Posts Tagged: "i4i"

This ruling cannot stand, and the CAFC needs to step back from the brink. The CAFC has vastly overreached in Soverain v. Newegg, and it is imperative that the Supreme Court hear the case and that Soverain prevail. This attack on patent-holders and the adverse implications from the change proposed by Newegg are unprecedented, and would deal a devastating blow to any U.S. patent-holder, large or small. The proposed change would alter the law and effectively eviscerate the patent system.

This month I have been running a series of articles on the United States Supreme Court. Today we switch things up a little and talk patents, focusing on one of the most important decisions the Supreme Court has made over the last generation — i4i v. Microsoft. I recently chatted with Michael Cannata. His is a name you might not know, but he was intimately involved in the i4i case. He is the manager of a fund that put up the capital for i4i to fight the battle. He consequently became a Director for i4i and was involved with co-managing the litigation for i4i.

icrosoft wanted to see that changed, with prior art not considered by the Patent Office requiring a lower evidentiary threshold to invalidate. To rule in Microsoft’s favor would have required the Supreme Court to throw away 30 years of well-settled Federal Circuit law, as well as overruling Supreme Court precedent in effect since at least 1934, but which traces back in some form from that date a further 100 years. That was a bridge too far for the Supreme Court, who ruled today 9-0 (with concurring opinions but no dissents) that in order to invalidate patent claims 35 U.S.C. 282 requires clear and convincing evidence regardless of whether the prior art was known by the Patent Office during prosecution of the patent application.

Hungar would go on to say that the clear and convincing standard “makes no sense,” which nearly immediately drew the first comment from the bench with Justice Ginsburg saying that it would be difficult to say the standard makes no sense when it was supported by Justice Cardozo and Judge Rich. Ginsberg would later, in a nearly annoyed way, say “then you have to be saying that Judge Rich got it wrong…” Hungar cut off Justice Ginsburg, not typically a wise move.

What becomes clear in reading these briefs (and the excerpts below) is that despite what you might have heard to the contrary the Supreme Court has already previously addressed this issue and has done so in support of a standard appreciably higher than the mere preponderance supported by Microsoft. The argument of those in support of Microsoft has been that at least some Circuit Courts of Appeal had a lower presumption of validity prior to when the Federal Circuit announced the clear and convincing standard of proof and thereby settled patent law. While that may be true it seems abundantly clear that law setting a preponderance standard was directly in conflict with the clear and unambiguous Supreme Court precedent directly on point. In fact, there is even Supreme Court precedent directly on point saying that more than a mere preponderance is necessary even when the prior art has not been previously considered. So perhaps i4i and the amici, including the U.S. government by and through the Solicitor General and the USPTO General Counsel Bernie Knight can convince the Supreme Court not to overrule its own prior decisions and keep an appropriately high standard.

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? Truthfully the standard for invalidating patent claims in court should be the same as it is when a patent is denied. The standard shouldn’t even be as low as “clear and convincing,” rather it should be “abuse of discretion.”

It is impossible to know for sure, but it is reasonable to assume that the 1000+ page IDS Kappos referred to might be in response to what the Supreme Court will likely do. The Supreme Court doesn’t seem to like to apply changes in the law prospectively, even radical changes as this would be. So if they do lower the burden the changes will be applied retroactively and affect (and infect) issued patents and pending patent applications. With that in mind, those with patent applications pending might want to anticipate the worst and file “everything made by man under the sun” information disclosure statements. That way you will be protected if the Supreme Court says there is a reduced standard for invalidating patent claims when prior art was not submitted to the Patent Office.

Today it is quite difficult to demonstrate that a patent claim issued by the United States Patent and Trademark Office is invalid and should not have been issued. Microsoft, along with a great many others, is urging the Supreme Court to change that and make it easier for them to demonstrate that patent claims, and thereby the associated patent rights, are invalid and should not have been issued. A strange association of those who are large patent owners themselves are urging the Microsoft position because they are tired of getting sued on patents that they infringe and having to pay tens of millions or hundreds of millions of dollars because they have trampled on the rights of innovators. So in order to excuse their own infringement they are asking the Supreme Court to throw the entire patent system under the bus, which is sadly more likely to happen than not.

At the end of December, we learned that Microsoft had petitioned the PTO Director to order reexamination of the ‘449, and this morning that petition has been released to the public. It shows that Microsoft’s chances at the Patent Office are not so long after all, that Microsoft’s argument for reexamination are stronger than many thought. The concerns about the “clear and convincing” standard being abandoned by the Supreme Court may not be justified – there is a real prospect that the Microsoft-i4i dispute could be resolved in the reexamination, without the need for the Supreme Court to reassess the burden of proof standard for accused infringers.

At this time of the year all typically sit back and reflect on the year that has been, spend time with family and friends, watch some football and set a course to follow into the new year. So here are the top 10 events that shaped the patent, innovation and intellectual property industry during 2010 — at least according to me, and with a heavy patent emphasis. What did you expect?

Earlier today the United States Supreme Court granted certiorari in Microsoft Corporation v. i4i Limited Partnership, with Chief Justice John Roberts taking no part in the decision or petition. This comes only days after the United States Patent and Trademark Office refused to grant reexamination of the patent in question. Given Microsoft doesn’t even have strong enough prior art to provoke a reexamination by the USPTO it seems absurd to think they could have been victorious even if the district court reviewed the patent claims de novo and without any presumption.

On Friday, September 17, 2010, I had the opportunity to chat with Professor Mark Lemley, who is the William H. Neukom Professor at Stanford Law School and partner in the San Francisco law firm Durie Tangri LLP. Lemley is well known both in the academic community and the practice community. In fact, he is one of only a select few that have managed to simultaneously have a stellar career both in academia and in private practice. I chat with Lemley via e-mail from time to time on various matters, and we have talked about an interview for some time. Then a draft of a amicus brief Lemly filed today with the United States Supreme Court arrived in my inbox and I knew this was the issue that would make for an excellent interview. Lemley is leading the charge of law professors who are asking the Supreme Court to review i4i v. Microsoft and address the presumption of validity enjoyed by an issued patent, pegging the presumption to those references considered by the patent examiner during prosecution.

Earlier this week i4i Limited Partnership announced that the United States Patent and Trademark Office confirmed the patentability of all claims of the U.S. Patent 5,787,449. The ‘449 patent was being reexamined by the USPTO at the request of Microsoft after the Redmond giant lost close to $300 million as a result of infringement of the i4i patent. Microsoft was also ordered to stop selling Word or remove certain XML functionality. MS had put a lot of hope in reexamination, and now their options are running out. They are apparently contemplating an appeal to the US Supreme Court.

The victories selected represent a diverse array of wins, which a press release announcing the Top 10 list says is due to “the differing objectives of IP litigation today.” These victories range from multimillion-dollar jury verdicts, including the biggest patent award ever, which was won by Johnson & Johnson’s Centocor Ortho Biotech unit against Abbott Laboratories, to the i4i injunction win blocking the distribution of Microsoft Word editions having a popular XML feature.