On Thursday, June 9, 2011, the Supreme Court issued its decision in Microsoft Corp. v. i4i Ltd. Partnership, concerning whether § 282 of the Patent Act, which sets forth the presumption that a patent is valid, requires a patent challenger to overcome the presumption with clear and convincing evidence of invalidity. The majority held that § 282 requires an invalidity defense to be proved by clear and convincing evidence, both in the case where the prior art or other evidence at issue was considered by the PTO in examining the application and in the case where it was not considered.
Justice Sotomayor delivered the opinion of the court. The court reaffirmed the general rule that “there is a presumption of validity, a presumption not to be overthrown except by clear and cogent evidence,” quoting Justice Cardozo writing for a unanimous court in Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U.S. 1, 2 (1934).
Noting that RCA traced nearly a century of case law that was later codified in § 282, the court rejected the idea that an invalidity defense need only be proved by a preponderance of the evidence, and rejected the alternative argument that when an invalidity defense rests on evidence that was never presented to the examiner, the lower standard of proof should apply.
Congress provides in § 282, “[a] patent shall be presumed valid . . . . The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.” The court noted that while the statute does not expressly state a standard of proof for overcoming the presumption of validity, Congress uses a common-law term that “comes with a common law meaning, absent anything pointing another way,” quoting Safeco Ins. Co. of America v. Burr, 551 U.S. 47, 58 (2007). The court noted that the term “presumed valid” has a settled meaning in the common law, and cited RCA as authoritative. By adopting the common-law presumption of validity in the codification, Congress also attached “an expression as to its ‘force’” that places “‘a heavy burden of persuasion,’ requiring proof of the defense by clear and convincing evidence.’”
The court also refused to adopt a hybrid standard, where a preponderance standard would apply to evidence before the factfinder that was not before the PTO during the examination process. While acknowledging that new evidence not considered during the examination of the patent may hold additional weight, the court observed that if Congress had meant for such a hybrid standard to apply, “we assume it would have said so expressly.” Instead, the court indicated that the factfinder can evaluate whether the evidence before it is new, and if so, can consider that in determining whether an invalidity defense has been proved by clear and convincing evidence.
In adopting its position, the court noted the policy arguments on both sides, but declined to supplant Congress’s clear meaning in codifying the common-law presumption of patent validity to include a heightened standard of proof.
Justice Breyer, joined by Justices Scalia and Alito, concurred, and emphasized that the clear and convincing standard applies to questions of fact, and not to legal conclusions such as obviousness. Justice Breyer indicated that courts should keep the strict “clear and convincing” standard to factual questions to “increase the likelihood that discoveries or inventions will not receive legal protection where none is due.” Justice Thomas also concurred, not persuaded that Congress codified the standard of proof but agreeing that because § 282 was silent as to the standard of proof, the common-law rule was not supplanted.