United States: Implications Of KSR In Prosecution And Litigation: The Standard Of Obviousness Under 35 U.S.C. § 103

Originally published in Managing Intellectual Property, Chinese Edition, March 2008.

The Supreme Court's decision in KSR International Co. v. Teleflex, Inc., 127 S. Ct. 1727 (2007), has impacted the realms of prosecution and litigation differently. Whereas prosecution has witnessed a significant change in responding to rejections under 35 U.S.C. § 103(a), litigation has arguably felt less of a change.

In prosecution, it is now more difficult for an applicant to present convincing arguments to persuade an examiner at the U.S. Patent and Trademark Office ("USPTO") to withdraw a § 103(a) rejection based on a combination of prior-art elements. Examiners are no longer required to identify a teaching, suggestion, or motivation ("TSM") rationale. Instead, they can merely identify some reason with some rational underpinning to support why one of ordinary skill in the art would have combined the prior-art elements in the manner claimed. See The Manual of Patent Examining Procedure ("MPEP"), § 2142, Rev. 6, Sept. 2007.

In the recently revised MPEP, § 2141, the USPTO published new Examination Guidelines for Determining Obviousness under 35 U.S.C. § 103(a) and listed seven exemplary rationales that may support a conclusion of obviousness, such as "[c]ombining prior art elements according to known methods to yield predictable results" and "[s]imple substitution of one known element for another to obtain predictable results." Predictability is an important factor to note because it appears the USPTO has the burden of demonstrating the results are predictable, not the applicant. Nonetheless, under these Guidelines, there have been an increasing number of obviousness rejections, many of which are maintained in final Office Actions.

Moreover, the Board of Appeals and Interferences at the USPTO ("the Board") is affirming with greater frequency examiners' obviousness rejections, partly because of KSR. For example, shortly after the KSR decision on April 30, 2007, the Board published three precedential opinions affirming the examiners' obviousness rejections: one in the biotechnology art (Ex parte Kubin, Appeal 2007-0819, May 31, 2007); one in the mechanical art (Ex parte Smith, Appeal 2007-1925, June 25, 2007); and one in the electrical art (Ex parte Catan, Appeal 2007-0820, July 3, 2007). This signifies the importance of KSR's impact on prosecution, because the Board rarely goes through the procedure of designating its opinions as precedential.

Given the current trend at the USPTO, applicants and companies may consider changing their patent strategy accordingly. To overcome obviousness rejections in this post-KSR era, for example, an applicant may need to rely more heavily on secondary considerations of nonobviousness. For example, an applicant may provide comparative test results to show unexpected properties of the invention or provide scientific and technical evidence to show unpredictability if the facts fall within one of the seven listed rationales.

In contrast to prosecution, the effect of KSR on litigation may not be felt as strongly. By the time a patent is litigated, it enjoys a presumption of validity, requiring a challenger to prove by clear and convincing evidence that the claimed invention is obvious. Under KSR, a challenger must show that one of ordinary skill in the art would actually recognize the benefit of combining references to achieve the claimed invention. This may be difficult to prove by clear and convincing evidence in the face of an opposing expert's testimony to the contrary. Moreover, patentees may still rely on secondary considerations of nonobviousness to support validity.

At the time this article was written, the Federal Circuit had decided only eighteen obviousness cases in the eight months following KSR. With this relatively small number of cases, it is difficult to establish any particular trends in the case law. Two points, however, are worth noting. First, since KSR, the Federal Circuit has reversed four district-court judgments to find the claims obvious, but it has also affirmed four judgments that the patents are not invalid. While reasonable minds may differ in interpreting these statistics, KSR, at the very least, has not empowered the Federal Circuit to reverse every holding that the patents are not obvious. Second, in three recent cases, the Federal Circuit affirmed the denial of defendants' motions for new trial based on the change in the law. The Court is therefore sending a message to past litigants that it will not issue an automatic remand for a new trial simply because the jury's obviousness instructions were based on a pre-KSR standard. Instead, the Court has required defendants to prove the difficult standard of "plain error" to justify a new trial—something that no party has been able to show thus far.

Accordingly, while there is no doubt that prosecuting patents will become more difficult in the face of KSR, it appears the Federal Circuit, and litigation in general, may live up to Judge Rader's prediction that KSR "would not lead to 'great changes' in the way the [court] looks at obviousness."

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