Supreme Court Upholds "TSM Test" of Obviousness; Mixed Impact for Pharmaceutical Patent Owners

KSR Int'l v. Teleflex, 550 U.S. ___ (2007)

In a unanimous decision released this morning, the Supreme Court reversed the Federal Circuit's decision in KSR v. Teleflex.  The Court rejected the Federal Circuit's rigid application of its "Teaching, Suggestion or Motivation" ("TSM") test in this particular case, but stopped short of discarding the test entirely.  Justice Kennedy wrote the opinion for the Court.

Under the TSM test, an invention is obvious (and therefore unpatentable) only if there is a teaching, suggestion or motivation to combine prior art references.  The TSM test is especially relevant to patents on "combination inventions," such as those on pharmaceutical formulations.  Indeed, in today's decision the Supreme Court cited with approval the Federal Circuit's flexible application of the TSM test in Alza v. Mylan, in which the Federal Circuit invalidated Alza's patent on an extended-release formulation of Ditropan.

Pharmaceutical patent owners are likely relieved that the Supreme Court did not reject the TSM test outright and replace it with a much more stringent standard, such as "Synergism" (as applied in a 1976 Supreme Court case) or "Extraordinary Level of Innovation" (as suggested by the Solicitor General).  On the other hand, today's decision does seem to raise the bar to patentability.

While the Court's decision today didn't establish a clear test of obviousness, it did suggest "predictability" as a touchstone for obviousness:

• "The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results."
• "[W]hen a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result."
• "If a person of ordinary skill can implement a predictable variation, Section 103 likely bars its patentability."
• "[A] court must ask whether the improvement is more than the predicatable use of prior art elements according to their established functions."

PhRMA, BIO, and IPO all filed briefs in support of Teleflex and a flexible TSM test.  Paul Berghoff, Jeremy Noe, and I contributed to the IPO brief.

[Incidentally, nothing seems to bring the Supreme Court together as much as a patent case.  In his confirmation hearings last year, Chief Justice Roberts spoke of his desire to bring more unity to the Court.  It seems like every Supreme Court patent decision in the past year has been unanimous or nearly so.  Maybe this explains the Court's recent interest in patent cases!]

RELATED READING:

• Patently-O; Pharmalot; WSJ Health Blog
• Legal Times article, quoting Chief Judge Michel