In a hotly anticipated decision that could make it easier to challenge patents of questionable quality, the justices called for loosening the current approach set by the nation's dedicated patent appeals court for deciding when a combination of existing elements deserves patent protection.
"Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may, in the case of patents combining previously known elements, deprive prior inventions of their value or utility," the court wrote in a majority opinion (PDF) penned by Justice Anthony Kennedy.
The court, which is rooted in an obscure dispute between KSR International and Teleflex over vehicle gas pedal designs.
Technology companies were quick to praise the decision. Several Silicon Valley heavyweights, including Intel and Cisco Systems, had submitted supporting briefs urging the Supreme Court to revise the lower court ruling.
"There will be a better opportunity for examiners to weed out patents or applications that are not worthy of getting patents, and it will go a long way toward re-establishing patent quality," said Emery Simon, counselor to the Business Software Alliance, whose members include Adobe Systems, Cisco Systems and Microsoft.
Others were wary of the decision's broader economic implications on patent holders and voiced concern that the decision will throw the patent system into a state of confusion.
"I think it's very fair to say that it's going to be harder, more costly and more time-consuming for inventors to obtain U.S. patents in all areas of technology, and particularly in areas with predictable art, as we call them, such as mechanical inventions and software and methods of doing business," Robert Greene Sterne, founding director of the patent law firm Sterne Kessler Goldstein & Fox, said in a conference call with reporters. He added that "existing patent portfolios will need to be looked at, and existing relationships will need to be evaluated."
Federal law dictates that an invention cannot be patented if a person of "ordinary skill" in the same field could have come up with it. But because it's easy to claim that an invention is obvious in hindsight, the U.S. Court of Appeals for the Federal Circuit in 1982 concocted a legal test designed to lead to a more objective conclusion.
That standard requires that for an invention to be declared obvious, some "teaching, suggestion or motivation" must exist to show that a person of ordinary skill would have thought to combine certain elements.
Critics have argued that in practice, written evidence is required to pass that test, which has made it harder to overturn allegedly obvious patents and rendered it easier to obtain them from the U.S. Patent and Trademark Office in the first place. Technology companies say that's especially hard for them to prove because of the speedy rate at which they tend to develop new products and ideas.
"It's not written down, it's not published, it's not the subject of scholarly discussion, and that's where the Federal Circuit was basically looking," Ed Black, president of the Computer and Communications Industry Association, whose members include Google, Oracle, Red Hat and Verizon, said in an interview with CNET News.com on Monday.
The justices were sympathetic to those criticisms. "The diversity of inventive pursuits and of modern technology counsels against limiting the analysis in this way," they wrote. "In many fields it may be that there is little discussion of obvious techniques or combinations, and it often may be the case that market demand, rather than scientific literature, will drive design trends."
Hardware and software makers have also argued that they're especially threatened by the standard because they would like to be able to rearrange at will the thousands of pre-existing components that compose their products. Some say the lax rules havewho make a living off predicting those incremental changes to existing high-tech inventions, landing patents, and then going after companies for infringement.
Supporters of the Federal Circuit's test had argued that any changes would dilute the value of their patents by erasing the "predictability" they currently expect of the system. A number of large, patent-reliant companies like General Electric, 3M, Johnson & Johnson and Procter & Gamble said they believed the current test has been working well and is critical for protecting and encouraging innovation.
Rather than throwing out the so-called "teaching, suggestion or motivation" test entirely, the justices said they expected a number of other factors to be considered as well, namely "the inferences and creative steps that a person of ordinary skill in the art would employ."
As a result of the ruling, "now I can just say, common sense, and a person who was skilled in the particular area, would have known that you could solve this problem using this technique," said Philip Swain, a patent attorney with the firm Foley Hoag in Boston. "You don't have to have a written suggestion or other evidence to suggest the combination; you can just say the person would have inherently known to use that solution."