THE EFFECT OF KSR ON CORPORATE PRACTICE

1. THE EFFECT OF KSR ON CORPORATE PRACTICE November 12, 2009 Jill Denesvich

2. US Supreme Court�s unanimous decision altered the evaluation of patentability A new standard for analyzing obviousness �Obvious to Try� and �Common Sense� 20/20 hindsight as the new standard for analyzing obviousness KSR v. Teleflex: New Supreme Court Decision

3. KSR v. Teleflex: How the Test compares to TSM TSM Teaching, motivation or suggestion to combine or modify prior art references, and Reasonable expectation of success The prior art, the nature of the problem or the knowledge of the person having ordinary skill in the art reveals some motivation or suggestion Obvious to Try Focus on common sense and attempts at trying different inventions in addressing an obvious question

4. Telefex claimed KSR infringed its patent on connecting an adjustable pedal assembly to an electronic throttle KSR argued that combining the two elements was obvious and thus not patentable The District Court agreed with KSR Federal Circuit vacated the District Court�s Decision � TSM test prevails, no impermissible hindsight Supreme Court unanimously reversed the Federal Circuit�s judgment � TSM inconsistent with �103 KSR International Co. v. Teleflex, Inc.

5. Any need or problem known in the field of the endeavor at the time of the invention and addressed by the patent can provide a reason for combining the elements in the manner claimed. Common sense teaches us that familiar items may have obvious uses beyond there primary purpose, 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. KSR International Co. v. Teleflex, Inc.

6. When 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 has good reason to pursue the know options within his or her technical grasp. Rigid preventative rules that deny fact finders recourse to common sense are unnecessary. KSR v. Teleflex: USPTO Obviousness Guidelines under 35 USC �103

7. KSR v. Teleflex: How is Corporate Intellectual Property Effected? Possible Outcome of KSR v Teleflex for CORPORATIONS: Future patents will be more difficult to obtain Current patents will be easier to invalidate Current licenses may be breached or renegotiated based on strength of claims

8. KSR v. Teleflex: What change is there in the Patent Office? Graham v. Deere factual inquiry: scope and content of prior art, difference between the prior art and claimed invention, level of ordinary skill in the art Explanation to support a rejection based an factual findings Seven rationales for a finding of obviousness in view of factual findings

9. CONFIDENTIAL Slide 9 KSR v. Teleflex: Rationales to Support Rejections under 35 USC 103 Combining prior art elements according to know methods to yield predictable results Simple substitution of one known element for another to obtain predictable results Use known technique to improve similar devices in same way Applying a known technique to a known device ready for improvement to yield predictable results

10. CONFIDENTIAL Slide 10 KSR v. Teleflex: Rationales to Support Rejections under 35 USC 103 �obvious to try� � choosing from a finite number of indentified, predictable solutions, with reasonable expectation of success Known work in one field may prompt variations of it for use in the same or different field based on design incentives or market forces if the variations would have been predictable to one of ordinary skill in the art Teaching, suggestion, or motivation in the prior art would have led one of ordinary skill to modify the prior art reference or combine to arrive at invention

11. Argue references do not teach what is set forth in Office Action Argue invention is not a predictable combination of elements Evidence of �teaching away� Evidence of �unexpected results,� challenging to invent Evidence of more than a �finite� number of solutions KSR v. Teleflex: What to do in during PROSECUTION of a patent application?

12. Advancement of Patentability can be Hindered Burden of Proof Changes Where does the Statutory Standard fall The Analysis is �Common Sense� Legislative Response may be needed KSR v. Teleflex: What are the Big Picture Issues?

13. Advancement of Patentability can be Hindered US patent system has traditionally focused on issuing patents for novel inventions based on scientific, creative and innovative development Burden of Proof Changes Proving validity fully shifts to an patent holder to set forth substantial evidence that is was NOT �obvious to try� KSR v. Teleflex: What are the Big Picture Issues?

14. Where does the Statutory Standard fall 35 USC �103 no longer addresses �what would have been obvious at the time the invention was made� The Analysis is �Common Sense� Attempts at trying different inventions in determining the obviousness question Legislative Response may be needed Congress can consider KSR effects and adopt patent reform to re-establish rewarding innovation, creativity and societal advancement KSR v. Teleflex: What are the Big Picture Issues in Patent Law?

15. KSR v. Teleflex: Impact on CORPORATE Innovation? Incremental Design Changes & Specific Implementations Marginal IP Value after KSR Significant Portion of IP Portfolio Driven by Product Development Activities Need to Continue to Change Focus onto Broad, Pioneering Concepts Innovative Technology / Features that Enable Differentiation However, these patents will be increasingly harder to obtain in many market niches Decreasing �white space� Resulting in more �creative� effort to innovate patentable inventions

16. KSR v. Teleflex: Impact on CORPORATE Portfolio Management ? Patent Preparation Costs will Increase Early and more comprehensive patent searches required to vet and prepare patent applications Critical Business & IP Evaluation of R&D Scope of investment White Space Knowledge of the prior art

17. Questions for me? Questions about KSR? Questions about law school? Questions about career development?