If you’ve ever trash-talked about the U.S. patent system–and who hasn’t?–you should be following closely the U.S. Supreme Court argument in KSR v. Teleflex. It could generate the most important patent ruling in decades.

Have you ever railed about how absurd it is that could get a patent on “one-click” online shopping? Or that Smuckers could get one on a crustless peanut-butter-and-jelly sandwich with the edges smushed together? If you’ve ever trash-talked about the U.S. patent system–and who hasn’t?–you should be following closely today’s U.S. Supreme Court argument in KSR v. Teleflex. It could generate the most important patent ruling in decades.

Most of the complaints one hears about patents revolve around the concept of “obviousness”–just how ingenious an idea must be to be patentable. Legally, to be patentable an idea must be (1) novel, (2) nonobvious, and (3) useful. In practice, though, “nonobviousness” is usually the pivotal bone of contention, because mere “novelty” is easily established and “usefulness” can usually be assumed, since otherwise people wouldn’t be litigating over the invention in the first place.

In KSR, the Court must decide what standard judges should use when deciding whether a particular combination of preexisting technologies, each of which had already been in common use, can be considered sufficiently nonobvious to be patentable. Teleflex, which makes accelerators for trucks and automobiles, patented a type of gas pedal that is adjustable (so that both tall and short drivers can use it comfortably) and that uses an electronic rather than mechanical sensor, suitable for most modern-day engines. There is no dispute that both aspects of the invention (adjustability and the use of an electronic sensor) were widely used before the Teleflex patent, but Teleflex claims to have invented the manner in which it melded the two earlier advances into one device. KSR, which also makes gas pedals, protests that the way to combine the two elements would have been obvious to any ordinary mechanic. Teleflex responds that the combination only seems obvious in hindsight, the way all inventions do.

The district court threw the case out before trial, agreeing with KSR. But the U.S. Court of Appeals for the Federal Circuit–the special court created in 1984 to hear all patent appeals–reversed, finding that KSR couldn’t meet the demanding test that court requires before it will invalidate a patent due to obviousness. That test requires KSR to show “teachings, suggestions, or motivations” in the prior technical literature foreshadowing how to make the combination in question. The U.S. Supreme Court will now decide–probably before the end of the term in June 2007–whether that is the proper test to use and, if so, whether the Federal Circuit is interpreted it too rigidly.

Because obviousness is such a fundamental concept in patent law, and because patents and other intellectual property are increasingly the most valuable assets American companies possess, the case has attracted enormous interest, with more than 40 amicus briefs having been submitted from companies, inventors, universities, trade groups, and intellectual property practitioners, professors, economists, historians.

Companies are generally dividing along the same lines we saw last year when the Court heard another momentous patent case, eBay v. MercExchange, which posed the question of whether there were ever extenuating circumstances that warranted denying a injunction to a patentee that had proven infringement. There eBay argued that the Federal Circuit court was using a rigid rule that made injunctions virtually automatic upon proof of infringement, inappropriately maximizing the leverage that patent-holders wield over accused infringers. In May, the Court unanimously reversed the Federal Circuit and restored a more flexible rule, but also suggested that this flexible approach wouldn’t lead to different outcomes in most cases.

As in eBay, the sector of the economy most strongly advocating change is the technology industry, particularly those companies that make products composed of numerous smaller inventions. Amicus briefs favoring KSR’s position were submitted, for instance, by Cisco, Intel, the Computer and Telecommunications Industry Association, the Business Software Alliance, and the Electronic Frontier Foundation. (The last organization has particular concerns about the way the current rule could disadvantage free and open source software developers in the event of patent litigation.) KSR also got support from the GM, Ford, Chrysler, Viacom and TimeWarner (which owns CNNMoney and Fortune), and, most importantly, from the Solicitor General of the United States, representing the views of both the Justice Department and the Federal Trade Commission.

WASHINGTON, DC (December 4) — Kilpatrick Stockton announced today the…’s lead story, from CNN Money – If you’ve ever trash-talked…