Supreme Court to Consider Patent Invalidity Standard of Proof
The United States Supreme Court will hear oral arguments on April 18, 2011 in the case Microsoft Corp. v. i4i Limited Partnership. The pleadings frame the question presented as follows: The Patent Act provides that "[a] patent shall be presumed valid" and that "[t]he burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity." 35 U.S.C. § 282. The Federal Circuit held below that Microsoft was required to prove its defense of invalidity under 35 U.S.C. § 102(b) by "clear and convincing evidence," even though the prior art on which the invalidity defense rests was not considered by the Patent and Trademark Office prior to the issuance of the asserted patent. The question presented is: Whether the court of appeals erred in holding that Microsoft's invalidity defense must be proved by clear and convincing evidence. The case concerns U.S. Patent No. 5,787,449 ("the '449 Patent"), which is owned by i4i Limited Partnership ("i4i") and which i4i accussed Microsoft Corporation ("Microsoft") of infringing. The '449 Patent involves markup languages, which are used in Microsoft's word processing software, Microsoft Word. Microsoft claimed that the '449 Patent is invalid because the invention was embodied in software sold in the United States more than one year before the application for the '449 Patent was filed, in violation of the one-year on-sale bar of 35 U.S.C. § 102(b). The United States Patent and Trademark Office ("USPTO") did not consider the prior software when determining whether to issue the '449 Patent. The parties disagreed about the standard of proof necessary to prove invalidity of the '449 Patent based on the prior software. i4i argued that the presumption of validity of an issued patent requires Microsoft to prove invalidity through clear and convencing evidence, and that Microsoft failed to meet that high burden. Microsoft argued that the clear and convencing standard does not apply when the USPTO did not consider the prior art at issue, as is the case with the '449 Patent. Rather, Microsoft argued that a lower burden of proof, namely proving invalidity by a preponderance of the evidence, applies in such cases. The United States District Court for the Eastern District of Texas agreed with i4i and informed the jury that Microsoft must prove invalidity by clear and convincing evidence. The jury concluded that Microsoft had not met this burden and awarded i4i $200 million in damages. The court entered judgment against Microsoft for $290 million, including enhanced damages, interest, and post-verdict damages, and entered a permanent injunction preventing Microsoft from selling Word products capable of opening certain files containing markup languages, namely all Word products currently available. Microsoft appealed the judgment, arguing that the district court used the wrong standard of proof in instructing the jury that Microsoft must meet the clear and convincing evidence standard. The United States Court of Appeals for the Federal Circuit upheld the decision, stating that the clear and convincing evidence standard is supported by Federal Circuit precedent, which was not altered by Supreme Court case law. Microsoft petitioned for a writ of certiorari on August 27, 2010. The Supreme Court granted the petition on November 29, 2010, with Chief Justice Roberts taking no part in the consideration or decision. The parties have since filed briefs, as have numerous amicus curiae. The United States has filed a brief supporting affirmance. Briefs may be read here on the Amercian Bar Association's website. Oral arguments are set for April 18, 2010, when the parties will present their arguments to the Court. The Acting Solicitor General has also petitioned for and has been granted leave to participate in the oral arguments. The docket may be viewed here on the Supreme Court's website.