For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

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Tuesday, 1 May 2007

Teleflex, Microsoft rulings from US Supreme Court

Two major US Supreme Court patent law decisions were delivered yesterday, while the IPKat was busying himself with trade marks and the copyright gap. The two - of which we shall all hear a great deal about in the coming days and weeks - are KSR International Co v Teleflex Inc and others (31 pages) and Microsoft Corp v AT & T (30 pages). Thank you, Toshiko Takenaka and Christopher Stothers, for drawing these decisions to the IPKat's attention.

KSR International Co v Teleflex Inc and others ,No. 04-1350, is all about obviousness: the US Supreme Court has assaulted the view that it is safe and proper to employ routinely the test of 'Teaching, Suggestion or Motivation' (TSM), which is often used as a rule of thumb for establishing obviousness both by practitioners and by the Court of Appeals (whose decision it reversed). In short, Section 103 of the US Patent Act states that a patent cannot be granted for an invention that would have been "obvious" to a hypothetical "person having ordinary skill in the art". The Court of Appeals for the Federal Circuit has employed the TSM test to help determine whether a claim involving a combination of known elements of the prior art was obvious: anyone seeking to invalidate a patent had to prove, by clear and convincing evidence, (i) that two (or more) earlier patents or other prior art references provided the same information as the challenged patent and that (ii) a person possessing ordinary skill in the art would have been motivated to combine those references. After Teleflex sued KSR for infringement, KSR petitioned the US Supreme Court to invalidate not just Teleflex's patent but the TSM test itself, on the basis that the courts have misinterpreted the Patent Act on obviousness, especially when a patent claims a combination of two known elements. Although the Supreme Court did not accept KSR's submissions in full, it unanimously agreed that they were correct on the facts of tbe dispute before it.

On the background to this ruling and the TSM test, see Patently-O here
On yesterday's ruling see Patently-O, Patent Baristas and and Duncan Bucknell

Microsoft Corp v AT & T was a 7-1 ruling (Justice John Paul Stephens dissenting) that allowed Microsoft's appeal and agreed that the company should not be held liable for patent infringement on copies of its Windows operating system that were sold outside the United States. AT&T had asserted that the Microsoft software code that infringed its patents could be deemed a "component" of a computer, in which case under US law any overseas sales of the Windows operating system would be treated as patent infringements. The Supreme Court's majority opinion was written by Justice Ruth Bader Ginsburg.

The IPKat thinks these two decisions are both probably right. As to KSR, he is always suspicious of rules of convenience when it comes to obviousness (or lack of inventive step, as Europeans have to call it), since you are effectively substituting, for the words of the statute, an arbitrary form of words that represent a concept that has not itself been given legislative sanction. He's a little concerned, though, about the uncertainty that arises when even an incorrect or unsanctioned test is rejected, where that test has been applied and broadly understood by practitioners and judges alike for a considerable period of time. Merpel says, stop being so squeamish about uncertainty. The very fact that the validity of a patent is put at issue in legal proceedings is proof that there is uncertainty as to its validity, irrespective of the test employed for ascertaining its (lack of) obviousness.

As to Microsoft, while patent owners may not like the result it seems appropriate that infringements that are firmly caught by the law of the country in which they occur should be actionable there. Merpel says this is nothing to do with fairness though: it's all to do with (i) giving local lawyers the chance to share the fun and (ii) reassuring infringing defendants that they only have to pay damages at the cheap local rate and not the expensive American one.

6 comments:

Gerontius said...

Whether or not the Microsoft decision is right, it looks to me like flagrant US protectionism - the Supreme court wouldn't want to risk the programming industry being exported to other countries, so they made sure that their decision kept the programmers in the US and the simple copying in those dirty foreign countries.

Now Microsoft can employ people in the US to write an infringing program, ensuring US programmers get paid, have it copied and distributed abroad where it doesn't infringe, and then send the profits back to the US. Hooray, the US wins and everyone else loses. Well done Supreme Court!

David said...

I don't understand how you have arrived at that conclusion. I thought the question was all about how one calculates damages based on infringement outside the US, with reference to the provisions of section 271(f). Whether the programming is done in the US or elsewhere wouldn't matter, would it? I don't see how this decision would prevent or encourage Microsoft from exporting programming duties to other countries around the world. If the program doesn't infringe in the countries in which it is sold (most likely because patents have not been granted), that is an issue for those countries, and should not be an issue for the US, as the Supreme Court has (correctly, in my view) found.

Gerontius said...

This decision doesn't "prevent or encourage Microsoft from exporting programming duties to other countries around the world", agreed, but the opposite decision would have encouraged Microsoft to outsource their programming to contries where they wouldn't have infringed. Hence, the Supreme Court were never going to make that decision whatever the legal situation.

David said...

Point taken. I think there were, however, plenty of other reasons why the Supreme Court did not take the opposite decision, common sense perhaps being one of them. The opposite decision would have set a dangerous precedent for US patents being effectively enforceable worldwide.

William Patry said...

I too am baffled by gerontius's remarks. My wife was a law clerk for the district judge in the case (although at a much earlier time), and I attended the oral argument in the Supreme Court with him. Also in the audience visiting was a delegation of EU judges. The case turned technically on construction of the U.S. statute, but a big policy concern was permitting U.S. judges to award damages for overseas conduct. The effect of the opinion is precisely to preserve the sovereignty of foreign patent systems to award or not award such damages based on the law of the country in question. Justice Ginsburg, who wrote the opinion,is a very refined judge with great sensitivity for foreign law. I would think Europeans would support the decision.
P.S. My wife's judge was reversed in the case, so I hardly have a bias as to the result.

StrategyNode said...

I think supreme court made the right decision... i agree with davad why

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