UPDATE 2-US high court loosens patent 'obviousness' test

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By Peter Kaplan

WASHINGTON, April 30 (Reuters) - The U.S. Supreme Court on Monday moved to loosen a key legal standard used in patent cases, potentially making it easier to invalidate some patents on the grounds they are obvious.

In a decision applauded by software and technology companies, the justices unanimously said the courts should be more flexible in the way they interpret the standard governing whether patents are valid or merely "obvious" combinations of previous inventions that should be rejected.

"Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may, for patents combining previously known elements, deprive prior inventions of their value or utility," the court said in its opinion.

The case has been keenly watched by industries that rely heavily on patents, such as the pharmaceutical, biotechnology and software industries. Obviousness in the most common ground for the U.S. Patent & Trademark Office to reject a patent.

The patent in dispute, held by Teleflex Inc. (TFX.N: Quote, Profile, Research, Stock Buzz), combines two existing inventions: an adjustable pedal and an electronic throttle control. It was ruled obvious and invalid by a federal district court after a lawsuit was filed by Canadian manufacturer KSR International.

But the U.S. Court of Appeals for the Federal Circuit, a court that specializes in patent cases and established the obviousness test, overturned the decision, saying the combination could not be considered obvious under its long-standing test.