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) (“RCA”). The Court held Congress, in using the Court’s common-law term “presumed valid,” codified this standard in 35 U.S.C. §282. “According 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.” Slip op. at 8 (internal quotation marks omitted).
The Court rejected Microsoft’s proposal to reduce the standard to a preponderance when the evidence had not been considered by the patent examiner. Acknowledging the Federal Circuit’s unwavering position that section 282 incorporates the common-law standard from RCA, the Court quoted Judge Rich (“a principal drafter of the 1952 Act”) that the “burden is constant and never changes and is to convince the court of invalidity by clear evidence.” American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360 (Fed. Cir. 1984). “Squint as we may,” 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 —that is, it is more convincing. Slip op. at 17 (“[W]e understand these cases to reflect the same commonsense principle that the Federal Circuit has recognized throughout its existence—namely, that new evidence supporting an invalidity defense may ‘carry more weight’ in an infringement action than evidence previously considered by the PTO) (internal citation omitted). The PTO’s decision of patentability, evidence on the patentee’s side, is undermined, shifting the balance of evidence more toward clear and convincing evidence of invalidity.
Microsoft’s reliance on the Court’s KSR observation that “the rationale underlying the presumption—that the PTO, in its expertise has approved the claim—seems much diminished” when the evidence was not before the examiner, KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 426 (2007), was unavailing. That observation was “true enough,” but amicus United States supplied an alternative rationale: protecting the patentee’s “reliance interests.”
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 “prevent the ‘clear and convincing’ standard from roaming outside its fact-related reservation.” Breyer, J., concurring slip op. at 2.
Justice Thomas concurred in the decision but did not find the standard of proof in section 282. “Because §282 is silent as to the standard of proof, it did not alter the common-law rule.” 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 – While the Court keeps the status quo, be vigilant that evidence cumulative to what the patent examiner considered is not represented as “new” evidence.
What this means for infringement defendants challenging patent validity – New evidence of invalidity carries more weight because it undermines the evidentiary force of the PTO’s 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.