U.S. Supreme Court Upholds Heightened Standard for Invalidating Patents


Microsoft Corp. v. i4i Limited Partnership


U.S. Supreme Court No. 10-290

Argued: April 19, 2011

Decided: June 9, 2011



With summer recess approaching, the U.S. Supreme Court decided three patent-related cases in just ten days.  Among these cases, was an 8-0 decision in Microsoft v. i4i, which rejected Microsoft’s request for a lower patent invalidity standard.

As discussed in detail below, Microsoft v. i4i was probably not a surprise for the patent community—the decision merely reaffirmed the existing standard for invalidating patents.  Specifically, one must prove a patent is invalid by “clear and convincing evidence,” rather than the lower “preponderance of the evidence” evidentiary standard requested by Microsoft. 

The Court also rejected the argument that the lower “preponderance of the evidence” standard should at least apply to evidence that was not considered by the U.S. Patent and Trademark Office (“USPTO”) during the patent examination process.

Finally, the Court simply left it up to Congress to recalibrate the standard of proof, if needed. 

Before exploring the details of Microsoft v. i4i, it may help to illuminate the central issues involved.  Briefly, once a patent issues, the patent holder can bring an action for patent infringement to enforce certain exclusive rights.  However, under §282 of the Patent Act of 1952, an alleged infringer can defend such a patent infringement action by proving that the asserted patent never should have issued in the first place (i.e., that the patent is invalid). 

That said, §282 specifies that “[a] patent shall be presumed valid” and “[t]he burden of establishing invalidity . . . rest[s] on the party asserting such invalidity.”  Although §282 specifies the burden of proof, it does not explicitly articulate any standard of proof (i.e., the degree or level of proof required). 

For example, the “preponderance of the evidence” standard of proof requires that the greater weight of the evidence support one side of an issue as compared to the other side. 

The “clear and convincing evidence” standard requires a greater burden than the “preponderance of the evidence” standard, but less than the “beyond a reasonable doubt” standard used in criminal trials.  To satisfy the “clear and convincing evidence” standard, the evidence must indicate that the thing to be proved is highly probable or reasonably certain.

With those basic concepts in mind, in Microsoft v. i4i, the Court acknowledged that §282 does not articulate any standard of proof for invalidating a patent, much less explicitly use the terms “clear and convincing evidence.”  However, the Court held that Congress nevertheless intended for §282 to include the heightened standard of proof.

Writing for the majority, Justice Sotomayor supported this conclusion by reasoning that, in drafting §282 to state that a patent is “presumed valid,” Congress used a term with a settled meaning in the common law.  To determine this settled meaning, the Court drew heavily from Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U. S. 1 (“RCA”), which required “clear and cogent evidence” to overturn the presumption that an issued patent is valid. 

The Court deduced that, according to its settled meaning in RCA, the presumption of patent validity encompasses both an allocation of the burden of proof and a heightened standard of proof.  Thus, adhering to the general rule that a common law term comes with its common law meaning, the Court presumed that Congress intended §282 to incorporate the common law heightened standard of proof, since §282 does not dictate otherwise.

After upholding the “clear and convincing evidence” standard, the Court then also rejected Microsoft’s argument that the lower “preponderance of the evidence” standard should at least apply to new evidence that was not considered by the USPTO during examination.  However, the Court nevertheless agreed that such new evidence supporting an invalidity defense might carry more weight than evidence previously considered by the USPTO.  Likewise, using such new evidence, the burden to persuade the jury that a patent is invalid by “clear and convincing evidence” may be easier to sustain. 

As such, the Court invited patent litigators to request, when warranted, that the jury be instructed to evaluate whether evidence is materially new and, if so, to consider that fact when determining whether an invalidity defense has been proved by “clear and convincing evidence.”

The Court declined to evaluate competing policy arguments for/against upholding the heightened “clear and convincing evidence” standard.  For instance, Microsoft and its amici argued that the heightened standard of proof hinders innovation by protecting “bad” patents from invalidity challenges.  Conversely, i4i and its amici argued that the heightened standard properly limits the circumstances in which a lay jury can overturn the judgment of an expert agency.

Rather than resolving such policy questions, the Court noted that the Federal Circuit has interpreted §282 to require the “clear and convincing evidence” standard for nearly 30 years.  During this time, Congress has made many changes to the patent laws, but has allowed the Federal Circuit’s interpretation of §282 to stand.  Thus, the Court left it for Congress to determine whether modification to the “clear and convincing evidence” standard is warranted.

Justice Breyer’s concurrence, joined by Justices Alito and Scalia, argued that the “clear and convincing evidence” standard applies only to questions of fact, and not to questions of law.

Justice Thomas also concurred in the Court’s judgment, but disagreed with the majority’s reasoning.  Specifically, Justice Thomas argued that the Patent Act of 1952 did not codify the “clear and convincing evidence” standard, as argued by the majority, rather, it simply left unaltered the common law rule requiring the “clear and convincing evidence” standard.

In sum, the main impact of the Microsoft v. i4i decision is simply that patent holders can breath a sigh of relief knowing that their patent investments are as safe as they were before this case.