Read our latest coverage of patent law and intellectual property issues, from Silicon Valley to the U.S. Supreme Court.
Steve Maebius of Foley & Lardner said the wording of the decision suggests the high court “wanted to avoid a radical upsetting of the apple cart.” But the decision will have a “really broad impact,” because in the trade-off between flexibility and predictability, “the court chose flexibility.”
The new case-by-case approach “could increase litigation and the cost of obtaining a patent in the first place,” Maebius says, because patent examiners will now feel freer to reject patent applications on obviousness grounds.
Rachel Krevans of Morrison & Foerster said in a statement, “The new test for obviousness, which will apply to challenges to patent validity regardless of whether the patent was issued before or after the KSR decision, may also impair the value of previously issued U.S. patents, because it makes it easier to challenge them in litigation, and to ask the patent office to reconsider the decision to issue the patent.”
In the second patent case decided Monday, AT&T claimed that Microsoft had infringed on its patent for software used by computers to digitally encode and compress recorded speech. The litigation focused on Microsoft’s installation of software including the disputed program in computers manufactured overseas.
Normally there is no infringement of U.S. patents in products made and sold in another country, but AT&T cited an exception to patent law that allows for in infringement claim if a product’s components are supplied from the United States.
The Federal Circuit sided with AT&T, but the Supreme Court reversed in a 7-1 decision. Justice Ruth Bader Ginsburg, writing for the majority, ruled that Microsoft is not liable for infringement in part because abstract software code does not qualify as a component.
Therefore, a software company can’t try to police how a patent is being used in another country using U.S. patent law, said Ropes & Gray partner Robert Goldman, who is based in Palo Alto.
“You now simply have to enforce your patents on a country-by-country basis,” he said. “I’ve been doing this for 30 years. We’ve been in a very pro-patent environment for the last 20 years, and maybe the pendulum is starting to swing back the other way.”
Tony Mauro is the U.S. Supreme Court correspondent for Legal Times, a Recorder affiliate based in Washington, D.C. Recorder staff reporter Jessie Seyfer contributed to this report.
