The U.S. Supreme Court on Thursday unanimously affirmed the Federal Circuit’s decision in Microsoft v. i4i, holding that patent invalidity must be proven by clear and convincing evidence. The Court rejected the argument advanced by Microsoft and its heavy-hitting amici Google, Apple, Verizon, and HP that invalidity should be a lower “preponderance of the evidence” standard across the board, and, alternatively, at least where the art was not considered by the U.S. Patent and Trademark Office (USPTO) during prosecution of the application.
The 8-0 decision delivered by Justice Sotomayor rests largely on the Court’s 1934 RCA opinion that required “clear and cogent evidence” to invalidate an issued patent and the subsequent case law as ultimately codified by Congress in the 1952 Patent Act. Acknowledging policy arguments both for and against a strong presumption of validity, the Court nevertheless decided that it was bound to follow Congress and the precedent. Specifically, “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 Section 282 to stand. Any recalibration of the standard of proof remains in [Congress’] hands.”
The Court agreed with Judge Rich’s American Hoist opinion that “new evidence” of invalidity probably carries more weight than evidence that had been considered by the USPTO. But the Court noted that, in those cases, a jury can be instructed that it was seeing art the USPTO had not previously considered in deciding whether the clear and convincing standard had been met.
The decision upholds the Eastern District of Texas jury verdict for $290 million in damages and a permanent injunction against the world’s largest software maker Microsoft for infringing the Toronto-based i4i software company’s patents.
It was the second decision this week where the Supreme Court not only affirmed the outcome of the Federal Circuit but also affirmed the reasoning, rule, and entire decision.