Under U.S. patent law, when an invention would have been obvious in view of subject matter invented by another, the invention is patentable if both the subject matter (only subject matter that is "prior art" under 35 U.S.C. 102(f) and 35 U.S.C. 102(g) qualifies] and the invention were owned or subject to an obligation of assignment to the same entity on the date of invention [35 U.S.C. 103(c)].
Congress created this exception to the non-obviousness requirement in view of the collaborative environment that exists in modern research organizations. This rule effectively disqualifies confidential information learned from other persons inside an organization (e.g., from other employees of the same corporation or university) from being used as the "prior art" upon which an obviousness rejection is based. The rule does not disqualify information that is prior art under the other sections of 35 U.S.C. 102, i.e., subject matter that is public knowledge, in public use in the U.S., on sale in the U.S. or patented or published information. Furthermore, the invention and the subject matter must have been commonly owned or subject to an obligation of assignment to the same entity at the time the invention was made. Care must still be taken when U.S. patent applications are filed by different inventive entities on related, commonly-owned inventions because obviousness rejections under 35 U.S.C. 102(e)/103 may still be made.