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Court Backs “Clear and Convincing Evidence” Patent Standard

USPTO building (USPTO.gov)

(USPTO.gov)

The U.S. Supreme Court, in a 8-0 vote, upheld a lower court ruling that Microsoft Corporation infringed on the patent of a small Canadian software developer, and affirmed the current high bar challengers must clear before overturning a patent. The unanimous decision — Chief Justice John Roberts did not vote because he owns Microsoft stock — rejected Microsoft’s arguments that patents may be invalidated with a lower threshold of evidence.

The case revolved around Microsoft’s use of eXtensible Markup Language (XML) processes in its Word 2003 and 2007 products. The Toronto company i4i — short for Infrastructures for Information — claimed Microsoft used its inventions that separated metadata from content, and thus infringed on its patents.

Microsoft not only denied infringing on i4i’s patent, it made the counterclaim that i4i’s patent was invalid and unenforceable. Microsoft said i4i made and marketed a software package with these XML processes called S4 one year before it filed its patent.

Moreover, said Microsoft, i4i never presented its S4 software to the U.S. Patent and Trademark Office (USPTO). Because not all relevant evidence was considered by USPTO in granting the patent, Microsoft argued that the standard for judging a patent’s validity should be by a “preponderance of the evidence” rather than the “clear and convincing evidence” standard based on nearly a century of case law.

Writing for the unanimous court, Justice Sonia Sotomayor upheld the decisions of both the district court and the U.S. Court of Appeals for the Federal Circuit — the appeals court that hears patent cases — ruling in i4i’s favor and awarding the company $290 million. Sotomayor traced court cases going back to the 1934 Radio Corp. of America vs. Radio Engineering Laboratories decision that said the law as framed by Congress “creates a presumption that a patent is valid and imposes the burden of proving invalidity on the attacker. That burden is constant and never changes and is to convince the court of invalidity by clear evidence.”

Sotomayor also rejected the exceptions sought by Microsoft calling for a lower standard of evidence. “Squint as we may,” wrote Sotomayor, “we fail to see the qualifications that Microsoft purports to identify in our cases.” The one part of Microsoft’s argument the court accepted was that juries could consider evidence not presented to the USPTO in evaluating if the clear and convincing evidence standard is met.

“To rule in Microsoft’s favor would have required the Supreme Court to throw away 30 years of well-settled Federal Circuit law, as well as overruling Supreme Court precedent in effect since at least 1934.” says Gene Quinn in the blog IP Watchdog.  “That was a bridge too far for the Supreme Court ….”

Patent attorney David Young tells Computerworld, however, that Microsoft still may have won something in the decision, referring to the language allowing juries to consider evidence that USPTO did not evaluate. “If the goal was to make it easier to invalidate patents, Microsoft moved the ball forward,” says Young.

Read more: Court Rules for Companies in University Collaborations

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