Nonobviousness and the Federal Circuit: An Empirical Analysis of Recent Case Law

=923309 (examining empirically the Federal Circuit's nonobviousness jurisprudence and finding that the court has not weakened the standards for obtaining patents). Notably, these studies either collect different data than the study reported in this Article or take different looks at the same type of data. 6 See FED. TRADE COMM'N, supra note 3, ch. 4, at 12. 7 See Brief for the United States as Amicus Curiae Supporting Petitioner at 12-15, KSR No. 04-1350 (U.S. Aug. 22, 2006), 2006 WL 2453601 (noting that the KSR case demonstrates the rigid application of the suggestion test and how it results in an improper finding that the patent is obvious). 20071 [VOL. 82:3 E lAMEI LAW REVIEW 914 No,, i r . ..... ... This Article provides such an empirical study. The study examines all Federal Circuit cases over a four-year period considering the nonobviousness of a patent claim. Appeals from both patent infringement cases before district courts and pending patent applications and interferences before the United States Patent and Trademark Office (USPTO) are investigated. The study looks at the data in two levels of detail. First, the study takes a "macro-level" look at the collected data, focusing on only the outcome of each of the nonobviousness claims. Whether the Federal Circuit found the patent claim nonobvious or obvious is recorded. In addition, whether the Federal Circuit affirmed, reversed, or vacated the lower tribunal's decision is considered. The purpose of this macro-level study is to test the broad claim being made in recent criticism-that the Federal Circuit has lowered the nonobviousness requirement. Second, the study takes a "micro-level" look at the actual reasoning behind the court's findings on the nonobviousness issue. This part of the study examines what prompted a finding of nonobvious, seeing if it was a failure to meet the suggestion test or something else. The micro-level study also focuses on the procedural posture of the case below-whether it was a grant of summary judgment, a grant of a motion for judgment as a matter of law (JMOL), a verdict from a bench trial, or a verdict from a jury trial. The micro-level study attempts to measure the impact of the suggestion test on the nonobviousness analysis. Based on this study's findings, the Article concludes that recent criticism is not supported by the last four years of Federal Circuit case law. In appeals from patent infringement cases, the macro-level study finds a distribution that slightly favors findings of nonobvious, with 36.27% of the patents being found nonobvious and 28.43% of the patents being found obvious. 8 In appeals from the USPTO, the macro-level study finds a high percentage of findings of obvious in 85.19% of the patents. These results suggest that the court has not lowered the nonobviousness requirement and may be maintaining a higher nonobviousness requirement in the case of the USPTO. But this conclusion is greatly tempered by the fact that the cases studied may all include litigants and patent applicants that have already taken into account a lowered nonobviousness standard. Thus, any inference into the strength of the nonobviousness requirement from this data is weak at best. The results of the macro-level study, therefore, while 8 The remaining percentage of patents, 35.29%, were vacated by the court. See infra Part I1I.A.1. NONOBVIOUSNESS AND THE FEDERAL CIRCUIT providing some insight, cannot provide a solid conclusion one way or the other. The micro-level study produced more usable results. The suggestion test causes a finding of nonobvious, or a vacation of a finding of obvious, in 32.91% of the patents appealed from patent infringement cases. The suggestion test causes similar findings in appeals from the USPTO in 11.11% of patents appealed. These low percentages stand in sharp contrast to claims that the suggestion test has caused the nonobviousness requirement to lower, particularly in the context of the USPTO. Instead, the suggestion test plays a fairly small role in the court's nonobviousness jurisprudence. This Article comes to these conclusions in the following manner. First, in Part I, the Article provides a background on the nonobviousness requirement, the suggestion test, and recent criticism. Part II of the Article describes the empirical study, including the parameters used and the study's limitations. Part III of the Article reports the study's findings, starting first with the macro-level study's results and then micro-level study's results. The Article then provides a detailed conclusion, reiterating the more significant findings from the study.