Recent Supreme Court rulings have changed IP protections.
U.S. patent law says that you can’t patent an invention that is “obvious.” However, in the 2007 case KSR International Co. v. Teleflex Inc. et. al., the Supreme Court raised the standard for showing that an invention is not obvious and is therefore worthy of a patent. As a result, a lot of inventions that were happily sprinting along the path to the patent finish line are now going to be tripped up and left sprawling. What’s more, many granted patents are now invalid.
This may be a good thing. A variety of voices have been complaining that the U.S. Patent & Trademark Office has been too liberal in handing out those 20-year patent monopolies. For example, in their 2004 book, Innovation and Its Discontents: How Our Broken Patent System Is Endangering Innovation and Progress, and What to Do About It, Adam B. Jaffe and Josh Lerner contend that “in the space of less than a decade, we converted the weapon that a patent represents from something like a handgun or a pocket knife into a bazooka, and then started handing out the bazookas to pretty much anyone who asked for one.” KSR v. Teleflex may prove to be a corrective adjustment to the system, leading to a more appropriate balance between awarding patents to stimulate innovation and inhibiting innovation with an overzealous distribution of patents.
But whether good or bad, the change presents new challenges for executives when it comes to managing their valuable intellectual property portfolios. Many companies still fail to manage the IP process like they manage other aspects of their business. IP is often left to the patent attorney gurus hidden away in a corporate IP silo or, worse yet, in some distant IP-crunching law firm. But if the Patent Office takes the Supreme Court at its word, and there are signs that it will, then those days are over. Gone also are the days when companies could count on patenting countless incremental improvements in order to extend the time during which their products were protected. Many of these incremental improvements will now be deemed obvious.
Now that the Patent Office has been empowered to stop handing out patent applications for incremental inventions, mistakes are not so easily remedied. Loose IP policies, poorly trained executives and managers, and cultures that do not appreciate the value of IP will be significant liabilities that result in expensive development efforts yielding products that can be freely copied by competitors.
While it is clearly too early to consider wholesale abandonment of patent applications for inventions that are only slight advances over the state of the art, companies should monitor the impact of KSR v. Teleflex on pending applications. It will pay to identify vulnerable patent applications proactively and develop alternative patent strategies for protecting innovative products. Once a product is launched, or even offered for sale, the opportunity to obtain patent protection may be significantly damaged. As such, managers cannot afford to sit back and wait for legal groups to take action. The earlier in the product development process that problems are identified, the more likely it is that they can be repaired and critical patent protection can be established that will extend the competitive advantage conferred by the company’s valuable innovations.