This week, the Supreme Court granted a petition for certiorari on a question of proof that arises in almost every patent infringement action. In particular, in Microsoft v. i4i Ltd. Partnership, No. 10-290 (U.S. Nov. 29. 2010), the Supreme Court agreed to review "[w]hether the invalidity defense provided for in the Patent Act, 35 U.S.C. § 282, must be proved by clear and convincing evidence." Under current law, a defendant must prove invalidity defenses by a higher standard of proof, the clear and convincing evidence standard, than the "preponderance of evidence" standard that the plaintiff must satisfy to prove infringement. The Supreme Court is now going to decide whether or not that disparate treatment in the application of the two standards of proof always is appropriate.
In the underlying case, plaintiff i4i obtained a nearly $290 million award against Microsoft following a jury verdict in the Eastern District of Texas. The jury found that Microsoft's popular Word program infringed patent claims covering a computer language that dictates the formatting of a digital document. On appeal, Microsoft claimed that prior to the formation of the Federal Circuit, the majority of the Courts of Appeal actually had held that the clear and convincing standard should apply only to evidence, particularly prior art, considered by the Patent and Trademark Office ("PTO") during prosecution of the underlying patent. Moreover, in KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007), the Supreme Court noted “that the rationale underlying the presumption-that the PTO, in its expertise, has approved the claim-seems much diminished" where an invalidity defense rests on evidence that the PTO never had an opportunity to consider. Citing this passage from the KSR, Microsoft petitioned the Supreme Court to determine whether the standard for a § 282 defense actually should be one of a "preponderance of evidence" when the evidence, including prior art, was not previously considered by the PTO.