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Supreme Court: To Invalidate a Patent, One Needs Clear and Convincing Evidence

In a statement of clarity, the U.S. Supreme Court has held that to invalidate a patent, the Patent Act requires that the invalidity defense must be proven by clear and convincing evidence. Microsoft Corp. v. I4i Limited Partnership, Case No. 10-290 (S. Ct. June 9, 2011)(available here). “Under §282 of the Patent Act of 1952, ‘[a] patent shall be presumed valid’ and ‘[t]he burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.’ 35 U. S. C. §282. We consider whether §282 requires an invalidity defense to be proved by clear and convincing evidence. We hold that it does.” Slip opn. p. 1. For 30 years, this burden of proof was confirmed by a multitude of appellate court decisions issued by the Court of Appeals for the Federal Circuit.

Microsoft ( claimed that the on-sale bar of 35 U.S.C. §102(b) rendered i4i’s patent invalid, pointing to i4i’s prior sale of a software program known as S4. At trial, parties agreed that, more than one year prior to the filing of the i4i patent application, i4i had sold the S4 program in the United States. Microsoft and i4i ( presented opposing arguments to the jury as to whether that S4 software embodied the invention claimed in i4i’s patent. Because the software’s source code had been destroyed years before, the factual dispute turned largely on trial testimony by S4’s two inventors— also the named inventors on the i4i patent—both of whom testified that S4 did not practice the key invention disclosed in the patent.

Microsoft had requested a jury instruction that its burden of proof with regard to its defense of invalidity based on prior art that the examiner did not review during the prosecution of the patent-in-suit is by preponderance of the evidence. This was rejected by the trial court, and the Federal Circuit Court of Appeals, and in the present case, Microsoft requested that the Supreme Court change the burden of proof to that of a preponderance of the evidence.

Microsoft’s primary argument rested upon a 2007 Supreme Court case, KSR Int’l Co. v. Teleflex Inc., 550 U. S. 398 (2007). In KSR, the Court indicated that where the evidence

before the trial court (namely, the factfinder) was not before the USPTO during the examination of the patent, “the rationale underlying the presumption—that the PTO, in its expertise, has approved the claim—seems much diminished.” KSR Int’l Co. 550 U. S. at 426. Microsoft had seized on that “much diminished” language in the present case.

As explained by Justice Sotomayor in the present case, if the USPTO did not have all material facts before it, its considered judgment may lose significant force and the challenger’s burden to persuade the jury of its invalidity defense by clear and convincing evidence may be easier to sustain. A jury instruction on the effect of such new evidence should be given.

“When warranted, the jury may be instructed to consider that it has heard evidence that the PTO had no opportunity to evaluate before granting the patent. When it is disputed whether the evidence presented to the jury differs from that evaluated by the PTO, the jury may be instructed to consider that question. In either case, the jury may be instructed to 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.” pg. 17-18.

With this decision, the Supreme Court establishes a bright line rule as to the burden of proof to invalidate a patent, that is, the challenger must establish invalidity by clear and convincing evidence.

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