Amicus Curiae Brief — KSR Intern. Co. v. Teleflex Inc.

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Supreme Court, U.S.

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No. 04-1350 AUG 2 2 2006

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In The

Supreme Court of the Anited States

KSR INTERNATIONAL CO.,

Petitioner,

TELEFLEX INC. and

TECHNOLOGY HOLDING CO.,

Respondents.

On Writ Of Certiorari To The

United States Court Of Appeals

For The Federal Circuit

BRIEF OF ECONOMISTS AND

LEGAL HISTORIANS AS AMICI CURIAE

IN SUPPORT OF PETITIONER

August 22, 2006 JOSHUA D. SARNOFF*

GLUSHKO-SAMUELSON

INTELLECTUAL PROPERTY

LAW CLINIC

WASHINGTON COLLEGE OF LAW

AMERICAN UNIVERSITY

4801 Massachusetts Avenue, NW

Washington, DC 20016

(202) 274-4165

*Counsel of Record

for Amici Curiae

Economists and Legal Historians

—— —

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COCKLE LAW BRIEF PRINTING CO (800) 225-6964

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TABLE OF CONTENTS

Page

Pac ccteiicatninihaitiniiiiansneniebicdninnistnindéi i

TABLE OF AUTHORITIEG..............cccccccccsseccssseceeeess il

INTEREST OF THE AMICI CURIAE .............00...c0000 1

SUMMARY OF THE ARGUMENT .....0.00.0.0....ccceeeeeeees 1

SEP UIITET snchishniStiinsiiadiceiamaddaniinainicleiinidaiicidinaslinnaniinaieiliaiing 3

I. This Court Historically Has Imposed a Sub-

stantial Threshold of Technological Creativity

for the Patentablity of New Inventions .......... 3

Il. The Graham Approach to Determining

Patentability is Sound, But Requires Further

Clarification for Its Proper Understanding

and Application by the Patent Office and the

SUITED cisistesscnscbisicineaisbiescceunantbisibiinieiadieitiiaeesieamideigilpeiditidaa 15

III. The Court Should Clarify the Burdens of

Production and Proof Regarding the Graham

SUPT icssichegeiiieieiidnicrheneisiasiatiniaadedediitsianadedsviciltieaicniliieia 28

TABLE OF AUTHORITIES

Page

CASES

Altoona Publix Theaters, Inc. v. Am. Tri-Ergon

Corp., 294 US. 477 (1985)...............cccrcessescosscesssesees 11,13

Ames v. Howard, 1 F. Cas. 755 (C.C.D. Mass. 1833).......... 7

Anderson’s-Black Rock, Inc. v. Pavement Salvage

i Ee UT cnccncisibhcnccicdaslibcncastiiitieticapihiiiggtasinetictienneude 14

Animal Legal Def. Fund v. Quigg, 932 F.2d 920

RAIS SSRI Pe me rs es Se 22

Atl. Works v. Brady, 107 U.S. 192 (1888)................ 9, 10, 16

Bean v. Smallwood, 2 F. Cas. 1142 (C.C.D. Mass.

SP iciiciisdeibichecidbccila digest ihn leslie 7

Brown ©. Piper G1 UB. ST (UBTE).......ccccccccsseseccescesscccescesesess 4

Cochrane v. Deener, 94 U.S. 780 (1876)..............ccccccceeeee eens 4

Concrete Appliances Co. v. Gomery, 269 U.S. 177

ERNE TE REEDS IPrrentonnsaereeene: A emmw Iman oF 13, 18, 19, 25

Corning v. Burden, 56 U.S. (15 How.) 252 (1853)............. 30

Cuno Eng. Corp. v. Automatic Devices Corp., 314

8 ERR ER eta Oe ee Ea a ee TE 11,14

Dann v. Johnston, 425 U.S. 219 (1976)................ccccceceeeeee 26

Densmore v. Scofield, 102 U.S. 375 (1880)... 14

Dunbar v. Myers, 94 U.S. 187 (1876) ..........ccccceeeeeceeees 9, 26

Earle v. Sawyer, 8 F. Cas. 254 (C.C.D. Mass. 1825)......6, 14

Electric Cable Joint Co. v. Brooklyn Edison Co., 292

Rr Sa aos a Sere ee 11

Evans v. Eaton, 8 F. Cas. 846 (C.C.D. Pa. 1816),

revd on other grounds, 16 U.S. (3 Wheat.) 454

RRIF eee: PAI en ae Ne ee 2 ON ONES 5

TABLE OF AUTHORITIES -— Continued

Page

Evans v. Eaton, 20 U.S. 356 (1822).........:...ccceeeseesseeeeeeseeeees 5

Florsheim v. Shilling, 137 U.S. 64 (1890)............ccccceeeeeees 11

Graham v. John Deere Co., 383 U.S. 1 (1966) ........... passim

Great Atl. & Pac. Tea Co. v. Supermarket Equip.

Corp., 340 U.S. 147 (1950)................:ccccceeeseeeeees 10, 12, 13

Hailes v. Van Wormer, 87 U.S. (20 Wall.) 353 (1878).......... iS)

Hollister v. Benedict Mfg. Co., 113 U.S. 59 (1885)............ 11

Honolulu Oil Corp. v. Halliburton, 306 U.S. 550

SIT ishcctnrindsiciidishasliciniegai edie ieiindihpabbiondianneiiiteedapinialacletipestinin 12

Hotchkiss v. Greenwood, 52 U.S. (11 How.) 248

STI cxcstoinee baie duesiindhientipdinciilpeeareupeyelteeebigtavesenbayentninai passim

Hovey v. Stevens, 12 F. Cas. 609 (C.C.D. Mass.

SNEED iainaithhicbccniineictaitscguntadiniiescceliianiahendlabibiarippeeaninibdiniriagitn 8

Howe v. Abbott, 12 F. Cas. 656 (C.C.D. Mass. 1842)........... 7

Hybritech Inc. v. Monoclonal Antibodies., Inc., 802

ce 8B Ee eee 22

In re Antonie, 449 F.2d 618 (C.C.P.A. 1977)............ccceeeees 18

In re Clay, 966 F.2d 656 (Fed. Cir. 1992) ..................cceeeee 26

In re Henze, 181 F.2d 196 (C.C.P.A. 1950) ....... 29

In re Kahn, 441 F.3d 977 (Fed. Cir. 2006)............. 24, 25, 26

In re Piasecki, 745 F.2d 1468 (Fed. Cir. 1984)............ 28, 29

In re Sang Su Lee, 277 F.3d 1338 (Fed. Cir. 2002)........... 25

In re Surrey, 319 F.2d 233 (C.C.P.A. 1963) ..................060.. 29

In re Tomlinson, 363 F.2d 928 (C.C.P.A. 1932) ................ .18

In re Warner, 379 F.2d 1011 (C.C.PA. 1967).......00.000..000... 28

TABLE OF AUTHORITIES - Continued

Laboratory Corp. of Am. Holdings v. Metabolite

Labs., Inc., 126 S.Ct. 2921 (2006) ...........sccesecereeeeeeeeesens 3

Lincoln Eng. Co. of Ill. v. Stewart-Warner Corp.,

Se cenncnskcessinitin iibiccieceptiihnsiainpaiiiaalataas 14, 15

Marconi Wireless Telegraph Co. of Am. v. United

Ot Es ree ee ae 25

Merck & Co., Inc. v. Kessler, 80 F.3d 1543 (Fed. Cir.

I cccrresvesesineiibiniiateniesiniacininsiputiteptisninsinnipaleiuleiapaasedadeigsea lanai 22

Novo Industri A/S v. Travenol Labs., Inc., 677 F.2d

re Ge Sian ntcrichtiticanbhnininnigietiininiiis 18

O'Reilly v. Morse, 56 U.S. (15 How.) 62 (1853) ................... 4

Parker v. Flook, 437 U.S. 584 (1978).........ccccccsessseeeeeeeeseees 3

Pearce v. Mulford, 102 U.S. 112 (1880).............. cee eeeeeeeee 11

Penn. R. Co. v. Locomotive Eng. Safety Truck Co.,

gee Bf | a ene wrespenseiitesenn 11, 24

Powers-Kennedy Contracting Corp. v. Concrete

Mixing & Conveying Co., 282 U.S. 175 (1930).............. 12

Princeton Biochemicals, Inc. v. Beckman Coulter,

Inc., 411 F.3d 1332 (Fed. Cir. 2005)................cccceeeeeeeeees 26

Pro-Mold & Tool Co. v. Great Lakes Plastics, Inc.,

75 F.3d 1568 (Fed. Cir. 1996) .................ccssccccscssseoreesees 11

Reckendorfer v. Faber, 92 U.S. 347 (1875) ...........cccceseeeeees 9

Sakraida v. Ag Pro, Inc., 425 U.S. 273 (1976)............ 13, 15

Saranac Automatic Mach. Corp. v. Wirebound

Patents Co., 282 U.S. 704 (1931) ......... cee ceeeeeeeee 11, 12

Smith v. Goodyear Dental Vulcanite Co., 93 US.

GED CFD cxisitinirsectnvtsinncinscmniitiicinaneamm

TABLE OF AUTHORITIES - Continued

Page

Smith v. Nichols, 88 U.S. (21 Wall.) 112 (1874).................. 9

Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530

SE PR EA ee a 27

Tec Air, Inc. v. Denso Mfg. Mich. Inc., 192 F.3d 1353

a lreuicliats 11

Teleflex Inc. v. KSR Int'l, Inc., 119 Fed. Appx. 282

EEE a nee er aE 11, 23, 26

Textile Mach. Works v. Louis Hirsch Textile Mach.,

I a i 11, 12

The Packing Company Cases, 105 U.S. 566 (1881).......... 11

Toledo Pressed Steel Co. v. Standard Parte, 307

Ln en a Se eT Cree 12, 27, 28

United States v. Adams, 383 U.S. 39

EST aE en SO 18, 19, 20, 27, 30

Webster Loom Co. v. Higgens, 105 U.S. 580 (1881)........... 23

Whittemore v. Cutter, 29 F. Cas. 1123 (C.C.D. Mass.

EE SSS SSE Ss ne ee oe Ee 6, 7

Wyeth v. Stone, 30 F. Cas. 723 (C.C.D. Mass. 1840)............ 4

Washburn & Moen Mfg. Co. v. Beat ‘Em All Barbed-

Wire Co. (the Barbed Wire patent), 143 U.S. 275

OS SERS ENG AT TR SO LC 22, 23, 24

CONSTITUTION AND STATUTES

SG ee ae ee 3

Act of April 10, 1790, ch. 7, § 1, 1 Stat. 109, 110................ 3

Act of Feb. 21, 1793, ch. 11, § 1, 1 Stat. 318, 318............... 5

Act of Feb. 21, 1793, ch. 11, § 2, 1 Stat. 318, 321............... 5

TABLE OF AUTHORITIES - Continued

Page

Act of July 4, 1836, ch. 357, § 1, 5 Stat. 117, 117............ 7,8

Act of July 4, 1836, ch. 357, § 2, 5 Stat. 117, 118........00...... 5

Act of July 19, 1952, ch. 950, § 103, 66 Stat. 792,

SRE SERRE Re es eee ee ee ss tatiahctleedeiaaiad aliiaadad 13, 14

8 EEE eee ee ovee a IRE. -e PRE 4

REF ESPEN a oe wae eee passim

ERIE esa ow Er eee eee Nee aT ene aS 21

| | RTS SRE, SENESCENT 29

35 U.S.C.A § 131 revision note (1954)..............ccccceceeeeeereeees 3

GOVERNMENTAL MATERIALS

Chief Judge Paul R. Michel, “The State of the

Court” (Federal Circuit Bar Association Annual

Conference, June 29, 2006, revised July 10,

2006), available at http://)www-fedcir.gov/speech.

pdf (last visited Aug. 9, 2006) ..................2.ccececeeeeeeeseeeees 19

Manual of Patent Examining Procedure § 2144.06

I 24

Manual of Patent Examining Procedure § 2143.01

ERIE A en one me a 24

I le 4

8 8 SESE SEE aer enon ne 7

U.S. Federal Trade Commission, To Promote

Innovation: The Proper Balance of Competition

and Patent Law and Policy (Oct. 2003), available

at http://www.ftc. gov/os/2003/10/innovationrpt. pdf

Grr Cea Batam, D, Be caticcrcccecscscsecccscoscescccncsveses 22, 28

vii

TABLE OF AUTHORITIES -— Continued

Page

OTHER

John H. Barton, Non-Obviousness, 43 IDEA 475

SERIES TS A SPR ate We a 15, 16, 23, 24, 28

John H. Barton, Reforming the Patent System, 287

4 EE een Sa os 10

Greg Blonder, Cutting Through the Patent Thicket;

The current U.S. system is harming innovation.

A simplified process with stronger patents would

encourage economic growth, Business Week

I le cadeniementnmppinnanaes 19

Wesley M. Cohen et al., Protecting Their Intellec-

tual Assets: Appropriability Conditions and Why

U.S. Manufacturing Firms Patent (or Not) (Natl.

Bureau of Econ. Research Working Paper No.

W7552, Feb. 2000), available at http://www.nber.

org/papers/w7552, last visited Aug. 9, 2006).......... 15, 16

John F. Duffy & Robert P. Merges, The Story of

Graham v. John Deere Company: Patent Law’s

Evolving Standard of Creativity, in Intellectual

Property Stories (Jane C. Ginsberg & Rochelle C.

Dreyfuss eds. Foundation 2006)........................+. 9, 16,17

Harold I. Dutton, The patent system and inventive

activity during the industrial revolution 1750-

1852 (Manchester U. Press 1984) .................cccseceeeseeeeeees 8

Niles Eldredge, Darwin, Discovering the Tree of

Life (W.W. Norton & Co. 2005) .0........cccccccsceeeeereneeeenenes 26

Matthew D. Henry & John L. Turner, The Court of

Appeals for the Federal Circuit's Impact on Pat-

ent Litigation, 35 J. Legal Stud. 85 (2006) ................... 29

TABLE OF AUTHORITIES -— Continued

Robert M. Hunt, Federal Reserve Bank of Philadel-

phia, Nonobviousness and the Incentive to Inno-

vate: An Economic Analysis of Intellectual

Property Reform, Working Paper No. 99-3 (Mar.

aD veissiceinticeseisiceseiaitinapitashninsindlbcihaderissieriatiiiadiitnatihtbipaiait 9, 10

Thomas Jefferson, Letter to Isaac MacPherson

(Aug. 13, 1813), reprinted in The Portable Thomas

Jefferson (Merrill D. Peterson ed. Penguin Books

EES EE ees eae es, ke Se 4, 5, 22

B. Zorina Khan, Property Rights and Patent Litiga-

tion in Early Nineteenth-Century America, 55 J.

I 9

Edmund Kitch, Graham v. John Deere Co.: New

Standards for Patents, 1966 Sup. Ct. Rev. 293............. 15

Steven Lubar, The Transformation of Antebellum

Patent Law, 32 Tech. and Culture 932 (1991)................. 7

Robert P. Merges, Commercial Success and Patent

Standards: Economic Perspectives on Innovation,

ee in Ss CE ceritrrictnenencentivien ncn chensibtentecconase 27

Robert P. Merges, Uncertainty and the Standard of

Patentability, 7 High Tech L.J. 1 (1992)..................002- 17

Joel Mokyr, Why Was the Industrial Revolution a

European Phenomenon, 10 Sup. Ct. Econ. Rev. 27

Sr iceijiinantaansinteghitennensastensindbdininsiiiueinaeianinetesiibininiinens 25, 26

Robert C. Post, “Liberalizers” versus “Scientific

Men” in the Antebellum Patent Office, 17 Tech.

CE EEE EEL LE OO Oe 7,8

Giles S. Rich, The Principles of Patentability, 42 J.

Pe, Ge BaD ctrtntcteitninecnsnnttstntesscenisiocins 3, 16, 27

TABLE OF AUTHORITIES — Continued

Page

John Schlicher, Patent Law: Legal and Economic

Peirce Ceres BID sseccccececectescnssecectcesccrssccensnousscenssss 15

John R. Thomas, The Patenting of the Liberal

Professions, 40 B.C. L. Rev. 1139 (1999) ..............cccccceeee 3

Edward C. Walterscheid, Patents and Manufactur-

ing in the Early Republic, 80 J. Pat. & Trade-

mark Off. Soc’y 855 (1998) .............cccccccccceeeesssersrreereeeeeees 7

Edward C. Walterscheid, The Hotchkiss Unobvi-

ousness Standard: Early Judicial Activism in the

Patent Law, 13 J. Intell. Prop. L. 103 (2005).... 4, 5, 6, 10

Edward C. Walterscheid, The Use and Abuse of

History: The Supreme Court’s Interpretation of

Thomas Jefferson’s Influence on Patent Law, 39

SUITE TT cdelesechbaihibitihiiteaiabiaapininbbdnebibeudtieiinaeioniien 5

Edward C. Walterscheid, To Promote the Progress to

Useful Arts: American Patent Law and Admini-

stration, 1787-1836 (Part I), 79 J. Pat. & Trade-

ey Se I cecrrnreventhieciotvesiethdectniitsintanieciicits 5

Email from Edward C. Walterscheid to Joshua D.

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INTEREST OF THE AMICI CURIAE

This brief is filed on behalf of the Economists and Legal

Historians identified in Appendix A (Historians).’ Historians

teach and write about technological development and United

States patent laws. Historians are concerned that the

standards currently applied to determine obviousness by the

U.S. Court of Appeals for the Federal Circuit (Federal

Circuit), and thus by the U.S. Patent and Trademark Office

(Patent Office), conflict with historic standards of this Court.

The Court’s standards have required new inventions to make

a substantial technological contribution to the art in order to

be patentable, and thus have helped to assure technological

progress in the United States. By reviewing the history of

the obviousness standard, Historians hope to assist the

Court in re-establishing appropriate thresholds of techno-

logical creativity and in providing guidance for the Patent

Office and courts to determine which new inventions war-

rant patents.

SUMMARY OF THE ARGUMENT

The Patent Office originally and this Court subse-

quently articulated a substantial technological threshold

for the level of inventive contribution that warrants the

grant of a patent. The Court later held this threshold to be

a constitutional requirement. Otherwise, patents would

withdraw from unrestricted use inventions that the public

already constructively possessed and would thereby

retard rather than promote technological progress. Before

’ Petitioner’s and Respondents’ letters of consent have been filed

with the Clerk. This brief was not authored in whole or in part by

counsel for any party. No one other than Amici and their counsel made

a monetary contribution to preparing or submitting this brief.

1952, the Court repeatedly held: that new inventions (particu-

larly combinations of prior art elements) were unpatentable

even though they had not been contemplated in the art; that

circumstantial evidence of technological creativity must be

evaluated with care; and that exogenous changes in technol-

ogy would predictably trigger rapid creation of new inven-

tions. Congress ratified the Court’s precedents on the

inventive threshold in 1952, when codifying the obviousness

standard in Section 103 of the Patent Act.

In Graham v. John Deere Co., 383 U.S. 1 (1966), the

Court articulated the purpose of the obviousness standard —

to limit patents to inventions that would not have been made

but for the patent incentive — and specified a methodology for

applying it. Additional guidance is needed, however, for

proper understanding and application of the standard.

Historians suggest that the Court restate the purpose of the

standard as to prohibit patents on inventions that could have

been made within a reasonable period of time and within

reasonable budgetary constraints. This restatement clarifies

that the Graham methodology mandates an inquiry requir-

ing both technical expertise and policy judgment. The

proposed restatement will lead over time to more reasoned

analysis by the Patent Office and the courts. In contrast, the

current standards being applied by the Patent Office and the

Federal Circuit — particularly the teaching, suggestion, or

motivation to combine test created by the Federal Circuit

and applied in this case — conflict with the Court’s jurispru-

dence, are applied without sufficient sensitivity to the

technological context at a particular time, and permit

patents to issue and to be held valid for insignificant contri-

butions to the art.

Historians further suggest that the Court clarify the

proper allocaticn of burdens of production and proof of

obviousness. Given the limited resources of the Patent Office,

the current allocation may often lead to erroneous results. At

a minimum, the Court should clarify that to assess obvious-

ness, no evidentiary burden exists to document a teaching,

suggestion, or motivation to combine the prior art.

ARGUMENT

I. This Court Historically Has Imposed a Substantial

Threshold of Technological Creativity for the

Patentability of New Inventions

The 1790 Patent Act required the Patent Office to

review applications to determine if the disclosed “inven-

tion or discovery [was] sufficiently useful and important”

to warrant granting a patent. See Act of April 10, 1790, ch.

7, § 1, 1 Stat. 109, 110.’ Since 1790, this Court has refused

to grant or has invalidated patents unless the new techno-

logical “invention™ for which exclusive rights were sought

resulted from substantial technological creativity. The

* Congress retained this language in the Patent Act until 1952, when

it was eliminated as “‘unnecessary ” ir light of the newly codified obvious-

ness standard. Giles S. Rich, The Principles of Patentability, 42 J. Pat. Off.

Soc’y 75, 80-81 (1960) (quoting 35 U.S.C.A. § 131 revision note (1954)).

* Historians refer to all novel creations and combinations as inven-

tions although many cases treated only those that were patentable as

inventions. Further, “inventions” or “discoveries” may not be patentable

unless they are within the “useful Arts.” U.S. Const., Art. I, § 8, cl. 8. See

Parker v. Flook, 437 U.S. 584, 593 (1978) (assessment of the type of

discovery must precede determination of novelty and obviousness). Cf

Laboratory Corp. of Am. Holdings v. Metabolite Labs., Inc., 126 S.Ct. 2921

(2006) (dismissing as improvidently granted a subject matter challenge to a

patented claim). See generally John R. Thomas, The Patenting of the

Liberal Professions, 40 B.C. L. Rev. 1139, 1163-75 (1999) (discussing

historic understanding of the “technological arts”).

Court in this case has the opportunity to affirm this

fundamental premise.

As this Court recognized in Graham, the three-person

Patent Board under the 1790 Patent Act had created rules

that categorically excluded certain types of novel inven-

tions from being considered patentable. See 383 U.S. at 9,

10 & n.3 (application of a machine to a new use;* changes

in the material of construction; changes of form; and use of

previously known implements in combination). The

premise of these rules was that the public constructively

possessed novel inventions that were within the skill in

the art to create or to apply, and thus public rights to use

such inventions should not be taken away by legislative

grants of exclusive rights. See Thomas Jefferson, Letter to

Isaac MacPherson (Aug. 13, 1813), reprinted in The

Portable Thomas Jefferson at 531 (Merrill D. Peterson ed.

Penguin Books 1975) (Jefferson, Letter) (“[T]his right [to

use] ought not to be taken from him and given to a mo-

nopolist, because the first perhaps had occasion so to apply

it.”); Brown v. Piper, 91 U.S. 37, 41 (1875) (inventions

“within the circle of what was well known before ...

belonged to the public”). This premise followed from the

lack of natural rights in inventions and the limited power

* This Court originally prohibited patents for processes and later

permitted new-use patents and patents on processes. Compare Wyeth v.

Stone, 30 F. Cas. 723, 727 (C.C.D. Mass. 1840), and O'Reilly v. Morse,

56 U.S. (15 How.) 62, 112-13 (1853), with Cochrane v. Deener, 94 U.S.

780, 787 (1876). Congress subsequently ratified patents for new uses of

existing inventions. See 35 U.S.C. § 100(b) (“process . . . includes a new

use of a known process, machine”); S. Rep. No. 82-1979, at 6 (1952)

(discussing the process definition).

* See also Edward C. Walterscheid, The Hotchkiss Unobviousness

Standard: Early Judicial Activism in the Patent Law, 13 J. Intell. Prop.

L. 103, 107-08 (2005) (Walterscheid, Hotchkiss).

vested in Congress. See id.; Graham, 383 U.S. at 5-6 (Con-

gress may neither “enlarge the patent monopoly without

regard to the innovation, advancement or social benefit

gained thereby” nor “authorize the issuance of patents whose

effects are to remove existent knowledge from the public

domain, or to restrict free access to materials already

available.”).

_ Jefferson also thought that the expertise of the Patent

Office, rather than of courts, was best suited to develop

the principles for determining the threshold of creativity

that warranted granting exclusive rights. See Jefferson,

Letter, supra, at 532. Jefferson was particularly concerned

that the grant of unjustified patents would result in

“harassment by lawsuits.” Jd. Jefferson's views on patent

laws, however, were controversial.°

Congress did not at first follow Jefferson’s advice, as it

eliminated the examination system in the 1793 Patent Act.

See Act of Feb. 21, 1793, ch. 11, § 1, 1 Stat. 318, 318.’ The

* See generally Edward C. Walterscheid, The Use and Abuse of

History: The Supreme Court's Interpretation of Thomas Jefferson's

Influence on Patent Law, 39 IDEA 195 (1999).

" See Edward C. Walterscheid, To Promote the Progress to Useful Arts:

American Patent Law and Administration, 1787-1836 (Part I), 79 J. Pat. &

Trademark Off. Soc’y 61, 72-74 (1997) (describing the transition from an

examination to a registration system based on the English patent system).

Congress did agree that “simply changing the form or the proportions . . . in

any degree, shall not be deemed a discovery.” Act of Feb. 21, 1793, ch. 11,.

§ 2, 1 Stat. 318, 321. See Evans v. Eaton, 8 F. Cas. 846, 852 (C.C.D. Pa.

1816) (the requirement limited patentability to changes in “principles” of

invention), rev'd on other grounds, 16 U.S. (3 Wheat.) 454 (1818); Evans v.

Eaton, 20 U.S. 356, 431 (1822) (same). See Walterscheid, Hotchkiss, supra,

at 108-15 (discussing doctrinal changes resulting from this language). In

1836, Congress eliminated this provision, but the Court continued to

invalidate patents that had issued for such inventions. See id. at 116; Act of

July 4, 1836, ch. 357, § 2, 5 Stat. 117, 118.

federal courts thus took up the task of elaborating the

required threshold of technological creativity that war-

ranted the grant of a patent. Like Congress, the courts did

not adopt Jefferson’s views wholesale.

For example, in Earle v. Sawyer, 8 F. Cas. 254 (C.C.D.

Mass. 1825), Justice Story upheld a patent for an im-

proved machine for sawing shingles, which substituted a

circular saw for a perpendicular saw. Justice Story re-

buffed the defendant’s “metaphysical” argument that the

invention was unpatentable without creative ingenuity. Jd.

at 255. Moreover, he rejected the entire argument that:

[an inventor] must find [the invention] out by men-

tal labor and intellectual creation. If the result of

accident, it must be what would not occur to all

persons skilled in the art, who wished to produce

the same result. There must be some addition to

the common stock of knowledge, and not merely

the first use of what was known before.... The

mere putting of two things together, although

never done before, is no invention.

Id. Nevertheless, even Justice Story agreed that not all

new inventions were patentable. In Whittemore v. Cutter,

29 F. Cas. 1123 (C.C.D. Mass. 1813), Justice Story held

that a new use of an existing machine or its combination

with other existing machines was not, without more, a

patentable invention. “(Flor if the different effects were all

produced by the same application of machinery, in sepa-

rate parts, and he merely combined them together, or

* Cf. Walterscheid, Hotchkiss, supra, at 105, 126-32 (arguing that

such judicial elaboration reflected activism that was not authorized by

the statute, but that Congress ultimately ratified the Court's prece-

dents in the 1952 Act).

added a new effect, such combination would not sustain

the present patent... .” Jd. at 1124.”

By 1836, Congress repented its earlier decision to

to prevent the widespread issuance of invalid patents that

had resulted in unjustified litigation and destruction of

businesses. See Act of July 4, 1836, ch. 357, § 1, 5 Stat.

117, 117. “Almost 10,000 patents were issued under [the

1793 Act], the majority of which were either for useless

inventions or used to fraudulently impose on the public.””

But effective examination would require the hiring of

highly qualified examiners, who would be familiar with

existing knowledge and technologies in the various arts in

which patents were sought. See S. Rep. No. 24-338, at 4

(1836). Congress did not provide sufficient funds to pay

required salaries, and examiners needed too much time to

research prior art. Thus, although trained examiners became

increasingly rigid in evaluating patentability, patent quality

suffered and significant backlogs in processing developed.”

* See also Bean v. Smallwood, 2 F. Cas. 1142, 1142 (C.C.D. Mass.

1843); Howe v. Abbott, 12 F. Cas. 656, 658 (C.C.D. Mass. 1842); Ames v.

Howard, 1 F. Cas. 755, 757 (C.C.D. Mass. 1833).

* See also S. REP. No. 24-338, at 1-8 (1836) (discussing the

statutory provisions, changes in the economy that had made the patent

system more important, and the need to “arrest injury and injustice at

the threshold”); Steven Lubar, The Transformation of Antebellum

Patent Law, 32 Tech. and Culture 932, 941 (1991) (discussing the

issuance and effects of patents under the 1793 Act).

“ Edward C. Walterscheid, Patents and Manufacturing in the

Early Republic, 80 J. Pat. & Trademark Off. Soc’y 855, 886 (1998).

* See, e.g., Robert C. Post, “Liberalizers” versus “Scientific Men” in

the Antebellum Patent Office, 17 Tech. and Culture 24, 33, 37-39 (1976),

Lubar, supra, at 945. Following a political campaign against rigid

examination, scientists were replaced by political appointees who

(Continued on following page)

Pre-1850 examination practice under the American system

was perceived abroad as “‘a miserable failure.’””

In this context, the Supreme Court decided Hotchkiss

v. Greenwood, 52 U.S. (11 How.) 248 (1851). The case

addressed a novel combination of prior art elements. The

inventor had substituted known clay and porcelain door

knobs for common iron knobs, employing a dovetail to secure

the shank. The plaintiffs requested a jury instruction that

clay knobs and shanks in the prior art had not been com-

bined earlier and that the attachment required skill and

invention to achieve the useful result (better functioning and

cheaper manufacturing). See id. at 264. The Court upheld

the trial court’s actual instruction that, if the same form and

purposes of knobs and attachments were known, if clay was

simply substituted for metal, and if “no more ingenuity or

skill [were] required to construct the knob in this way than

that possessed by an ordinary mechanic acquainted with the

business,” then there was no patentable invention and the

issued patent was invalid. Jd. at 265.“

The Court rejected the argument that substitution of

materials — even if it makes an invention “better and

cheaper” to manufacture —- makes for a patentably distinct

invention. Jd. at 266. “The difference is formal, and destitute

of ingenuity or invention. It may afford evidence of judg-

ment and skill in the selection and adaptation of the

lowered examination standards, fueling an explosion in patenting

beginning in the 1850s. See Post, supra, at 39-52.

“ Harold I. Dutton, The patent system and inventive activity

during the industrial revolution 1750-1852 61 (Manchester U. Press

1984) (citation omitted).

“ At least one lower court had interpreted the 1836 Act to preclude

patents on new combinations that were “a very obvious change to any

mechanic.” Hovey v. Stevens, 12 F. Cas. 609, 612 (C.C.D. Mass. 1846).

materials in the manufacture of the instrument for the

purposes intended, but nothing more.” Jd. The Court also

rejected the argument that there were unique advantages

to the particular combination. See id. at 266-67 (noting

that even if the fastening produced “a new and peculiar

effect” having various benefits, the effect would be

achieved by other available materials). As the Court later

affirmed in Reckendorfer v. Faber, 92 U.S. 347 (1875), to be

patentable “the results must be the product of the combi-

nation, not a mere aggregate of several results, each the

complete product of one of the combined elements.” Jd. at

353 (citing Hailes v. Van Wormer, 87 U.S. (20 Wall.) 353

(1873)). See also Dunbar v. Myers, 94 U.S. 187, 199 (1876)

(change of “form, proportions, or degree, or the substitution

of equivalents,” does not make an invention patentable, even

though they “may produce better results”) (citing Smith v.

Nichols, 88 U.S. (21 Wall.) 112, 115 (1874)).

Hotchkiss was decided during a period of remarkable

technological change, when invention and innovation were

highly valued.” The Court’s holding should be no surprise,

as the justification for a high creative threshold “rests in

part on the existence of change in social needs, conditions

and technology ... [and] should be less important in a

static society or one experiencing only very gradual

change.”” In Atlantic Works v. Brady, 107 U.S. 192 (1883),

* See, e.g., B. Zorina Khan, Property Rights and Patent Litigation in

Early Nineteenth-Century America, 55 J. Econ. Hist. 58, 70-71 (1995) (also

noting changing judicial attitudes over the course of the 19th Century).

* John F. Duffy & Robert P. Merges, The Story of Graham v. John

Deere Company: Patent Law's Evolving Standard of Creativity, in

Intellectual Property Stories at 114 (Jane C. Ginsberg & Rochelle C.

Dreyfuss eds. Foundation 2006). See Robert M. Hunt, Federal Reserve

Bank of Philadelphia, Nonobviousness and the Incentive to Innovate:

An Economic Analysis of Intellectual Property Reform, Working Paper

(Continued on following page)

Justice Bradley provided a detailed conceptual justifica-

tion for setting the threshold of technological contribution

above “ordinary mechanical or engineering skill,” which

precluded patents on inventions that “would naturally and

spontaneously occur... .” Jd. at 200. Otherwise, “[s]uch an

indiscriminate creation of exclusive privileges tends rather

to obstruct than to stimulate invention. It creates a class

of speculative schemers . . . [who anticipate improvements

and use their patent monopolies} to lay a heavy tax upon

the industry of the country, without contributing anything

to the real advancement of the art.” Id. See id. (such

patents “embarrass[] the honest pursuit of business with

fears and apprehensions of concealed liens and unknown

liabilities to lawsuits and vexatious accountings for profits

made in good faith”); Great Atl. & Pac. Tea Co. v. Super-

market Equip. Corp., 340 U.S. 147, 152-53 (1950) (patents

on combinations of “old elements with no change in their

respective functions” withdraw “what already is known

into the field of its monopoly and diminish{] the resources

available to skillful men.”). The Court in Graham there-

fore treated the prohibition of patents on obvious inven-

tions as a constitutional requirement. See 383 U.S. at 6.”

No. 99-3 (Mar. 1999) (explaining how reducing nonobviousness re-

quirements can lead to reductions in research and development activity,

particularly in rapidly innovating industries). Cf John H. Barton,

Reforming the Patent System, 287 Science 1933, 1933 (2000) (limiting

patents on minor inventions reduces patent system costs “without any

effect on the incentives provided for more important innovation”).

" But cf. Walterscheid, Hotchkiss, supra, at 124-26 (arguing that the

Court in Graham interpreted the Constitution to impose a requirement of

inventive contribution beyond novelty, but did not justify the obvious-

ness standard on this requirement). Mr. Walterscheid believes, how-

ever, that the Constitution does require such a prohibition and that

Graham should have been decided on this basis. Email from Edward C.

Walterscheid to Joshua D. Sarnoff (Aug. 21, 2006).

In the second half of the 19th Century and the first

half of the 20th Century, the Court solidified its decisions

on the high inventive threshold for patentability, repeat-

edly holding that significant technological creativity was

required above the ordinary skill in the art (as reflected by a

substantial change to prior art applications or functions).”*

The fact that the “new form of result hald) not before been

contemplated” (what the Federal Circuit has characterized

as a teaching, suggestion, or motivation to combine the prior

art”) did not suffice for patentability. Penn. R. Co., 110 U.S.

at 494. Even without prior contemplation of the combination

and economic motivations to make it, the invention had to

reflect a sufficient technological advance beyond what

ordinary skill could create. Accordingly, the Court (unlike the

Federal Circuit) has treated skill in the art and prior con-

templation as cumulative or disjunctive hurdles.”

* See, eg, The Packing Company Cases, 105 U.S. 566, 571-72

(1881) (citing Pearce v. Mulford, 102 U.S. 112, 118 (1880)); Penn. R. Co.

v. Locomotive Eng. Safety Truck Co., 110 U.S. 490, 494 (1884); Flor-

sheim v. Shilling, 137 U.S. 64, 76 (1890); Saranac Automatic Mach.

Corp. v. Wirebound Patents Co., 282 U.S. 704, 713 (1931) (citing

Hollister v. Benedict Mfg. Co., 113 U.S. 59, 72-73 (1885)); Cuno Eng.

Corp. v. Automatic Devices Corp., 314 U.S. 84, 89-90 (1942).

” See Teleflex Inc. v. KSR Int'l, Inc., 119 Fed. Appx. 282, 285-86

(Fed. Cir. 2005) (citing, inter alia, Tec Air, Inc. v. Denso Mfg. Mich. Inc.,

192 F.3d 1353 (Fed. Cir. 1999); Pro-Mold & Tool Co. v. Great Lakes

Plastics, Inc., 75 F.3d 1568, 1572 (Fed. Cir. 1996)).

* See, e.g., Textile Mach. Works v. Louis Hirsch Textile Mach., 302

U.S. 490, 497 (1938) (“the addition fof a new element to a combination]

must be the result of invention rather than the mere exercise of the skill

of the calling, and not one plainly indicated by the prior art”) (emphasis

added), Altoona Publix Theaters, Inc. v. Am. Tri-Ergon Corp., 294 U.S. 477,

486 (1935) (improvements “must be the result of invention, and not the

mere exercise of the skill of the calling or an advance plainly indicated

by the prior art”) (citing Electric Cable Joint Co. v. Brooklyn Edison Co.,

292 U.S. 69, 79-80 (1934)) (emphasis added).

Proof of the existence in the prior art of all of the parts of

the combination thus was normally sufficient to demonstrate

that the invention was unpatentable,” unless the patentee

introduced evidence to show that an unexpected function had

resulted. In that case, the Court would carefully scrutinize

the evidence of an unexpected function and arguments that

the function had resulted from the application of more than

ordinary skill.” Similarly, the Court would carefully scruti-

nize arguments that evidence of commercial success demon-

strated that ordinary skill was insufficient to make the

combination. As the Court recognized, commercial success

can result from many sources, and even success attributable

to the invention does not necessary demonstrate a sufficient

technological contribution.” Thus, the Court rarely credited

* See, e.g., Honolulu Oil Corp. v. Halliburton, 306 U.S. 550, 562

(1939) (“{T}he method claimed in suit was clearly indicated in the prior

art. It cannot reasonably be held that anything more than mechanical

skill ... would be required to suggest the [last step, which was known

from other prior art patents}.”).

™ See, e.g., Powers-Kennedy Contracting Corp. v. Concrete Mixing

& Conveying Co., 282 U.S. 175, 184 (1930) (noting the lack of evidence

of prior impracticability and the “presumption of operability from ...

patenting”); id. at 184-85 (rejecting arguments of inventiveness based

on a change in size, which involved “no more than mechanical! skill and

would not amount to invention”); Toledo Pressed Steel Co. v. Standard

Parts, 307 U.S. 350, 356 (1939) (concluding “[o]n the records before us,

it is impossible to hold that production of the patented device [a ‘mere

aggregation’] required more than mechanical skil] and originality

attributable to those familiar with the art”).

* See, e.g., Textile Mach. Works, 302 U.S. at 498-99 (“success may

be decisive where invention is in doubt, but an insuperable obstacle .. .

here is our inability .. . to say ‘that an art which knew how to [use the

prior art elements] ... required some uncommon talent merely to

conceive of combining the two’”) (citation omitted), Saranac Automatic

Mach. Corp., 282 U.S. at 713-14 (rejecting commercial success evidence

because the patented invention did not “embrace| |” a “new result” and

did not “involve invention”); Great Atl. & Pac. Tea Co., 340 U.S. at 153

(rejecting lower court reliance on evidence that the invention “filled

(Continued on following page)

circumstantial evidence of commercial success when direct

evidence suggested that sufficient skill existed in the art.”

Finally, as the Court recognized in Concrete Appliances

Co. v. Gomery, 269 U.S. 177 (1925), a novel combination may

become apparent when exogenous developments in technology

occur or when a new motivation to apply existing technology

arises, resulting in the nearly simultaneous invention of

similar or identical subject matter. A few years prior to the

invention at issue in that case, the use of wet concrete had

become the norm in building practices and prior art devices

for moving grain and similar substances had been adapted for

use with wet concrete. See id. at 182. Once the feasibility of

using wet concrete was established, “common experience in

the mechanical arts would lead one to expect that ... the

mechanical skill of those familiar with engineering and

building problems would seek to make use of known methods

and appliances. ...” Jd. at 184. Given the exogenous techno-

logical developments, the independent and nearly simultane-

ous creation of a novel combination and the existence of

competing patent applications provided “persuasive evidence”

to demonstrate the lack of patentable creativity. Id. at 185.

‘In 1952, Congress codified the Court’s high threshold of

inventive creativity, prohibiting patents on new inventions

that were “obvious” differences from the prior art. See Act

a long-felt want and has enjoyed commercial success” because “commer-

cial success without invention will not make patentability”); Sakraida

v. Ag Pro, Inc., 425 U.S. 273, 282-83 (1976) (production benefits and

commercial success “‘did not produce a “new or different function” . . .

within the test of validity of combination patents.’ ... These desirable

benefits ‘without invention will not make patentability.’”) (citations

omitted).

* See, e.g., Altoona Publix Theaters, 294 US. at 487-88 (lack of invention

“would have to be far more doubtful . . . to be aided by evidence of commercial

success, indicating that it brought realization of a long-felt want”).

of July 19, 1952, ch. 950, § 103, 66 Stat. 792, 798 (currently

codified at 35 U.S.C. § 103(a)). Congress provided that:

A patent may not be obtained though the inven-

tion is not identically disclosed or described as

set forth in section 102 of this title, if the differ-

ences between the subject matter sought to be

patented and the prior art are such that the sub-

ject 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 said

subject matter pertains.

35 U.S.C. § 103(a). As the Court held in Graham, “the

revision was not intended by Congress to change the

general level of patentable invention... [but] was in-

tended merely as a codification of judicial precedents”

including Hotchkiss. 383 U.S. at 17. See id. at 3-4.”

Accordingly, in Anderson’s-Black Rock, Inc. v. Pave-

ment Salvage Co., 396 U.S. 57 (1969), the Court held that

the invention at issue merely combined the functions of

separate machines into one machine, which was “not

critical or essential to the functioning” but rather was only

“a matter of great convenience[ that] did not produce a

‘new or different function ... within the test of validity of

combination patents.’” Jd. at 60 (quoting Lincoln Eng. Co.

* The enacted provision also included that “[p]atentability shall not be

negatived by the manner in which the invention was made.” 35 U.S.C.

§ 103(a). This additional language should not be understood as altering the

Court’s prior standard for the objective technological contribution required.

Rather, it reflects only legislative rejection of the subjective “flash of

creative genius” formulation articulated in Cuno Eng. Corp., 314 U.S. at

91, which the Court in Graham subsequently held was only a “rhetorical

embellishment” of the Hotchkiss standard. 383 U.S. at 15 n.7. Cf Densmore

v. Scofield, 102 U.S. 375, 378 (1880) (quoting appellant’s argument that the

invention lacked “‘a flash of thought’”); Earle, 8 F.Cas. at 255 (rejecting

consideration of “mental labor”).

of Ill. v. Stewart-Warner Corp., 303 U.S. 545, 549 (1938)). See

id. at 59 (placing all the components together “is relevant to

commercial success, not to invention”). Similarly, in Sak-

raida, the Court held that, by rearranging old elements to

perform the same functions, the invention might “perhaps

producfe] a more striking result” but “[s]uch combinations

are not patentable under standards appropriate for a combi-

nation patent.” 425 U.S. at 282. See id. at 281-82 (dismissing

evidence of improved function that had been relied on by the

Court of Appeals to reverse the District Court).

Il. The Graham Approach to Determining

Patentability is Sound, But Requires Further

Clarification for Its Proper Understanding

and Application by the Patent Office and the

Courts.

As the Court held in Graham, the purpose of the

obviousness standard is “to develop some means of weed-

ing out those inventions which would not be disclosed or

devised but for the inducement of a patent.” 383 U.S. at

11.¥ This statement of purpose takes into account the

different incentives that exist to make inventions and the

different means of appropriating returns from inventions.”

* Cf. Edmund Kitch, Graham v. John Deere Co.: New Standards

for Patents, 1966 Sup. Ct. Rev. 293, 301 (recommending an “unlikely to

be developed” standard and noting that obviousness analysis “does not

view the inducement of investment . . . as an appropriate function of the

patent system”); John Schlicher, Patent Law: Legal and Economic

Principles at 5-7 (West 1992) (arguing that § 103 forbids patents “where

the cost and risk of independent research to obtain an invention are low

enough that an ordinary researcher would be expected to incur them at

about the same time without the additional incentive of a patent”).

” See, e.g., John H. Barton, Non-Obviousness, 43 IDEA 475, 491-93

(2003) (Barton, Non-Obviousness) (citing Wesley M. Cohen et al.,

(Continued on following page)

This statement of purpose, however, does not readily

distinguish when the patent incentive is needed, given

that “there is little doubt that ... routine research would

be done in the absence of a patent system, assuming the

market is important enough.”

This statement of purpose, moreover, fails to articu-

late a relevant time frame over which to assess whether

new inventions would otherwise have been “disclosed or

devised.” See Atl. Works, 107 U.S. at 200 (ordinary me-

chanics continuously make improvements and thus inven-

tions “naturally and spontaneously occur”). The legislative

language requires only that the judgment of obviousness

must be based on the state of the art “at the time the

invention was made.” 35 U.S.C. § 103(a). But obviousness

must be assessed by evaluating what will occur in the

future (based on analysis informed by looking at the past).

Because the articulation in Graham does not directly

address how quickly the art would develop, the Patent

Office and the courts have failed adequately to consider

how quickly the invention might spontaneously occur.”

Protecting Their Intellectual Assets: Appropriability Conditions and

Why U.S. Manufacturing Firms Patent (or Not) (Natl. Bureau of Econ.

Research Working Paper No. W7552, Feb. 2000), available at

http://www.nber.org/papers/w7552, last visited Aug. 9, 2006).

* Barton, Non-Obviousness, supra, at 506. See Duffy & Merges,

supra, at 152 (describing how, once a market developed, “the problem of

streamlining aln) internet checkout was easily solved,” requiring only

“the obvious application of existing techniques to a new problem”).

* See, e.g., Rich, supra, at 81-82 (discussing “the constant increment of

improvements on what we already have,” without explaining how to

differentiate between improvements produced “by the expected skill of

ordinary workers in the arts and by the unobvious developments which

would not occur spontaneously from the application of sucn ordinary skill”).

The Graham formulation also contains a conceptual

problem that encourages errors of analysis. Although a

patent provides an economic incentive, this Court’s case law

makes clear that the obviousness determination is a techni-

cal judgment regarding the capability of those skilled in the

art to make the invention. Obviousaess does not and should

not normally involve any consideration of the economic

motivations in the art to create the invention.”

A clearer restatement of the purpose wf the obvious-

ness standard is thus needed. Historians suggest that the

Court hold that the obviousness inquiry is designed to prohibit

patents on inventions that could have been made by those

skilled in the art within a reasonable period of time (following

the time that the invention at issue was actually made) and

within reasonable budgetary constraints. Historians believe

that this standard is implicit in the Court’s holding in

Hotchkiss that an invention is unpatentable if it requires “no

more ingenuity or skill ... to construct ... than that pos-

sessed by an ordinary mechanic acquainted with the busi-

ness.” 52 U.S. (11 How.) at 265." Some threshold of time and

effort is required to distinguish patentable from unpat-

entable inventions. The Court’s precedents regarding combi-

nations functioned as a proxy for directly assessing how

quickly the invention would be “devised or disclosed” and

*° There may be some rare inventions that are so costly and so risky

that the ability to recoup investments must be considered preconditions to

the ability of those skilled in the art to make them. But the level of skill in

the art presumes a reasonable research budget and the ability to engage in

routine development risks. See Robert P. Merges, Uncertainty and the

Standard of Patentability, 7 High Tech L.J. 1, 48-62 (1992).

™ See Duffy & Merges, supra, at 117 (discussing the “persistent

application of ordinary skills” and the “greater level of skill” required by

Hotchkiss, in regard to technical problems solved “after a few months of

modestly ingenious effort”).

whether that should be considered quickly enough. Direct

assessment of these questions requires more explicit

application of technical expertise and more explicit articu-

lation of policy judgments.

Because inventive efforts are limited by time and

budgetary constraints, persons having ordinary skill in the

art normally will experiment only with combinations having

reasonable expected probabilities of discovering new or

improved functions. Unless the reward is particularly great or

they have unusually large institutional or individual re-

sources, ordinary artisans cannot experiment with every

possible combination. For this reason, this Court held in the

companion case to Graham that the ability to repetitively

combine all known prior art substitutes does not necessarily

demonstrate obviousness, particularly if the prior art discour-

aged an expectation of success (which is commonly referred

to as teaching away from the solution). See United States v.

Adams, 383 U.S. 39, 51-52 (1966) (the combination battery at

issue required a person skilled in the art to “ignore..

long-accepted factors, [that] when taken together, wud,

we believe, deter any investigation into such a combina-

tion”).” Conversely, as recognized by the Court in Concrete

Appliances Co., once an exogenous technology shift occurs,

skilled artisans will rapidly apply new technology to create

new machines and processes having improved functions that

™ See, e.g., Novo Industri A/S v. Travenol Labs., inc., 677 F.2d

1202, 1208 (7th Cir. 1982) (discussing finite research time); Jn re

Antonie, 559 F.2d 618, 620 (C.C.P.A. 1977) (stating that ignoring

unexpected results by focusing on “‘obvious to try’” experimentation is

inconsistent with the second sentence of § 103); In re Tomlinson, 363

F.2d 928, 931 (C.C.P.A. 1932) (stating that an “‘obviousness to try’”

approach to patentability would result in “a marked deterioration” of

incentives to invest in research).

earlier would have been thought unlikely to succeed. See 269

US. at 284.”

Significantly, the restatement Historians propose, like the

case law it derives from, poses only a technical question. It

requires determination of the expectation of success in achiev-

ing an inventive contribution of a particular magnitude within

reasonable (as determined by the Patent Office or the courts)

time and budgetary constraints. Nothing in this standard

requires evaluation of motivations — economic or otherwise —

to make the invention at issue, even though a patent might

provide economic motivations to do so. Rather, the standard

takes into account the degree of innovation that would occur

in a field without considering patentability.

This restatement accords with this Court’s holdings in

Graham and Adams, as well as its earlier and later cases.

In contrast, the teaching, suggestion, or motivation to combine

test “created by the Federal Circuit”™ and applied in this case

conflicts with this Court’s cases. For example, under the

Federal Circuit’s test, the inventions in Graham should have

been deemed nonobvious, as there was no explicit or implicit

teaching, suggestion, or motivation in the prior art to combine

the known mechanical parts.” In contrast, under the Federal

* Cf. Greg Blonder, Cutting Through the Patent Thicket; The

current U.S. system is harming innovation. A simplified process with

stronger patents would encourage economic growth, Business Week

Online (Dec. 20, 2005) (discussing how AT&T took old microwave

patents and filed identical claims on optical inventions, once the ability

developed to make things smaller).

“ Chief Judge Paul R. Michel, “The State of the Court,” at 9

(Federal Circuit Bar Association Annual Conference, June 29, 2006,

revised July 10, 2006), available at http://www-fedcir.gov/speech pdf

(last visited Aug. 9, 2006).

* See, e.g., 383 U.S. at 24-25 (“We assume that the prior art does

not disclose such an arrangement.... Certainly a person having

(Continued on following page)

Circuit's test, the chemical combination in Adams would have

been unpatentable based on a prior art suggestion to combine.”

Given the restatement proposed here, the Court can also

further clarify the methodology adopted in Graham.” As the

Court held in Graham, obviousness or nonobviousness “is

determined” “[a]gainst th{e] background” of: (1) determining

“the scope and content of the prior art”; (2) ascertaining the

“differences between the prior art and the claims at issue”;

and (3) resolving “the level of ordinary skill in the perti-

nent art.” 383 U.S. at 17. Circumstantial evidence of these

facts may be considered in determining obviousness. But

such secondary consideration evidence should be used only to

supplement the factual background against which to legally

determine obviousness. See id. at 17-18 (“Such secondary

considerations as commercial success, long felt but unsolved

needs, failure of others, etc., might be utilized to give light to

the circumstances surrounding the origin of the subject

_ matter sought to be patented.”) (emphasis added). Secondary

ordinary skill in the prior art . .. would immediately see that the thing

to do was what Graham did... .”); id. at 30, 35 (“the [appeals] court

found ‘nothing in the prior art suggesting Scoggin’s unique combination

of these old features’... . The substitution of a rib built into a collar

likewise presents no patentable difference above the prior art.”).

* In Adams, the prior art suggested combination of magnesium

and cuprous chloride for batteries, but because the invention accom-

plished unexpectedly good results using water as an electrolyte (the

problem to be solved) the Court concluded that the combination

reflected an “interdependent functional relationship” and more than

“mere substitution” of prior art designs. 383 U.S. at 50-51.

” See 383 U.S. at 18-19 (emphasizing the need for the Patent

Office to follow the same approach to obviousness determinations to

avoid litigating validity after the fact — thereby “debilitatling] the

patent system” - and to provide a closer correlation of judicial and

administrative practice).

considerations (particularly regarding motivations) do not

themselves determine obviousness.

Because the “ultimate question of patent validity” is a

question of law, obviousness (one of the “three conditions” of

validity) also is a question of law. Jd. Like any legal question,

obviousness “lends itself to several basic factual inquiries,” upon

which legal judgment must operate. Jd. Given the restatement

proposed here, the legal judgment applied to the factual back-

ground requires both an expert technical assessment of how

quickly the art would have developed the capability to make the

invention (given reasonable budgetary constraints) and a policy

judgment of whether it would have developed that capability

quickly enough. The expert assessment determines when the

public would possess the knowledge without the inventor's

contribution, and thus could make unrestricted use of the

technology. The policy judgment determines what budgetary

constraints are considered reasonable and whether the public

would have had to wait an unreasonably long time.”

Without additional legislative guidance, the courts (or the

Patent Office”) must develop policies through the “abundance

* How long the public should have to wait will depend on the

importance of the invention. The legal question requires balancing the

benefits of earlier public acquisition with the costs of exclusive rights.

Thus, Congress originally required judgments by the Patent Office

(replaced by the obviousness standard) that an invention must be

sufficiently useful and important. See supra at 3 & n.2. Similarly,

Congress initially and the courts subsequently held that certain

categories of inventions either were not sufficiently important or were

already within the public’s constructive possession at the time of

invention. See supra at 3-4, 5 & n.7, 6-12.

* The Patent Office likely possesses discretion to adopt policies in

individual adjudications, given the need to apply the obviousness

standard when exercising examination authority. See 35 U.S.C. § 131.

However, the Patent Office may be foreclosed from adopting such

policies by legislative (but not interpretive) rules, as the Federal Circuit

(Continued on following page)

of cases which [have] not be[en] brought under rule, until

they should have presented themselves under all their

aspects....” Jefferson, Letter, supra, at 532. However, this

Court has not yet provided sufficient guidance regarding how

to make the requisite technical predictions and policy judg-

ments. In the absence of clearer guidance, the courts have

often reached conclusions that are not compelled by the facts

and that lack persuasive, articulated rationales.

For example, in the Barbed Wire patent case” the Court

carefully described the prior art and the differences between

it and the claimed double-stranded, coiled-barbed-wire

invention (which better secured the barb to the wire), as

well as secon’sry considerations of long-felt need, failure

of others to make the necessary substitution, and commer-

cial success.” After its careful recitation of the facts,

has repeatedly held that the Patent Office lacks substantive rulemak-

ing authority. See, e.g., Merck & Co., Inc. v. Kessler, 80 F.3d 1543, 1549-

50 (Fed. Cir. 1996); Animal Legal Def. Fund v. Quigg, 932 F.2d 920, 930

(Fed.Cir.1991).

“ Washburn & Moen Mfg. Co. v. Beat ‘Em All Barbed-Wire Co., 143

U.S. 275 (1892). This case also is significant because of the Court’s stated

reluctance to credit oral testimony regarding prior invention, leading to

adoption of corroboration rules and to a judicially imposed clear and

convincing evidentiary presumption of validity. See id. at 284-92; Hybri-

tech Inc. ». Monoclonal Antibodies., Inc., 802 F.2d 1367, 1375-76 (Fed.

Cir. 1£ « ,. When codifying the presumption of validity in Section 282,

Congress did not freeze the Court’s ability to vary the strength of

presumptions for different facts affecting legal judgments of validity.

The U.S. Federal Trade Commission has called for removal of such a

strong factual presumption. See FTC, To Promote Innovation: The Proper

Balance of Competition and Patent Law and Policy, at ES-8 to ES-10 (Oct.

2003), available at http//www.ftc.gov/os/2003/10Annovationrpt.pdf (last

visited Aug. 9, 2006) (FTC, To Promote Innovation).

“ See 143 U.S. at 281-84. The Court was careful to note that the

secondary consideration evidence did not create an invariable rule of

decision and that commercial success and widespread adoption did not

establish patentable invention in all cases. See id. at 283-84 (citing

(Continued on following page)

however, the Court conclusorily held that because the inven-

tor’s invention, disclosure and use had led to widespread

adoption of the technology, “we think the doubts we entertain

concerning the actual inventor of this device [given that it

may have been developed by accident earlier] should be

resolved in favor of the patentee.” Jd. at 292. The Court's

reasoning conflates novelty with obviousness,” and fails to

explain why the combination was patentable. See id. at 283-84

(discussing the conflicting precedents but failing to articulate

why those relied upon were more applicable to the facts).

Even after Graham, sufficient guidance to ground

reasoned judicial decisionmaking has been lacking. For

example, in the case at hand, the Federal Circuit failed to

articulate any relevant and persuasive reasoning for revers-

ing the District Court. See Teleflex Inc., 119 Fed. Appx. at

286-88 (acknowledging that the prior art contained all of the

elements of the combination and describing the grounds for

the District Court’s factual findings of a suggestion to com-

bine); id. at 288 (requiring that “the nature of the problem to

be solved be such that it would have led a person of ordinary

skill in the art to combine the prior art teachings in the

particular manner claimed,” i.e., “when two prior art refer-

ences address the precise problem that the patentee was

trying to solve,” and concluding that the prior art references

did not address the precise problem). Like the reasoning in

the Barbed Wire patent case, the Court of Appeals reasoning

here apparently conflated nonobviousness with novelty“

Webster Loom Co. v. Higgens, 105 U.S. 580, 591 (1881), and Smith v.

Goodyear Dental Vulcanite Co., 93 U.S. 486, 495 (1876)).

“ See id. (Field, J. dissenting “upon the ground there was no

novelty in the invention”).

“ Cf Barton, Non-Obviousness, supra, at 482-83 (“The MPEP’s

demand that there be suggestions in the prior art as a pre-requisite to

(Continued on following page)

and failed adequately to explain why the combination was

patentable. Like the Barbed Wire patent case, the Court of

Appeals decision fails to distinguish (much less provides a

reason to ignore) this Court’s precedents holding that new

combinations were obvious when they lacked any unexpected

function or simply applied existing technology to a new use

(which appears to be the case here from the undisputed facts in

the record). Nor does it provide any explanation of why the

combination was a significant achievement, even if it had not

previously been “contemplated.” Penn. R. Co., 110 U.S. at 494.

Unless the Court overrules its precedents, the patent at issue in

this case does not appear sustainable.

The Federal Circuit’s teaching, suggestion, or motiva-

tion to combine test, moreover, conflicts with this Court’s

approach to obviousness in a number of important ways.“

First, it wrongly imposes an additional and unwarranted

evidentiary requirement on the legal judgment of obvious-

ness,” in a misguided effort to prevent “hindsight” bias. Jn

combine references converts non-obviousness to something near

novelty.”).

“ Existing Patent Office guidance to examiners also conflicts with this

Court's jurisprudence, as it is based on the Federal Circuit's (and its predeces-

sor’s) jurisprudence. See, eg, Manual of Patent Examining Procedure

§§ 2144.06, 2143.01 (8th ed Rev. 3 2005); Barton, Non-Obviousness, supra at

480-81 (discussing the requirement for the prior art to suggest substitution of

equivalents); id at 481-82 (discussing the requirement for a prior art sugges-

tion of the desirability of making the combination).

“ Historians note here their general support for the merits amicus

brief filed in support of Petitioner by Intellectual Property Law Professors,

and specifically agree that the teaching, suggestion, or motivation test

improperly converts a legal judgment into a question of fact. Counsel of

Record and some of the Historians were signatories to the brief of Twenty-

Four Intellectual Property Law Professors at the petition stage.

re Kahn, 441 F.3d 977, 986-87 (Fed. Cir. 2006).“ As noted

above, prior art suggestions to combine could demonstrate

obviousness, but were not previously required in order to do

so. The Federal Circuit test thus fails to permit consideration

of developments in technology or motivations shortly before

the date of invention, which had not yet resulted in contem-

plation of the particular combination. It thereby eliminates

“foresight” that was part of the skill in the art at the time of

invention. As recognized by Justice Frankfurter in dissent in

Marconi Wireless Telegraph Co. of Am. v. United States, 320

U.S. 1 (1943), the “real question is how significant a jump is

the new disclosure from the old knowledge.” Jd. at 62. After

warning against “(rjeconstruction by hindsight,” Justice

Frankfurter emphasized that “the history of thought records

insight first declared to the world by a particular individual

was ‘in the air’ and ripe for discovery and disclosure.” Jd. For

this reason, the Court held in Concrete Applications Co. that

substantial attention must be paid to developments in

technology just before the invention was made. See 269 U.S.

at 184.“

“ See id. at 988 (discussing the requirement for the Patent Office

to provide “some articulated reasoning with some rational underpin-

ning,” but inappropriately citing to In re Sang Su Lee, 277 F.3d 1338,

1343-46 (Fed. Cir. 2002), which requires highly specific factual findings

reviewed for substantial evidence).

“ This does not mean that all simultaneous inventions should be

considered to have been obvious at the time they were made. See, e.g.,

Joel Mokyr, Why Was the Industrial Revolution a European Phenome-

non, 10 Sup. Ct. Econ. Rev. 27, 54 (2003) (“The emergence of a mini-

mum epistemic base is a necessary but insufficient condition for a new

technique to be invented.”). Thus, perhaps the most famous “simultane-

ous” discovery — the theory of evolution by natural selection, by Charles

Darwin (in basic concept by 1838 and more fully by 1842) and by Alfred

Russel Wallace (at least by 1858) — reflected such a significant advance

(Continued on following page)

Second, the Federal Circuit’s test improperly raises the

unwarranted evidentiary burden even higher, by requiring

prior art references that might suggest the combination to

address the “precise problem” solved by the patentee. Teleflex

Inc., 119 Fed. Appx. at 288. This eviscerates the “analogous

arts” doctrine, which had defined the contents of the prior art

available to skilled artisans. See Dann v. Johnston, 425 U.S.

219, 227-29 (1976); In re Clay, 966 F.2d 656, 658-59 (Fed. Cir.

1992). Under that doctrine, once the reference was held

analogous, it was available without restriction both for

combination of its contents and for what it contemplated.

Third, the Federal Circuit’s test converts the technical

capability of the skilled artisan into a business motivation or

research imperative, i.e., it changes the potential to create the

invention from a “could” into a “would.” See, e.g., Kahn, 441

F.3d at 988 (“‘[would] an artisan . .. confronted by the same

problems ... have selected the various elements ... and

combined them in the manner claimed’ ”) (quoting Princeton

Biochemicals, Inc. v. Beckman Coulter, Inc., 411 F.3d 1332,

1337 (Fed. Cir. 2005)). This conflicts with this Court’s prece-

dents holding that, absent unusual functions in the combina-

tion, the person skilled in the art is presumed capable of

making substitutions of known elements without regard to

motivations to do so. See, e.g., Dunbar, 94 US. at 199.

Fourth, the Federal Circuit’s test and related doctrinal

developments alter the Graham approach to secondary

over prior knowledge it dramatically changed human history (although as a

scientific theory it was not a patentable invention). See Niles Eldredge,

Darwin, Discovering the Tree of Life 10-18, 43-53 (W.W. Norton & Co. 2005)

(discussing the factual context for evaluating the scientific contribution).

Nevertheless, given a certain basis of knowledge, institutional set-up, and

luck, “many inventions or their equivalents seem to have been quite

probable ex ante and a few inevitable.” Mokyr, supra, at 38.

considerations. Graham, like earlier cases, expressed

skepticism regarding the relevance and strength of secon-

dary consideration evidence.” The Federal Circuit, however,

has required that secondary consideration evidence always

be considered, regardless of the results of the direct techno-

logical inquiry.” The Federal Circuit thus has elevated

secondary considerations into a “quasi-presumption” of

patentability.” Secondary consideration evidence cannot

establish a prima facie case of obviousness that requires a

teaching, suggestion, or motivation to combine in the prior

art; it can be used only to rebut such a case. As this Court

has recognized, however, commercial success evidence is

highly suspect, because “market-related factors, as op-

posed to sheer technological superiority” are theoretically

and empirically much more likely to determine commercial

success.” Although failure of others is a better and more

direct indicator of technological achievement,” it also must

be subjected to careful scrutiny, particularly given the

phenomenon of simultaneous invention. See, e.g., Toledo

Pressed Steel Co., 307 U.S. at 356 (discounting evidence

“ See 383 U.S. at 36 (“these factors do not ... tip the scales of

patentability” in light of the “small and non-technical mechanical

differences,” particularly given constructive availability of a prior art

patent that made the prior failures of others “wholly irrelevant”).

* See, e.g., Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538

(Fed. Cir. 1983).

” See Robert P. Merges, Commercial Success and Patent Stan-

dards: Economic Perspectives on Innovation, 76 Cal. L. Rev. 803, 823-42

(1988) (Merges, Commercial Success).

" Id. at 846. See id. at 852 (discussing improper inferences that result

from commercial success where firms have reasons to avoid experiments). Cf.

Rich, supra, at 84 (commercial success evidence would require “value

judgments of a kind |the Patent Office and courts) are not equipped to make”

and such evidence is rarely available at the time of patenting).

® See Merges, Commercial Success, supra, at 862-66.

regarding two prior failures unaccompanied by evidence of

awareness of the relevant prior art, and noting the ab-

sence of any evidence of “widespread effort to solve the

problem here involved”).

Ill. The Court Should Clarify the Burdens of

Production and Proof Regarding the Graham

Factors.

Substantial costs of error result from misapplying the

obviousness standard and issuing patents on obvious inven-

tions.” To minimize such errors, the Court should clearly

articulate the burdens of production and proof in making

Patent Office, the current allocations may often be outcome

dispositive and may frequently lead to erroneous results.“

The Patent Act has been interpreted by the Federal

Circuit and its predecessor to impose a burden of production

and proof regarding obviousness on the Patent Office.” In

light of the discussion above, it is critical that the Court make

clear that no evidentiary burden is placed on the Patent Office

(or the party contesting validity in infringement litigation) to

document a teaching, suggestion, or motivation in the prior

art to make the invention at issue. The evidentiary burden

“ See Barton, Non-Obviousness, supra, at 495.

™ See FTC, To Promote Innovation, supra, at V-4 to V-24 (discussing

current burdens of effective examination, data on patent quality, the need

for more resources, and recommending post-grant oppositions to address

the numerous invalid patents that predictably issue); Barton, Non-

Obviousness, supra, at 482-83 (nonobviousness “is ultimately predicated

on whether there is an adequate body of literature that is accessible to

patent examiners to render a determination of patentability.”).

* See, eg., In re Piasecki, 745 F.2d 1468, 1472 (Fed. Cir. 1984)

(citing In re Warner, 379 F.2d 1011, 1016 (C.C.P.A. 1967)).

relates to the contents of the prior art and to skill in that

art, not to the legal judgment of whether the invention

reflects a sufficient technological advance.

At one time the Federal Circuit’s predecessor adopted

presumptions of unpatentability regarding certain types of

inventions.” These presumptions shifted to applicants the

burdens of production and proof of obviousness in the Patent

Office. Historians encourage the Court to examine its prece-

dents regarding combination and other inventions, to articu-

late the burdens of production and proof of nonobviousness

or obviousness in the Patent Office and in infringement

litigation. In doing so, the Court should specify what author-

ity the Patent Office and lower courts possess to adopt

additional presumptions that shift the burdens to applicants

or patentees, who are the parties most likely to possess

relevant information and incentives to disclose it.

Prior decisions of this Court have been extended by

the Federal Circuit to convert the presumption of validity

under 35 U.S.C. § 282 into a strong evidentiary hurdle in

infringement litigation,” notwithstanding the level of

Patent Office review of the relevant evidence. Historians

encourage the Court to clarify its earlier statements. In

particular, the Court should clarify that a clear and

convincing burden of proof should not apply to issues for

” See, e.g., Piasechi, 745 F.2d at 1472 (citing, e.g., In re Henze, 181

F.2d 196, 201 (C.C.PA. 1950), and In re Surrey, 319 F.2d 233, 235

(C.C.P.A. 1963)).

” See Matthew D. Henry & John L. Turner, The Court of Appeals for the

Federal Circuit’s Impact on Patent Litigation, 35 J. Legal Stud. 85, 114 (2006)

(noting that the Federal Circuit’s “stronger presumption of validity” has

resulted in a three-fold increase in success in overcoming district court

invalidity decisions on appeal, which decisions district courts make half as

often as before and patentees appeal twenty-five percent more often).

which the relevant evidence was not previously considered

by the Patent Office.”

Finally, Historians encourage the Court to adopt a burden-

shifting approach to the Graham methodology. If a prima facie

case of obviousness or nonobviousness can be made based on

the facts regarding the prior art and skill, the burdens of

production and proof should then shift to rebut that conclusion

using secondary consideration evidence (and then only for its

bearing on the technological cre:.tivity involved). This appears

to have been the structure contemplated by Graham, when

holding that it is “[algainst this background [that] the obvious-

ness or nonobviousness of the subject matter is determined”

and that when the level of technological creativity has already

been demonstrated, secondary considerations are “wholly

irrelevant.” 383 U.S. at 17, 36.

CONCLUSION

Historically, the Supreme Court has held inventions to

a reasonably high standard of technological creativity in

order to warrant a patent. The Federal Circuit’s teaching-

suggestion-motivation test as applied in this case deviates

from this historical standard, and thus the judgment of

the Court of Appeals should be reversed.

Respectfully submitted,

JOSHUA D. SARNOFF

Counsel of Record for Amici Curiae

Economists and Legal Historians

“ Cf Corning v. Burden, 56 U.S. (15 How.) 252, 271 (1853) (“a

patent, thus issued after an inquisition or examination . . . is entitled to

much more respect, as evidence of novelty and utility, than those

formerly issued without any such investigation.”).

App. 1

IX A- AMI ns

James Bessen

Research on Innovation

Robert Friedel

Professor of History

University of Maryland

Paul Israel

Director and General Editor

The Edison Papers, Rutgers University

Steven Lubar

Professor of American Civilization

Brown University

Robert Merges

Professor of Law

University of California, Berkeley

Michael Meurer

Professor of Law

Boston University School of Law

* Institutional affiliations are provided only for purposes

of identification.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.