Microsoft Corp. v. i4i SCOTUS certiorari granted
On Monday, November 29, the Supreme Court granted a writ of certiorari in Microsoft Corp. v. i4i Limited Partnership, No. 10-290. Microsoft petitioned the Supreme Court to review the Federal Circuit’s position that one must prove patent invalidity defenses by “clear and convincing evidence.” Chief Justice Roberts did not participate in the decision to grant certiorari in this case.
Microsoft would have the Supreme Court rule that defendants to infringement suits must prove invalidity only by a preponderance of the evidence when the invalidity defenses are based on alleged prior art that the USPTO had not considered. The Supreme Court has said in KSR International Co. v. Teleflex Inc. 550 US 398 (2007) that previously-unexamined prior art can make the presumption of validity “much diminished.” The parties dispute whether this “diminished” validity means a lower burden of proof for invalidity defenses in such situations. While the preponderance of the evidence standard would only require that the defendant show a patent to be more likely than not invalid, the clear and convincing evidence standard sets substantially higher requirements.
In its decision, the Federal Circuit upheld district court jury instructions adhering to the clear and convincing evidence standard. Microsoft emphasized that a preponderance of the evidence standard received support from all twelve regional circuits prior to establishment of the Federal Circuit as well as from Microsoft’s interpretation of KSR. i4i, on the other hand, emphasized that the Federal Circuit has long been applying the clear and convincing evidence standard to invalidity defenses without Congressional disapproval and that KSR is consistent with the clear and convincing evidence standard, even where previously unexamined prior art has given rise to allegations of invalidity. In more policy-oriented statements, Microsoft argued that challenges to allegedly invalid patents should have the lower preponderance of the evidence standard so as to easily rid the patent system of patents that should not have been granted. However, i4i argued that inventors would have a lesser incentive to invent under the preponderance of the evidence standard because the lower burden of proof would cause detrimental fear of patent invalidation.
As the parties argued, a Supreme Court ruling upholding the Federal Circuit’s clear and convincing evidence standard would keep the current strength of patents, while a ruling rejecting the Federal Circuit’s standard in favor of a preponderance of the evidence standard would facilitate validity challenges. Patent applicants and owners may wish to consider their patent portfolios in light of the pendency of this case and seek strong patents. Conversely, those who may potentially infringe a patent should watch this case to determine the burden they may have to bear should they assert patent invalidity as a defense to infringement. Regardless, with the Supreme Court granting certiorari in this case, all parties can hope for greater certainty regarding the burden of invalidity defenses where previously unexamined prior art is concerned.
The Patents Post Grant blog also reports that the USPTO recently denied a second Microsoft request to review the patent at issue in this case, which may hamper Microsoft’s ability to make its case before the Supreme Court.