In Microsoft Corp. v. i4i Limited Partnership (i4i), the Supreme Court affirmed that a party challenging the validity of a patent must prove invalidity by “clear and convincing” evidence. The Court rejected Microsoft’s argument that the Court should adopt a lower “preponderance” of the evidence standard for invalidity challenges generally, or in the alternative where the invalidity defense is based on evidence that was not presented to PTO during prosecution of the patent. Nevertheless, the Court endorsed the use of jury instructions which would allow the jury to consider the fact that evidence was not presented to the PTO, and further acknowledged that such evidence may carry additional persuasive weight when deciding whether a patent challenger has satisfied the “clear and convincing” standard.
Under Section 282 of the Patent Act, an Invalidity Defense Must be Proven by Clear and Convincing Evidence
Microsoft advanced a two-part argument before the Supreme Court. Microsoft first asserted that a defendant in an infringement action need only prove invalidity by a “preponderance” of the evidence. In the alternative, Microsoft asserted that the lower “preponderance” standard must apply “at least when an invalidity defense rests on evidence that was never considered by the PTO in the examination process.” The Supreme Court rejected both contentions.
Although § 282 does not expressly state the standard of proof required to demonstrate invalidity, the Court explained that common law has long held that a presumption of validity is “‘not to be overthrown but by clear and cogent evidence.’” Therefore, the Court reasoned, when Congress used the term “presumed valid” in § 282, it imported the related common law evidentiary standard used to overcome the presumption, i.e. the clear and convincing standard, which represents a “heavy burden of persuasion.”
The Court also refused to adopt Microsoft’s more limited proposal that “a preponderance standard must at least apply where the evidence before the factfinder was not before the PTO during the examination process.” The Court rejected this “fluctuating standard of proof” as lacking basis in prior Supreme Court case law or in the text of § 282:
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 done so expressly.
Hence, the Court affirmed that a single evidentiary standard – the clear and convincing standard – applies regardless of whether certain evidence was presented to the PTO.
New Evidence May Carry More Weight and Jury Instructions on the Effect of New Evidence Should be Given
Although refusing to lower the standard of proof where evidence was not before the PTO, the Court nevertheless agreed that “new evidence supporting an invalidity defense may ‘carry more weight’ in an infringement action than evidence previously considered by the PTO.” Consequently, juries should take into consideration whether evidence was before the PTO when deciding whether an invalidity defense has met the clear and convincing standard:
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.
Although the Court declined to “endorse any particular formulation,” it approved the use of jury instructions on the effect of “new evidence” when warranted, including instructions:
- To consider that the jury has heard evidence that the PTO had no opportunity to evaluate before granting the patent; and
- To consider whether the evidence presented to the jury differs from the evidence presented to the PTO.
In either of these situations, “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.”
Justice Breyer’s Concurrence: The Clear and Convincing Standard Applies Only to Questions of Fact, Not to Questions of Law
Justice Breyer in his concurrence emphasized the limited scope of the majority’s opinion, noting that “the evidentiary standard of proof applies to questions of fact and not to questions of law.” Justice Breyer made this distinction primarily because “[m]any claims of invalidity rest … not upon factual disputes, but upon how the law applies to the facts as given.” Consequently, “[w]here the ultimate question of patent validity turns on the correct answer to legal questions … today’s strict standard of proof has no application.” To ensure that i4i’s evidentiary standard is not misapplied to legal questions, Justice Breyer suggests tailoring jury instructions to the specific facts of each case, or “using interrogatories and special verdicts to make clear which specific factual findings underlie the jury’s conclusions.”