Will The Supreme Court Review Patent Invalidation Standard In Microsoft vs. i4i Case?

from the perhaps dept

At the end of August, when Microsoft officially appealed its loss in a patent infringement lawsuit filed by a company named i4i over features for editing XML in a document (patent 5,787,449), I doubted that the Supreme Court would hear the case, given the lack of any larger significance. However, I may have underestimated how much the tech and legal community would rally behind a key point in the appeal: the legal standard for invalidating a patent -- something the Supreme Court hinted it had trouble with way back in the famous KSR case.

As the EFF explains in its blog post about its own brief:

In court, parties have to prove their case by some "standard of proof." In almost all civil cases, the standard is "preponderance of the evidence" -- meaning it is more likely than not that the facts are true. When the question is invalidating a patent, however, the U.S. Court of Appeals for the Federal Circuit decided that a defendant trying to prove a patent invalid must do so by a higher standard than normal civil cases, that of "clear and convincing" evidence. "Clear and convincing" means that the facts are "highly probable," which is a much more difficult standard to meet when trying to invalidate a patent than just a preponderance.

Considering the massive economic harm that bad patents can do, you would think that it would absolutely make sense for there to be a lower standard to invalidate bad patents. And, certainly, it seems that lots of folks agree. The link to Law.com above has links to most of the briefs filed in support of changing the standard -- including summaries of what's in each brief. We already mentioned EFF (whose filing was done with Public Knowledge, CCIA and the Apache Software Foundation), but other briefs came from CTIA, Google, Yahoo, Intel, Apple, Verizon, Facebook, Wal-Mart, HP, Dell, HTC, Intuit, Toyota, Netflix, Newegg, SAP, GM, Teva Pharmaceuticals, Cisco and a few others as well. In other words, there are a lot of folks interested in this issue, and reasonably see this as an important way to stop the harm caused by bad patents.

The key issue, of course, is that patent examiners really don't have that much time to spend on patents, so their ability to really review the state of the art and the prior art is limited. That's not putting down the patent examiners; it's just the fact of the matter. An average examiner spends just a few days on a patent, which is hardly enough time to recognize what the real state of the art might be. So it seems to make a lot of sense to have a low bar to proving a patent invalid at a later date -- especially if more evidence can be shown on the state of the art at the time.

Along those lines, in a filing by a bunch of law, economics and business professors it's pointed out that, not only do patent examiners not have nearly enough time to understand the state of the art, but that a patent examination process happens with no real "opposition," who has the real incentive to point out the state of the art or the prior art. That's what happens during a trial, and that's a more likely situation to be able to fairly evaluate patent quality. Thus, the courts shouldn't put too much weight on the examiner's determination, as it's hardly the best review.

Another key point made in the filings, is the fact that, back before CAFC (the appeals court that handles most patent appeals) was created and started using this standard, disputed patents were much more likely to be rejected as invalid. However, since this change has occurred, a much higher percentage are held valid. The quality didn't change -- those are still bad patents. It's just that the standard for invalidating bad patents changed. It's hard to see who would argue that leaving bad patents in place is a good thing... unless your business relies on bad patents.

I'm still not convinced the Supreme Court is really interested in taking this on, but given the amount of firepower asking it to fix this issue, perhaps the Court will do the right thing.

Filed Under: cafc, clear and convincing, invalidation, patents, preponderance of the evidence, standards, supreme court
Companies: i4i, microsoft