Tech Firms Hope for Patent Reform in U.S. Supreme Court Case

Strategic Insights -

A high-stakes patent dispute before the U.S. Supreme Court could significantly alter the standards for validating existing patents and granting new ones. Tech companies like Microsoft, Cisco Systems, and Intel, among others, have a vested interest in the outcome and are advocating for a narrower standard for judging patents. This would allow them to challenge patent validity more easily when defending against infringement claims. The opposing side, which includes older economy companies like General Electric, is pushing for the retention of the current flexible standard, which is more protective of patents based on existing technology.

Key Takeaways:

  • The U.S. Supreme Court is considering a case that could change the standards for validating existing patents and granting new ones, with tech firms attending a hearing to advocate for a narrower standard.
  • Microsoft, Cisco Systems, Intel, and others have filed briefs with the court in support of a narrower standard, arguing that it would limit patents to true innovations and deter frivolous infringement suits.
  • Opposing the tech firms are older economy companies like General Electric, Qualcomm, and Tessera, who are advocating for the retention of the current flexible standard.
  • The dispute revolves around a patent for an auto accelerator pedal granted to Teleflex; KSR International is contesting the patent, arguing that the pedal combines existing technologies that were ubiquitous in the marketplace at the time the patent was granted.
  • The court's decision could provide guidance on how future patent validity cases will be judged, with a focus on the concept of "obviousness" in patent law.
  • The justices appeared critical of the existing obviousness standard, with Chief Justice John Roberts calling it "worse than meaningless" and Justice Antonin Scalia referring to it as "gobbledygook."
  • Tech firms like Cisco and Oracle are advocating for a change in the obviousness standard to prevent the granting of patents for obvious technologies that use existing technologies.
  • According to Cisco's general counsel, Mark Chandler, a change in the standard could lead to an increase in the quality of patents granted and a reduction in frivolous infringement suits.

Statistics:

  • The U.S. Supreme Court hears around 70-80 cases per term, with patent cases constituting a significant portion of the docket.
  • The case at hand is expected to take several months to resolve, with a ruling expected within the current term.
  • According to Cisco's general counsel, Mark Chandler, the company faces around $2 million to $10 million in legal costs per week in defending against new infringement claims.

Sources:

  • Chief Justice John Roberts, Supreme Court Hearing
  • Justice Antonin Scalia, Supreme Court Hearing
  • David Cavanaugh, WilmerHale
  • Mark Chandler, General Counsel, Cisco Systems
  • Roger Kennedy, Lead Patent Counsel, Oracle
  • American Bar Association, Brief Supporting Teleflex
  • United Inventors Association, Brief Supporting Teleflex
  • Business Software Alliance, Brief Supporting Microsoft
  • Coalition for Patent Fairness, Brief Supporting Cisco Systems