Justice Sotomayor delivered the opinion of the Court, in which Justices Scalia, Kennedy, Ginsburg, Breyer, Alito, and Kagan joined. Justice Breyer filed a concurring opinion, in which Justices Scalia and Alito joined. Justice Thomas filed an opinion concurring in the judgment. Chief Justice Roberts took no part in the consideration or decision of the case. [Appealed from Fed. Cir.]
In Microsoft Corp. v. i4i Ltd. Partnership, No. 10-290 (U.S. June 9, 2011), the Supreme Court held that 35 U.S.C. § 282 requires that an invalidity defense be proved by clear and convincing evidence. In so doing, the Court rejected Microsoft Corp.’s (“Microsoft”) contention that the jury may be instructed that a patent invalidity defense need only be proved by a preponderance of the evidence under certain circumstances, namely, when prior art evidence relied upon for a patent invalidity defense was not before the PTO during examination.
i4i Limited Partnership and Infrastructures for Information Inc. (collectively “i4i”) hold the patent-at-issue in this case, which claims an improved method for editing computer documents. In 2007, i4i sued Microsoft for willful infringement. Microsoft counterclaimed and sought a declaration that i4i’s patent was invalid and unenforceable.
In the district court, Microsoft objected to i4i’s proposed jury instruction that it was required to prove its invalidity defense by clear and convincing evidence, and proposed an instruction that described its burden as a preponderance of the evidence for prior art that the examiner did not review during prosecution of the patent-in-suit. The district court rejected Microsoft’s proposed language and instructed the jury that the burden was clear and convincing evidence. The Federal Circuit affirmed, relying on its settled interpretation of § 282.
The Supreme Court first pointed to Congress’s use of the phrase “presumed valid” when describing a patent in § 282, finding that such use codified the common law presumption of patent validity in effect prior to the Patent Act of 1952 (the “Act”) and, implicitly, the heightened standard of proof attached to it. The Court found that the heightened standard applies whether or not the prior art evidence was before the PTO during examination, and noted that even the pre-Act case law did not adopt or endorse a fluctuating standard of proof advanced by Microsoft. Further, many of the Supreme Court’s pre-Act decisions applied the heightened standard of proof without discussing whether the relevant prior art was before the PTO during examination.
The Supreme Court explained how the issue of whether invalidity evidence was before the PTO could be incorporated in jury instructions:
Simply put, if the PTO did not have all material facts before it, its considered judgment may lose significant force. And, concomitantly, the challenger’s burden to persuade the jury of its invalidity defense by clear and convincing evidence may be easier to sustain. In this respect, although we have no occasion to endorse any particular formulation, we note that a jury instruction on the effect of new evidence can, and when requested, most often should be given. When warranted, the jury may be instructed to consider that it has heard evidence that the PTO had no opportunity to evaluate before granting the patent. When it is disputed whether the evidence presented to the jury differs from that evaluated by the PTO, the jury may be instructed to consider that question. In either case, the jury may be instructed to evaluate whether the evidence before it is materially new, and if so, to consider that fact when determining whether an invalidity defense has been proved by clear and convincing evidence.
Slip op. at 17-18 (citation omitted).
Finally, the Supreme Court declined the parties’ invitations to judge their policy arguments. Instead, the Court deferred to Congress, noting that “Congress specified the applicable standard of proof in 1952 when it codified the common-law presumption of patent validity. Since then, it has allowed the Federal Circuit’s correct interpretation of § 282 to stand. Any re-calibration of the standard of proof remains in its hands.” Id. at 20.
Accordingly, the Supreme Court affirmed the Federal Circuit’s decision.
In a concurring opinion, Justice Breyer wrote separately to emphasize that “the evidentiary standard of proof applies to questions of fact and not to questions of law.” Breyer Concurrence at 1. Thus, the standard is applicable where the dispute is about, e.g., “when a product was first sold or whether a prior art reference had been published.” Id. But, Justice Breyer expressed his view that “[m]any claims of invalidity rest, however, not upon factual disputes, but upon how the law applies to facts as given.” Id. For example:
Do the given facts show that the product was previously “in public use”? 35 U. S. C. §102(b). Do they show that the invention was “nove[l]” and that it was “nonobvious”? §§102, 103. Do they show that the patent applicant described his claims properly? §112. Where the ultimate question of patent validity turns on the correct answer to legal questions—what these subsidiary legal standards mean or how they apply to the facts as given—today’s strict standard of proof has no application.
Id. (alteration in original).
To help compartmentalize the clear and convincing standard within its proper “fact-related” bounds, Justice Breyer recommended using case-specific jury instructions or “using interrogatories and special verdicts to make clear which specific factual findings underlie the jury’s conclusions.” Id. at 2. Thus, in Justice Breyer’s view, “courts can increase the likelihood that discoveries or inventions will not receive legal protection where none is due.” Id.
Justice Thomas concurred in the Court’s judgment, but wrote separately because he was “not persuaded that Congress codified a standard of proof when it stated in the Patent Act of 1952 that ‘[a] patent shall be presumed valid’” or that the words “so clearly conveyed a particular standard of proof to the judicial mind in 1952 as to constitute a term of art.” Thomas Concurrence at 1 (alteration in original). Justice Thomas, however, reached the same outcome as the majority because § 282’s silence as to the standard of proof reflected that “it did not alter the common-law rule.” Id. at 2.