U.S. Supreme Court to Hear Patent Case Regarding Standard of Proof

A patent grants an exclusive set of rights. In exchange for disclosing the details of an invention, an inventor is given the exclusive right to prevent others from using his or her invention for a limited period of time. When someone violates this exclusive right, the patent holder may have a viable legal claim, and may be able to prevent the sale of the infringing product and receive damages for the infringement.

Such was the case last year, when tech company i4i alleged that Microsoft infringed one of its software patents with certain versions of Microsoft Word. Microsoft argued that i4i's underlying patent was invalid, and therefore Microsoft's use of the technology did not constitute infringement.

A Texas jury agreed with i4i; Microsoft was ordered to stop selling particular versions of Word and was to pay more than $290 million in damages. A federal appellate court upheld the ruling, but now the Supreme Court has agreed to review the case.

Specifically, the Supreme Court will consider the appropriate standard to use when reviewing the validity of a patent. The relevant federal statute notes that patents are presumed to be valid, but does not specify the standard for overcoming this presumption. Federal courts have traditionally required that a company or party challenging the validity of a patent prove that it is invalid by clear and convincing evidence.

Microsoft argues that this standard is inappropriate in this situation. According to Microsoft, the challenge to the validity of this patent includes evidence the U.S. Patent and Trademark Office (PTO) did not consider at the time it issued the i4i patent. Because of this additional evidence, Microsoft argues the standard should be lower.

Instead of proving invalidity by clear and convincing evidence, Microsoft argues they should only have to prove invalidity by a preponderance of the evidence. In contrast, i4i argues that any such change to existing practices should be dictated by Congress, not by the courts.

For individuals and companies who hold patents, the outcome of this case may have significant ramifications. If the Supreme Court holds that a lesser evidentiary standard is appropriate in situations where the PTO did not consider all evidence, patent holders alleging infringement may have a more difficult time withstanding the defense of invalidity. If, in contrast, the Supreme Court deems that invalidity must be proven by clear and convincing evidence, companies being accused of infringement will face challenges when alleging invalidity.

The Supreme Court is expected to render a decision by June 2011. Those with questions regarding the defense of invalidity should speak with a knowledgeable intellectual property lawyer.