Obviousness and KSR—One Year Later John T. Johnson IIP—AIPLA Meeting Tokyo, Japan April 14, 2008

1. Obviousness and KSR—One Year LaterJohn T. JohnsonIIP—AIPLA MeetingTokyo, JapanApril 14, 2008

2. KSR International Co. v. Teleflex Inc. • The Supreme Court—in reevaluating the legal standard for “obviousness” under Section 103 of the Patent Act—rejected the “rigid application” of the Federal Circuit’s “teaching, suggestion or motivation” (aka “TSM”) test • The Court reiterated the “flexible” analysis from its earlier decision in Graham v. John Deere • But the language in KSR discussing the standard for obviousness seemed to go farther

3. KSR International Co. v. Teleflex Inc. • What is likely to be obvious to the Supreme Court? • Combinations of familiar elements according to known methods • Predictable variations based on design incentives and market forces • Use of a known technique to improve a device in a known way • Predictable uses of prior elements according to their established functions

4. KSR International Co. v. Teleflex Inc. • The Supreme Court’s guidelines: • Any need or problem known in the field can provide a reason for combining the elements as claimed • Common sense teaches that familiar items may have obvious uses beyond their primary purposes • Design needs or market pressure and a finite number of predictable solutions can make “obvious to try” a sufficient reason for obviousness • Avoid hindsight, but apply “common sense”

5. KSR International Co. v. Teleflex Inc. • The Supreme Court suggested ways to show non-obviousness: • Does the combination yield unpredictable results? • Teach away art—do the teachings in the references lead the inventor down the wrong path? • Unexpected results—does the combination have a synergistic effect? • The Court still requires that there be an explicit showing of a reason to combine the cited elements as in the claimed invention.

6. Post-KSR District Court Decisions • District Court decisions—51 • 16 found patents obvious • 13 uphold validity • 3 mixed-result • 19 no decision (e.g., denial of summary-judgment or preliminary injunction)

7. Post-KSR District Court Statistics Preliminary Injunctions 1

8. Post-KSR District Court Statistics Summary Judgment

9. Post-KSR District Court Statistics Bench Trials

10. Post-KSR District Court Statistics Jury Trials

11. Post-KSR Federal Circuit Decisions • Federal Circuit decisions—19 • 11 found patents obvious • 5 uphold validity • 3 no decision

12. Post-KSR Federal Circuit Statistics • Appeal from grant of preliminary injunction—1 • Preliminary injunction vacated due to serious questions on obviousness

13. Post-KSR Federal Circuit Statistics • Appeal from grant of summary judgment—2 • Affirmed 1 finding of obviousness • Vacated and remanded 1 summary judgment finding of non-obviousness

14. Post-KSR Federal Circuit Statistics • Appeal from Bench Trials—5 Obvious NotObvious Reversals—3 - Finding Obvious—3 Affirmances—2 - Finding Obvious—1 - Finding Non-obvious—1

15. Post-KSR Federal Circuit Statistics • Appeal from Jury Trials—7 Obvious Not Obvious Reversals—1 - Finding obvious—1 (jury verdict of non-obviousness reversed) - Finding Non-obvious—0 Affirmances—6 (5 jury verdicts, 1 grant of JMOL) - Finding obvious—2 (including JMOL finding claims obvious) - Finding Nonobvious—4

16. Post-KSR Federal Circuit Statistics • Appeal from PTO Board of Appeals Rulings—3 Obvious NotObvious Federal Circuit affirmed—3 of 3 decisions finding obviousness

17. District Court Trends • Summary judgment grants on obviousness grounds more common • “Reason” for combination found on the thinnest of threads of “common sense” • District Courts finding obviousness dismissive of secondary considerations—critical lack of nexus

18. District Court Trends • When summary judgment is denied, it was most often because of questions of fact on “prima facie” aspect: • “differences between prior art and claims (i.e., is the element present at all in the combination, is there teaching away, is the combination ‘impossible’ or ‘incompatible’); • Presence of secondary considerations alone often not enough to create a triable issue of fact (because of skepticism of nexus).

19. District Court Trends • If you go to a district court bench trial • About 50/50 • Decisions finding obvious again dismissive of secondary considerations • When finding non-obvious, it is because element is missing entirely or there was direct evidence of teaching away or unexpected results; not because of any lack of “reason” to combine • In these cases court usually also found secondary considerations supportive of decision.

20. District Court Trends • If you go to a jury trial: • Jury trial odds more in favor of non-obviousness (5 out of 7), but sample size is small • Jury finding of non-obviousness is much more likely to be left alone on JMOL and on appeal to the Federal Circuit

21. Federal Circuit Trends • Federal Circuit seems more likely to find obviousness • Threshold for finding “reason” to combine/modify prior art is low • More likely to reverse bench trial results • More deferential to jury verdicts

22. Federal Circuit Trends • Like district courts, secondary considerations alone seem not likely to carry the day if there is a “prima facie” case of obviousness • If patentee wants secondary considerations to be weighed in favor of patent, make strong nexus showing • Federal Circuit dispute about “predictable results” in chemical/bio cases • Some strong dissents. Does not seem to be an issue for the electrical/computer/mechanical arts • Jurisprudence is developing