Patent Predictions

Protecting intellectual property can hardly be called cheap or predictable. In fact, about the only thing predictable about IP litigation is that outcomes are hard to predict. And, after a decision from the U.S. Supreme Court in April, attorneys' ability to provide meaningful advice to clients in assessing risk in advance of litigation has likely just taken a turn for the worse.

A typical patent infringement lawsuit will cost each party millions in attorneys' fees if it goes to trial. Add on the prospect of millions of dollars in damages and the possibility of an injunction, and these cases can become “bet-the-company” exercises. At a minimum, patent cases swallow up an enormous amount of resources, often with questionable prospects for return on that investment. With such a scenario, clients often seek opinions and advice in advance of litigation to minimize risk or justify the investment these cases represent.

Just ask LeapFrog, Fisher-Price and Mattel. For over three years they have been battling a patent infringement case concerning computerized interactive learning toys. In one of the first cases decided since the Supreme Court's April 2007 ruling in KSR v. Teleflex, LeapFrog's patent was declared “obvious.” It was based on the logic of combining several pieces of existing technology (“prior art”), including a 30-year-old puzzle game that used a phonograph to reproduce letter sounds.

There's a fair chance that before the KSR decision, the LeapFrog decision would not have held up. But the court rejected as supposedly too “rigid” what little certainty there was in the legal obviousness analysis. Before KSR, courts required there to be some evidence of “teaching, suggestion or motivation” to combine prior art to invalidate a patent as obvious. The rationale was that without some evidence to combine the prior art, any accused infringer could look at the prior art with hindsight and essentially piece together the invention.

Instead of affirming the long-established test requiring objective evidence of a teaching suggestion or motivation to combine, the court opted for what it called a more “flexible” approach. Now. the obviousness inquiry is to consider the “common sense” of prior inventors, and whether combining prior art references would result in “unexpected” results, or “synergy.”

Regardless of whether the Leapfrog case was decided correctly, one thing is certain—it's the first of a long line of cases redefining how the risks of IP litigation will be analyzed.