Standard for Proving Patent Invalidity Affirmed by Justices

On June 9, the Supreme Court issued its long-awaited opinion in i4i v. Microsoft, in which the Court unanimously affirmed the “clear and convincing” standard for proving patent invalidity, in keeping with the statutory presumption of the validity of issued patents.

Microsoft had argued at trial that because the key prior-art reference at issue had not been presented to the Patent Office during prosecution of i4i’s asserted patent, it should have been entitled to a jury instruction reducing its burden of proof to a mere preponderance of the evidence. On appeal, Microsoft (and amici) argued that the preponderance standard should apply to all prior-art, regardless of whether or not the patent examiner had considered it during prosecution.

The Supreme Court, however, found that the clear and convincing standard was implicit in the statutory language of 35 U.S.C. § 282 and explicit in the case law for more than a century before the statute’s 1952 adoption. Writing for the Court, Justice Sotomayor held that while previous cases have deemed the presumption of validity “‘weakened’ or ‘dissipated’ in the circumstance that the evidence in an infringement action was never considered by the PTO,” they did not support a preponderance standard. (Slip. Op. at 16-17.) The Court also rejected policy arguments that the clear and convincing standard insulates poor-quality patents from invalidity challenges and encourages juries to abdicate their role in considering invalidity claims.

However, the Court recognized “the same commonsense principle that the Federal Circuit has recognized throughout its existence—namely, that new evidence supporting an invalidity defense may ‘carry more weight’ in an infringement action than evidence previously considered by the PTO.” (Id. at 17.) Specifically, “if the PTO did not have all material facts before it, its considered judgment may lose significant force,” and thus “the challenger’s burden to persuade the jury of its invalidity defense by clear and convincing evidence may be easier to sustain.” (Id. [emphasis added].) As a practical matter, the Court held it would be appropriate to instruct a jury in a patent case to evaluate whether the prior-art before it is “materially new,” and, if so, to consider that fact in its deliberations. (Id. at 17-18 [emphasis added].) The Court thus appears to have reaffirmed the “clear and convincing” burden while allowing some flexibility in its implementation. The interpretation of the Court’s new phrases, such as “all material facts,” “easier to sustain,” and “materially new,” will apparently be left to the lower courts.