IP lawyer: Common-sense patent law – fact or legal fiction?
The latest in a string of decisions of the Court of Appeals for the Federal Circuit regarding patent rights raises questions about the role of common sense in obviousness analysis
The innovation quotient of the US patent system depends on the integrity of the grant of valid patent claims and their enforcement. This falls short where the US Patent and Trademark Office (USPTO) allows claims whose illegitimacy must be tested in federal courts, which have less patent familiarity. The America Invents Act of 2011 sought to ameliorate this dichotomy by outfitting the USPTO with a robust review of its own patent-granting decisions through the creation of the Patent Trial and Appeal Board (PTAB). Further, this design came armed with a new procedure known as inter partes review: an enhanced vehicle for third-party challenges to granted patents.
Since its implementation, inter partes review has surpassed its legislative aim of culling illegitimate patents. By some measure, the PTAB has initiated inter partes reviews in about 50% of the nearly 3,000 petitions filed, with 60% of initiated inter partes reviews resulting in final written decisions and over 70% of the disputed patent claims in those decisions being invalidated. Some attribute the statistics to early tranches of questionable pre-America Invents Act patents and thus forecast increasingly balanced outcomes. However, as with all new and lopsided occurrences, rumours have abounded ranging from overall agency policy to the individual inclinations of newly appointed PTAB judges.
The reviewing authority for PTAB decisions, the US Court of Appeals for the Federal Circuit, continues to set forth applicable precedent regarding PTAB inter partes review dispositions. The key issues have included the unreviewability of PTAB inter partes review institution decisions, the differential in PTAB versus federal court claim interpretation standards and, increasingly, the substantive basis for PTAB decisions. In this last regard, the August 10 2016 Federal Circuit opinion in Arendi SARL v Apple Inc addressed a PTAB inter partes review decision concerning obviousness.
A US patent may be granted only if the claimed subject matter is new and non-obvious. Because obviousness flows from an unfamiliar perspective, as well as a temporal distortion (ie, asking what one of ordinary skill in the art at the time of the invention would have found obvious in view of the prior art), ‘obviousness’ has been widely recognised as problematic to discern in practice, despite established theoretical guidelines.
In KSR Int’l Co v Teleflex Inc (550 US 398 (2007)) the Supreme Court admonished against a rigid rubric to find obviousness, but also opined that “a combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results”. It reasoned that “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”.
In Arendi, the Federal Circuit considered an instance in which the PTAB applied common sense to find obviousness. It reversed the PTAB inter partes review decision that US Patent 7,917,843 – which related to a beneficial coordination allowing a user to access and conduct a search using the second computer program while remaining in the first computer program displaying the document – was invalid as obvious under 35 USC §103. The Federal Circuit framed the single question at issue as whether the PTAB misused common sense to conclude that it would have been obvious to supply a missing limitation in a prior art publication to arrive at the claimed invention.
The Federal Circuit did not eschew common sense, common wisdom and common knowledge when it comes to analysing obviousness. However, the appellate court made clear that common sense cannot substitute for reasoned analysis and evidentiary support, especially when dealing with a limitation missing from the cited prior art references. The Federal Circuit concluded that the PTAB had accepted conclusory statements and unspecific expert testimony about general knowledge in the art without evidence on the record – particularly where it was an important limitation which was not evidently and indisputably within the common knowledge of those skilled in the art. However, in reaching this conclusion on the limited circumstances in Arendi, the Federal Circuit may inadvertently have opened up a new can of worms.
Arendi leaves unclear what role common sense may serve in the obviousness analysis in other cases. Does it reflect undocumented prior art which constitutes a necessary finding of fact to which the PTAB or other trial forum must attach a reasoning sufficiently detailed to allow a deferential appellate review? Or is it merely an applicable analytical tool to facilitate the ultimate conclusion regarding obviousness based on the consideration of the documentary prior art of record? The latter seems to be the jurisprudential crux to date, but one can also imagine the former as a reasonable extrapolation. Such an extension would encourage greater reliance on expert testimony. To the extent that the nature of common sense comprises some or all of these things, further doctrinal clarification by the Federal Circuit awaits.
In any event – particularly given the increasing acceptance of inter partes reviews – the focus on the PTAB’s application of patent law doctrines, such as the common-sense approach to obviousness, will undoubtedly form a crucial part of any review of its success from the perspectives of both the judiciary and the public at large.
Lawrence M Sung is a partner with Wiley Rein LLP, Washington DC, United States