June 16, 2011

U.S. Supreme Court Affirms "Clear and Convincing" Evidentiary Standard of Proof for Invalidity, Suggests Ways to Address Presumption of Validity

Holland & Knight Alert
John P. Moran

On June 9, 2011, the U.S. Supreme Court, in Microsoft Corp. v. i4i Limited Partnership, unanimously affirmed that patents can only be proved invalid by “clear and convincing evidence.” Justice Sotomayor delivered the opinion of the Court, which was joined by all justices, except Justice Thomas who issued his own concurrence. Justice Breyer joined the majority opinion but also wrote a concurring opinion, which Justices Alito and Scalia joined. Chief Justice Roberts recused himself from the case.

Although the Court reaffirmed longstanding Federal Circuit precedent – that clear and convincing evidence is required to invalidate a patent – the Court’s willingness to hear the case raised speculation that it was poised to articulate a new (and lower) standard of proof for invalidity. However, the justices held that it was up to Congress – not the courts – to change the standard. The decision means that Microsoft may now face a judgment in excess of $250 million.


In 2007, i4i claimed that Microsoft’s Word product infringed its patent for a method of editing computer documents. Microsoft denied infringement and argued that i4i’s sale of a computer program before the filing of the application that led to i4i’s patent meant that the asserted patent was invalid as anticipated under 35 U.S.C. § 102(b).

During the trial, Microsoft objected to the district court’s instruction to the jury that Microsoft had the burden of proving invalidity by “clear and convincing evidence.” Instead, Microsoft proposed an instruction that, for prior art references not considered by the U.S. Patent & Trademark Office (PTO) during patent prosecution (such as i4i’s software), Microsoft should only be required to meet a “preponderance of the evidence” standard. The district court rejected Microsoft’s proposed instruction, and the jury found that Microsoft failed to demonstrate that i4i’s patent was invalid and that Microsoft had “willfully infringed” i4i’s patent (which can result in a trebling of damages).

Microsoft appealed the district court’s rejection of its proposed jury instruction, but the Federal Circuit affirmed the district court’s ruling. Microsoft then petitioned for a writ of certiorari to the Supreme Court, which accepted Microsoft’s petition and heard oral arguments earlier this year.

The Court’s Decision

Justice Sotomayor’s opinion traces the common law roots of the clear and convincing standard of proof necessary to invalidate a patent. According to the Court, and contrary to Microsoft’s argument, Congress’ failure expressly to codify the heightened standard of proof in 35 U.S.C. § 282 (which states that patents are presumed to be valid) did not somehow “drop” the standard to a preponderance of the evidence. According to the opinion, “[s]quint as we may, we fail to see the qualifications [to establish a lower standard] that Microsoft purports to see in our decisions.” After explaining why the clear and convincing standard of proof is appropriate, the opinion concluded that “Congress specified the applicable standard of proof in 1952 when it codified the common law presumption of patent validity. Since then, it has allowed the Federal Circuit’s correct interpretation of § 282 to stand. Any recalibration of the standard of proof remains in its hands.” Justice Thomas, in his concurrence, disagreed with the Court’s discussion of Congress’ actions and stated that “I am not persuaded that Congress codified a standard of proof.”

Critical Considerations

Although the Court rejected Microsoft’s invitation to change the standard of proof, it did recognize, at least in part, Microsoft’s argument that prior art not considered by the PTO during patent prosecution could be evaluated differently than prior art that was before the PTO. In what may ultimately prove a common litigation tactic, Justice Sotomayor “note[d]” that, upon request by defendants, courts “should” instruct a jury “that it has heard evidence that the PTO had no opportunity to evaluate before granting the patent” and that the jury should “evaluate whether the evidence before it is materially new, and if so, to consider that fact when determining whether an invalidity defense has been proved by clear and convincing evidence.”

Justice Breyer’s concurrence may also ultimately limit the reach of the majority’s opinion. According to Justice Breyer, because the clear and convincing evidentiary standard applies to questions of fact (and not to questions of law, such as obviousness), he suggested that courts use jury interrogatories, special verdicts, or “specific factual findings” to separate out the factual and legal aspects of an invalidity claim. He wrote that separating factual and legal conclusions would “increase the likelihood that discoveries or inventions will not receive legal protection where none is due.” Because the line between the factual predicate and the ultimate legal conclusion is a crucial aspect of determining invalidity under 35 U.S.C. § 103, Justice Breyer’s suggestion, if adopted by district courts, could have important implications for the obviousness analysis.

While the Supreme Court left the “clear and convincing” standard of proof for patent invalidity in place, the justices at the same time suggested possible arguments that could allow litigants and lower courts flexibility in applying the standard. The decision is important to all companies asserting or defending against patent invalidity, as it provides several ways that courts can interpret the “clear and convincing” standard of proof.

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