Risk Management

Not Invented Here

The existing federal test for ''obvious'' patents stifles innovation, say critics, but a pending Supreme Court decision may provide new guidance.
John McPartlinFebruary 15, 2007

A seemingly mundane dispute over gas-pedal design may result in a
Supreme Court decision that would invalidate patents deemed too “obvious.” And that may be bad news for, among others, companies that rushed to patent E-commerce business processes such as one-click transactions.

The case, involving Canadian company KSR International and Pennsylvania-based Teleflex, hinges on whether the existing patent standard — that a design would not have been obvious to someone with ordinary skill in the art at the time of the invention — is too vague to be of value.

According to Chief Justice John Roberts, the existing federal test for obviousness is “worse than meaningless.” Critics say the unclear definition leads to the granting of marginal patents for things that are not entirely original or that incorporate elements of devices or services that already exist. Such patents stifle innovation, they argue, and also make it possible for companies to game the system by acquiring intellectual-property rights to which they are not entitled.

“The purpose of the patent system is not to serve patent holders but to serve the public interest, help the economy, and provide the public with access to knowledge,” says Jason Schultz, a staff attorney with the Washington, D.C.-based Electronic Frontier Foundation, which supports reworking the current standard. “The only companies that should be concerned about this potential ruling are those that have weak and suspect patents.”

No one is offering a guess as to how many patents might be affected. The ruling could invalidate patents already granted, but only if a party pursues a legal challenge to a specific patent.

The Court is expected to decide the case sometime between March and July. If the judges simply throw out the existing test instead of providing new guidance, the decision may come soon.

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