Tag Archives: i4i v. microsoft

Supreme Court Affirms Clear and Convincing Standard for Proving Invalidity in Microsoft v. i4i Decision

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

Today, the Supreme Court confirmed that parties challenging the validity of a patent have the burden to prove invalidity by clear and convincing evidence. Justice Sotomayor delivered the unanimous opinion for the Court in its decision in Microsoft Corp. v. i4i Limited Partnership (No. 10-290), which affirmed the Federal Circuit. Justice Breyer filed a concurring opinion, and Justice Thomas filed an opinion concurring in judgment. Chief Justice Roberts took no part in the decision.

Circumstances Below

By statute (35 U.S.C. § 282), patents are presumed valid, based, in part, on the deference shown to the Patent Office in examining patents. In the underlying case, Microsoft challenged the validity of the patent using a reference never considered by the Patent Office when examining the patent. Microsoft argued that the presumption of validity did not mean that it needed to prove invalidity by clear and convincing evidence, especially in these circumstances. Both the district court and the Federal Circuit disagreed, finding under long-established precedent that those challenging the validity of a patent must prove invalidity by clear and convincing evidence in all circumstances.

Microsoft’s Arguments For a Preponderance of the Evidence standard

At the Supreme Court, Microsoft argued that the Court should adopt one of two standards, either (1) accused infringers need only prove invalidity by a preponderance of evidence or (2) a hybrid approach where accused infringers need to prove invalidity by clear and convincing evidence for those references considered by the Patent Office but only by a preponderance of the evidence for anything else. The Supreme Court strongly rejected both approaches and affirmed the clear and convincing standard in all circumstances.

The Supreme Court’s Analysis

Tracing the history of patent law in the United States, the Court noted that it had previously considered the standard of proof in its decision in Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U.S. 1 (1934). In that decision, Justice Cardozo stated that “there is a presumption of validity, a presumption not to be overthrown except by clear and cogent evidence.” This common-law understanding was well-rooted by the time that Congress enacted § 282, which declared that patents are presumed valid.

The Court also found persuasive how Congress reacted to the courts on this point. In 1984, the Federal Circuit recognized the clear and convincing standard of proof in its decision in American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350 (Fed. Cir. 1984), and, in the nearly thirty years since that decision, consistently reaffirmed this standard of proof. Despite amending the patent act numerous times since the American Hoist decision, Congress never expressed disapproval with the Federal Circuit’s decisions, which indicated to the Court that Congress agreed with this standard.

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Oral Arguments in Microsoft v. i4i Limited on the Burden of Proof for Invalidity

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

The United States Supreme Court heard oral arguments today in Microsoft Corp. v. i4i Limited Partnership, Case No. 10-290, a case that calls into question what the proper burden of proof is to invalidate a patent claim. Microsoft challenges the long-standing standard of clear and convincing evidence and argued today that the proper standard of proof is merely by a preponderance of the evidence. Both i4i and the government argued that clear and convincing status quo should be maintained.

As is their custom, the Justices peppered both sides with questions about what the burden should be, and the Justices did not seem to clearly favor either side. While initially arguing in its briefs that the Court should adopt a hybrid approach—clear and convincing evidence for anything considered by the Patent Office during prosecution and preponderance for everything else—that position was largely ignored today during oral arguments. Instead the parties and the Court focused on a uniform standard and what it should be.

Justice Breyer noted the tension that exists between not giving legitimate inventions the protections they deserve and giving protection to inventions that do not deserve it. Counsel for i4i particularly stressed the need for protecting inventors and their inventions. In particular, he reminded the Justices that an inventor must completely describe his or her invention to the public in order to obtain a patent, which prevents the inventor from protecting his or her invention in other ways. The Justices also focused on the exact language of the statute (35 U.S.C. § 282) and the Court’s prior cases addressing the burden of proof. The parties also discussed how to instruct a jury about prior art that the Patent Office did consider.

  • A copy of the transcript can be downloaded here.
  • The Supreme Court docket for this case is located here.
  • The various briefs can be found here.

A decision is expected later this summer. Note that Chief Justice Roberts did not participate in the oral argument.

i4i v. Microsoft: Patent Case of the Year? Supremes to Decide

Posted by Henry M. Sneath, a principal, shareholder and IP Group Chair, and  Robert Wagner, an intellectual property attorney, both at Picadio Sneath Miller & Norton, P.C.  in Pittsburgh, Pennsylvania.

All of a sudden, the burden of proof in patent invalidity claims is under review. Where did that come from? i4i beat Microsoft in an infringement case in Texas and now Microsoft wants to change the battlefield rules. They have appealed to the Supreme Court, which will hear argument this  Monday April 18, 2011, that the burden of proof on patent validity challenges should be lowered from “clear and convincing” to “preponderance of the evidence.” Clear and convincing means that the proof must be substantially more likely than not, that the evidence is true.” This is less than “beyond a reasonable doubt” employed in criminal cases, but more stringent than “preponderance” which means simply “more likely than not.” Judges will frequently tell the jury that this inquiry is best visualized like the ‘scales of justice’, and if the evidence tips ever so slightly in favor of one party, then the burden of “preponderance” is met. “Clear and convincing” is a much steeper burden than preponderance – at least according to the law. Microsoft believes that it is much too steep for patent invalidation evidence.

The issue arose at trial in Texas when Microsoft wanted to introduce the prior art of i4i’s own previously designed and used software, which Microsoft claimed invalidated the i4i patent in suit (on sale bar). By the time the lawsuit was filed, the original source code for this prior work was lost, so Microsoft had to rely on circumstantial evidence about what the prior art did. Ultimately, they did not win before the jury or the Courts, and they argued that this was because of the high burden of proof (clear and convincing).

Originally, Microsoft contended that there should be a lower burden of proof (preponderance) only for items not considered by the PTO. It did not attempt to lower the bar for everything. The case has now morphed into an overall attack on the burden of proof in all cases, not just where the PTO has not considered the prior art in question. Microsoft proposes that everything should be preponderance, and, only as a fallback, that things not considered by the PTO need only be proved by a preponderance.

We think the arguments are fairly compelling that the standard needs to apply to everything equally, whatever that standard may be. A hybrid approach where invalidity based on some items need only be proved by a preponderance, while other items would require clear and convincing will simply be unworkable.

Among the problems we see (and the numerous amicus briefers saw) with the hybrid approach are:

1. What counts as being considered by the PTO? If it was disclosed? If it was specifically mentioned by the examiner?

a. If it is everything disclosed in the record, patentees will absolute deluge the PTO with references, which will make the examiner’s job more difficult and will result in references being buried and examinations taking longer.

b. If it is only things discussed by the examiners, that will be unfair to patentees. Examiners are not required to address every reference. They only have to discuss the most relevant ones. Thus, a duplicative reference that still is important may not be mentioned, even though it contains material that the examiner thought highly relevant. Now that reference will be evaluated under a lower burden.

c. Also, examiners frequently look at a number of references in their searches that are never identified in the record. Do these count? How would you find out what was looked at?

2. What do you do with invalidity positions that involve some references that were considered and some that were not?

3. What do you do with a reference that was considered for one basis (anticipation), but not another (obviousness)?

We  think it likely that the Supreme Court will adopt a blanket approach, either preponderance or clear and convincing. If it maintains the status quo, which we think is the better argument, nothing will change in the patent world. As far as we know, this has not been a pressing or disputed issue for years. If they do change to a preponderance standard, we expect that there will be a significant shift in Courts granting summary judgment motions for invalidity. We’re not sure that juries really pay much attention to preponderance or clear and convincing, although it might make a difference in a few cases.

We think that the major corporations siding with Microsoft hope that a change will make it easier to beat back troll (NPE) cases. In particular, larger corporations are likely to be able to afford to draft better patents with more prior art searching that the individual inventors cannot do or afford. We think that they are banking on their own patents’ strength not being affected too much, but with the perhaps underfunded trolls taking a hit. Overall, a shift to preponderance will only weaken patents and their enforceability. It will likely also encourage competitors to take more risks in creating products that arguably infringe; knowing that their burden of proof for invalidity has gone down significantly. We think it is hard to say whether companies will stop applying for patents. In the end, for some products the only thing you can do to protect them is to get a patent. There really aren’t many alternatives for products that are easily reverse engineered.

For ongong coverage of this Supreme Court argument, please check back with us regularly. You may also want to follow a great source for Microsoft news at the Nick Eaton’s Microsoft Blog from Seattle PI: http://blog.seattlepi.com/microsoft/2011/04/14/microsoft-i4i-at-supreme-court-patent-law-at-a-crossroads/

Henry Sneath                  Robert Wagner