Argument Recap: KSR v. Teleflex on 11/28

The following argument recap was written by Brian Love of the Stanford Supreme Court Litigation Clinic. His preview of this case, including links to all the briefs, can be found here. Lyle Denniston also posted an analysis of oral argument here.

On Tuesday, the Court heard argument in KSR v. Teleflex. (No. 04-1350), considering the question whether the Federal Circuit’s teaching-suggestion-motivation test for determining whether an invention is “obvious” is the proper standard under 35 U.S.C. § 103(a).

James W. Dabney of Fried, Frank, Harris, Shriver, & Jacobson, L.L.P., arguing for petitioner, opened by characterizing the patent claim at issue – claim 4 of U.S. Patent No. 6,237,565 (the Engelgau patent) – as an overly broad grant of rights that was issued in error. Justice Ginsburg kicked off the Court’s questioning, eventually asking whether petitioner’s arguments would hold up under the Federal Circuit’s most recent decisions on obviousness – In re Kahn, Alza Corp. v. Mylan Labs., Inc., and Dystar Textilfarben GmbH v. C.H. Patrick Co. – which seem to relax the teaching-suggestion-motivation test. Dabney responded that the Federal Circuit had merely adopted “escape devices” to what otherwise remains a rigid requirement of an explicit teaching, suggestion, or motivation. He explained that even in light of these new decisions, the test fails to result in quick and predictable decisions. Chief Justice Roberts posed the next challenge, asking whether, as the Federal Circuit claims, the teaching-suggestion-motivation test is necessary to combat hindsight bias. Dabney characterized such hindsight concerns as a “frontal assault” on the Patent Act and Supreme Court precedent, suggesting that the “secondary considerations” laid out by the Court in Graham v. John Deere Co. were sufficient to take care of any hindsight that might arise.

Next, an exchange with Justice Breyer laid the foundation for what would become a common theme during the argument – what is meant by the “motivation” element of the teaching-suggestion-motivation test? Justice Breyer explained that he understood the concept of a teaching or suggestion, but could not understand what the motivation portion of the Federal Circuit’s test was meant to encompass. Justice Scalia brought up the same point soon after, admitting that he too could not understand the role of motivation in the test. While Dabney never directly addressed the issue, Justice Ginsburg rightly pointed out that he disagreed with the test and therefore was not the proper person to ask.

Justice Kennedy occupied the remainder of Dabney’s time, exploring the contours of petitioner’s position. Justice Kennedy first asked whether petitioner would support a test under which the teaching-suggestion-motivation framework was a sufficient, but not necessary test for obviousness. Dabney replied that it would not, but without much elaboration. Soon after Kennedy again challenged Dabney, asking whether the fact that more than a decade elapsed between the invention of the Asano adjustable pedal assembly (the prior art reference chiefly relied upon by petitioner in its motion for summary judgment of invalidity) and that of the Engelgau patent suggested that the claim at issue is non-obvious. Kennedy later expressed concern with petitioner’s arguments, explaining to Dabney that “I don’t know what your test is.”

Thomas G. Hungar, Deputy Solicitor General, argued next on behalf of the United States as an amicus in support of petitioner. The Chief Justice quickly returned to the concerns of Justices Breyer and Scalia and asked Hungar if he could explain the meaning of the motivation element. Hungar explained that he too found it hard to distinguish a suggestion from a motivation, but offered that a motivation might be, for example, a suggestion in the prior art that combining two references could save money. Justice Kennedy quickly followed, asking whether in the view of the Solicitor General, it would be advisable to retain the teaching-suggestion-motivation test, but to supplement it with additional means of proving obviousness. Hungar replied that the United States supports the teaching-suggestion-motivation test as a valid, nonexclusive test for obviousness. Justice Souter next inquired whether overturning the teaching-suggestion-motivation test after more than 20 years of application would result in “chaos” with “100,000 cases filed tomorrow morning.” Souter inquired whether, even if an error, the test could become good law over time. Hungar responded that there could be no valid reliance on lower court precedent that conflicted with Supreme Court precedent. He argued that the only patents affected would be a marginal set on the outer boundary of patentability, and thus many could be invalidated by summary judgment if challenged.

Justice Ginsburg next addressed the Solicitor General’s “innovation test,” asking whether the term “innovative” was too vague and hard to define. Chief Justice Roberts soon after expressed his own concerns, asking whether the Solicitor General was offering an innovation test, or instead a broad standard. Hungar responded that the Solicitor General’s “innovation test” was not a test, but rather a loose standard developed to describe the Court’s opinion in Graham. Hungar suggested that the ultimate test for obviousness would be a legal judgment informed by a number of factual inquiries.

Justice Scalia inquired whether a change in standard now would mean the end of the “presumption of validity” for granted patents. He asked whether in the event of a standard change it would make sense to presume the validity of patents issued under an erroneous standard. Hungar asserted that the statute would nevertheless require a presumption of validity and attempted to allay any such fears by again suggesting that the set of patents affected by a standard shift would be a small set of relatively trivial inventions.

Before the United States’s time expired, Justice Ginsburg asked what the Solicitor General made of the qualified expert testimony in the record which asserted that the patent was not obvious. Hungar responded by referring to such testimony as mere “assertions,” and emphasized that in the view of the United States obviousness is ultimately a matter of law, not fact.

Thomas C. Goldstein of Akin, Gump, Strauss, Hauer, & Feld, L.L.P., arguing for respondents, opened by addressing the Court’s confusion over the role of “motivation.” Goldstein explained that the test for obviousness is whether an invention would be “apparent or not apparent” to one having ordinary skill in the relevant art. Goldstein argued that the teaching, suggestion, and motivation terms were not meant to be limitations, but rather terms encompassing a wide range of explicit or implicit knowledge or circumstances that might invalidate a patent as obvious. Prompted further by Justice Breyer, Goldstein pointed the Justices to the text of the recent Dystar case in which the Federal Circuit stated that a “motivation” might be an implication that combining elements in the prior art might result in a stronger, cheaper, or otherwise better product.

Several justices spoke out with open contempt for the claim at issue and the Federal Circuit’s test. Justice Breyer suggested that someone with a high school level of knowledge could understand the basics of the Engelgau invention, likening the technology to moving a sensor on one’s garage door to a higher location to prevent raccoons from eating it. Other justices threw out barbs expressing disapproval of the teaching-suggestion-motivation test—Justice Scalia referred to it as “meaningless” “gobbledygook” comprised of “three imponderable nouns,” while the Chief Justice suggested it was nothing more than an unnecessary “layer of Federal Circuit jargon.”

In response, Goldstein attempted to get back on track by distinguishing his “apparent or not apparent” standard from the capability-based standard supported by petitioner. Goldstein argued that the key to an invention can be identifying that a problem exists and locating pieces in the prior art that can be used to solve that problem. He explained that in the case of any invention composed of prior art elements, a person with skill in the relevant art will be capable of physically connecting the pieces, regardless whether the choice of pieces or how to arrange them was apparent. Goldstein argued that the teaching-suggestion-motivation test is valuable because it provides an analytical framework necessary to guide lower courts in applying this obviousness standard.

Goldstein also stressed that the teaching-suggestion-motivation test should be favored because it balances the interests of both patentees and society at large by reducing the possibility of hindsight bias, while also providing a level of patentability that knocks out truly unpatentable subject matter. Goldstein argued that the support of respondents’ position by every major patent bar association further emphasized this fact. The Chief Justice dismissed this point, suggesting that the support of such associations only means that the test generates more patents, and thus more business, for the patent bar. Justice Breyer followed up on this point, pointing out that there is much debate in the patent bar about whether there is too much patent protection.

Following an exchange in which Justice Breyer expressed approval of creating a broad obviousness standard informed by many factors, the remainder of the argument largely focused on the specifics of the Engelgau patent and what aspects of it might make it obvious or non-obvious. Here, the argument became a tug of war between several justices, each hinting that the claim at issue is no more than the combination of an adjustable pedal system (APS) with electronic throttle control (ETC), and Goldstein, who explained that the invention is more nuanced than suggested. Goldstein urged the Court to “cross the t’s and dot the i’s” in the case – which, Goldstein asserted, would make clear that what was claimed was not simply any combination of an APS with an ETC, but rather a combination of those components in a particular manner. In response to the concerns of Justice Kennedy and Chief Justice Roberts, Goldstein directed the Court to the claim language and patent diagrams, stressing that the patent claimed a particular APS with ETC – one in which the ETC is attached to the immobile support of the APS and is responsive to a fixed pivot. Justice Breyer expressed skepticism that such specifics could render the invention nonobvious. Breyer explained that, in his view, the invention contained only a limited number of parts, and it would only make sense to attach an ETC to a part that moved in fixed proportion to the pedal. To counter, Goldstein described the Federal Circuit’s opinion below, reiterating that in the Federal Circuit’s view the claim is nonobvious because no one in Engelgau’s position would have thought to use the Asano APS and no one would have placed the ETC where Engelgau chose to place it in his invention.

Goldstein next attempted to dismiss the notion that Federal Circuit precedent in the area of obviousness has shifted since the Court granted certiorari. Goldstein argued that while recently explaining how flexible and implicit the teaching-suggestion-motivation test can be, the Federal Circuit has consistently cited to prior Federal Circuit case law. As a result, Goldstein argued, if the Court found that Federal Circuit precedent had radically shifted, the Court simply did not “believe the judges in the Federal Circuit.” Justice Alito countered that cases such as In re Dembiczak seem to expressly require an explicit teaching-suggestion-motivation in the prior art. Goldstein conceded that outlier cases exist, but contended that this should be expected since the Federal Circuit has heard more than 300 obviousness cases.

The overriding feeling from the Court seemed not to favor any one test – be it synergy, innovation, or teaching-suggestion-motivation – but rather to favor recasting the obviousness requirement as a broad standard informed by myriad factors which may very well encompass all the tests proposed in this case. Justice Ginsburg seemed most sympathetic to respondents’ quest to retain the teaching-suggestion-motivation test’s exclusivity. However, even she did not come out in vocal support of the test. Justice Souter’s questions focused exclusively on the impact a shift in the legal standard might create. Souter thus appears sincerely concerned about the legal and practical ramifications of overturning a rule that has been applied for more than two decades and which underlies some 160,000 patents issued every year. As a result, Souter may support upholding the status quo. Justices Breyer and Kennedy vocally supported the creation of a broad obviousness standard, free of any mandatory framework. The Chief Justice and Justice Scalia seemed most adverse to the teaching-suggestion-motivation test and may very well support its total elimination from the law. While Justice Thomas was (as is often the case) silent, Justice Stevens also remained surprisingly quiet throughout the argument and so his opinion is hard to predict. Justice Alito also remained largely quiet but, in all, his questions seemed to favor rejecting the teaching-suggestion-motivation test.