Supreme Court Affirms Patent Validity Presumption Standard

In a unanimous 8-0 concurrence (CJ Roberts took no part), Microsoft Corp. v. i4i Ltd. Partnership, 564 U.S. (2011) (Decided June 9, 2011), the Supreme Court approved the Court of Appeal for the Federal Circuit’s long standing rule that clear and convincing evidence is required to prove a patent invalid. In unequivocal language, the Court held that 35 U.S.C. § 282 “requires an invalidity defense to be proved by clear and convincing evidence.” Slip Op. at 1.

In its counterclaim to i4i’s willful infringement suit, Microsoft sought a finding that i4i’s patent was invalid and unenforceable as being barred by an on-sale bar. There was no challenge by i4i to Microsoft’s allegation that there was a prior sale more than one year prior to the patent application of a computer program known as S4. However, the parties did argue whether the S4 program embodied the claimed invention. Relevant to the issue before the Court, Microsoft objected in the court below that i4i’s jury instruction requiring the invalidity defense to be proved by a showing by clear and convincing evidence was improper. Rather Microsoft sought an instruction that for art not presented to the Examiner during prosecution of the application, to prove invalidity the burden should be a preponderance of the evidence. The District Court rejected Microsoft’s position, the jury found the patent valid and infringed, and the Federal Circuit affirmed.

In its opinion, the Court traced the origin of the clear and convincing standard to almost two decades before the invalidity defense was codified in § 282 by the Patent Act of 1952. In 1934, the Court found that “there is a presumption of validity, a presumption not to be overthrown except by clear and cogent evidence.” Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U. S. 1, 2 (1934) (tracing the origins of the presumption through nearly a century of case law). The i4i Court adhered to the common-law jurisprudence that “a preponderance standard of proof was too ‘dubious’ a basis to deem a patent invalid.” Slip Op. at 8 (internal citations omitted). The Court determined that at the time Congress enacted the 1952 Patent Act, the presumption imposed a “heightened standard of proof.” Id.

Regarding Microsoft’s alternative argument that a preponderance standard should be applied at least to evidence before the fact finder that was not before the Patent Office, the Court found that its pre-codification cases never “adopted that kind of fluctuating standard of proof . . . .” Slip Op. at 15. Plus, the Court found there was nothing in the text of s 282 to suggest that Congress meant to enact a sliding scale for the standard of proof. Slip Op. at 16.

In his concurrence, Justice Breyer called for special jury verdict forms that separate legal conclusions from factual findings. He called on courts to keep the “standard within its proper legal bounds by separating factual and legal aspects of an invalidity claim,” Breyer concurrence Slip Op. at 1. Separating these aspects might keep non-novel, obvious subject matter from improperly retaining legal protection.

This decision adds certainty to patent enforcement. Patentees’ right to exclude is secure in all but those patents which are susceptible to invalidity challenges meeting the clear and convincing standard, and accused infringers will have to continue to formulate invalidity challenges which meet that standard.

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