The federal circuit and patentability: An empirical assessment of the law of obviousness

Texas Law Review

Volumn 85, Issue 7, 2007, Pages 2052-2110

  Petherbridge, Lee ^a   Polk Wagner, R ^b  

^a LOYOLA LAW SCHOOL   (United States)

^b UNIVERSITY OF PENNSYLVANIA   (United States)

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EID: 34547773117     PISSN: 00404411     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (271)

1. See, e.g., Mark D. Janis, Patent Law in the Age of the Invisible Supreme Court, 2001 U. ILL. L. REV. 387, 387 (2001) ("The Court of Appeals for the Federal Circuit . . . has become the de facto supreme court of patents."). From the creation of the Federal Circuit until April 2006, the Supreme Court has granted certiorari in only sixteen patent cases.
2. Arthur J. Gajarsa & Lawrence P. Cogswell, III, Foreword: The Federal Circuit and the Supreme Court, 55 AM. U. L. REV. 821, 822 (2006).
3. See NAT'L RESEARCH COUNCIL OF THE NAT'L ACAD., A PATENT SYSTEM FOR THE 21ST CENTURY 18-19 (Stephen A. Merrill, Richard C. Levin & Mark B. Myers eds., 2004)
4. [hereinafter A PATENT SYSTEM FOR THE 21ST CENTURY] (acknowledging the economic importance of patents).
5. See generally FED. TRADE COMM'N, TO PROMOTE INNOVATION: THE PROPER BALANCE OF COMPETITION AND PATENT LAW AND POLICY (2003), available at http://www.ftc.gov/os/2003/10/ innovationrpt.pdf
6. [hereinafter TO PROMOTE INNOVATION] (addressing the appropriate balance between competition and patent policy to foster innovation);
7. FRED WARSHOFSKY, THE PATENT WARS (1994) (noting the critical nature of patents in economic development).
8. See, e.g., NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005) (adjudicating a patent infringement lawsuit against the makers of the BlackBerry wireless email system).
9. See Christian A. Chu, Empirical Analysis of the Federal Circuit's Claim Construction Trends, 16 BERKELEY TECH. L.J. 1075, 1098 (2001) (noting that the Federal Circuit's reversal rate hovers around 50%).
10. Teleflex, Inc. v. KSR Int'l Co., 119 F. App'x 282 (Fed. Cir. 2005) (vacating the district court's grant of summary judgment on the ground of obviousness), rev'd, 127 S. Ct. 1727 (2007);
11. see, e.g., MercExchange, L.L.C. v. eBay, Inc., 401 F.3d 1323 (Fed. Cir. 2005) (reversing the district court's denial of a permanent injunction against infringement), vacated, 126 S. Ct. 1837 (2006);
12. see also, e.g., Brief for the United States as Amicus Curiae at 16, KSR Int'l Co. v. Teleflex, Inc., 126 S. Ct. 2965 (2006) (No. 04-1350) [hereinafter Brief for the United States] (stating that the Federal Circuit's obviousness jurisprudence "renders patent examination and litigation more costly, grants patent applicants unjustified rewards for disclosing non-innovative subject matter, and forecloses competitors from using the public storehouse of knowledge that should be freely available to all");
13. Brief of Twenty-Four Intellectual Property Law Professors as Amici Curiae in Support of Petitioner at 2, KSR Int'l Co. v. Teleflex, Inc., 126 S. Ct. 2965 (2006) (No. 04-1350) [hereinafter Professors' Brief] (characterizing the Federal Circuit's obviousness jurisprudence as "at odds with the statutory language, inconsistent with [the Supreme] Court's precedent, and contrary to the goals of the patent system").
14. For some information concerning practitioner complaints, see, for example, Paul R. Michel, The Court of Appeals for the Federal Circuit Must Evolve to Meet the Challenges Ahead, 48 AM. U. L. REV. 1177, 1182-85 (1999) (addressing the debate over the Federal Circuit's increasing role).
15. See, e.g., S. REP. No. 97-275, at 4-5 (1981), as reprinted in 1982 U.S.C.C.A.N. 11, 14-15 (stating that the creation of a centralized court to hear suits related to patents will provide doctrinal stability and as a result will decrease uncertainty and increase innovation). For what is perhaps the seminal theoretical piece considering the formation of the Federal Circuit,
16. see Rochelle Cooper Dreyfuss, The Federal Circuit: A Case Study in Specialized Courts, 64 N.Y.U. L. REV. 1 (1989).
17. See infra Part III; .
18. see also R. Polk Wagner & Lee Petherbridge, Is the Federal Circuit Succeeding? An Empirical Assessment of Judicial Performance, 152 U. PA. L. REV. 1105 (2004) (using judicial opinions as a source of data in the same manner as this Article).
19. 35 U.S.C. § 103(a) (2000).
20. NONOBVIOUSNESS - THE ULTIMATE CONDITION OF PATENTABILITY (John F. Witherspoon ed., 1980).
21. See, e.g., Robert W. Harris, The Emerging Primacy of "Secondary Considerations" as Validity Ammunition: Has the Federal Circuit Gone Too Far?, 71 J. PAT. & TRADEMARK OFF. SOC'Y 185, 201 (1989) (discussing the start of a general trend in the Federal Circuit towards favoring the issuance of patents);
22. Arti K. Rai, Intellectual Property Rights in Biotechnology: Addressing New Technology, 34 WAKE FOREST L. REV. 827, 833 (1999) (pointing out the lowered bar for obviousness in the area of biotechnology);
23. Katherine J. Strandburg et al., Law and the Science of Networks: An Overview and an Application to the "Patent Explosion," 21 BERKELEY TECH. L.J. 1293, 1329-38 (2006) (asserting that the weakening of patentability standards is a major cause of the recent "patent explosion").
24. See TO PROMOTE INNOVATION, supra note 2, at 8-15 (reporting the testimony and writings of a number of commentators critical of the Federal Circuit's obviousness law);
25. A PATENT SYSTEM FOR THE 21ST CENTURY, supra note 2, at 87-94 (identifying the court's obviousness law as in need of change).
26. Teleflex, Inc. v. KSR Int'l Co., 119 F. App'x 282 (Fed. Cir. 2005), rev'd, 127 S. Ct. 1727 (2007).
27. Petition for Writ of Certiorari at i, KSR Int'l Co. v. Teleflex, Inc., 126 S. Ct. 2965 (2006) (No. 04-1350).
28. We provide only a review because this subject has been addressed in more depth in other places. For a more in-depth discussion of the institutional design of the Federal Circuit, see Charles W. Adams, The Court of Appeals for the Federal Circuit: More than a National Patent Court, 49 MO. L. REV. 43 (1984),
29. Dreyfuss, supra note 6,
30. and Wagner & Petherbridge, supra note 7, at 1107-24.
31. Federal Courts Improvement Act of 1982, Pub. L. No. 97-164, 96 Stat. 25 (codified as amended in scattered sections of 28 U.S.C.).
32. The authors are of course aware of the Supreme Court's decision in Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., 535 U.S. 826 (2002), which permits appeals of some patent issues to return to the regional circuits.
33. See S. REP. NO. 97-275, at 5 (1981),
34. as reprinted in 1982 U.S.C.C.A.N. 11, 15 ("[P]atent law [is] an area in which the application of the law to the facts of a case often produces different outcomes in different courtrooms in substantially similar cases.").
35. See Dreyfuss, supra note 6, at 7
36. (citing Thomas Cooch, The Standard of Invention in the Courts, in DYNAMICS OF THE PATENT SYSTEM 34, 56-59 (William B. Ball ed., 1960)).
37. See S. REP. NO. 97-275, at 3-6,
38. as reprinted in 1982 U.S.C.C.A.N. 11, 13-16 (discussing reports that forum shopping was common to patent litigation).
39. See id. at 5,
40. as reprinted in 1982 U.S.C.C.A.N. 11, 15 (discussing reports that forum shopping "increases the cost of litigation and 'demeans the entire judicial process and the patent system as well'").
41. It is generally thought that the most likely reason for this was the size of the Supreme Court's docket and, perhaps, a recalcitrance to take patent cases due to their high level of legal and technical difficulty. See Adams, supra note 14, at 45 (noting a higher level of certiorari petitions at the time);
42. Dreyfuss, supra note 6, at 6 ("Perhaps because of its own docket problems and its lack of expertise, the Supreme Court rarely reviewed the patent law decisions of the regional circuits."). This is also consistent with the Senate Report that notes that the Supreme Court "appears to be operating at - or close to - full capacity; therefore, in the future the Court cannot be expected to provide much more guidance in legal issues than it now does." S. REP. NO. 97-275, at 3,
43. as reprinted in 1982 U.S.C.C.A.N. 11, 13.
44. Dreyfuss, supra note 6, at 6.
45. Id.
46. See Adams, supra note 14, at 55-57 (noting the heterogeneity of regional circuit standards).
47. This observation is captured nicely by Professor Dreyfuss. See Dreyfuss, supra note 6, at 6 (indicating that the decisions of the CCPA did not receive the respect of regional courts and that the presumption of validity in regard to CCPA decisions was steadily eroded by these regional courts).
48. S. REP. NO. 97-275, at 5,
49. as reprinted in 1982 U.S.C.C.A.N. 11, 15.
50. See id. at 6,
51. as reprinted in 1982 U.S.C.C.A.N. 11, 16 (reporting the comments of Harry F. Manbeck, Jr., General Patent Counsel of General Electric Company, who testified that doctrinal stability has an effect on innovation and that decreasing uncertainties are important to business decision making).
52. See id. at 5, as reprinted in 1982 U.S.C.C.A.N. 11, 15.
53. See id. ("The Federal Circuit also provides a forum that will increase doctrinal stability in the field of patent law.").
54. See id. at 6,
55. as reprinted in 1982 U.S.C.C.A.N. 11, 16 (stating that stable and predictable law is better for the national economy).
56. It is worth noting that the record is clear that Congress does not intend that the Federal Circuit be a "specialized" court as that term is so often, and pejoratively, used. Rather, Congress was express in the alternative stating: The Court of Appeals for the Federal Circuit will not be a "specialized court," as that term is normally used. The court's jurisdiction will not be limited to one type of case, or even two or three types of cases . . . it will have a varied docket spanning a broad range of legal issues and types of cases. Id.
57. See id. at 4,
58. as reprinted in 1982 U.S.C.C.A.N. 11, 14 ("The Court of Appeals for the Federal Circuit provides such a forum for appeals from throughout the country in areas of the law where Congress determines that there is a special need for national uniformity.").
59. Id. at 5-6,
60. as reprinted in 1982 U.S.C.C.A.N. 11, 15-16;
61. Dreyfuss, supra note 6, at 7.
62. See Wagner & Petherbridge, supra note 7 (discussing the Federal Circuit's development of claim-interpretation jurisprudence).
63. See infra subpart II(B).
64. Dreyfuss, supra note 6, at 18-19.
65. See id. at 30-52 (discussing some areas where the court has wielded jurisprudential influence and concluding that the court's success was mixed).
66. Id. at 10-11.
67. Id. at 21-22.
68. This is a necessarily sweeping statement. It should be noted that there are of course other things a patent applicant needs to do before a patent may be obtained. For example, a patent applicant must file a timely application that includes information sufficient to disclose and enable the invention. See 35 U.S.C. §§ 102, 112 (2000).
69. Harries v. Air King Prods. Co., 183 F.2d 158, 162 (2d Cir. 1950) (Hand, C.J.).
70. NONOBVIOUSNESS - THE ULTIMATE CONDITION OF PATENTABILITY, supra note 9.
71. Those readers familiar with the obviousness requirement of modern patent law may wish to skip this section.
72. Patent Act of 1952, ch. 950, § 103, 66 Stat. 792, 798 (1952) (codified as amended at 35 U S.C. § 103(a) (2000)).
73. 35 U.S.C. § 103(a).
74. Id.
75. Graham v. John Deere Co. of Kan. City, 383 U.S. 1 (1966).
76. Id. at 17-18 (citation omitted).
77. See id. at 18 (noting that case-by-case development lends itself well to the fact-intensive inquiry that patent cases require).
78. Id.
79. 35 U.S.C. § 103(a) (2000).
80. Graham, 383 U.S. at 14.
81. Id. at 15
82. (citing S. REP. NO. 82-1979, at 6 (1952)
83. and H. REP. NO. 82-1923, at 7 (1952));
84. see also 35 U.S.C. § 102 (describing what constitutes prior art).
85. Graham, 383 U.S. at 14.
86. Id. at 36 (internal citation and quotation marks omitted).
87. A search of Federal Circuit opinions on LEXIS, for the period of the study using the search terms "patent /100 obvious" and "Graham" revealed 172 cases. A similar search using the terms "patent /100 obvious" and '"383 U.S. 1'" (the U.S. Reports citation for Graham v. John Deere) revealed 156 cases. The difference is most likely due to the court's common usage of the term "Graham factors" to describe the analysis set forth in the Supreme Court's opinion.
88. See, e.g., Group One, Ltd. v. Hallmark Cards, Inc., 407 F.3d 1297, 1304 (Fed. Cir. 2005) (referring to "Graham factors" without citing to the U.S. Reports).
89. See Iron Grip Barbell Co. v. USA Sports, Inc., 392 F.3d 1317, 1320 (Fed. Cir. 2004) ("We turn first to a comparison between the prior art and the claimed invention. In this inquiry, we are mindful of the repeated warnings of the Supreme Court and this court as to the danger of hindsight bias."
90. (citing Graham, 383 U.S. at 36)).
91. See, e.g., In re Piasecki, 745 F.2d 1468, 1474 (Fed. Cir. 1984) (taking into account evidence of nonobviousness of an invention "at the time the invention was made").
92. See id. at 1475 (finding the contested patent was not obvious at the time the invention was made).
93. See In re Dembiczak, 175 F.3d 994 (Fed. Cir. 1999) (considering a Patent Office rejection for obviousness of a patent application for an orange yard bag with a jack-o'-lantern depicted on its exterior).
94. Id. at 999.
95. It is worth noting that the use of hindsight is not strictly prohibited in an obviousness analyses. See Ruiz v. A.B. Chance Co., 357 F.3d 1270, 1276 (Fed. Cir. 2004) ("While this court indeed warns against employing hindsight, its counsel is just that - a warning. That warning does not provide a rule of law that an express, written motivation to combine must appear in prior art references before a finding of obviousness." (emphasis added)).
96. Dembiczak, 175 F.3d at 999 (quoting C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340, 1352 (Fed. Cir. 1998)).
97. Id. (emphasis added).
98. Id.;
99. see also, e.g., In re Rouffet, 149 F.3d 1350, 1357-58 (Fed. Cir. 1998) (requiring that the Patent Office provide evidence for its assertion that a person of ordinary skill in the art would collect and combine disparate sources of prior art);
100. In re Fritch, 972 F.2d 1260, 1265 (Fed. Cir. 1992) (holding that the Patent Office must provide a "showing [of] some objective teaching in the prior art or that knowledge generally available to one of ordinary skill in the art would lead that individual to combine the relevant teachings"
101. (quoting In re Fine, 837 F.2d 1071, 1074 (Fed. Cir. 1988))).
102. See Gillette Co. v. S.C. Johnson & Son, Inc., 919 F.2d 720, 723 (Fed. Cir. 1990) ("[Appellant] urges that the district court . . . committed legal error by requiring that a claimed combination be 'clearly suggested' by the prior art in order to be obvious.").
103. 119 F. App'x 282 (Fed. Cir. 2005), rev'd, 127 S. Ct. 1727 (2007).
104. Id.
105. See TO PROMOTE INNOVATION, supra note 2, at 28 (recommending that the legal standard developed by the Federal Circuit to prove invalidity is too high and needs to be lowered);
106. A PATENT SYSTEM FOR THE 21ST CENTURY, supra note 2, at 5-6 (recommending to improve the patent system by reinvigorating the nonobviousness standard).
107. See ADAM B. JAFFE & JOSH LERNER, INNOVATION AND ITS DISCONTENTS 34 (2004) ("[T]he granting of patents despite clear evidence of invalidity, in the form of prior art that makes the invention not novel and/or obvious, has become all too common.").
108. See, e.g., John H. Barton, Non-Obviousness, 43 IDEA 475, 477 (2003) ("The nonobviousness standard has since been . . . greatly weakened in a very specific and relatively detailed body of patent law, developed primarily by the [Federal Circuit] . . . .");
109. Rebecca S. Eisenberg, Obvious to Whom? Evaluating Inventions from the Perspective of PHOSITA, 19 BERKELEY TECH. L.J. 885, 889 (2004) ("Courts have marginalized the role of PHOSITA [or a person having ordinary skill in the art to which said subject matter pertains] by presuming that PHOSITA is incapable of innovation and by treating determinations of nonobviousness as conclusions of law. They have further marginalized PHOSITA's role . . . by requiring evidence of 'suggestion' to combine . . . .");
110. Glynn S. Lunney, Jr., E-Obviousness, 7 MICH. TELECOMM. & TECH. L. REV. 363, 373-74 (2001) (reporting that since the advent of the Federal Circuit the use of the doctrine of obviousness has decreased as a means of establishing invalidity in comparison to other doctrines and concluding that this means that obviousness is disfavored).
111. Teleflex, 119 F. App'x at 283.
112. Id. at 284 n.1.
113. Id. at 284.
114. See, e.g., id. at 283.
115. Id. at 290.
116. See, e.g., id. at 285.
117. Id. at 285.
118. Id.
119. Id. at 288
120. (quoting In re Kotzab, 217 F.3d 1365, 1371 (Fed. Cir. 2000)).
121. Id.
122. Professors' Brief, supra note 5.
123. Brief for the United States, supra note 5.
124. See id. at 16 (stating that the Federal Circuit's application of the TSM analysis "grants patent applicants unjustified rewards for disclosing non-innovative subject matter, and it forecloses competitors from using the public storehouse of knowledge");
125. Professors' Brief, supra note 5, at 10 (stating that the TSM analysis causes the issue of patent rights that have "pernicious social effects").
126. See A PATENT SYSTEM FOR THE 21ST CENTURY, supra note 2, at 48 ("[T]he claim that quality has deteriorated in a broad and systematic way has not been empirically tested."). Further, even those studies demonstrating a rise in patenting, or a rise in patenting intensity, fail to link such a rise with a loss of social benefits.
127. See, e.g., id. at 29, 46-63. Indeed, empirical demonstration, while likely possible, would be very costly.
128. See, e.g., Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 SCIENCE 698, 698 (1998) (explaining how multiple rights to exclude might cause an underuse of resources). It is worth noting that there is also property theory that argues against this assumption, as well as some particularized examples of empirical work that show that it may not be a serious problem.
129. See John P. Walsh, Ashish Arora & Wesley M. Cohen, Effects of Research Tool Patents and Licensing on Biomedical Innovation, in PATENTS IN THE KNOWLEDGE-BASED ECONOMY 285, 331 (Wesley M. Cohen & Stephen A. Merrill eds., 2003) (finding, inter alia, that upstream rights have not thus far significantly inhibited product development);
130. John P. Walsh, Charlene Cho & Wesley M. Cohen, View from the Bench: Patents and Material Transfers, 309 SCIENCE 2002, 2003 (2005) (concluding that the results of a survey of academic biomedical researchers offered "little empirical basis for claims that restricted access to IP is currently impeding biomedical research").
131. See TO PROMOTE INNOVATION, supra note 2, at 5 ("Hearings participants raised concerns about the number of questionable patents issued. Such patents can block competition . . . and harm innovation in serious ways." (citation omitted));
132. A PATENT SYSTEM FOR THE 21ST CENTURY, supra note 2, at 3 ("Over the past decade the quality of issued patents has come under frequent sharp attack . . . .").
133. E.g., Professors' Brief, supra note 5, at 13-14.
134. While there is not a consensus regarding what constitutes a low-quality patent, as a general matter a low-quality or questionable patent can be thought of as one that is likely to be invalid. See TO PROMOTE INNOVATION, supra note 2, at 5 ("A poor quality or questionable patent is one that is likely invalid or contains claims that are likely overly broad."). The number and importance of potential causes of low-quality patents is also debated. Others view the substantive requirement as only a factor.
135. See A PATENT SYSTEM FOR THE 21ST CENTURY, supra note 2, at 47 (citing a lowered standard for nonobviousness, fewer prior art search resources at the Patent Office, lower examiner qualifications and experience, and increased workload as other factors);
136. cf. Lee Petherbridge, Positive Examination, 46 IDEA 174, 178 (2006) (arguing that another cause of questionable patents is poor information concerning the scope of the right sought during examination, and that given the difficulty and ambiguity associated with applying the substantive requirement, a more sensible approach to patent quality would include an enhanced focus on defining the meaning of the claims during examination).
137. Brief for the United States, supra note 5, at 12.
138. Professors' Brief, supra note 5, at 9.
139. Id.
140. Brief for the United States, supra note 5, at 14.
141. Professors' Brief, supra note 5, at 9.
142. Id. at 5-6.
143. See A PATENT SYSTEM FOR THE 21ST CENTURY, supra note 2, at 3 ("The claim that quality has deteriorated in a broad and systematic way could be, but has not been, empirically tested.").
144. See, e.g., Wagner & Petherbridge, supra note 7, at 1126 ("[T]his study evaluates the Federal Circuit's methodological approach to claim construction by measuring - that is, categorizing according to standardized criteria - the court's expressions of its methodology in the opinions accompanying judicial decisions.").
145. See Mark A. Hall & Ronald F. Wright, Systematic Content Analysis of Judicial Opinions (Wake Forest Univ. Legal Studies Research Paper Series, Research Paper No. 913336, 2006), available at http://ssrn.com/abstract=913336.
146. Id. at 3.
147. Id. at 10.
148. Id. at 11.
149. See id. at 10 ("Systematic content analysis allows scholars to verify, analyze, or refute the empirical claims about caselaw that are implicit or explicit in all branches of legal scholarship.").
150. See Wagner & Petherbridge, supra note 7, at 1128-30 (considering these oft-cited concerns and limitations about using judicial opinions for systematic study).
151. Edward L. Rubin, The Concept of Law and the New Public Scholarship, 89 MICH. L. REV. 792, 801 (1991).
152. See, e.g., FED. CIR. R. 36 (listing the conditions under which the Federal Circuit will enter a judgment of affirmance without an opinion).
153. One such external factor would be if the Federal Circuit had a policy or target of authoring a certain percentage of opinions that affirm, reverse, or vacate. The authors know of no such policy.
154. January 1, 1990, was chosen as the starting point for the following reasons: first, to reduce the size of the data set to manageable proportions; second, to limit the term of the study to more recent Federal Circuit jurisprudence; and third, to include at least fifteen years of opinions. June 1, 2005, was chosen as the end point because our initial data gathering began in fall 2005; the time lag is designed to ensure that all relevant opinions are included in the LEXIS database.
155. The LEXIS file name is "CAFC"
156. For example, the search terms "patent and obvious" were used.
157. Both of these cases were excluded because the form of obviousness analysis (if conducted at all) is not sufficiently comparable to the typical § 103 analysis to be of use in the data set.
158. Custom software was developed for this purpose.
159. Coding was accomplished with the use of purpose-built Excel spreadsheets, wherein some portions of each record (e.g., the case title and judges) were blinded (as much as practicable) from coders so as to prevent bias. In addition, pull-down menus were utilized to minimize data-entry errors.
160. Graham v. John Deere Co. of Kan. City, 383 U.S. 1, 17 (1966).
161. Id. at 18.
162. While we took every step to reduce the subjectivity of the coding, limiting as strictly as possible coding based on "judgment calls" or "impressions," the nature of content coding makes nearly impossible the assertion that no subjectivity remains. And while we believe that the results of our coding are replicable by at least some others with similar backgrounds and experience, the number of others capable of doing so may be relatively small. Given the technological complexity and highly factual nature of the many Federal Circuit opinions, it is quite likely that this study requires a degree of legal and technical skill that precludes most law students and nonpatent lawyers from being effective coders. If so, this is an unfortunate, albeit inherent, aspect of this approach.
163. In the situation just described, two analyses would have been counted.
164. The machine coding, given its inherent properties, was evaluated (during the development of the software) for its ability to return the desired results.
165. There is no bright-line standard for the sample size of the reliability coding, though researchers suggest that at least a ten-percent sample be used. See Stephen Lacy & Daniel Riffe, Sampling Error and Selecting Intercoder Reliability Samples for Nominal Content Categories, 73 JOURNALISM & MASS COMM. Q. 963, 969-73 (1996). Records used in the reliability coding were chosen via computer algorithm based on the generation of random numbers.
166. Jacob Cohen, A Coefficient of Agreement for Nominal Scales, 20 EDUC. & PSYCHOL. MEASUREMENT 37 (1960). There are other statistical tests that can be used, and some methodologists debate the pros and cons of each. Cohen's kappa was selected for its relative ease of calculation and general acceptance.
167. See Hall & Wright, supra note 98, at 39-40 (noting that the most common statistical test is Cohen's kappa).
168. c is the expected proportion of agreed-upon judgments (those caused by chance).
169. See Matthew Lombard, Jennifer Snyder-Duch & Cheryl Campanella Bracken, Practical Resources for Assessing and Reporting Intercoder Reliability in Content Analysis Research Projects, http://www.temple.edu/mmc/reliability (last updated June 13, 2005).
170. TSM_Other (Field 33) and Procedural Posture (Field 42).
171. Depth (Field 39). Note that this variable is not used in this Article.
172. See supra subpart II(A).
173. See supra Part III.
174. See supra subpart II(A).
175. See Graham v. John Deere Co. of Kan. City, 383 U.S. 1, 18 (1966) ("We believe that strict observance of the requirements laid down here will result in that uniformity and definiteness which Congress called for in the 1952 Act").
176. As Circuit Judge Rader noted in dissent from the Federal Circuit's famous Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448, 1476 (Fed. Cir. 1998), opinion: "[T]his reversal rate, hovering near 50%, is the worst possible. Even a rate that was much higher would provide greater certainty."
177. This includes all obviousness analyses in the database and thus combines the dispositions of the PTO, district courts, the Court of Federal Claims, and the ITC.
178. It should be noted that this requires an assumption that the authors find reasonable. The measurement metric for the study is analyses, not claims, cases, or patents. Thus, one must assume that the number of analyses/opinions reversing a judgment is, on the whole, close to the same as the number of analyses/opinions affirming a judgment.
179. FED. CIR. R. 36.
180. See, e.g., In re Kretchman, 125 F. App'x 1012, 1012 (Fed. Cir. 2005) (affirming, with Rule 36, the Board of Patent Appeals and Interferences' rejection of the applicant's claims for obviousness).
181. See supra Table 1.
182. See infra Figure 1.
183. For example, 35% of summary judgments were vacated. See infra Table 2. As the accompanying discussion notes, this number may well reflect gambling in view of the economics of litigation and efforts to modify the law rather than a lack of stability, or even uncertainty, in the law.
184. See Wagner & Petherbridge, supra note 7, at 1127-28.
185. Id.
186. See Chu, supra note 4, at 1097-99 (reporting the results of a study on the Federal Circuit's reversal rate on all issues in patent cases that covered a twenty-eight month period between January 1998 and April 2000).
187. Like the 22.9% reversal rate that we find, the 47.3% reversal rate reported by Chu does not take into account cases affirmed under Rule 36. Chu finds that Rule 36 affirmances accounted for the disposition of one-fifth of the patent cases during the twenty-eight month period. Including this information, Chu finds that the overall reversal rate for the period studied was 36.6%. Id. at 1099-100. A separate study examining the Federal Circuit's reversal rate over all issues reports a 22% reversal rate for district court patent cases. See Kimberly A. Moore, Judges, Juries, and Patent Cases - An Empirical Peek Inside the Black Box, 99 MICH. L. REV. 365, 396-97 (2000) (reporting reversal rates from 1993-1998). While this rate seems to align closely with the 22.9% rate that we report for the individual issue of obviousness, the 22.0% rate reported by Moore is arrived at very differently than the values reported here and those reported by Chu. For example, the Moore rate excludes data from appeals from the Patent Office while taking into account summary affirmance.
188. See id. at 380 (reporting that the data for the study derived from compilations provided by the Administrative Office of the U.S. Courts consisting of "a population of tried cases from 1983 to 1999");
189. id. at 396 (stating that the data represents "district court reversal rates for all cases appealed to the Federal Circuit" (emphasis added)). Including appeals from the Patent Office provides a more complete picture of the Federal Circuit's treatment of the doctrine, while excluding appeals that were summarily affirmed would increase the rate reported. Thus, perhaps the most that can be said regarding obviousness based on the 22% reversal rate evident in the Moore study is that, excluding appeals from the PTO, the Federal Circuit's overall reversal rate for obviousness that we report is similar to the rate at which the court reverses district courts in all patent cases. Overall, we think this suggests substantial stability in the doctrine of obviousness, for it does not differ substantially from the court's reversal rate across all issues (and the court decides a great number of other issues).
190. However, the error was not outcome determinative in all cases. See Chu, supra note 4, at 1100-03.
191. Kimberly A. Moore, Are District Court Judges Equipped to Resolve Patent Cases?, 15 HARV. J.L. &TECH. 1, 11 (2001).
192. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1476 (Fed. Cir. 1998) (Rader, J., concurring in the judgment).
193. 2 = 0.013, t-obs = 2.500, which indicates statistical significance at the p = 0.050 level.
194. The number for analyses after jury trials is the sum of JMOL-denied + JMOL-granted = 19.8% + 4.8% = 24.6%.
195. See supra section II(B)(1).
196. For example, the Graham factors are viewed by the Federal Circuit as questions of fact. McGinley v. Franklin Sports, Inc., 262 F.3d 1339, 1349 (Fed. Cir. 2001). So too, whether the prior art contains within it a teaching, suggestion, or motivation to combine is also a question of fact. In re Lee, 277 F.3d 1338, 1342-43 (Fed. Cir. 2002).
197. The Federal Circuit's performance when reviewing an obviousness determination following a bench trial is consistent with what others have observed for the court's review of bench trials across all issues. See Moore, supra note 141, at 17 (reporting an affirmance rate of 77% for bench trials on the issue of validity). Chu reports affirmance rates for bench trials across all issues for his twenty-eight-month study that are somewhat less at 56%.
198. See Chu, supra note 4, at 1152 tbl.B-2. The three most probable explanations for the difference between Chu and Moore are the time periods examined, their comparative breadth, and the presence of claim-construction data in the rate reported by Chu.
199. The numbers of our study are harder to compare to this rate, as prior
200. Chu, supra note 4, at 1152 tbl.B-2. There are at least four possible explanations for this. One is the different sampling periods. Another is the comparative breadth of the studies. A third is that, as Chu explains, all reviews of a judgment following a jury trial (including JMOL-granted) are included in the 45%) number. Finally, a fourth is the presence of claim-construction data in the rate reported by Chu.
201. Chu reports a frequency of affirmance of 56%. Chu, supra note 4, at 1152 tbl.B-2.
202. Graham v. John Deere Co. of Kan. City, 383 U.S. 1, 17-18 (1966).
203. The critical reader should note that this situation could be expected to be amplified as TSM is used more frequently. See infra subpart IV(B) (describing the increased use of TSM). It is a logical result of the Federal Circuit's requiring evidence of TSM to establish obviousness. See supra section 11(B)(1). Assuming that the textual TSM is a relatively rare event, TSM must come from other sources. One common source is expert testimony describing the relevant scope, content, knowledge, and skill in the relevant art. To sustain summary judgment, the nonmovant would have to do little more than secure an expert who would contest the movant's expert's interpretation or description of the art.
204. There may be other reasons as well. The first is the presumption of validity. See 35 U.S.C. § 282 (2000) ("A patent shall be presumed valid."). If the lower court is going to guess, it might well align its guess with the relevant presumptions. Secondly, those with a high level of knowledge of the doctrine are probably aware that it is sometimes perceived (usually erroneously) that there may be subrules that prohibit an obvious finding, and perhaps fewer perceived subrules (in light of Graham) that direct toward a finding of obviousness. It is probably not uncommon for particularly inexperienced lower courts to become convinced that such subrules exist. Although, if true, such a phenomenon suggests at least some lack of clarity in the doctrine.
205. See Jack H. Friedenthal & Joshua E. Gardner, Judicial Discretion to Deny Summary Judgment in the Era of Managerial Judging, 31 HOFSTRA L. REV. 91, 120-21 (2002) (discussing the various structural economic incentives in favor of granting summary judgment).
206. 2 = 0.74, t-obs = 12.87, which indicates statistical significance at the p = 0.01 level.
207. See supra Table 2 (showing a 28.8% reversal rate).
208. In re Gartside, 203 F.3d 1305, 1308, 1311-15 (Fed. Cir. 2000).
209. 2 = 0.13, t-obs = 5.14, which is statistically significant to a level ofp = 0.01.
210. See, e.g., supra notes 10-13 and accompanying text.
211. The 57.8% obvious outcome number is surprising in that it is achieved in the face of the law's presumption of validity, which can only be overcome by clear and convincing evidence. See 35 U.S.C. § 282 (2000) ("A patent shall be presumed valid."); Neff Instrument Corp. v. Cohu Elecs., Inc., 298 F.2d 82, 86 (9th Cir. 1961) ("A presumption of validity, which can only be overcome by clear and convincing proof, arises from the issuance of a patent.").
212. Compare Ruiz v. A.B. Chance Co., 234 F.3d 654 (Fed. Cir. 2000), with Ruiz v. A.B. Chance Co., 357 F.3d 1270, 1276 (Fed. Cir. 2004).
213. Lunney, supra note 71, at 374.
214. It also is at least possible that the 1994-1995 information could be correct for that period, but because of the size of the sample, a relatively poor reflection of the overall activity of obviousness at the Federal Circuit.
215. Note that this rate is even lower when the issue is tried. See supra Table 2.
216. Another possible explanation is that parties prefer to use other doctrines to invalidate patents when they can. Anticipation is conceptually simpler, making it easier to explain to a judge or jury. As fields get crowded and patenting becomes heavy, it may be more likely that there is anticipatory art. If, as is generally thought, the Patent Office does a poor job at locating prior art, "real" prior art searching may await litigation. Then, it may be learned that there is anticipatory art, and the case is litigated on that issue. Also, other doctrines may have ascended over time.
217. One of the reasons it was thought that the Federal Circuit was needed was the high rate of regional circuit invalidity that Professor Lunney documents. See supra subpart II(A). Other studies address the rate of invalidity before the creation of the Federal Circuit. See American Patent System: Hearings Before the Subcomm. on Patents, Trademarks, and Copyrights of the S. Comm. on the Judiciary, 84th Cong. 176-85 (1956) (statement of P.J. Federico) (reporting that from 1948 to 1954, the percentage of patents found valid and infringed in the circuit courts of appeals was 18% when patents counted more than once were excluded); GLORIA K. KOENIG, PATENT INVALIDITY: A STATISTICAL AND SUBSTANTIVE ANALYSIS 4-41 (rev. ed. 1980) (reporting a likelihood of noninvalidity before the creation of the Federal Circuit of around 35%); see also Jungerson v. Ostby & Barton Co., 335 U.S. 560, 572 (Jackson, J., dissenting) ("[T]he only patent that is valid is one which this Court has not been able to get its hands on.").
218. See supra Figure 5.
219. See supra Table 3.
220. See supra Table 1 and accompanying discussion.
221. See supra Figure 1.
222. See supra Table 2.
223. See supra subpart II(B).
224. 35 U.S.C. § 103(a) (2000).
225. See supra Table 5 (noting a less than 3% difference in the frequency of vacating judgments between when TSM applies and when it does not).
226. See supra Table 3.
227. See supra Table 6.
228. 2 = 0.45, t-obs = 19.33, which is statistically significant to a level of p = 0.01.
229. See, e.g., In re Dembiczak, 175 F.3d 994, 1001 (Fed. Cir. 1999) (holding that the Board did not make the required particular findings regarding the "locus of the suggestion, teaching, or motivation to combine the prior art references"); In re Rouffet, 149 F.3d 1350, 1359 (Fed. Cir. 1998) (stating that the Board must specifically identify the reasons "one of ordinary skill in the art would have been motivated to select the references and combine them to render the claimed invention obvious"); Ashland Oil, Inc. v. Delta Resins & Refractories, Inc., 776 F.2d 281, 297 (Fed. Cir. 1985) (holding that the district court's conclusion of obviousness was incorrect because it "did not elucidate any factual teachings, suggestions or incentives from this prior art that showed the propriety of combination").
230. See supra notes 69-71 and accompanying text.
231. Compare supra Table 3, with supra Table 6 (showing that the frequency of obvious outcomes is substantially similar between those analyses that included TSM and those that did not).
232. 2 = 0.19, t-obs = 6.50, which is statistically significant to a level of p = 0.01.
233. It is less likely that it reflects Federal Circuit freelancing, as appellate courts do not generally involve themselves with issues and arguments not raised by the parties.
234. See supra Figure 3 and accompanying text.
235. 35 U.S.C. § 103(a) (2000).
236. Graham v. John Deere Co. of Kan. City, 383 U.S. 1, 15 (1966).
237. See In re Dembiczak, 175 F.3d 994, 999 (Fed. Cir. 1999) (listing the above factors as those that are considered).
238. Brief for the United States, supra note 5, at 12, 11-12.
239. See supra Table 3.
240. See supra Table 6.
241. See supra Figure 6.
242. See supra Figure 7.
243. See supra Figure 4.
244. A critical reader should query whether the increase in the application of TSM and the corresponding decrease in nonobvious results at the Federal Circuit is a good measure of how well the Patent Office and lower courts are using TSM. For example, one might reasonably argue that the Federal Circuit's doctrinal pronouncements influence the selection of cases that are appealed. If so, cases where a patent challenger cannot establish TSM may be less likely to be appealed on the issue of obviousness and thus would not show up in the results of this study. While such a situation could exist, however, it relies on some not-too-well-founded assumptions. One is that the missing cases contain "obvious" subject matter that cannot be characterized as being taught or suggested by the prior art. It is at least equally likely that subject matter that cannot be characterized as taught or suggested by the prior art is nonobvious. A second assumption is that the Patent Office and litigants are not interested enough in litigating and appealing claims they firmly believe to be obvious, where those claims might be difficult to put in terms of being taught or suggested by the prior art.
245. If the Patent Office and litigants are pulling cases with obvious claims because they cannot characterize disputed claims as either taught or suggested by the prior art, the temporal aspect of this study might have revealed a tumble in either the frequency or rate of obviousness analyses. This was not seen. In fact, the frequency of the Federal Circuit obviousness analyses increased, albeit slightly, during the period of the study, and reversal rates remained stable for the entire fifteen-year period of the study.
246. See In re Gartside, 203 F.3d 1305, 1311-14 (Fed. Cir. 2000) (applying the substantial evidence standard of review to PTO findings of fact).
247. See s upra Table 2.
248. See, e.g., In re Dembiczak, 175 F.3d 994, 999 (Fed. Cir. 1999) ("We have noted that evidence of a suggestion, teaching, or motivation to combine may flow from the prior art references themselves, the knowledge of one of ordinary skill in the art, or, in some cases, from the nature of the problem to be solved ....").
249. See supra Figure 8.
250. Given the nearly total scholarly focus on TSM, we have not in this Article made an effort to describe and rule out other features of the law of obviousness that may differ between the Graham approach laid out so long ago and the contemporary doctrine.
251. Wagner & Petherbridge, supra note 7, at 1171.
252. While the thought of TSM playing this role is appealing, it may also be troublesome because the Federal Circuit may have handed over a significant amount of power to the Patent Office and lower courts. If it becomes too easy to establish obviousness, doctrinal clarity may begin to fade into a battle of the experts as the obviousness determinations are subsumed into (relatively) review-immune TSM determinations.
253. Teleflex, Inc. v. KSR Int'l Co., 119 F. App'x 282, 290 (Fed. Cir. 2005), rev'd, 127 S. Ct. 1727 (2007).
254. See supra section II(B)(I).
255. See, e.g., Transcript of Oral Argument at 40, KSR In'l Co., 127 S. Ct. 1727 (No. 04-1350) (calling the standard meaningless).
256. See Transcript of Oral Argument, supra note 202, at 41 ("[The TSM analysis] is gobbledygook. It really is, it's irrational.").
257. See supra section II(B)(1).
258. KSR Int'l Co., 127 S. Ct. at 1741.
259. Id.
260. See supra Figure 8.
261. KSR Int'l Co., 127 S. Ct. at 1740-41.
262. See supra section II(B)(1).
263. KSR Int'l Co., 127 S. Ct. at 1741 (citing In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006)).
264. See KSR Int'l Co., 127 S. Ct. at 1741 ("There is no necessary inconsistency between the idea underlying the TSM test and the Graham analysis.").
265. See FED. CIR. R. APP. P. 47.6(b) (indicating that opinions designated as nonprecedential may not be cited as precedent by parties other than for purposes of estoppel or law of the case).
266. KSR Int'l Co., 127 S. Ct. at 1741.
267. See, e.g., Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722 (2002); Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996).
268. See Christopher A. Cotropia, Nonobviousness and the Federal Circuit: An Empirical Analysis of Recent Case Law, 82 NOTRE DAME L. REV. 911, 952-53 (2007) (summarizing findings that "should, at the very least, give pause to recent calls to modify or do away with the suggestion test and the Federal Circuit's recent nonobviousness jurisprudence"); Gregory Mandel, Patently Non-Obvious II: Experimental Study on the Hindsight Issue Before the Supreme Court in KSR v. Teleflex, 9 YALE J.L. & TECH. 1, 38 (2007) ("The study reported here, however, reveals that even if the non-obvious standard is too low, it is not because of the Federal Circuit's suggestion test. The suggestion requirement simply does not appear to reduce the likelihood of an invention being held obvious.").
269. Brief of Business and Law Professors as Amici Curiae in Support of the Respondents at 2, KSR Int'l Co., 127 S. Ct. 1727 (No. 04-1350) ("We conclude that while the analysis is imperfect, and aspects of the Court of Appeals' caselaw should be clarified, [the TSM] approach provides the best available analytic framework for implementing the statutory and constitutional goals of the nonobviousness requirement.").
270. See Transcript of Oral Argument, supra note 202, at 36 ("[T]he Federal Circuit has made quite clear that its test is inclusive, and we think that that establishes that it's not necessary to add some new sort of undetermined test....").
271. See Memorandum from the United States Patent and Trademark Office on KSR Int'l Co. v. Teleflex Inc. (May 3, 2007), available at http://app.onlinequickblog.com/files/80059-70098/ Focarino.pdf (noting that the Court did not reject the TSM test outright, but rather only rejected its rigid application).