U.S. Supreme Court Considers Patent Reform

Michael Hayes
WASHINGTON — In what could prove to be a landmark patent case, the U.S. Supreme Court heard oral arguments addressing the so-called “obviousness test.” A ruling that tosses out the test, which many lawyers call the cornerstone of patent law, could make it easier to challenge patents in the future, something many in the adult entertainment industry who rely on new technologies to deliver their content, think is a good thing.

The case at bar, in which Teleflex brought suit against KSR International alleging that it infringed on its patent for an adjustable gas pedal system, raises the question of obviousness because the defendant contends that the plaintiff’s design simply combines existing products, making it ineligible for patent protection.

Patent attorney Sharon Barner said the case could prove to be monumental.

“All indications are that they will reverse [the Federal Circuit],” she said. “There's a notion out there that there are too many patents. They do not enhance the patent system."

According to patent lawyer Dennis Crouch, who teaches at Boston University Law School, the obviousness test consists of a threefold analysis. A party challenging a patent by saying that it simply combines previous inventions must show that there was a “teaching, suggestion or motivation” to put the earlier inventions together.

“The test, known by the acronym ‘TSM,’ has been labeled as a poster-child for bad patent behavior,” Crouch said. “According to opponents of the test, the bright-line test makes patents too easy to obtain resulting in a glut of patents covering trivial improvements. Those patents, in turn, hold-up industry research and greatly increase transaction costs and legal fees.”

Homegrown Video President Spike Goldberg, a member of the Joint Defense Group — an adult entertainment industry coalition created to battle a wave of lawsuits filed by patent portfolio firm Acacia Technologies Group — told XBIZ the patent system is in desperate need of overhaul.

“Any decision that makes it easier to challenge a patent is a good thing,” Goldberg said.

Patent attorney Anna Vradenburgh told XBIZ the U.S. Supreme Court hears few patent cases, and likely chose to take up the obviousness test to clarify an issue that has long left room for interpretation.

According to reports from the court’s oral arguments, Justices may agree with Goldberg that the patent system is in need of reform, with Justice Antonin Scalia taking aim at the three elements of the obviousness test.

“It is misleading to say that the whole world is embraced within these three nouns,” Scalia said. “This is gobbledygook. It really is. It's irrational.”

But according to Crouch, Scalia and the rest of his colleagues must play catch-up with patent attorneys, many of whom filed amicus briefs in support of the rule through their bar associations.

“Much of the oral argument was filled with an attempt to simply understand the TSM test,” Crouch said. “If they cannot figure out the test, they would likely completely trash it as unworkable.”

With a decision expected in early February, Crouch cautioned against reading too much into comments made at oral argument.

“Reports from the hearing noted that Justice who used the term TSM spoke with disdain and were highly critical of the test,” Crouch said. “Although oral arguments are always full of counterfactuals and wild-theory testing, the level of criticism supports the conventional wisdom that the TSM test is likely to be eliminated as the exclusive test.”

In other words, change will come slowly to the patent system, if it is to come at all.