Microsoft v. i4i, Docket No. 10–290 (Supreme Court 2011)
Briefing has begun in earnest. Microsoft recently filed its opening brief on the merits (File Attachment: microsoftopen.pdf (250 KB)) and now twenty-five self-proclaimed friends-of-the-court have added their respective two-cents. The case focuses on the burden of proof required to invalidate an issued patent. Microsoft has challenged the Federal Circuit's rule that clear-and-convincing evidence is necessary. Instead, the software giant argues that a preponderance of the evidence should be sufficient to invalidate a patent — especially when a court is considering evidence of invalidity that was not considered by the Patent Office during examination.
In many ways, this case would only shift marginal cases — such as when an accused infringer is able to prove that a patent is probably invalid, but cannot provide clear and convincing evidence of that fact. The specific marginal problem for Microsoft is that it presented only limited evidence of the existence of custom built prior-art software that would invalidate i4i's patent. Unfortunately for Microsoft, that twenty-year-old software code is no longer available and the parties presented competing factual testimony as to the operation of the prior art software.
Of the twenty-five friend-of-the-court (FOTC) briefs filed thus far, twenty explicitly and officially support Microsoft's position that the standard should be lowered. Five briefs claim to support “neither party.” (Briefs supporting i4i will be filed in March, 2011). The official claim of support often has limited meaning. I would roughly divide the briefs into four groups: (1) Seven briefs support Microsoft's position that the clear-and-convincing standard should not apply when the evidence of invalidity was not considered by the USPTO. (2) thirteen briefs further argue that the standard should be lowered-across-the-board in [essentially] all cases. (3) Two briefs take the opposite position — that the standard should remain clear and convincing. Although these two briefs officially support neither party, I expect many similar briefs to be filed in support of i4i next month. (4) Three briefs focus on interesting issues of whether we should have dual (or variable) standards that depend upon whether the PTO considered the evidence during prosecution. The following is a discussion of some of the more interesting aspects of the briefs that I noticed.
Lowering the Standard when the PTO has not Considered the Arguably Invalidating Evidence:
The well respected Supreme Court patent team at Fried Frank of Jim Dabney, Professor John Duffy, and Steve Rabinowitz filed a brief on behalf several corporations, including SAP, Symantec, Facebook, and Yahoo!. Their brief agrees with Microsoft that the standard for invalidating a patent should be lowered unless the file wrapper “shows that the PTO has engaged in reasoned decisionmaking with regard to a factual issue.” The brief grounds its argument in the Administrative Procedures Act (APA). As suggested above, the brief indicates that the APA “reasoned decisionmaking” analysis should occur on a fact-by-fact basis — with deference only given when evidence shows that the PTO made a reasoned decision regarding the fact in question. File Attachment: sap.pdf (170 KB). Writing for a group of 37 Professors, Professor Mark Lemley adds that APA deference may be appropriate only in very limited circumstances — such as when a particular factual question was decided in the course of an adversarial inter partes reexamination proceeding. File Attachment: lemley.pdf (229 KB). In a complementary brief, WM Mitchell Law School's IP Institute (led by Profs Moy and Erstling) reviews 150 years of Supreme Court case to reach its conclusion that the clear-and-convincing evidence rule “was extended to issues not before the USPTO only recently.” File Attachment: wmmitchell.pdf (178 KB). See also File Attachment: bsa.pdf (196 KB).
Generic pharmaceutical companies generally support Microsoft's position that “bad” patents should be easier to invalidate. Shashank Upadhye (Apotex's IP chief) generally presents interesting arguments. The gist of his brief is that courts would do better to err on the side of free competition (i.e., invalidity). File Attachment: apotex.pdf (181 KB). Teva argues that C&C standard encourages applicant to conceal prior art. The logic behind that argument is that applicants would prefer to sneak through the PTO and then rely on the C&C standard in litigation to win the case or force settlement. File Attachment: tevapharma.pdf (234 KB). The Bar Association of DC argues the other-side — that increasing the incentive to submit prior art references during prosecution will not lead to better patent quality. File Attachment: badc.pdf (104 KB).
Apple and Intel support Microsoft's position. However, it is clear that the companies (likely Apple) strained to avoid saying that they support “Microsoft” or even the “petitioner.” Overall, I would say that the brief does more harm to its cause than good. The problem is that the brief offers no additional arguments except for a three page section regarding “practical” and “empirical” evidence that the C&C standard makes a difference to juries. Unfortunately for Apple, the evidence presented is glaringly weak. File Attachment: apple.pdf (109 KB). However, evidence from other briefs, such as that filed by Prof Hollaar may provide a cumulative bulk sufficient to make this case. File Attachment: hollaar.pdf (262 KB).
EFF and PubPat: As might be expected, the Electronic Frontier Foundation (EFF) and the Public Patent Foundation (PubPat) both argued that a preponderance of the evidence should be sufficient to invalidate a patent in all cases. EFF's brief (penned primarily by Michael Barclay) focuses primarily on policy — arguing that the sheer number of issued-but-invalid patents makes this an important issue that needs resolution. File Attachment: eff.pdf (293 KB). Dan Ravicher at PubPat similarly writes that the “extremely poor quality” of US patents screams for a lowering of the standard. File Attachment: pubpat.pdf (92 KB). See also, File Attachment: ctia.pdf (200 KB), File Attachment: hercules.pdf (207 KB). The brief by Google, et al., takes this a step further than the normal “lack of time” and “incompetence” statements – arguing that the current law and practice “tilt the scales heavily in favor of granting patent applications based on incomplete analyses.” File Attachment: google.pdf (241 KB).
Cisco, Ebay, Netflix, Toyota, and others argue that the advent of third-party requested reexaminations changes the system in a way that impacts the proper standard used in district court litigation. The brief argues (in a way that I don't yet fully understand) that the existence of reexaminations suggests that the litigation standard should be a preponderance of the evidence. File Attachment: cisco.pdf (187 KB).
Supporting a High Standard: As the largest US patent holder, it might be no surprise that IBM supports a high standard for invalidating a patent. Of course, across the “v” sits Microsoft as another very large patent holder. I would point to three primary differences between IBM and Microsoft: (1) IBM has a long and extensive pro-patent stance; (2) IBM has an extremely strong and lucrative patent monetization program; and (3) perhaps most importantly, IBM itself has only rarely been sued for patent infringement. File Attachment: IBM.pdf (274 KB). The AIPLA – the largest association of US patent lawyers – also supports the status quo. File Attachment: aipla.pdf (157 KB).
Professor Morris does not take a position regarding a high or low standard. Rather, her focus is on whether it makes sense to have two standards of proof that vary according to whether the particular fact in question was considered by the USPTO. File Attachment: Morris.pdf (494 KB).
- Microsoft provided a ZIP file of all the briefs. File Attachment: Amicus Briefs.zip (4504 KB)
- Michael Barclay discusses the briefs on his IP Duck Blog.