US Supreme Court Weighs In on Two Patent Cases
Joseph E. Gortych
The US Supreme Court recently decided two patent cases that likely will have a significant impact on patenting and on patenting strategies for high-tech businesses.
The first case, Microsoft v. AT&T, involved the US export of components of a patented invention. Under US patent law, direct patent infringement occurs when someone makes, uses, sells, offers to sell or imports into the US a patented invention. One also can be liable for “active inducement” to infringe a patent by providing to another all or a substantial portion of the components of a patentable invention, even if the components are exported from the US and then combined abroad to form the patented invention.
AT&T holds a US patent on an invention that digitally encodes and compresses recorded speech. Microsoft’s Windows operating system includes software that, when installed on a computer, allows a computer to process speech in a manner that infringes on the AT&T patent.
The patent dispute centered on Microsoft’s providing the Windows software in the form of a master version to foreign manufacturers, who used it to make copies of Windows that were then installed on computers sold abroad. AT&T sued Microsoft for infringement of its US patent. Microsoft believed that it should not be liable for infringing on AT&T’s patent because the software master alone did not constitute a “component” per se, and because the Windows copies formed from the master were not “supplied from the US,” as is called for under the applicable law.
The Supreme Court sided with Microsoft, finding that software detached from an activating medium such as a computer remains uncombinable and as such is not a “component.” The court also reasoned that, because the copies from the master were made abroad, the “supplied from the US” requirement for the “components” was not met. Influencing the court’s decision was its reluctance to extend US patent law to cover foreign activities, the court stating that “[if] AT&T desires to prevent copying in foreign countries, its remedy today lies in obtaining and enforcing foreign patents.”
The second case, KSR International v. Teleflex, addressed the question of what the proper test is for determining whether an invention is obvious and thus unpatentable. Although the case involved Teleflex’s patent for an accelerator pedal for automobiles, the holding in the case has broad application to all patents pending as well as to those already issued.
The Court of Appeals for the Federal Circuit (the “CAFC,” the highest patent court below the Supreme Court) had developed and was employing an approach to analyzing obviousness referred to as the “teaching, suggestion or motivation” (“TSM”) test. Under the TSM test, a patent claim is deemed obvious only if there is some “teaching, suggestion or motivation” to combine prior art teachings.
KSR, which was sued by Teleflex for infringing on its patent, argued that the TSM test is too narrow, virtually never results in a showing of obviousness and is inconsistent with Supreme Court precedents involving questions of obviousness. In a unanimous decision, the Supreme Court sided squarely with KSR and rejected the CAFC’s narrow application of the TSM test. The court, in effect, reset the obviousness standard back to the expansive and flexible approach enunciated in its precedents, stating that “the combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.”
The resetting of the obviousness standard in KSR International v. Teleflex should make it much easier for the US Patent and Trademark Office, and the nation’s courts, to find inventions obvious and thus unpatentable.
Joseph E. Gortych, Esq., is president of Opticus IP Law PLLC in Sarasota, Fla.;
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