The U.S. Supreme Court yesterday made it more difficult for inventors to get patents on works that build on previous inventions. And interested parties have a greater ability to challenge patents and a greater possibility of prevailing. As such, we could see thousands of cases asking the Patent Office to re-examine patents it has already granted.

The United States Supreme Court yesterday concluded a series of cases that weaken the protection given to patent holders, making it harder to get a patent and easier to challenge existing ones. The decisions in two closely watched patent cases continue a recent court pattern of clarifying patent law and suggesting limits on when inventors can win exclusive rights to make and sell an item.

(See: Obvious or Ingenious?)

One of two cases decided yesterday — KSR International v. Teleflex — may well be the court’s farthest-reaching ruling in the patent field for decades and the more significant of the two cases. In a unanimous decision, the justices made clear their belief that standards for patents have become too loose, blurring distinctions between innovations that are “ordinary” and truly “extraordinary.” It is, in fact, as The New York Times calls it, the court’s “most important patent ruling in years,” going on to say:

Because most inventions combine previously known elements, the court’s approach to deciding what sort of combination is so “obvious” as to be ineligible for patent protection will have widespread application. The result will be to make patents harder to obtain and defend.

To be eligible for a patent, an invention must be novel, useful and not “obvious” to a person of “ordinary skill” in the field.

The decision yesterday sends a clear message that the U.S. Patent and Trademark Office and lower courts “must be more open in considering whether inventions are ‘obvious,’ a common ground for denying an application,” The Washington Post reports.

In the separate, software case, the court ruled that Microsoft did not violate an AT&T patent when its Windows software was installed, thus overturning a lower-court decision for AT&T against Microsoft in a dispute involving Microsoft’s export of a master version of its Windows operating system.

The Associated Press (via NYT) reports:

The Supreme Court sided with the Microsoft Corporation on Monday, finding that patent law does not apply to software sent to foreign countries. In a 7-1 decision, the court rejected AT&T’s position that it was entitled to damages for every Windows-based computer made outside the United States using technology that compresses speech into computer code. AT&T had said computers running the Windows operating system infringed on its technology for a digital speech coder system.

The decision limits patent liability for U.S. companies that design software here and ship master disks overseas. The justices said Microsoft “did not trigger liability.”

Many high-tech companies have been urging Congress to make clear that U.S. patent law cannot be applied to activities outside the country. The court’s decision seems to settle that, however. The decision is important for the entire information technology industry, adding clarity and balance to our patent system. The ruling could affect the country’s most innovative industries, in particular the computer and biotechnology sectors.

Indeed, the Supreme Court ruling has created a common sense standard that could have a broad impact, as it has to do with the fundamental issue that affects all patents: whether a patent should be issued in the first place.

As such, patent experts expect the case to change the rules of the patenting game.

Although the two cases — along with the earlier-decided MedImmune v. Genentech — concerned different aspects of the law, experts say the cases collectively show a Supreme Court united in its belief that patent holders have received too much protection in the past. Though the Supreme Court’s decision regarding KSR was focused on the specific case, the justices seem intent on sending a broader message.

The KSR International and MedImmune, Inc. cases together mean much less certainty for holders of thousands of existing patents, John R. Thomas, a Georgetown University law professor who specializes in intellectual property, tells The Washington Post. “The bottom-line effect is that interested parties have a greater ability to challenge patents and a greater possibility of prevailing.”