WASHINGTON (AP) – The Supreme Court on Monday scaled back a controversial legal test that has made it difficult to challenge patents on new products.
In a unanimous ruling, the justices said a federal appeals court had gone too far in embracing a standard that has fueled an era of patent protection.
The court said a federal appeals court applied the test in a manner that is too narrow and too rigid.
The case addresses one of the most basic issues in patent law: How to determine whether a product is obvious and therefore not worthy of a patent.
In the case of KSR International Co. v. Teleflex Inc., the U.S. Court of Appeals for the Federal Circuit upheld a patent for adjustable gas pedals. That court in Washington, D.C., hears all appeals in the field of patents.
The legal test at issue in the Teleflex lawsuit has been criticized by the Bush administration as leading to an unwarranted extension of patent protection to claimed inventions that are obvious. Critics of the test say it results in less competition and stifles innovation. Proponents warned that throwing out the standard would upset decades of settled law.
To invalidate a patent, a challenger must show that all parts of a claimed invention were known previously. In addition, the challenger must show that there is a prior ”teaching, suggestion or motivation” to combine these prior technologies to produce the invention.
”Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may … deprive prior inventions of their value,” wrote Justice Anthony Kennedy.
”Helpful insights” that the standard provides ”need not become rigid and mandatory formulas,” he added.
The test relied on by the appeals court underlies 160,000 patents issued every year, its supporters say.
In the past two decades, patent applications have more than tripled to more than 440,000 a year. Last year, the government approved more than half of those.
The federal appeals court seemed to anticipate that the Supreme Court might change the standard. After the justices agreed to hear the KSR case, the appeals court became more cautious in applying the test.
Arguing for a move away from the appeals court test, the Bush administration, KSR and International Business Machines Corp. each urged standards that would make it more difficult to obtain a patent and easier to show that a claimed invention is obvious.
Companies including GE, DuPont and Johnson & Johnson say that weakening the position of patent-holders would jeopardize billions of dollars invested in product development.
Cisco Systems Inc. has built up a portfolio of patents for defensive purposes, simply to neutralize a proliferation of trivial patents, papers in the court case stated.
A Federal Trade Commission report in 2003 urged Congress to make it easier to challenge patents at the U.S. Patent and Trademark Office and to allow courts to find patents invalid based on a preponderance of the evidence rather than clear and convincing evidence.
Many large companies in the software and computer industry oppose the appeals court test while much of the biotechnology industry favors it.
The case is KSR v. Teleflex, 04-1350.
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