Sunday, May 06, 2007

Was the TSM test rejected as a prerequisite for finding obviousness?

In addition to the report on scotusblog of the Supreme Court "abolishing" TSM in KSR, one also has the following on scotusblog: By rejecting T-S-M as a prerequisite for finding obviousness in a new combination of known elements, the Court turns T-S-M into a useful but incomplete set of factors tending to show obviousness. IPBiz does not think the Supreme Court explicitly rejected TSM, or endorsed TSM, as a prerequisite for finding obviousness. HOWEVER, because the Supreme Court used TSM in finding obviousness in KSR, there is a strong implication that the TSR test, with the guidance of the Supreme Court in KSR, is still around, and that a failure to establish TSM could foreclose a finding of obviousness. See also LBE's More on the impact of KSR posted on scotusblog on May 1, 2007, which included the text: Tony Mauro quoted Chief Judge Paul Michel of the CAFC as saying that under his reading of the opinion, the teaching, suggestion, or motivation test remains part of the calculation of obviousness, “but it gives us forceful instruction on the manner in which the test is to be applied.”

The text by Brian Kahin also includes:

Although a cottage industry has spring up around idea of being able to value patents and other intangible assets, few companies want to look closely at the liability side, for fear that they might discover something that is all too real and requires reporting or further investigation. Thanks to Sarbanes-Oxley, we have at least a theoretical need for looking at the liability side of patents.

In the short run, there may well be increased litigation over existing patents [because of the KSR decision]. In the medium term, this may be balanced by the silencing of a lot of questionable patents. In the long run, of course, it means fewer but more valuable and more meaningful patents. Hopefully, it will improve the value of the patent database, which may convince IT professionals that it cost-effective to read patents [IPBiz: !] (at least if the willful infringement problem gets fixed). And if IT patents were sufficiently high quality and actually read as a source of useful knowledge about the state of the art, that could go a long toward fixing the disconnect between IT and pharma/biotech.

In so doing, the Court notes that PHOSITA is “a person of ordinary creativity, not an automaton.” Compare Judge Rich’s characterization of PHOSITA in Standard Oil Co. v. American Cyanamid Co.: “one who thinks along the line of conventional wisdom in the art and is not one who undertakes to innovate, whether by patient, and often expensive, systematic research or by extraordinary insights, it makes no difference which.” 774 F.2d 448, 454 (Fed. Cir. 1985)

Assigning it to a hypothetical “person having ordinary skill in the art” does not make it any less subjective through wrapping it a superficially objective framework. And under the old interpretation you get someone who is characterized by their lack of insight.


To the extent that KSR succeeds in focusing additional scrutiny on PHOSITA, it begs the question how it should be applied in what is no longer an artisan economy [IPBiz: !] or whether the test as formulated makes in a world economy where artisans of ordinary skill are irrelevant. This basic formula was expressed in 1850 and restated in the Patent Act of 1952. Even since 1952, there has a revolution in thinking in favor of establishing expert credentials and implementing peer review in both public policy and program management. [IPBiz: lest we forget, peer review allowed the frauds of Jan-Hendrik Schon and Hwang Woo Suk to pass right into the scientific literature.]


IPBiz has to chuckle about the reference to PHOSITA as "one who thinks along the line of conventional wisdom in the art" in terms of how the legal academic community blindly accepted the "conventional wisdom" of a 97% patent grant rate. The fact that the methodology produced a grant rate IN EXCESS OF 100% for several years was never questioned by the legal academic community. Thus, "under the old interpretation of PHOSITA" [or under the current intellectual property academic standard], "you get someone who is characterized by their lack of insight," which probably is the RIGHT baseline. That is, somebody who reads the literature, and accepts the truth of what is there, without any further thought.

From the Supreme Court KSR decision:

So interpreted, the court held, the patents would not have led a person
of ordinary skill to put a sensor on an Asano-like pedal. That it might
have been obvious to try that combination was likewise irrelevant.


Third, the court erred in concluding that a patent claim
cannot be proved obvious merely by showing that the combination of
elements was obvious to try. 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 in the art has good reason to pursue the known
options within his or her technical grasp.
If this leads to the anticipated
success, it is likely the product not of innovation but of ordinary skill and
common sense.

IPBiz notes that the PREVIOUS standard (in Deuel and in O'Farrell) had been "obvious to try with a reasonable expectation of success." To the extent that the new Supreme Court standard is different from that of Deuel, it would seem to involve a FINITE number of solutions which do NOT present a reasonable expectation of success. Under the Supreme Court standard, these cases WOULD establish motivation (and thus obviousness), but under the Deuel standard they would NOT establish motivation. Of course, it the finite number of solutions did not have a reasonable expectation of success BECAUSE of "teaching away," then they would be OUT (under Adams, for example). However, if there were no "teaching away," the Supreme Court standard would seem to PUNISH an innovator who undertook study where there was NO reasonable expectation of success, because the "finite number" of solutions would render his work obvious. This nuance could be devastating in the drug/biotech business. In this context, the words of Judge Rich: “one who thinks along the line of conventional wisdom in the art and is not one who undertakes to innovate, whether by patient, and often expensive, systematic research or by extraordinary insights, it makes no difference which” do make sense.

See also The TSM test after KSR v. Teleflex


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