Microsoft Corp. v. i4i Ltd. Partnership

2011-06-09

Headline: Patent challengers must meet a high proof standard: Court holds invalidity must be shown by clear and convincing evidence, making it harder for accused companies to cancel patents in court.

Holding: The Court held that under the Patent Act a party challenging a patent’s validity must prove invalidity by clear and convincing evidence, rather than by a mere preponderance of the evidence.

Real World Impact:

Makes it harder for accused infringers to invalidate patents in court.
Requires juries to apply a clear-and-convincing standard to patent invalidity defenses.
Allows juries to consider new evidence but still under the higher standard.

Topics: patent validity, standard of proof, patent litigation, software patents

Summary

Background

A small patent holder, i4i, sued Microsoft, claiming Microsoft Word products infringed a patent for a way to edit computer documents. Microsoft argued the patent was invalid because the inventor had sold an earlier software product called S4 more than a year before the patent application. The S4 source code had been destroyed, so the dispute relied largely on testimony from the inventors. A jury found Microsoft infringed and did not prove the patent invalid. The Federal Circuit affirmed and the case reached this Court.

Reasoning

The Court asked whether the Patent Act’s statement that a “patent shall be presumed valid” requires challengers to meet the clear-and-convincing evidence standard. Relying on earlier decisions and the statute’s history, the Court held that Congress codified the common-law presumption, which includes a heightened standard of proof. The Court rejected Microsoft’s view that a lower preponderance standard applies generally or when evidence was not before the Patent Office. The opinion explained that new evidence may carry more weight, but it still must meet the clear-and-convincing standard. The Court affirmed the Federal Circuit’s judgment.

Real world impact

This decision means defendants in patent suits must usually convince a jury with clear and convincing evidence to prove a patent invalid. Juries can be told to give extra weight to evidence the Patent Office never saw, but the higher proof requirement remains. Congress, not the courts, must change that standard.

Dissents or concurrances

Justice Breyer (joined by Scalia and Alito) emphasized the higher standard applies to factual disputes but not to legal questions. Justice Thomas agreed with the outcome but disagreed that Congress clearly codified the standard.