Addressing a business seminar in New Delhi, India, United States Undersecretary of Commerce for International Trade Franklin Lavin recently called India's patent and copyright laws antiquated and unable to offer protections necessary for foreign companies to operate in India.

"Patent and copyright laws in India are old and back-dated and they no where match the world standards," said Lavin.

Now here's what others might've heard: "Hi, kettle. I'm a pot and you're black."

The U.S. patent system was designed to encourage innovation by giving inventors a temporary monopoly to profit from their new ideas without preventing other people from building upon those ideas. Creativity in various industries depends on this delicate balance.

Nowadays, though, the system is a bit out of control, according to many high-tech firms that claim the current legal standard for granting patents is ineffective at weeding out inventions that should be obvious. The system has created a race between companies and lawyers to secure the rights to incremental variations and half-baked concepts and then sue to attain royalties and settlements from everyone in sight. Software and hardware makers, for instance, have long complained that a glut of so-called junk patents threatens to disrupt the way they do business.

The reasons for the mess, however, are less than obvious. Some blame poor training and understaffing at the U.S. Patent & Trademark Office, while others blame some inventors' and companies' "patent everything just in case" attitude, as San Jose's The Mercury News recently noted.

So it is, in their third major patent case this year, U.S. Supreme Court justices on Nov. 28 heard arguments on the issue of what exactly constitutes "obviousness" when it comes to patent rules.

The most important of the three cases arose after the U.S. federal appeals court overturned a lower court ruling that said a patent by Canadian auto parts manufacturer KSR International wasn't enforceable because it was based on a way to create a pedal assembly that would be obvious to a person of ordinary skill. The appeals court, according to InformationWeek, said that the defendant in the case failed to show that the method was obvious. Pennsylvania-based Teleflex has sued KSR for patent violation. (The other two patent cases: MedImmune vs. Genentech and Microsoft vs. AT&T.)

The case addresses one of the most fundamental questions in patent law: What makes an invention, particularly a combination of existing parts, too "obvious" to warrant protection?

Because of the case's implications on future inventions across many patent-dependant industries, the once-obscure patent spat has attracted the attention of high-tech, pharmaceutical and biotechnology firms, among others.

According to federal patent law, an invention must be declared obvious, and thus non-patentable, when a person of "ordinary skill" in the same field could have come up with it.

A major part of the problem is that, in hindsight, many genuine insights appear obvious.

If sweeping changes are made to the test, asked Justice Scalia, "does it make sense to assume patents are valid under a test that has been erroneous for 20 years?"

In 1982, the U.S. Court of Appeals for the Federal Circuit, the nation's dedicated patent appeals court, set what is known as the "teaching, suggestion or motivation" test. Under Federal Circuit precedent, an invention is deemed obvious if there is an explicit or implicit "teaching, suggestion, or motivation" that would lead a person having ordinary skill in the relevant art to combine teachings in the prior art in the manner claimed in the patent at issue.

Since then, the high court and Congress have issued guidelines that take into account prior inventions and the knowledge that an ordinary person working the field would have, as the courts attempted to construct a more objective way to come to the determination of whether a person of "ordinary skill" in the same field may have been able to come up with the invention.

In the court appearance late last month, justices appeared to take issue with the current legal standard for granting patents. During hour-long oral arguments, Chief Justice John Roberts suggested that an existing federal court test for determining patent obviousness relied too little on common sense, while Justice Antonin Scalia went so far as to call the test, ahem, "gobbledygook" and "meaningless," reports CNET News.

If the high court decides to rewrite the legal standard of patent "obviousness" to make it more restrictive, the effects could very well reshape U.S. intellectual property law and reduce the number of marginal patents, thus echoing throughout any number of industries.

The arguments on Nov. 28 are the only ones that will be heard in the case. A decision is expected by July 2007.

Resources

U.S. official blasts Indian patent system
by K.C. Krishnadas
EE Times, Dec. 4, 2006

Patent system veers off track
The Mercury News, Dec. 4, 2006

Supreme Court To Decide What's 'Obvious' In Key Patent Case
by Paul McDougall
InformationWeek, Nov. 22, 2006

Supreme Court weighs 'obviousness' of patents
by Anne Broache
CNET News, Nov. 28, 2006

Week in review: Tell it to the judge
by Steven Musil
CNET News, Dec. 1, 2006