“New, Useful, and Nonobvious”
An invention must be all three to get a patent, and even then it may have trouble. The story of two hundred years of U.S. patent law and its impossible but necessary task of defining what is an invention.
Should new forms of life, the creations of biotechnology, be protected by patents? Many of their inventors argue that they should. The patents would reward those inventors with a chance to profit from their inventions and encourage them to invent more. In exchange for the exclusive right to make, use, or sell their creations, the inventors would be required to disclose their discoveries, furthering the advance of science. Others argue against patenting lifeforms, most often on moral grounds; how can you patent a new kind of life? From the historian’s view, the problems of patenting biotechnology are but the latest in a long series of controversial issues in the history of the patent system.
Like the earlier disputes, this one will be settled—probably more than once—according to laws and judicial decisions based on a few words in Article I, Section 8, of the United States Constitution: “The Congress shall have Power To … promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” The Founding Fathers could not have dreamed of genetic engineering, but patent protection for this technology, as for other technologies yet unimagined, must be based on those few words. Two hundred years after its founding, the Patent Office remains a gatekeeper of American technology and innovation.
Like so much of the Constitution, the patent clause left much undefined. What’s a “Discovery”? What’s a “useful Art”? Useful to whom? Just how shall Congress secure inventors’ rights? Two years after the Constitution was ratified, the patent law of 1790 established the basic form of the American patent system: it would give inventors control over commercial use of their inventions for a fixed period in exchange for disclosing the invention’s details. Ever since, patent holders and those who wished to use their inventions have argued over just how the system should work. Patent holders have argued that the law should give greater encouragement to inventors by increasing their control over their patented inventions. The users of patented inventions have insisted that inventors’ monopolies on their inventions discourage economic growth and have urged that the law limit patent rights. The battle has been joined both in the legislature and in the courts.
In a series of laws from 1790 to the present, Congress has described the procedures by which patents are granted. Each of these laws was the subject of much debate. In 1790 George Washington suggested that any entrepreneur who imported a new foreign invention to the United States should receive a patent and have exclusive rights to it, as the most direct way of encouraging industry in the new nation. The idea met with the criticism that such a government grant of monopoly was unseemly for a republic. Washington’s proposal was dropped. The 1790 law answered those who feared monopoly by limiting patents to inventors themselves and requiring that the Secretaries of State and War and the Attorney General, or any two of them, approve each patent. This, of course, proved unwieldy, and few patents were granted.
The patent law of 1793 went to the opposite extreme. It instituted a system merely of registration; almost anyone who applied for a patent was granted one, with the courts (and sometimes Congress) left to sort out the problems. Those who could afford to hire good lawyers or good lobbyists usually won. In the 1820s and 1830s Jacksonians argued that this patent system did not serve the average inventor well and should be changed to allow a professional, nonjudicial, nonpolitical review of all patents, putting all patentees on the same level.
That was the intent of the 1836 patent law, which established the Patent Office in its modern form. But debate continued. In the 185Os those at one extreme argued that the patent system should be done away with completely, perhaps to be replaced by a system of government grants for inventors. Others suggested that property in patents be made perpetual, rather than restricted to fourteen years with the possibility of an extension. (This was increased to seventeen years, with no extensions, in 1861.)
Patent laws, like all laws, did and do represent compromises. They’re political. Courts interpret these laws, and court interpretations have been crucial in shaping the patent system. The most important question the courts have addressed over the years is simply, What is patentable?
The grant of a patent by the Patent Office is a hunting license to go after infringers, but it’s also an invitation for infringers to argue in court that the patent was improperly granted. Judges have always felt free to overturn the decisions of the Patent Office; between 1921 and 1973 the judges of U.S. circuit courts declared almost two-thirds of the patents they ruled on invalid. Associate Justice of the Supreme Court Joseph Story, the judge who more than any other set the tone for patent-law cases in the first half of the nineteenth century, wrote in 1817 that a “patent is to be considered merely prima facie evidence of a very slight nature.” He was referring to the registration system that existed before 1836, but even the establishment of a body of professional examiners didn’t change judges’ opinions very much. In 1949 Justice Robert H. Jackson suggested, only partly in jest, that “the only patent that is valid is one which this Court has not been able to get its hands on.”
Any valuable patent is likely to be challenged, and not until the courts have ruled on it and affirmed its validity is it enforceable. Patent courts today uphold a patent if it meets three conditions: The invention must be new, it must be useful, and it must be nonobvious—that is, sufficiently different from the state of the art. (It must also be not an abstract principle, not a scientific theory, and not a law of nature.) The first two conditions, newness and usefulness, were written into the 1790 patent law. The third, a refinement of the notion of newness to answer questions of how new is new and when is an invention really an invention, first appeared in the 1952 patent law.
The degrees of newness, usefulness, and nonobviousness required for a patent have changed a lot over two hundred years. The emphasis the courts have put on each of them has changed too; sometimes the decisions have emphasized the need for novelty, sometimes usefulness, and sometimes creativity. These changing weights reflect bigger issues in the history of American technology—changes in the ways Americans have thought about inventive genius, the place of technology in society, and the politics of business and economics.
The way the American legal system works, a few cases in any field, usually ones of no special importance, end up assuming enormous significance. A case that happens to frame an issue well finds its way to the Supreme Court, where it evokes an opinion that goes far beyond merely settling the case and acquires its own life. Almost no one today knows that Marbury v. Madison , the landmark decision that in 1803 established the Supreme Court’s power to overturn laws passed by Congress, started out when William Marbury wanted to keep his job as a justice of the peace in Washington, D.C. And so it has been with patent cases. A handful of cases dealing with patents for things as diverse as shingles, doorknobs, and frozen fish have become shorthand for entire fields of patent laws. Talk to patent lawyers today about “nonobviousness,” and they’ll probably think first of Graham v. John Deere —the hinged-plow case of 1966. But the key cases—and the interpretation of the law—keep changing. A lawyer in 1850, or 1900, or even 1950, could have thought of different cases, cases that proved rather different things.
The Constitution says merely that a patent system is to promote the “useful Arts,” but what is useful? Practical usefulness is not always synonymous with usefulness to society, and the Constitution does not distinguish between the two. Practical usefulness is hardly considered at all in awarding patents today. (Patents for new chemicals are an exception.) And neither the Patent Office nor the courts care whether patentees orofit from their inventions.
The issue of simple practical usefulness was addressed, and largely settled, in Lowell v. Lewis , heard by Justice Story in 1817. Lowell was Francis Cabot Lowell, the founder of the textile mills of Waltham, Massachusetts, and namesake of the textile city of Lowell, Massachusetts. He wasn’t the inventor; Jacob Perkins, an eminent New England inventor and business associate and friend of his, was. Perkins had invented a new form of pump, one that used triangular valves. Winslow Lewis, the defendant in the case, had bought the rights to use another patent pump, James Baker’s, which was similar but with oval valves. Lowell sued, claiming that Baker’s patent infringed on Perkins’s.
Lewis’s attorney tried to convince Justice Story that the Perkins patent was not valid because it was not useful. “Usefulness,” he contended, meant something quite broad; he wanted Lowell to show that the Perkins invention was “of general utility.” That is, it must “supersede the pumps in common use” and be “a better pump than the common pump.” Justice Story held otherwise. It didn’t have to be extremely useful or the most useful pump; it just had to have utility. Clearly the Perkins pump was useful; people used it. It was, as Story put it in a later case, “capable of being applied to good purposes.”
Usefulness to society, the second definition of usefulness, has remained a controversial issue. It has been an ongoing concern of courts in deciding whether to uphold patents.
Early in the 1800s the consensus grew that patents would encourage new technology and that technology was useful—that it would lead to economic development. Preindustrial skepticism about governmental protection for invention waned, and judges became more supportive of patents. The increasingly popular “instrumentalist” view of law—the belief that the law should be an instrument of public policy, promoting economic development—weighed in the patent system’s favor. In 1807, in Whitney et al. v. Fort , Eli Whitney’s lawyer argued that the economic and social utility of the cotton gin was a reason to uphold the patent on it, because “the whole interior of the southern states was languishing, and its inhabitants emigrating, for want of some object to engage their attention, and employ their industry, when the invention of this machine at once opened views to them, which set the whole country in active motion.” The potential that new technology held for developing the country was an essential part of the early defense of patent rights.
But it wasn’t enough that a patent should be useful. It also should not hurt society—should not be, in Story’s words, “injurious to the well-being, good policy, or sound morals of society. The word ‘useful,’” he wrote, “is in contradistinction to mischievous or immoral.” An invention to poison people or to promote debauchery, for example, would not be patentable. A test of morality as a determinant of patentability may be surprising to modern ears. We’re accustomed to the assumption that technological change is good, or at least morally neutral. But such a test fits well with the eighteenth-century belief that development was appropriate only if it did not interfere with the property rights of others. (An eighteenth-century morality held sway for a long time in some fields; birth-control devices could not be patented for most of the nineteenth century. And the Patent Office still hesitates before granting patents for gambling equipment or for devices for illegal drug use.)
By the 1830s judges were joining in the general belief that patents would bring public gain. “Patents for invention,” Justice Story wrote in 1833, “are not to be construed with the utmost rigor,” and he abandoned his earlier “insistence on strict and precise definition” in favor of a “more liberal and pragmatic approach.” He had no doubt, writes R. Kent Newmyer, his biographer, that the “law should serve the public by encouraging invention,” and so he redefined patent law so that it “would favor inventors and … serve national interest by promoting technological progress.” Chief Justice John Marshall, who had at first favored a narrow interpretation of the patent law, was convinced by Story’s arguments. Marshall summarized what had become a common view in an 1832 decision. “The great object and intention of the [patent] act,” he wrote, “is to secure to the public the advantages to be derived from the discoveries of individuals.”
Once the national interest and technological progress had come to seem identical, the patent law gained new importance, and patents new respect. By the 1830s more than five hundred patents a year were being issued, as opposed to an average of fewer than thirty a year before 1800. Property in patents had come to resemble, in the words of the legal historian Morton Horwitz, “a dynamic, instrumental, and more abstract view of property that emphasized the newly paramount virtues of productive use and development.” But this belief began to change as the role of patents changed in the second half of the nineteenth century. More and more, patents were not the property of independent inventors—men and women who made their inventions and themselves sold the products based on their patents or sold the patent rights to the products. Instead, as the country continued to industrialize and patents became increasingly important, they were more often held by corporations than by individuals. Many patents were the result of work done by corporate employees, and corporations bought the rights to many others.
Before long corporations were using patents to suppress competition. The 185Os saw the beginning of patent pools—arrangements for sharing patents among firms. Some of these were honorable legal attempts to reduce patent litigation by allowing companies to make use of one another’s patents. The first patent pool was of this sort. Sewing machine manufacturers, embroiled in litigation, agreed to pool their patents and make them available at a reasonable fee to any manufacturer.
Other patent pools were less legal; they were designed to keep new firms out of a market by denying them access to the patents. In the glass-bottle industry Owens-Illinois and HartfordEmpire pooled their patents in 1924 and licensed them only, they told a congressional committee, to “manufacturers of the better type, refusing many licensees whom we thought would be price-cutters.”
Companies also took advantage of the patent system in other ways. Some tried to buy up every patent related to their business—patents that could keep competitors out of the business or tie them up in court for years. In the 1880s and 1890s businesses like American Telephone and Telegraph, Westinghouse, and Standard Oil built bulwarks of patents around their operations to defend themselves against competitors. Other firms insisted that customers buy patents they didn’t want along with those they needed or buy renewable products to go with patented ones—staples to go with a patented stapler, for example, or punch cards to go with a tabulating machine. Firms that used patents illegally were sometimes found guilty of patent abuse.
The success of big business at using patents, trusts, and combinations to restrain trade and control markets engendered a political reaction. Progressives elected to the state and federal legislatures and governorships not only began trust-busting—passing a variety of laws to make the restraint of trade illegal—but also appointed new judges, who before long took on whatever they saw as the abuse of the patent system.
The courts responded to the use of patents for the restraint of trade by making it more difficult both to uphold a patent in court and to receive an injunction against infringement. In the second half of the nineteenth century, so many decisions overturned patents or made them harder to defend that one legal historian has labeled those years the “patent-smashing era.” Judges began to rule that the “usefulness” of the new technology the patent system encouraged was being counterbalanced or even outweighed by the patents’ detrimental role in promoting monopoly. They insisted that social utility be considered along with technical utility.
The courts’ hostility toward patents continued into this century. The question of monopoly became explicit when the Supreme Court held in 1944 that it was fair to take into account an inventor’s or his or her assignee’s degree of control of the industry before deciding whether or not the additional monopoly of a patent would be enforceable. A patent owned by a company that had a monopoly in an industry would not be as “useful” as one owned by a less monopolistic company.
In the mid-nineteenth century patents had been assumed to promote economic growth and therefore to be generally useful. By the 1940s and 1950s many judges assumed that patents often promoted economic concentration and thus were not generally useful. Usefulness to society, a cultural and political standard, has played a surprisingly large and changing role in patent decisions.
Newness, the second criterion for patents, is a less political one than usefulness. Just how new does ànew invention have to be? When is a technological advance an invention , not just a minor improvement or obvious extension of existing technology? Clearly this is a difficult thing to measure. Sufficient novelty is the issue over which most patent cases today are fought. It’s also the issue in which the laws and rulings have changed the most.
Even though the 1793 patent law was merely a system of patent registration, it required that a patent consist of more than “simply changing the form or the proportions of any machine, or composition of matter, in any degree.” Justice Story addressed this issue directly in Earle v. Sawyer , an 1825 case.
Willard Earle of Boston, an “ingenious mechanic,” had applied for and received a patent on his new shingle mill. What was new was the saw; he replaced the up-and-down saw in his mill with a circular saw. Except for this change, the shingle mill was like earlier ones. But this improvement made the saw work much faster, and Earle was able to charge $150 or $200 for his shingle mills when the old-fashioned, much less efficient type went for only $60 or $70. Sawyer was a mill owner who copied Earle’s mill without paying for it. Earle sued for infringement.
Sawyer’s lawyer decided that the best defense was a good offense and suggested that Earle’s patent was no good. A patentable invention, he told the court, must be more than a simple improvement, more than simply replacing an up-and-down saw with a circular saw. He suggested that an inventor must undertake “mental labor and intellectual creation.” The invention must not be a thought that would occur to any person skilled in the art, but rather “some addition to the common stock of knowledge.” Justice Story rejected this line of reasoning. “It is of no consequence,” he wrote, “whether the thing be simple or complicated; whether it be by accident, or by long, laborious thought, or by an instantaneous flash of mind, that it is done. The law looks to the fact, and not to the process by which it is accomplished.” He added that the law “asks nothing as to the mode or extent of the application of his genius to conceive or execute it.” Earle’s patent was upheld.
This standard was not to last. Hotchkiss v. Greenwood was the first of several cases in which the Supreme Court retreated from the standard Justice Story had set in Earle v. Sawyer . John Hotchkiss was one of several inventors who together received a patent in 1841 for an improvement in doorknobs; they substituted porcelain for wood. This was clearly a useful invention—it swept the market—but the Supreme Court decided in 1850 that it was not a sufficient breakthrough. It lacked “that level of skill and ingenuity which constitute an essential element of every invention.” Devising a porcelain handle required, the Court ruled, “no other ingenuity or skill … than that of an ordinary mechanic acquainted with the business.” The invention was “the work of the skillful mechanic, not that of the inventor.” This was a distinct shift away from Story’s unconcern for the degree of “genius” in Earle’s invention.
This issue became increasingly important. One key case involved railroad tank cars. James and Amos Densmore, two brothers from the Pennsylvania oil country, received a patent on “a new and useful improved oil-tank car for carrying petroleum and other like substances” in 1866. The Densmore brothers mounted two large vertical tanks onto a flatcar, securing them with iron rods. The scheme was obvious and successful. To protect it further and to intimidate imitators, James Densmore filed for three more patents on the same general idea. Two were for cars with three vats, and one was for cars with rectangular tanks.
Better tank cars were soon invented, but Densmore continued to prosecute infringement cases. The alleged infringers responded in court that Densmore’s invention had been nothing new, that many shippers had used barrels on rail cars to ship oil and other liquids before the Densmores came along. In Densmore v. Scofield , in 1880, Justice Noah Swayne used a phrase that would define invention, and bedevil judges and juries, for the next hundred years. A patentable invention required, he wrote, a “flash of genius … an exercise of the inventive faculty.” The invention could not be obvious; it had to represent a substantial breakthrough, a significantly new way of doing things. The Densmore tank car failed the test.
Even though the “flash of genius” standard was, as one judge wrote, “metaphysical” and difficult to define, it held sway for many years. Some judges resorted to the same reasoning that later became famous in pornography cases: They knew it when they saw it. The Supreme Court wrote in 1891 that genius is an abstraction that “is virtually a practical impossibility to define adequately … that impalpable something which distinguishes invention from simple mechanical skill.”
In the twentieth century the definition of invention was further tightened as corporate abuses of patents raised questions about the social utility of the patent system. In 1944 the Supreme Court held that step-by-step laboratory research was not invention. A planned research program that resulted in new ideas was everyday work, not a “flash of genius.” The Court held that patents emerging from corporate research and development must thus meet a higher standard of patentability than an individual’s invention.
And that standard of patentability kept getting higher. The case of Cuno Engineering Corp. v. Automatic Devices Corp. in 1941 included a patent for an automobile cigarette lighter with a thermostat to cut off the current when it got hot enough. The court decided this concept—already used in other appliances—was “too simple,” and called for “a flash of creative genius.” Then a 1950 case that was fought over a mechanism for moving groceries along the checkout counter at supermarkets— Great Atlantic and Pacific Tea Co. v. Supermarket Equipment Corp. —led Justice William Douglas to go further than any justice had gone before in his interpretation of the constitutional patent clause, setting a standard for newness so high that few inventors could meet it. The framers of the Constitution, Douglas declared, had intended that a patent “serve the ends of science—to push back the frontiers of chemistry, physics, and the like; to make a distinctive contribution to scientific knowledge…. The Constitution never sanctioned the patenting of gadgets. Patents serve a higher end—the advancement of science.”
The advancement of science! That would have been a surprise to the tens of thousands of inventors of gadgets who had received patents over the previous 160 years. The new standard struck fear into the hearts of patent attorneys, who lobbied for a new patent law to settle the questions the courts had raised.
The patent act of 1952 did away with the “flash of genius” standard for newness that most courts had been applying ever more narrowly and substituted a new standard: nonobviousness. It declared that an invention would be unpatentable “if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.”
Nonobviousness thus became the third of the three modern criteria for patentability. The appeal of the nonobviousness standard was that it replaced—or seemed to replace—a question of imponderables with one of facts. Its proponents argued that it gave objective criteria against which to measure patentability. No longer would judges have to look into the minds of inventors for the afterglow of the flash of inspiration. Instead they would merely have to undertake a few factual inquiries.
The Supreme Court explained just how those factual inquiries should be handled in Graham v. John Deere , a 1966 case involving a patent for an improvement on a plow. The John Deere Company had patented a plow with a hinge in the shank, so that the plow could bend rather than break when it hit a rock. Was this “obvious” to a “person having ordinary skill in the art”? The Supreme Court decided it was. Here’s how it said the Patent Office should decide such matters: First an examiner should determine the state of the prior art. Then he or she should look at the difference between the prior art and the claims at issue. Finally the examiner should resolve the level of ordinary skill in the art. The first question—the state of the art—was easy; examiners at the Patent Office use the files of previous patents (American and foreign) and scientific articles on their subjects, and inventors submit examples of “prior art” with their patent applications. The second issue was a little more difficult, but something that patent examiners become expert in. The third issue, though, turned out to be quite difficult. How could the courts determine the ordinary level of skill in the art?
The courts set to work to define what became known as Mr. Phosita—that is, the P erson h aving o rdinary s kill i n t he a rt. What was his skill? In a series of cases after Graham , the courts evolved a list of “objective” factors that must be examined to determine the “ordinary level of skill.” These included the educational level of the inventor and of other workers in the field, the types of problems typically encountered in the art, prior solutions to those problems, the speed with which innovations were being made in the field, and the sophistication of the technology. Courts looked at the people who previously received patents—typically, in most fields today, engineers specializing in that particular field—and used them as the benchmark.
Mr. Phosita had “ordinary” skills, perhaps, but he had extraordinary knowledge. He was supposed to know all of the prior art; his patent would not be valid if anyone had suggested it or used it before. Mr. Phosita knew all the tools and practices known to any and all persons working in his field, and he had read all the printed publications in the field and all the patents in the field in all countries the instant they were available. (In fact, he knew about patents when they were filed for, not when they were granted.)
In part because of Mr. Phosita’s enormous knowledge and skills, court decisions on nonobviousness became increasingly complex and confusing. Different courts in different parts of the country defined nonobviousness differently. A good attorney could almost always make an invention seem obvious in hindsight. For example, simultaneous invention, a widespread phenomenon, was used to prove that an invention was obvious and not deserving of a patent. After all, more than one person had thought of it.
In 1982, to help settle this confusion, a whole new court was created, the Court of Appeals for the Federal Circuit, to handle appeals of patent cases and a few other types of specialized appeals. This court brought order to the confusion of patent law. One of the ways it overcame the problem of defining invention was by putting a greater emphasis on what are called secondary criteria, especially commercial success, in determining the patentability of an invention.
Secondary criteria for patentability are not new. As early as 1876, in Smith v. Goodyear Dental Vulcanite , the Supreme Court ruled that the widespread acceptance of hard rubber false teeth meant that Goodyear’s invention must indeed be new and useful. It seems reasonable, after all, that if an invention fills a long-felt need or is quickly adopted and widely used—if it makes a lot of money for its inventor—it must be new, useful, and nonobvious. Otherwise someone else would have invented it.
Judge Learned Hand suggested that this be a standard rule of thumb in 1960. Judges couldn’t evaluate “the range of ingenuity of a person having ‘ordinary skill’ in an ‘art’ with which we are totally unfamiliar,” he said, and he suggested that they instead look at how long the need for the invention had existed, how many inventors had tried to answer that need, and how immediately the invention was recognized as useful. Commercial success is one of several recent criteria that attempt to sidestep the ineffable standard of the “flash of genius.”
Commercial success as a measure of nonobviousness has gained wide acceptance among patent lawyers. It has its critics, though, who argue that by emphasizing commercial success and innovation , the courts have slowed the progress of invention . They claim that patents no longer reflect, and protect, technological advance, but rather reward the commercial prowess of their inventors or the companies they work for. Others suggest that the courts, by considering commercial success, are putting the emphasis where it belongs. The economy’s competitiveness, they say, depends not just on technological advance but on the application of that advance to the needs of the economy.
It is interesting to consider the current biotechnology issue in the light of the history of the patent system. Opponents argue against patents on new forms of life on moral and political grounds. The social activist Jeremy Rifkin, for one, claims that such a patent “reduces the entire animal kingdom of this planet to the lowly status of commercial commodity.” The National Council of Churches finds the idea “morally offensive.” Some opponents believe such patents will hurt farmers.
Proponents of patents for new lifeforms claim these issues are red herrings, the relevant issue being whether the inventions are new, useful, and nonobvious. They seem annoyed that the debate has taken on moral and political overtones, though they’re perfectly willing to answer with economic arguments. The Patent Office, they say, isn’t the appropriate place for this battle. But they shouldn’t be surprised by these nontechnological, nonlegal issues. The decision to grant or uphold patents has always reflected more than a few rules. It has always reflected morals, politics, and economics.
And so the patent debate continues. It is impossible to perfect the patent system because it is impossible to define invention or to find a perfect balance between encouraging inventors and encouraging the wide use of their inventions. Invention is a creative mental process that we are far from understanding. Innovation is a complex economic, sociological, political, and technological puzzle. The patent system, an attempt to capture inventive genius in the prism of the law and turn it toward technological innovation and productive gain, will never be perfect. The controversy over the best way to promote the “Progress of Science and useful Arts” will continue.