US DOJ: Invalidating an Issued Patent Should Require Clear and Convincing Evidence

Microsoft v. i4i (Supreme Court 2011)  Download Msftvi4i.usgovt

US Acting Solicitor General Neal Katyal took over the job after Elana Kagan was nominated to the US Supreme Court. In his role as solicitor, Katyal recently filed an amicus brief strongly supporting i4i's position that invalidity can only be proven with clear and convincing evidence "even if the defendant relies on evidence of invalidity that was not before the PTO." As a back-stop, however, the Government argues that newly presented evidence may be "given greater weight, making the defendant's burden easier to satisfy."

The brief justifies its conclusions based upon several factors:

1. The clear and convincing standard follows longstanding Supreme Court precedent. See Radio Corp. of Am. v. Radio Eng'g Labs., Inc., 293 U.S. 1, 8-10 (1934) (RCA).
2. The presumption of validity found in 35 U.S.C. § 282 is the result of an attempt to codify the existing judge-made presumption of validity.
3. The Federal Circuit has a longstanding and well settled rule that clear and convincing evidence is required.
4. The clear and convincing standard "best accommodates … the principles of deference to agency authority and expertise."
5. The clear and convincing standard serves patent holder's property interest.
6. Although the standard for proving invalidity is high, this is balanced by the collateral preclusive effect of an invalidity finding.

On the agency-deference issue, the government argues that a "jury should not be permitted to overturn the considered decision of the PTO when the evidence is substantially in equipoise, but rather should be allowed to take that step only if it possesses a high degree of confidence that the PTO erred."

The government also distinguished the high presumption of patent validity with the preponderance standard for registered copyrights and trademarks. The copyright and trademark statutes specifically state that registration serves as "evidence of validity" rather than bestowing a presumption of validity. In addition, the copyright and trademark systems are designed simply to encourage registration "rather than to recognize the agencies' expertise" in granting rights.

In many ways, the patent law is something of an enigma when compared with our usual approach to agency decisions. The government writes:

Ordinarily, when a court reviewing agency action concludes that the agency's decision was based on incomplete evidence, the proper course is to remand to the agency. In an infringement suit, however, that option is not available, and both of the options before the court are in some tension with usual administrative-law principles. Applying the preponderance standard that petitioner advocates would permit the jury to determine for itself what the PTO would or should have done had it considered the new evidence, while the clear-and-convincing evidence standard has the practical effect of according deference to an agency decision that did not consider potentially material facts.

As between those alternatives, applying the clear-and-convincing-evidence standard across the board reflects the better reading of Section 282 in light of that provision's text, history, and purposes.

Finally, the brief spends some time considering (and rejecting) the suggestion that a high standard be applied for evidence considered by the PTO and a low standard be otherwise applied.

[I]mportantly, the text of Section 282 does not suggest that the standard of proof governing questions of patent validity varies depending on the nature of the evidence that a challenger introduces. Such a variable-proof regime, moreover, would reflect a substantial departure from the way in which evidentiary burdens typically operate. Although juries routinely give different weight to different types of evidence, petitioner identifies no statute under which the standard of proof governing a particular determination depends on the type of evidence that the parties introduce. The Federal Circuit's longstanding approach to the question presented here, under which evidence that was not before the PTO "may * * * carry more weight and go further toward sustaining the attacker's unchanging burden," American Hoist, 725 F.2d at 1360, is thus much more consistent with the usual application of evidentiary burdens than is a regime under which the introduction of new evidence changes the standard of proof itself.