The Supreme Court of the United States today granted certiorari in a case that questions the long-standing clear-and-convincing evidentiary standard for invalidating a patent. The case is Microsoft Corp. v. i4i L.P., No. 10-290 (cert. granted Nov. 29, 2010), and the question it presents is below:
The Patent Act provides that "[a] patent shall be presumed valid" and that "[t]he burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity." 35 U.S.C. § 282. The Federal Circuit held below that Microsoft was required to prove its defense of invalidity under 35 U.S.C. § 102(b) by "clear and convincing evidence," even though the prior art on which the invalidity defense rests was not considered by the Patent and Trademark Office prior to the issuance of the asserted patent. The question presented is: Whether the court of appeals erred in holding that Microsoft's invalidity defense must be proved by clear and convincing evidence.
Microsoft filed its certiorari petition after the Federal Circuit affirmed a judgment of over $290 million for Microsoft's infringement of i4i's patent – the largest monetary judgment ever affirmed on appeal in a patent case. Microsoft's petition pointed out that the clear-and-convincing evidentiary standard was created by the Federal Circuit after all of the regional circuits had refused to do so. The petition also emphasized the Supreme Court's footnote in its recent unanimous KSR v. Teleflex decision noting that the presumption "seems much diminished" when the Patent and Trademark Office (PTO) has not considered the validity challenge.
If the Supreme Court ultimately rules in Microsoft's favor on the merits, the case could have far-reaching impacts not just on patent litigation, but also on initial patent prosecution strategies as well as patent reexamination and reissue practice. For new patent applications, it will be more valuable to know with better certainty the prior art landscape so that all potentially relevant prior art can be submitted to the PTO during the initial examination process, thereby precluding a challenger from later attacking the validity of the patent using a lower evidentiary burden based on that same prior art. For existing patents, patent owners may increasingly turn to reexamination and reissue as tools to recover lost strength in the presumption of validity by giving the PTO an opportunity to consider prior art that becomes a concern.