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Maximizing Value and Minimizing Risk: Three New Intellectual Property Developments That Will Affect Your Business in 2007 . Corporate Counsel Series February 2007. “One Of The Most Important Intellectual Property Cases In A Generation” Pending Supreme Court Patent Case On Obviousness.

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Maximizing Value andMinimizing Risk:Three New Intellectual Property Developments That Will Affect Your Business in 2007

Corporate Counsel Series

February 2007


“One Of The Most Important Intellectual Property Cases In A Generation” Pending Supreme Court Patent Case On Obviousness

Challenge to the Federal Circuit’s“Teaching-Suggestion-Motivation” (TSM) Test

Presented by Rick Fladung,Partner, Strasburger & Price, LLP


June 30, 2007

Houston Chronicle

Supreme Court Scraps Federal Circuits Patentability Test: 100,000 Declaratory Judgment Patent Cases Filed

July 30, 2007

Dallas Morning News

Texas Instrument Announces The Value Of Its Patent Portfolio Decreased 50% In View Of New Supreme Court Patentability Test

June 30, 2007

Wall Street Journal

Surge In Patent Licensees Filing Patent Declaratory Judgment Lawsuits To Test Licensed Patents While Protected By License Agreement

supreme court vs federal circuit
Supreme Court vs Federal Circuit

Using 1960’s to 1980’s Supreme Court precedent, patents will be harder to obtain from U.S. Patent Office and harder to uphold in litigation.


Federal Circuit’s “teaching-suggestion-motivation” test (not found in statute or Supreme Court’s decisions) has been described a “one-way rachet in favor of patentability”.



effects of negative decision on teaching suggestion motivation tsm



Effects Of Negative Decision On Teaching-Suggestion-Motivation (TSM)

Could reduce the value of patent portfolios

A new “obvious” test could open the door for litigation of millions of U.S. patents that were obtained or upheld under the old TSM standard for the past 20 years.


effects of negative decision on teaching suggestion motivation tsm7
Effects Of Negative Decision On Teaching-Suggestion-Motivation (TSM)

MedImmune v. Genentech ― 8-1 Supreme Court decision issued January 9, 2007.

Patent licensee’s can now challenge the scope, infringement, validity and enforceability of a patent licensed from a third party even when the licensee continues to pay royalties on the license.


Protected By



Licensor Attack Thwarted

Known “Adjustable Pedal Assembly” and Known “Electronic Throttle Control”equalsThe ‘565 Teleflex Invention?
proceedings in the trial court and the federal circuit

U.S. Patent


U.S. Patent

Proceedings In The Trial Court And The Federal Circuit
  • Trial Court: Granted summary judgment of obviousness of claim based on combination of Asano with known electronic control references.
  • Fed. Cir.: In an unpublished opinion vacated & remanded. “The correct standard requires a court to make specific findings showing a teaching, suggestion or motivation to combine prior art teachings in the particular manner claimed by the patent at issue”
ksr s attack on teaching suggestion motivation test
KSR’s Attack On Teaching-Suggestion-Motivation Test
  • Contrary to Supreme Court precedents and Sec. 103
    • Hotchkiss (1890); Great A & P (1950); Graham (1966); Andersons Black Rock (1969); Sakraida (1976)
  • Teaching-Suggestion-Motivation allows patenting of inventions that would be obvious under Supreme Court precedents
brief of u s government
Brief of U.S. Government
  • Supports alleged infringer KSR on generally the same grounds asserted by KSR
  • Adds suggestion that an invention needs to be “extraordinary” to qualify for a patent
amicus briefs against teaching suggestion motivation tsm
Amicus Briefs Against Teaching- Suggestion-Motivation (TSM)
  • TSM permits too easy patenting of inventions in fields where there is little publication of innovations. E.E. Frontier Foundation
  • TSM can impact generic drug prices. AARP
  • Tests should be “common sense, case specific”. Business Software Alliance
  • Rearrangement of old elements into new combinations should require “synergy”. Econ.
  • TSM test should not supplant Sec. 103. Intel/Micron
patent owner teleflex in favor of teaching suggestion motivation tsm
Patent Owner Teleflex: In Favor Of Teaching-Suggestion-Motivation (TSM)
  • TSM is not restricted to express suggestions in the art
    • Can use what is implicit or within skill of the art
  • TSM is critical to restrain effect of hindsight warned against in 1966 Supreme Court Graham case
  • To discard TSM after 20 years invites chaos
amicus briefs pro teaching suggestion motivation tsm
Amicus Briefs Pro Teaching-Suggestion-Motivation (TSM)
  • Fed. Cir.’s post cert opinions in other cases expounding on motivation
    • Alza (9-06); Dystar (10-06); Optivus (11-06)
  • All major patent groups favor TSM : AIPLA, ABA-IPL, IPO
    • Losing TSM test would weaken patent protection
    • TSM test focuses on the “time the invention was made” to offset hindsight
    • TSM test is deeply rooted and losing it would significantly weaken patent system
supreme court justices hearing comments critical of teaching suggestion motivation
Supreme Court Justices Hearing Comments Critical Of Teaching-Suggestion-Motivation
  • Justice Scalia:

“Three imponderable nouns”

“I would say its [Federal Circuit’s] test is meaningless”

“…this is gobbledygook…”

  • Chief Justice Roberts:

“Federal Circuit jargon that is inflexible”.

“…it’s worse than meaningless because it complicates the inquiry rather than focusing on the statute.”

supreme court justices milder hearing comments 1
Supreme Court Justices: Milder Hearing Comments (1)
  • Chief Justice Roberts:

“In hindsight everybody says, I could of thought of that; and you need – if you don’t have the sort of constraint that their test imposes, its going to be too easy to say that everything was obvious.”

  • Justice Souter:

“And, to tip it over now is going to produce chaos. What’s the answer to that?”

crystal ball
Crystal Ball
  • The Teaching-Suggestion-Motivation test may not survive at all, in light of the most critical judicial views expressed.
  • Even if the Teaching-Suggestion-Motivation test survives, it is likely to be in the watered down state in view of the recent post certiorari Federal Circuit cases.
  • Or none of the above may happen.
sarbanes oxley and ip management

Sarbanes-Oxley and IP Management

Presented by Alan Thiele,Partner, Strasburger & Price, LLP

justice breyer on supreme court analysis
Justice Breyer on Supreme Court Analysis

1. Text of the law itself

2. History of the language in the law

3. Tradition

4. Precedent

5. Impact on a party of not ruling as argued

6. Impact on those similarly situated

what if







IP Managers

U.S. Patent


U.S. Patent

What If?
action plan
Action Plan







going forward
Going Forward

STEP 1. Recognize/evaluate ideas

STEP 2. Protection plan

STEP 3. Recognize changes in value

biggest mistakes
Biggest Mistakes
  • Allow internal politics to determine value
  • Mislead owners on activity
  • Not appreciate impact of changes
  • Quick reference to all I.P. assets
  • Way to monitor importance
  • Vehicle to report changes









Comm’l Products or Services

Future Products or Services


Products or Services

Great Ideas


or Business Methods

choosing your words carefully search engines trademarks and you

“Choosing Your Words Carefully:” Search Engines, Trademarks, and…YOU

Presented by Charles M. Hosch,Partner, Strasburger & Price, LLP

how search engine advertising works
How Search Engine Advertising Works
  • Advertiser buys “keywords” by “bid”
    • Google, Yahoo, etc. then use the keywords to find the advertiser’s site and present it
    • How? Proprietary, secret algorithms no one sees
    • Site placement = function of (bid $ + ad quality)
    • Usually, advertiser pays “per click” by user.
better keywords better results
Better Keywords = Better Results
  • …but how to pick “keywords?” (alone, or in bundles)
  • The Right Way:
    • Know your customers and what they associate with your product or service
    • Search engines offer help

(automated “tools” – plug in URL, engine suggests keywords; or personalized advice)


what if a competitor buys your trademark as one of its keywords
What If a Competitor Buys Your Trademark as One of Its “Keywords?”
  • Search engines’ policies decry it, but so what?
  • Search engines won’t show your trademark in the course of the search (use secret, proprietary algorithms)
  • The Problem: since user doesn’t see the mark, is this actionable “use” in commerce?
if a trademark falls in the forest and no one sees it is it use
If a Trademark Falls in the Forest and No One Sees It, Is It “Use?”
  • Circuits Are Divided:
    • Ninth Circuit
      • Yes: Search engines’ use of trademarks as “keywords” = “use in commerce,” potentially likely to cause confusion (Playboy case)
    • Second Circuit
      • No: search engines’ “use” in a way that doesn’t

communicate the mark to the public is [like] “an individual’s private thoughts about a trademark”

(WhenU case)

    • W.D. Texas
      • Maybe: purchase of plaintiff’s trademarks as Keywords may constitute “initial interest confusion” (Bluesky case)
what if a competitor pulls this on me
What If a Competitor Pulls This on Me?
  • An ounce of prevention:
    • Keep promoting distinctive marks, rather than merely “descriptive” ones
  • If necessary, cure:
    • Focus on Section 43(a) (federal law of unfair competition)
    • Argue “use in commerce” means using the wires, not so much “use” as will support a trademark registration
    • Consider state causes of action

(e.g., tortious interference)