Innovation and Its Discontents by Lerner Josh Jaffe Adam B. & Josh Lerner

Author:Lerner, Josh, Jaffe, Adam B. & Josh Lerner
Language: eng
Format: epub
Publisher: Princeton University Press
Published: 2004-01-14T16:00:00+00:00

3. Limiting Challenges to Patent Validity

As noted in the Introduction, one of the critical tests as to whether an invention is patentable relates to whether it is “obvious.” The frequently invoked test is whether an individual who has “ordinary skill in the art”—thus, someone who is not Thomas Edison—would consider the discovery to be obvious. Numerous observers—whether friendly to or skeptical about the CAFC—have noted that the court has shown a willingness to see patents as non-obvious, even when there appears to be abundant prior art.104

The Supreme Court had ruled in 1966 that three considerations were of paramount importance in determining whether a discovery is obvious: the scope and content of the prior art, the differences between the prior art and the claims of the patent, and the amount of skill an average practitioner in the area under consideration possessed. Other more circumstantial considerations—such as whether the invention was commercially successful, whether others had tried and failed to undertake similar inventions, and whether the patented invention satisfied an unmet need—were deemed “secondary,” though they “may be relevant.”105 The rationale for giving only secondary consideration to this kind of evidence was that commercial success could come about for many reasons, which may have little to do with the fundamental originality of the discovery. In the pre-CAFC era, the various circuit courts had differed in exactly how they interpreted these instructions, lending an element of uncertainty to the process by which obviousness was considered.

But the CAFC has placed much greater emphasis in its decisions on these supposedly “secondary” considerations. In fact, they have gone so far to state that such considerations are frequently “the most probative and cogent evidence in the record” and that these “must always when present be considered.”106 This has led to a variety of problematic—though predictable—consequences. For instance, firms, upon receiving patent awards, frequently will immediately approach their weakest rivals in the industry, demanding that they take out licenses. Firms that do not have the financial resources for a court battle, and whose modest sales may generate only small royalty obligations, can be expected to agree to a license even if they doubt the validity of the patent. The patent-holders then approach their more formidable competitors, those who might be more likely to challenge the validity of the patent in court, rather than acceding to license demands. But now, if it comes to a legal battle, the patentee can point to the fact that they have already successfully licensed the patent as evidence that it was non-obvious, on the basis of “commercial success.” Indeed, an extension of the CAFC’s logic—that commercial success demonstrates non-obviousness—would be that no patents should ever be struck down for obviousness, because the willingness of the patent-holder to go to the trouble and pay the legal fees for the application and the ensuing litigation is an indication that the award is of commercial importance.

Not surprisingly, creating new ways to demonstrate supposed non-obviousness has led to a declining ability of alleged infringers to prove that the patents that they are accused of violating are invalid due to obviousness.

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