In a decision issued today, the US Supreme Court reinvigorated the "obviousness test" used to determine whether a patent should be issued. Ruling in the case of KSR v. Teleflex, the Court found that the US Court of Appeals for the Federal Circuit, which handles patent appeals, had not been using a stringent-enough standard to determine whether a patent was infringing.

At issue in KSR v. Teleflex is a gas pedal manufactured by KSR. The pedal has an electronic sensor that automatically adjusts its height to the height of the driver. Teleflex claimed that KSR's products infringed on a patent it held. KSR said that Teleflex's patent combining a sensor and a gas pedal was one that failed the obviousness test, and as such, should not have been granted.

Patent law appeared to be on KSR's side: 1952 legislation mandated that an invention could not be patented if a "person having ordinary skill in the art" would consider it obvious. KSR argued that the US Patent and Trademark Office should have denied Teleflex's patent, as it only combines components performing functions they were previously known to do. However, the Federal Circuit had adopted a higher standard, ruling that those challenging a patent had to show that there was a "teaching, suggestion, or motivation" tying the earlier inventions together.

KSR had plenty of support from the likes of Intel, Microsoft, Cisco, and GM, while Teleflex's supporters included GE, 3M, DuPont, and a number of other companies concerned that some of their patent holdings would be harmed should the Court side with KSR.

SCOTUS found KSR's arguments convincing, ruling that the Federal Circuit had failed to apply the obviousness test. "The results of ordinary innovation are not the subject of exclusive rights under the patent laws," Justice Anthony Kennedy wrote for the Court. "Were it otherwise, patents might stifle rather than promote the progress of useful arts."

The Supreme Court also said that the Federal Circuit's conception of a patent's obviousness was too narrow. "The Circuit first erred in holding that courts and patent examiners should look only to the problem the patentee was trying to solve," according to Justice Kennedy's opinion. "Second, the appeals court erred in assuming that a person of ordinary skill in the art attempting to solve a problem will be led only to those prior art elements designed to solve the same problem."

The end result is that Teleflex's patent has been invalidated and more importantly, the Federal Circuit will now have to pay closer attention to a patent's obviousness. That may be good news for Vonage in its appeal of a court's decision that its VoIP service infringes on three Verizon patents. Our analysis of the patents indicates that they, too, may fail the obviousness test.

More importantly, the Supreme Court ruling is good news for a patent system in dire need of fixing. New legislation introduced to Congress a couple of weeks ago is another attempt at a fix. The bill would streamline the patent appeal process while switching the US patent system from a first-to-invent to a first-to-file system. It would also cap the amount of damages that could be awarded for infringing patents.