The U.S. Supreme Court made it more difficult Monday to obtain patents based on previous inventions and made it easier to invalidate such patents in a case involving a Canadian company.
In a unanimous ruling, the court said that in asserting a contested patent was valid, a federal appeals court had too loosely applied a basic test of whether a claimed invention warrants patent protection.
The test, which states that an obvious invention is not worthy of patent protection, is the fundamental basis on which the U.S. Patent and Trademark Office (USPTO) sifts 160,000 patents issued from among 440,000 applications a year.
"Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may ... deprive prior inventions of their value," Justice Anthony Kennedy wrote in his ruling in the case of KSR International Co. v. Teleflex Inc.
Teleflex, of Limerick, Pa., in 2002 sued KSR International Inc. of Ridgetown, Ont. — about 100 kilometres east of Windsor — over a claim that the Canadian company infringed on an adjustable gas pedal design that KSR said simply combines existing technologies.
A U.S. District Court judge in Detroit found that Teleflex's patent was invalid, a ruling that was overturned by the U.S. Court of Appeals for the Federal Circuit in Washington. The Supreme Court decision reversed the appeals court.
Technology sector heavyweights such as Intel Corp. had filed briefs supporting KSR's position, arguing that combining existing inventions should be ineligible for patent protection. Building on previous innovations is a cornerstone of computer and software development. A laptop computer can draw on as many as 200 patents.
In contrast, pharmaceutical companies argue that by curbing their ability to patent drugs created with the aid of previously established innovation, their ability to charge premium prices to recover research and development costs — which they say can reach $800 million US for a single drug — would be hindered.
A U.S. Federal Trade Commission report in 2003 urged the U.S. Congress to make it easier to challenge patents at the USPTO and let courts invalidate patents on a preponderance of evidence, rather than clear and convincing evidence.