1. Welcome to the FICPI ABC Conference 2007

2. © Birch, Stewart, Kolasch & Birch, LLP KSR v. Teleflex: U.S. Supreme Court Decision Raises Patentability Standard FICPI ABC Conference Loch Lomond May 2007 by Andrew D. Meikle Birch, Stewart, Kolasch & Birch, LLP

3. © Birch, Stewart, Kolasch & Birch, LLP U.S. Supreme Court Addresses “Obviousness” Patentability Standard KSR International, Co. v Teleflex, Inc., 82 USPQ2d 1385 (U.S. 2007) Court of Appeals for the Federal Circuit (CAFC) reversed District Court decision holding patent claim invalid based on obviousness surprisingly, U.S. Supreme Court accepted appeal Oral Argument took place Nov. 28, 2006 Supreme Court reversed CAFC decision on April 30, 2007

4. © Birch, Stewart, Kolasch & Birch, LLP Question Presented by U.S. Supreme Court Whether the Court of Appeals for Federal Circuit (CAFC) erred in holding that a claimed invention cannot be held “obvious,” and thus unpatentable under 35. U.S.C. 103(a), in the absence of some proven “teaching, suggestion, or motivation that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed” [emphasis added]

5. © Birch, Stewart, Kolasch & Birch, LLP The U.S. Supreme Court Justices

6. © Birch, Stewart, Kolasch & Birch, LLP The U.S. Supreme Court Justices that are Patent Attorneys

7. © Birch, Stewart, Kolasch & Birch, LLP District Court Decision in KSR v. Teleflex District Court held claim 4 of USP 6,237,565 (Engelgau ‘565) invalid based on “obviousness” over various combinations of prior art references CAFC overturned holding stating that District Court failed to identify an adequate, specific basis for a teaching, suggestion or motivation (TSM) to combine prior art references together

8. © Birch, Stewart, Kolasch & Birch, LLP The Claimed Invention: Engelgau ‘565 claims a vehicle pedal device

9. © Birch, Stewart, Kolasch & Birch, LLP Engelgau ‘565 Figure 2 showing: support 18, adjustable pedal assembly 22, pivot 24, and electronic pedal sensor control 28

10. © Birch, Stewart, Kolasch & Birch, LLP

11. Advantages of Engelgau ‘565 Adjustable Pedal Device electronic control 28 (a pedal position sensor) remained in fixed position while driver adjusted pedal pedal assembly less complex, more compact (i.e. smaller, simpler, cheaper)

12. © Birch, Stewart, Kolasch & Birch, LLP Summary of Prior Art Patents “Asano” disclosed all mechanical elements of patented adjustable pedal device including a “fixed pivot”, but with mechanical sensor “Rixon” disclosed an adjustable pedal device with movable pivot and an electronic sensor located on the movable pedal (with a “hanging” wire susceptible to chafing) “Smith” disclosed non-adjustable pedal device with an electronic sensor on a fixed support

13. © Birch, Stewart, Kolasch & Birch, LLP Review of “Obviousness” Standard Under the statute 35 U.S.C. § 103(a), prior art invalidates a patent for obviousness when the "subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which the subject matter pertains” District Court interpreted the statute by using the “obviousness” analysis endorsed by the earlier Supreme Court decision Graham v. John Deere Co., 148 USPQ 459 (1966)

14. © Birch, Stewart, Kolasch & Birch, LLP Review of “Obviousness” Standard Graham factual inquiries: Scope and content of the prior art? Level of ordinary skill in the art? Differences between the prior art and the claimed invention? Any evidence of secondary considerations (e.g. commercial success, long felt but unsolved needs, failure of others, etc.)?

15. © Birch, Stewart, Kolasch & Birch, LLP Review of “Obviousness” Standard District Court also attempted to comply with CAFC “TSM” requirement: CAFC decisions additionally required that even if all the claimed elements are disclosed by various prior art references, the claimed combination is not rendered obvious, unless there is evidence of “some [teaching,] motivation or suggestion [TSM] to combine the prior art teachings” to arrive at the claimed combination No U.S. Supreme Court decisions expressly endorsed the TSM requirement

16. © Birch, Stewart, Kolasch & Birch, LLP District Court Decision KSR v. Teleflex District Court held that one basis for TSM to combine Asano with other references rested on the fact that the automobile industry had increasingly used electronic sensors with other mechanical parts before the patent was filed (i.e. market pressure made this “inevitable”) Another basis for TSM to combine Asano with other references was tied to nature of the problem to be solved (how to reduce complexity and size) combined with the fact that knowledge of person skilled in this area included fact that electronic sensors could be used as a solution

17. © Birch, Stewart, Kolasch & Birch, LLP District Court Decision KSR v. Teleflex District Court held: Hypothetical person skilled in the art with an undergraduate degree in mechanical engineering (or equivalent industry experience) who was familiar with pedal control systems for vehicles would have found it “obvious” to attach an electronic pedal position sensor to the support member in the mechanical device of Asano

18. © Birch, Stewart, Kolasch & Birch, LLP CAFC Decision KSR v. Teleflex CAFC reasoned: Asano disclosed adjustable pedal device with fixed support, but did not address goal of making device smaller, simpler, cheaper with an electronic sensor Rixon disclosed electronic sensor on adjustable pedal, but did not suggest how to solve problem of wire chafing Smith disclosed electronic sensor on fixed support, but did not suggest to use this feature in the context of an adjustable pedal device

19. © Birch, Stewart, Kolasch & Birch, LLP CAFC Decision KSR v. Teleflex CAFC complained that District Court applied an “incomplete” TSM analysis by focusing on the nature of the problem and the ability of one skilled in the art to solve such a problem, rather than identifying a specific basis for a TSM to obtain the claimed combination

20. © Birch, Stewart, Kolasch & Birch, LLP CAFC Decision KSR v. Teleflex CAFC found no specific basis in alternative prior art references for a TSM to attach the electronic sensor in a fixed position to the support of an adjustable pedal assembly of Asano “Combining prior art references without evidence of [a TSM] simply takes the inventor’s disclosure as a blueprint for piecing together the prior art to defeat patentability—the essence of hindsight,” stated the CAFC

21. © Birch, Stewart, Kolasch & Birch, LLP U.S. Supreme Court Oral Argument (Nov. 28 th, 2006) KSR argued against requiring CAFC TSM test: TSM should not necessarily be required if patent claim is very broad and/or differences from prior art very small TSM is not only protection against prohibited “hindsight” analysis “secondary considerations” (e.g. “commercial success” and “long felt but unsolved needs” from Graham case) also provide safeguard one Justice asked if TSM could be used as one factor to determine obviousness rather than as an exclusive test

22. © Birch, Stewart, Kolasch & Birch, LLP U.S. Supreme Court Oral Argument (continued) Teleflex argued in support of exclusive TSM test: TSM test requires evidence of what was apparent to person skilled in the art, not merely evidence of whether the person was “capable” of making claimed invention Problem was not to merely combine an electronic sensor with a pedal assembly, but to specifically combine these elements such that the electronic sensor is attached to the fixed support

23. © Birch, Stewart, Kolasch & Birch, LLP Supreme Court: CAFC Impermissibly Limited TSM Inquiry 1. CAFC incorrectly required disclosure in prior art of specific problem patentee was trying to solve “…any need or problem known in the field of endeavor at the time of invention…can provide a reason for combining the elements in the manner claimed.”

24. © Birch, Stewart, Kolasch & Birch, LLP Supreme Court: CAFC Impermissibly Limited TSM Inquiry (continued) 2. CAFC incorrectly assumed that person of ordinary skill in the art (POSA) would be led only to those elements of prior art designed to solve same problem addressed by patentee “…familiar items may have obvious uses beyond their primary purposes, and in many cases a [POSA] will be able to fit the teachings of multiple [references] together like pieces of a puzzle.”

25. © Birch, Stewart, Kolasch & Birch, LLP Supreme Court: CAFC Impermissibly Limited TSM Inquiry (continued) 3. CAFC incorrectly concluded that patent claim cannot be held “obvious” (unpatentable) merely by showing that the combination of elements would have been “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 [POSA] has good reason to pursue the known options within his or her technical grasp.”

26. © Birch, Stewart, Kolasch & Birch, LLP Supreme Court Favorably Cites Dystar and Alza Dystar Textilfarben GmbH v. C.H. Patrick Co., 80 USPQ2d 1641 (Fed. Cir. 2006) prior art not required to explicitly state TSM basis, since TSM evidence may be found: in knowledge of person skilled in the art (e.g. well known principle) nature of problem to be solved (e.g. well known problem-solving strategy) implicitly based on common knowledge or common sense

27. © Birch, Stewart, Kolasch & Birch, LLP Supreme Court Favorably Cites Dystar and Alza (continued) Alza Corp. v. Mylan Laboratories Inc. 80 USPQ2d 1001 (Fed. Cir. 2006) evidence of TSM may be found implicitly in prior art evidence of TSM may be based on knowledge generally available to POSA

28. © Birch, Stewart, Kolasch & Birch, LLP KSR Decision Lessons: Combination Patents Beware! Patent Examiners and Patent Attackers (PEs & PAs) are less restricted in showing a TSM basis to combine references PEs & PAs can pay much less attention to the problems solved by the invention and focus on the knowledge and problem solving strategies of the hypothetical POSA possible sources: engineering manuals and science textbooks

29. © Birch, Stewart, Kolasch & Birch, LLP KSR Decision Lessons: Combination Patents Beware! PEs & PAs can rely on “common knowledge” or “common sense” as evidence of a TSM basis PEs & PAs can find TSM basis “implicitly” in prior art but must provide explicit reasons without conclusory statements

30. © Birch, Stewart, Kolasch & Birch, LLP KSR Decision Lessons: Combination Patents Beware! Applicant’s (or Patentee’s) argument that “obvious to try” falls short of establishing obviousness is gone! expands prior art to include: references in the same general technology area that may not mention any feature or technical issue addressed by the claimed invention “design need” and “market pressure” become legitimate TSM bases to combine references possible source: publications about industry design trends

31. © Birch, Stewart, Kolasch & Birch, LLP KSR Decision Lessons: Combination Patents Beware! The POSA of the past CAFC decisions seemed to work with either a “clean slate” or a disorganized desk jammed with 1,000 possible, confusing reference combinations The “new and improved” POSA after KSR v. Teleflex seems to be more creative, be more organized, has much better problem solving skills, and is aware of industry design trends and market pressures

32. © Birch, Stewart, Kolasch & Birch, LLP KSR Decision Lessons: Combination Patents Beware! At least the requirement for a TSM basis to combine references together lives on Supreme Court appreciated this “helpful insight” and did not reject this requirement USPTO issued official memo acknowledging that this requirement still exists

33. © Birch, Stewart, Kolasch & Birch, LLP Contact Information: Andrew D. Meikle adm@bskb.com Birch, Stewart, Kolasch & Birch, LLP www.bskb.com mailroom@bskb.com