On June 9, 2011, the Supreme Court, in Microsoft Corporation v. i4i Limited Partnership,1 unanimously held that 35 U.S.C. § 282 requires that patent invalidity be proved by clear and convincing evidence.2
Section 282 of the Patent Act states that a patent is “presumed valid,” and that the burden of establishing invalidity rests on the party asserting the defense. The statute does not explicitly address, however, the appropriate standard of proof.
In an opinion authored by Justice Sotomayor, the Court held that Congress’ codification of the common law presumption of validity carried with it its settled common law meaning – namely, that “a defendant raising an invalidity defense bore ‘a heavy burden of persuasion,’ requiring proof of the defense by clear and convincing evidence.”3 The Court reasoned:
Under the general rule that a common-law term comes with its common-law meaning, we cannot conclude that Congress intended to “drop” the heightened standard [of] proof from the presumption simply because §282 fails to reiterate it expressly. . . . “On the contrary, we must presume that Congress intended to incorporate” the heightened standard of proof, “unless the statute otherwise dictates.”4
Favorably citing Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U.S. 1 (1934), the Court noted that “RCA leaves no doubt that attached to the common-law presumption of patent validity was an expression as to its ‘force,’ . . . that is, the standard of proof required to overcome it.”5
The Court rejected Microsoft’s argument that the lower preponderance of the evidence standard should apply at least in cases where the evidence of invalidity was not considered by the U.S. Patent & Trademark Office (“PTO”) at the time the application was examined.6 The Court reasoned that the cases leading up to the enactment of Section 282 do not support a “fluctuating standard of proof,” or otherwise indicate that anything less than a clear and convincing standard should apply, even though numerous courts have acknowledged that the presumption of validity may be “weakened” when the evidence was not previously considered by the PTO.7 Relying again on RCA, the Court noted that “the Court spoke on this issue directly in RCA, stating that because the heightened standard of proof applied where the evidence before the court was ‘different’ from that considered by the PTO, it applied even more clearly where the evidence was identical.”8
The Court further reasoned that the language of Section 282 does not suggest that Congress intended to enact a standard that varies depending on the facts of each case:
Indeed, had Congress intended to drop the heightened standard of proof where the evidence before the jury varied from that before the PTO—and thus to take the unusual and impractical step of enacting a variable standard of proof that must itself be adjudicated in each case . . . we assume it would have said so expressly.9
The Court acknowledged, however, the long-recognized “commonsense principle” that new evidence of invalidity can carry more weight than evidence already considered by the PTO, and that “the challenger’s burden to persuade the jury of its invalidity defense by clear and convincing evidence may be easier to sustain.”10 In such circumstances, the Court noted, “a jury instruction on the effect of new evidence can, and when requested, most often should be given.”11 In particular, “the jury may be instructed to consider that it has heard evidence that the PTO had no opportunity to evaluate before granting the patent.”12 And, when a dispute exists about whether certain evidence differs from what was before the PTO, “the jury may be instructed to consider that question.”13 “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.”14 Because Microsoft did not ask the district court to enter such an instruction, however, the Court declined to consider whether such an instruction was warranted in this case.
Finally, the Court declined to weigh in on the parties’ policy arguments regarding the “wisdom” of the heightened standard.15 The Court noted that Congress “has allowed the Federal Circuit’s correct interpretation of §282 to stand” and that it is up to Congress to recalibrate the standard of proof.16
Justice Breyer filed a concurring opinion, joined by Justices Scalia and Alito, underscoring that the clear and convincing standard applies to questions of fact, not questions of law, and encouraging the use of instructions, interrogatories, and special verdicts to “help . . . keep the application of today’s ‘clear and convincing’ standard within its proper legal bounds.”17
Justice Thomas also filed an opinion concurring in the judgment, but noting his disagreement with the conclusion that Congress’ statement that a patent shall be presumed valid codified a standard of proof.18 Instead, Justice Thomas concluded that the heightened standard of proof articulated in RCA applies because it has never been overruled by the Court or otherwise modified by Congress.