Microsoft Corp. v. i4i Limited Partnership
This case, now pending before the US Supreme Court, questions the standard of proof necessary to invalidate an issued patent based on issues not considered by the USPTO during examination. For Microsoft, lowering the standard appears to be its only chance to escape from a pending judgment of over $100 million in favor of i4i. Microsoft lost at the district court, lost on appeal, lost at the PTO during reexamination, and was summarily denied a second attempt at reexamination. The Supreme Court, however has offered the software giant some light.
The issue is whether the District Court and Federal Circuit erred in holding that Microsoft was required to prove its invalidity defense by clear and convincing evidence "even though the prior art on which the invalidity defense rests was not considered by the Patent and Trademark Office prior to the issuance of the asserted patent."
It turns out that the parties are not so far apart on the answer. Although i4i argues that the level of proof should remain clear-and-convincing, it also admits that the Federal Circuit has consistently held that the burden can be more easily satisfied with prior art that the PTO never considered.
Throughout its existence, the Federal Circuit has held that the clear-and-convincing standard may be more easily satisfied with references the PTO did not consider. See, e.g., Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1549 (Fed. Cir. 1983); SSIH Equip. S.A. v. U.S. Int'l Trade Comm'n, 718 F.2d 365, 375 (Fed. Cir. 1983) (five-judge panel); SIBIA Neurosciences, Inc. v. Cadus Pharm. Corp., 225 F.3d 1349, 1355-1356 (Fed. Cir. 2000); Jervis B. Webb Co. v. Southern Sys., Inc., 742 F.2d 1388, 1392 n.4 (Fed. Cir. 1984) (citing cases). . . . As with such other evidence, prior art that the PTO never considered does not change the standard of proof. Instead, the jury can give more or less weight to the evidence because of its particular characteristic.
This argument apparently works for i4i because, although the jury might not have been instructed on the proper appliation of the standard, Microsoft has not preserved that issue for further appeal.
The i4i brief serves as a point-by-point critique of the arguments introduced by Microsoft and others. This technocrat approach is effective, but it also leaves i4i open to the simple cross-doctrinal counter that was so effective in the eBay case. The court will certainly ask – If a preponderance of the evidence is all that is required to invalidate a real property claim, a personal property claim, a registered copyright, a trademark, or a trade secret claim, what is so different about patent law?
Friend-of-the-court briefs in support of i4i's position are expected this week.
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