June 10, 2011
Microsoft Corp. v. i4i Limited Partnership, U.S., No. 10-290 (June 9, 2011).
The Supreme Court unanimously upheld a clear and convincing standard for proving a patent invalid, whether or not the evidence had been considered by the patent examiner.
Before the Patent Act of 1952, the Court required clear and convincing evidence of invalidity. Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U.S. 1 (1934) (âRCAâ). The Court held Congress, in using the Courtâs common-law term âpresumed valid,â codified this standard in 35 U.S.C. §282. âAccording to its settled meaning, a defendant raising an invalidity defense bore a heavy burden of persuasion, requiring proof of the defense by clear and convincing evidence.â Slip op. at 8 (internal quotation marks omitted).
The Court rejected Microsoftâs proposal to reduce the standard to a preponderance when the evidence had not been considered by the patent examiner. Acknowledging the Federal Circuitâs unwavering position that section 282 incorporates the common-law standard from RCA, the Court quoted Judge Rich (âa principal drafter of the 1952 Actâ) that the âburden is constant and never changes and is to convince the court of invalidity by clear evidence.â American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360 (Fed. Cir. 1984). âSquint as we may,â the Court saw no lighter standard used in its earlier cases for evidence the patent examiner had not considered. Slip op. at 10. Through the many years that the Federal Circuit has interpreted the statute in this way, and in spite of later amendments to address the problem of patents that should never have been issued, Congress has not modified §282 to require a different standard of proof.
But new reference or new evidence carries more weight âthat is, it is more convincing. Slip op. at 17 (â[W]e understand these cases to reflect the same commonsense principle that the Federal Circuit has recognized throughout its existenceânamely, that new evidence supporting an invalidity defense may âcarry more weightâ in an infringement action than evidence previously considered by the PTO) (internal citation omitted). The PTOâs decision of patentability, evidence on the patenteeâs side, is undermined, shifting the balance of evidence more toward clear and convincing evidence of invalidity.
Microsoftâs reliance on the Courtâs KSR observation that âthe rationale underlying the presumptionâthat the PTO, in its expertise has approved the claimâseems much diminishedâ when the evidence was not before the examiner, KSR Intâl Co. v. Teleflex Inc., 550 U.S. 398, 426 (2007), was unavailing. That observation was âtrue enough,â but amicus United States supplied an alternative rationale: protecting the patenteeâs âreliance interests.â
Justice Breyer, writing also for Justices Scalia and Alito, cautioned in his concurring opinion that the heightened standard applies only to questions of fact, not those of law. He suggests using jury instructions to separate the factual and legal determinations to âprevent[] the âclear and convincingâ standard from roaming outside its fact-related reservation.â Breyer, J., concurring slip op. at 2.
Justice Thomas concurred in the decision but did not find the standard of proof in section 282. âBecause §282 is silent as to the standard of proof, it did not alter the common-law rule.â Thomas, J., concurring in judgment slip op. at 2.
This was the third patent decision from the Supreme Court inside of ten days.
What this means for patentees â While the Court keeps the status quo, be vigilant that evidence cumulative to what the patent examiner considered is not represented as ânewâ evidence.
What this means for infringement defendants challenging patent validity â New evidence of invalidity carries more weight because it undermines the evidentiary force of the PTOâs decision of patentability. Patent challengers with new evidence of invalidity should ask the jury to be instructed to consider that the PTO had no opportunity to consider that evidence before granting the patent. The jury should also be given guidance in distinguishing factual issues, where the clear and convincing evidence standard applies, from legal issues, where the preponderance standard applies.