Supreme Court Patent Watch: i4i Files Brief in Microsoft Case
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog
Zies, Widerman & Malek
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Posted: Mar 13, 2011 @ 6:19 pm
On Friday, March 11, 2011, lawyers representing i4i Limited Partnership filed the Brief for Respondents in the matter of Microsoft Corp. v. i4i Limited Partnership. The fight is at the United States Supreme Court, which will hear oral arguments in the matter on April 18, 2011. At issue is whether a patent in litigation deserves a heightened presumption of validity under the clear and convincing evidence standard or not. Today, in order for a defendant to invalidate a patent claim there must be clear and convincing evidence that the claim should have have been issued by the Patent Office. Microsoft seeks to lower the standard and make it easier to challenge issued patents in court.
More specifically, Microsoft would like to have the standard for invalidating a patent claim lowered to a mere preponderance of the evidence standard. They say that prior art not considered by the Patent Office should not be afforded the same level of deference. I say — why not?
What Microsoft and those who support Microsoft fail to appreciate is that whenever a patent search is done there are many hundreds, if not many thousands, of references reviewed. The patent searchers we typically use go through many thousands of patent applications and issued patents before settling on the 100 to 200 that seem most relevant. We then further weed down the list and wind up typically working with the inventor to articulate a description of the invention that clearly distinguishes the invention from the closest 3 to 7 references. Does that mean we have only considered 3 to 7 references and those are the only ones that should enjoy a clear and convincing standard? Of course not! The suggestion that only those references considered by the Patent Examiner be afforded a heightened presumption is preposterous and demonstrates a complete and total lack of understanding of how patent searching is done and how Patent Examiners use search results.
It is also incredibly ridiculous to pretend that we should aspire to a legal system that treats pro-patent and anti-patent determinations so differently. If a patent is denied reviewing courts will apply an abuse of discretion standard to see if the Patent Examiner and the Board of Patent Appeals made a mistake. For those unfamiliar with the law, whenever abuse of discretion is the standard that means you have little realistic chance of prevailing. Nevertheless, those who propose the “Microsoft plan” would like to see patents granted challenged based upon a mere preponderance of the evidence, which is simply world’s apart in terms of the threshold of proof required. So don’t get a patent and you realistically can’t prevail on a challenge in court. Get a patent and the challenger has an easy (or easier) path to challenging your right in court. That is fundamentally unfair.
The truth is that the standard for invalidating patent claims in court should be the same as it is when a patent is denied. Truthfully the standard shouldn’t even be as low as “clear and convincing,” rather it should be “abuse of discretion.” Those who say that isn’t appropriate because the challenger wasn’t allowed to participate in the patent application process are conveniently and selectively telling only half the truth. Any challenger has a right to request a reexamination of the patent and upwards of 95% of reexamination requests are granted by the Patent Office. If the challenger wants a lower standard they should be forced to return to the Patent Office and seek reexamination, otherwise the standard that is in place for unsuccessful applicants should be the standard in place for challengers who seek to invalidate claims obtained by successful applicants; namely an abuse of discretion standard.
Now before anyone gets too worried, questioning whether I have lost my senses, I realize what I am proposing doesn’t even have the chance of a proverbial snowball in Hades. I am just telling you the way it should be to make the situation fair and balanced for both sides, which after all is what the law is supposed to do, right? Of course it is, but it won’t, which is disheartening. The Supreme Court has said that great deference needs to be paid to the Patent Office when they deny patent claims as a result of administrative law principles, so why then don’t the same patent examiners get the same level of deference when they issue a patent? There is no good answer.
In any event, I didn’t set out to pontificate, but rather to provide the brief filed by i4i. If you read nothing else take a look at the “Introduction,” which is reproduced below. Did you know that Supreme Court Justice Cardozo once wrote that the presumption should be “clear and cogent evidence.” It would seem that this group of Supreme Court Justices will need to overrule themselves in order to give Microsoft what they ask for. The Supreme Court overruling itself, even after generations, is not something that anyone can or should predict. It happens rarely indeed. Let’s hope that trend continues.
By the way i4i has some real heavy hitters representing it before the Supreme Court. Finnegan, Henderson, Farabow, Garrett & Dunner are joined by Wilmer Cutler Pickering Hale and Dorr. The lead attorney? Well the first name on the brief is Donal Dunner, the Dean of Federal Circuit Advocates.
Now, the Introduction from the i4i Brief for the Respondents:
For over 150 years, this Court and others have consistently held that the presumption of patent validity imposes a heightened standard to prove invalidity. “Even for the purpose of a controversy with strangers,” Justice Cardozo explained for a unanimous Court in one case, “there is a presumption of validity, a presumption not to be overthrown except by clear and cogent evidence.” Radio Corp. of Am. v. Radio Eng’g Labs., Inc., 293 U.S. 1, 2 (1934) (hereafter RCA). The Court’s holdings on this point, moreover, are uniform: This Court has never held or even stated in dicta that the presumption can ever be overcome by “a dubious preponderance” of the evidence. Id. at 8.
The same is true of the Federal Circuit, which Congress created specifically to “strengthen the United States patent system.” Markman v. Westview Instruments, Inc., 517 U.S. 370, 390 (1996). From its earliest days, that court has consistently held—relying on this Court’s precedent—that the standard to prove invalidity under 35 U.S.C. §282 is always clear and convincing evidence. See, e.g., American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360 (Fed. Cir. 1984) (Rich, J.) (citing RCA). Before the Federal Circuit’s creation, the vast majority of regional circuits took the same view. See infra p.52 & n.18. Indeed, by 1970 two circuits had labeled the clear-and-convincing standard “elementary patent law.” Mercantile Nat’l Bank v. Quest, Inc., 431 F.2d 261, 264 (7th Cir. 1970); King-Seeley Thermos Co. v. Refrigerated Dispensers, Inc., 354 F.2d 533, 536 (10th Cir. 1965) (each citing Mumm v. Jacob E. Decker & Sons, 301 U.S. 168 (1937)).
Microsoft thus asks this Court to depart from settled precedent to effect a radical change in patent law— an area in which stability and predictability are paramount. In fact, Microsoft seeks a more extreme change than it advocated at the petition stage. Then, Microsoft argued that the standard of proof should be a preponderance when relevant prior art was not considered by the Patent and Trademark Office. Microsoft presented that issue as warranting review by pointing to dictum in KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007), and pre-1982 regional-circuit decisions, all of which purportedly conflicted with Federal Circuit precedent. Now, Microsoft argues primarily for an across-the-board preponderance standard. That rule, however, finds no support in KSR, any other decision of this Court, or virtually any case from the circuits (before or after 1982). Furthermore, this argument has been waived because it was not pressed or passed on below. See, e.g., United States v. United Foods, Inc., 533 U.S. 405, 416-417 (2001) (declining to consider an “argument … ‘not raised or addressed’ in the Court of Appeals,” even though it fell within the ambit of the broadly worded question presented).
The reason for Microsoft’s switch is apparent: As several of Microsoft’s own amici recognize, a hybrid standard of proof is indefensible. It is completely unmoored from the text of §282. It conflicts with this Court’s jurisprudence, which “never has approved case-by-case determination of the proper standard of proof for a given proceeding.” Santosky v. Kramer, 455 U.S. 745, 757 (1982) (emphasis omitted). And it would cause jury confusion about how to apply multiple standards of proof on a single issue (perhaps even a single piece of prior art) and generate wasteful collateral litigation about, for example, which evidence patent examiners considered. Federal Circuit precedent, by contrast, avoids all these problems—and accords with this Court’s observation in KSR—by applying a single standard of proof but allowing it to be satisfied more easily with evidence the PTO never considered. See, e.g., American Hoist, 725 F.2d at 1359-1360. That approach is also substantively identical to pre-1982 regional-circuit decisions holding the presumption “weakened” by such evidence.
The universal-preponderance standard to which Microsoft has shifted is no better than a hybrid standard. It contradicts every holding of this Court regarding the standard to prove invalidity—and hence also contradicts §282, which codified those uniform holdings. It would also marginalize the PTO, draining that agency’s expert determinations regarding patentabilityof virtually any significance. And like the hybrid standard, it would harm the public: The clear-and-convincing standard promotes strong, stable patent rights, thereby encouraging innovation and the disclosure of inventions that the public enjoys. A weakening or abandonment of that standard would undermine patent rights and thus discourage innovation—in derogation of “the policy of stimulating innovation that underlies the entire patent system.” Dawson Chem. Co. v. Rohm & Hass Co., 448 U.S. 176, 221 (1980). At the same time, in light of the extant reexamination process, such a change would do little to promote competition, and would guarantee the perpetuation of any problems with the patent-examination process, about which Microsoft and its amici complain at length.
The Federal Circuit’s judgment should be affirmed.
About the Author
Gene Quinn is a US Patent Attorney, law professor and the founder of IPWatchdog.com. He is also a principal lecturer in the top patent bar review course in the nation, which helps aspiring patent attorneys and patent agents prepare themselves to pass the patent bar exam. Gene started the widely popular intellectual property website IPWatchdog.com in 1999, and since that time the site has had many millions of unique visitors. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, USA Today, CNN Money, NPR and various other newspapers and magazines worldwide. He represents individuals, small businesses and start-up corporations. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.