Case Studies
KSR v. Teleflex
In KSR v. Teleflex, the Supreme Court addressed the doctrine of non-obviousness that had been developed by the Federal Circuit via the use of a "teaching-suggestion-motivation" (TSM) test. The case involved a patent, held by Teleflex, which disclosed in one of its claims an adjustable automobile gas pedal with a drive-by-wire sensor mounted at the pedal's pivot point. KSR had previously developed an adjustable pedal with a mechanical linkage; however, when chosen by GM to supply adjustable pedals for trucks with computer-controlled throttles, KSR added a sensor to its design and Teleflex sued for infringement. The District Court granted Summary judgment and the Federal Circuit reversed, holding that the District Court did not apply the TSM test strictly enough, as the prior art referenced in the Teleflex patent did not precisely address the specific problem that the patent was to solve and would thus not motivate an inventor to look at those references.
The Supreme Court reversed, holding that the Federal Circuit addressed the question of obviousness in a "narrow, rigid manner," and that a person of ordinary skill in the relevant art would readily be able to grasp the concept of mounting a sensor on a fixed pivot point of an adjustable pedal. Therefore, the Supreme Court held, the patent was invalid due to obviousness.
The decision of the Supreme Court makes it much easier to invalidate patents based on obviousness, as one will now have to consider whether an invention was the product of innovation or simply a combination of the prior art. Since the PTO examines every patent application for obviousness, this decision will have an impact both on the litigation and prosecution aspects of patent law practice.
In re Seagate
In Seagate, the Federal Circuit established a new standard for willfulness and enhanced damages in infringement cases and clarified issues of attorney-client privilege and work product protection created by reliance on advice of counsel as a defense to willful infringement. The Court's decision addressed three issues: under what conditions a court may award enhanced damages for willful infringement; the scope of the privilege waiver triggered by reliance on advice of counsel; and whether the waiver encompasses trial counsel's work product.
The Federal Circuit first overruled its 1983 decision in Underwater Devices and held that proof of willful infringement that permits enhanced damages requires at least a showing of objective recklessness. The court abandoned the "affirmative duty of due care" standard of Underwater Devices, which permitted a finding of willful infringement in cases that were more akin to negligence rather than willfulness. The court established a new standard where, to establish willful infringement, one must "show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent." If that condition is satisfied, the patentee must further establish that the "objectively-defined risk…was either known or so obvious that it should have been known to the accused infringer."
The Court also significantly restricted the scope of privilege waiver, holding that a party's assertion of the advice of counsel defense to willful infringement does not constitute waiver of attorney-client privilege for communications with trial counsel. Furthermore, relying on opinion counsel's work product does not waive work product immunity with respect to trial counsel. However, in the presence of chicanery, for example, waiver of privilege may be extended to trial counsel.
As willful infringement is alleged in a large majority of cases due to the possibility of treble damages, a significant narrowing of the standard will have broad ramifications in patent litigation. Furthermore, the elimination of most waivers of privilege for trial counsel will make reliance on advice of other counsel less perilous.
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