious to try” may be an appropriate test in more situations than we previously contemplated.”

The Board went on to quote the Supreme Court’s comments on “obvious to try” when there are a finite number of identified predictable solutions to a problem. In the case before it the Board found that there were a limited number of methodologies as to how to isolate the desired polypeptide. Thus the Board concluded

The skilled artisan would have had reason to try these methodologies with a reasonable expectation that at least one would be successful.

Thus the polynucleotide coding for this polypeptide was not patentable because isolation of the polypeptide was obvious.

Tentative Conclusions

At present therefore it is difficult to predict what the ultimate effect of the KSR decision is likely to be except to note that the standards of obviousness will be raised and in litigation at least, trends in the art are likely to become more important to making the determination. What will happen in practice before the USPTO is more difficult to predict. Using a flexible “totality of the circumstances” approach can work in litigation. It seems less practicable in routine prosecution. As noted above, the PTO’s initial response was simply to point out to examiners that they still had to give reason as to why one skilled in the art would have combined prior teachings. It does, however seem likely that something is unpatentably obvious because it was obvious to try has been broadened so that if there are a limited number of options to try and there is a reasonable expectation that one of them will work then whichever one or ones do work will be unpatentable. It also seems likely that arguments based on the premise that the art cited is non-analogous will have even less chance of success than previously. On the other hand, in view of the Federal Circuit’s decision in Takeda, it seems that the prior law relating to what constitutes prima facie obviousness for new chemical compounds remains intact.