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A decision in KSR International Co. v. Teleflex, Inc. is anticipated from the U.S. Supreme Court by the end of the current term. Much has already been written about this patent case, with a primary focus on the “who’s who” of technology companies supporting the petitioner’s argument � through both formal amicus briefing and statements in the media � that the Federal Circuit’s “teaching, suggestion or motivation” test for determining obviousness under 35 U.S.C. �103(a) should be discarded. These and other opponents of the current standard, which generally requires a party challenging the validity of a patent to present objective evidence in the form of tangible prior art, denounce it as an overly rigid framework precluding a common-sense view of what should be considered obvious to one of ordinary skill. The conventional wisdom appears to be that a rejection of the Federal Circuit’s test, and the consequential raising of the bar for patentability, will reward innovation by removing barriers to competition, and at the same time deter patent “trolls,” whose only business is patent enforcement. This view oversimplifies the issue, however. A substantial number of both newer and established technology companies manage to simultaneously innovate in the form of development and commercialization of new products and protect those innovations through an active patenting strategy. In fact, there is a strong argument to be made that a Supreme Court decision in KSR that radically changes the obviousness analysis will actually be a blow to innovation, by removing one of the principal deterrents to the copying of novel inventions by business competitors, while at the same time eliminating a primary incentive for companies to invest in new technologies. Consider first the case of an emerging growth company focused on solving specific problems in a narrow technical field. While having a patent (or even a family of patents) declared invalid is a manageable proposition for a larger company that can lay claim to as many as tens of thousands of patents in its portfolio, the same cannot be said about the newer company whose survival depends on territorializing a space. The ability of its patents to withstand invalidity challenges is the lifeblood of these newer companies. A heightened patentability standard will favor an established company already motivated to squeeze smaller competitors from the market by, inter alia, miring its competition in litigation by asserting the obviousness of the emerging company’s patents.
Read our latest coverage of patent law and intellectual property issues, from Silicon Valley to the U.S. Supreme Court.

In addition, many large and established companies � especially those that have achieved market dominance through proportionately larger investment in research and development than their competitors � also have reason to fear a dramatic altering of the obviousness test. The competitive challenge to these businesses, who have already committed their resources to an in-house technology development strategy that depends on vigorous patent protection, is the follow-on market entrant whose strategy is to duplicate products or processes that have already demonstrated market acceptance. Built in to the Patent Act, of course, is a significant deterrent to such copying: the possibility of trebled damages for willful infringement under 35 U.S.C. �284. But even overwhelming evidence of copying by a patent infringement defendant does nothing to help a patentee if the asserted patent is found invalid for being obvious.

A lowered standard for invalidating patents for obviousness threatens the prospects for growth and viability of both established and emerging companies.

As these two common business scenarios illustrate, a lowered standard for invalidating patents for obviousness threatens the prospects for growth and viability of both established and emerging companies. At the same time, critics of the current test have a reasonable point � the words “teaching,” “suggestion” and “motivation” appear nowhere in the statute, and the unpredictable way the Federal Circuit has applied these concepts over the past 20 years justifies, at least in part, the concern that not all protected inventions are really innovative. The Supreme Court’s main challenge, therefore, is to determine whether the Federal Circuit’s existing approach to obviousness truly upsets the delicate balance between rewarding innovation and preserving competition � the balance that has always been at the core of any policy debate about the Patent Act. In doing so, the court also needs to acknowledge the disruptive effect of a fundamental rule change on already-issued patents and the reasonable expectations of their owners. The beginnings of an answer may be found in recognizing that requiring objective evidence consistent with and directly related to the prior art, on the one hand, and a reliance on common sense, on the other, are not mutually exclusive approaches to demonstrating the obviousness of an invention. In KSR, both the petitioner’s and its amicus curiae briefs, and its oral arguments to the court, urged a “return” to an emphasis on the viewpoint of a person having ordinary skill in the art, so as to align the obviousness inquiry with the statutory language of �103(a). But this seemingly straightforward approach not only places too much emphasis on subjective expert opinion � it also opens the door to an “obvious in hindsight” approach that, as pointed out by the respondent, is clearly inconsistent with the statute. Thus, while it may well be justified in rejecting the “teaching, suggestion or motivation” test as currently applied, the Supreme Court should preserve the emphasis on objectivity lying at its core in order to prevent a de facto burden shift to patentees to “prove” the validity of their patents. Continuing to insist that a challenger present evidence to establish the “state of the art” at the time of conception, and not in hindsight, is an essential part of any new standard. Conversely, a well-reasoned, balanced decision � one that acknowledges that the Federal Circuit’s obviousness test is consistent with many of the public policy objectives of the Patent Act, while at the same time criticizes its application to certain cases � can inspire confidence in emerging and established companies alike to continue the innovation vital to their growth and that of the global economy. Brett Williamson is the managing partner, and Gilbert Villaflor an associate, in the Newport Beach office of O’Melveny & Myers, where they both specialize in representing high-technology companies in patent cases. They are currently preparing a detailed analysis of the KSR v. Teleflex case in anticipation of the Supreme Court’s decision, focused on the likely impact a change in the invalidity standard will have on patentees. � Practice Center articles inform readers on developments in substantive law, practice issues or law firm management. Contact Sheela Kamath with submissions or questions at [email protected].

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