On June 9, 2011, the U.S. Supreme Court held that a defendant accused of patent infringement must prove invalidity by clear and convincing evidence, rejecting the argument that a lower standard of proof, such as "preponderance of the evidence," could suffice. The Court did acknowledge, however, that "new" prior art should be given greater weight in the invalidity analysis than prior art previously considered by the U.S. Patent and Trademark Office (USPTO), and further sanctioned the use of jury instructions addressing this issue.
Background of the i4i decision
Under the Patent Act, a patent is presumed valid.1
Thus, a party asserting invalidity of a patent bears the burden of
proof.2 The Patent Act does not articulate the
applicable standard of proof, but lower courts (and in particular
the Federal Circuit) have interpreted it as requiring clear and
convincing evidence.
In the case at bar, i4i had sued Microsoft for infringement of a
patent relating to an improved method for editing computer
documents.3 Microsoft claimed that the patent was
invalid under 35 U.S.C. § 102(b) due to i4i's prior sale
of its "S4" software.4 Microsoft argued at the
district court and the Federal Circuit that, because "S4"
was not considered by the USPTO during prosecution of the patent,
Microsoft need not prove invalidity by clear and convincing
evidence — rather, a lower standard of a preponderance of
the evidence should suffice.5 Both the district court
and the Federal Circuit rejected Microsoft's
argument.6 The U.S. Supreme Court, affirming the lower
courts, responded as follows.
The Patent Act requires invalidity to be proved by clear and convincing evidence
The Supreme Court ruled, unequivocally, that 35 U.S.C. §
282 requires that invalidity be proved by clear and convincing
evidence.7 In affirming the lower courts, the Court
looked to the history of invalidity and § 282. The Court
determined that, by including a presumption of validity in §
282, Congress had intended to codify existing common
law.8 And, by the time of § 282's enactment,
the presumption of validity at common law carried with it a
heightened standard of proof — specifically, validity was
"not to be overthrown except by clear and cogent
evidence."9 The Court acknowledged that § 282
did not expressly articulate this standard of proof, but stated
that the general rule is that "a common-law term comes with
its common-meaning."10 Correspondingly, the Court
stated that it could not conclude that Congress "intended to
'drop' the heightened standard of proof simply because
§ 282 [failed] to reiterate it
expressly."11
The Court did acknowledge, however, that "new" prior art
likely carries more weight in the invalidity analysis than prior
art that has been previously considered and rejected by the USPTO.
Indeed, the Court expressly stated that a "challenger's
burden to persuade the jury of its invalidity defense by clear and
convincing evidence may be easier to sustain" where the
relevant prior art was not considered by the
USPTO.12
Looking forward after i4i
The Court's reticence to modify the heightened standard of
clear and convincing evidence is somewhat notable. Although
standards of proof may be esoteric from a jury's perspective,
having a lower standard for "new" prior art could have
been helpful for a party asserting invalidity. For example, when
presenting "new" prior art, a defendant could have
reinforced that its burden was notably lower by comparatively
emphasizing the different standards of proof (e.g., preponderance
of the evidence vs. clear and convincing evidence).
That being said, the Court's decision may nonetheless prove to
be beneficial to defendants, as the Court expressly acknowledged
that "new" prior art should be given greater weight than
prior art previously considered by the USPTO. As mentioned above,
the Court suggested that "new" prior art may make it
easier to sustain a showing of clear and convincing evidence of
invalidity. The Court also suggested that the additional weight
that should be afforded "new" prior art can be addressed
through jury instructions and verdict forms. Indeed, one of the
more interesting — and perhaps beneficial —
aspects of the Court's decision is that it arguably sanctions
jury instructions that (1) inform jurors that certain prior art was
not considered by the USPTO and (2) instruct the jurors to consider
this fact in determining whether invalidity has been proved by
clear and convincing evidence.13 This should make it
easier for defendants to obtain jury instructions such as these,
particularly in jurisdictions that do not routinely permit
them.
One other notable aspect of the Court's decision is Justice
Breyer's concurrence, wherein he emphasizes that the
clear-and-convincing standard applies only to questions of fact.
This is particularly apropos in the patent context, since
obviousness, although it depends on factual inquiries, is
ultimately a question of law. Justice Breyer suggests that, by
properly confining the heightened clear-and-convincing standard to
factual inquiries, "courts can increase the likelihood that
discoveries or inventions will not receive legal protection where
none is due."14 Similar to the majority, he
suggests that jury instructions and verdict forms can be used to
separate out "factual and legal aspects of an invalidity
claim."15
Footnotes
1. 35 U.S.C. § 282.
2. Id.
3. Microsoft Corp. v. i4i Ltd. Partnership, Slip
Op. at 4.
4. Id.
5. Id. at 4-5.
6. Id. at 5.
7. Id. at 1.
8. Id. at 7.
9. Id. at 7-8.
10. Id. at 8-9.
11. Id. at 9.
12. Id. at 17.
13. Id. 17-18.
14. Breyer Concurrence at 2.
15. Id.
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