Patently Obvious

As a practical matter, however, Shutz expects KSR to have relatively little impact on companies like IBM and Honeywell, at least in their dealings with one another. Major corporations maintain large patent portfolios partly for defensive purposes, he says. “It’s like the mutually assured destruction idea between the United States and the Soviets during the Cold War, with lots of missiles pointed at each other. It’s rare for another large operating company to sue IBM for patent infringement because IBM will sue back for infringement of two of its patents. I don’t think KSR will change that.”

Holloway predicts that patents on “business methods” may feel the impact of the KSR decision. Many of these concern software applications of established paper-and-pencil techniques for handling matters such as inventory control and other pre-existing non-automated processes.

Niederluecke says the biggest shakeup will occur in “mature industries” where innovations tend to be incremental—building on previous technologies—rather than coming in the form of major breakthroughs.

Shutz predicts that the new rules will strike hardest at mechanical devices, such as the gas-pedal sensor in the KSR decision, because they are likely to combine pieces of prior inventions.

Allgeyer argues that company size and industry will be irrelevant; what matters will be the complexity of the science behind the invention. Judges and patent examiners will be more likely to decide a patent is obvious if they understand the prior art.

And KSR’s likely effect on innovation and the U.S. economy? The litigators, who argue both sides of infringement cases, all say it’s a close call. Asked whether KSR’s overall impact will be positive or negative, even Taylor, who helps companies obtain patents, prefaces his remarks with, “If I had to choose . . .”

That said, Taylor argues that by exchanging the rigidity of the TSM test for the flexibility of “common sense,” the Supreme Court made a bad trade. “It makes things less predictable, which nobody likes,” he says. “Uncertainty is bad for the economy and bad for business.”

McDonald’s take: “I think it will promote the use of existing technology,” because companies will be less likely to be sued for using established methods. He adds: “But it will hurt the incentive to create new technology,” by making it harder to obtain a patent in the first place.

Shutz predicts that “at the end of the day, KSR will have minimal impact on innovation.” He says the decision may be a bigger threat to the U.S. economy, however, because foreign competitors might be its unintended beneficiaries. “If foreign companies start to bring in cheaper products that U.S. patents can no longer defend [against], then the Supreme Court will look shortsighted.”

Finally, from Allgeyer: “Overall, I’d say the decision is probably good because the pendulum had swung a little too far in favor of patent holders. It had become too easy to get a patent. Did KSR go too far? Maybe. We’ll see.”