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Microsoft Loses Clear and Convincing Evidence Challenge to Validity of Patents

The United States Supreme Court affirmed the use of the clear and convincing evidence standard for challenges to the validity of patents last week in a closely watched and eagerly anticipated case, i4i v. Microsoft. The Supreme Court’s opinion re-affirmed decades of case law that the standard to challenge the validity of a patent is clear and convincing evidence rather than the preponderance of the evidence standard urged by Microsoft.

The patent held by i4i claimed an improved method for editing computer documents. The patent was asserted against Microsoft Word and Microsoft countered that the patents were invalid and challenged the standard for determining the validity of a patent, arguing that it should be by a preponderance of the evidence rather than the existing clear and convincing standard currently used in patent cases.

After Microsoft lost the case in district court and lost on appeal to the Federal Circuit, Microsoft petitioned the Supreme Court to hear the case. The Supreme Court granted Microsoft’s petition. At the Supreme Court, Microsoft argued that the Patent Act did not provide for clear and convincing evidence but only that an issued patent was presumed valid. From this, Microsoft argued that the standard for proving a patent invalid should be by a preponderance of the evidence. Alternatively, Microsoft argued that the standard should be clear and convincing evidence if the patent office considered the prior art and a preponderance of the evidence if the prior art had not been presented to and considered by the Patent and Trademark Office.

The Supreme Court rejected both of Microsoft’s arguments. First, the Supreme Court found that clear and convincing evidence was the appropriate standard to determine whether a patent is valid in court because Congress used a common law term in the Patent Act. The Supreme Court found based on its precedent that the common law term required clear and convincing evidence. Second, the Supreme Court rejected Microsoft’s argument that a preponderance of the evidence standard should apply where the evidence before the trial court was not before the Patent and Trademark Office during the patent prosecution process. Again, the Supreme Court found that Congress had not differentiated between prior art before the Patent Office and prior art that was not before the Patent Office and, therefore, the standard should be clear and convincing evidence for both.

The majority opinion–and a point strongly emphasized by the concurring opinion–noted that a jury may be instructed to evaluate whether the prior art before it is materially new, and if so, to consider that fact in determining the validity of a patent by clear and convincing evidence. The Court rejected Microsoft’s invitation to remand to the district court for a new trial on this ground, however, because Microsoft had not requested such an instruction below and it was too late to do so now.

Finally, the Supreme Court stated that it was in no position to judge the comparative force of the parties’ policy arguments on whether the clear and convincing evidence standard is appropriate because that is the standard that Congress adopted. Accordingly, any change to that standard will be for Congress to implement.

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There are two significant points to take from the i4i case.

First, although jury instructions were occasionally requested on prior art not before the Patent Office, it was not a routine practice and they certainly were not routinely granted. Expect that to change. It will now be common for such instructions to be requested and to be given by the district courts. Indeed, this may be more significant than a change to the standard itself, as jury instructions can be used far more effectively by trial lawyers than burdens of proof. This is likely to be the lasting legacy of i4i.

Second, with Congress actively engaged in debating the Patent Reform Act, watch to see if anyone in Congress raises the burden of proof issue and tries to inject that into the current version of the Patent Reform Act. Such a debate could slow the Act down but it also could have a significant impact on the Act itself if enough members of Congress decide that the burden of proof issue is important enough to address.

The authors of are patent litigation lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or