From Corporate Dealmaker Forum, May, 1, 2007:
The value of patents has dropped again following a decision by the U.S. Supreme Court in KSR International Co. v Teleflex, Inc. The nation’s highest court evaluated the tenet of “obviousness,” and on Monday reversed a legal test that had been relied upon for 24 years to decide if a patent claim was obvious when considering prior art.
The effect is to broaden the standard for obviousness and make it easier to argue that a patent in invalid. This is the fifth patent case in two years where the Supreme Court has changed patent law with its rulings. While the U.S. Congress tries its hand at patent reform yet again, the court is adjusting the aging patent system through its caseload.
Rachel Krevans, an intellectual property litigation partner in the San Francisco office of Morrison & Foerster LLP, says the ruling should have a greater effect on the electronics industry and little affect on the biotechnology industry.
As the Supreme Court focuses on patents, investors and corporate dealmakers should take note. As more and more of a company’s value derives from intangibles, such as patents, such legislating from the bench could have a profound impact on a portfolio of intellectual property.— Stacey Higginbotham
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