Supreme Court Decides Microsoft Corp. v. i4i Ltd. Partnership

On June 9, 2011, the Supreme Court decided Microsoft Corp. v. i4i Ltd. Partnership, No. 10-290, holding that patent invalidity defenses must be proven by clear and convincing evidence, but it is proper to instruct a jury that new evidence not considered by the patent examiner may have greater weight in proving a defense. 

Under §282 of the Patent Act of 1952, one defense against a claim of patent infringement is that the patent is invalid.  A patent, however, "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. Based on the text and history of §282, the Federal Circuit has long held that the presumption of validity can only be rebutted with clear and convincing evidence of invalidity.

When i4i sued Microsoft for infringing its patent claiming an improved process for editing computer documents, Microsoft argued that the patent was invalid.  It further argued that, to the extent its challenge rested on prior art that had not been presented to the patent examiner, the burden for proving invalidity should be by preponderance of the evidence.

The district court rejected Microsoft's argument and instructed that the standard of proof was clear and convincing evidence.  The Federal Circuit affirmed, and so did the Supreme Court.

Congress has the power to prescribe the standard of proof, wrote the Court.  It did so in §282 by using the phrase "presumed valid," which had a "settled meaning in the common law."  When Congress uses a term with a settled meaning, it is presumed to adopt that meaning unless the statute says otherwise. Nothing in §282 expresses the intent to adopt a different standard, and Microsoft's argument that the heightened standard applied only in limited circumstances historically is unpersuasive.

There is also no basis in text or history for relaxing the standard when an invalidity challenge rests on evidence not presented to the patent examiner. Had Congress intended to establish a fluctuating standard of proof, presumably it would have said so expressly. It is true that new evidence not previously considered by the examiner may "carry more weight." Thus, "a jury instruction on the effect of new evidence can, and when requested, most often should be given." But the existence of new evidence does not alter the standard of proof.

Finally, for 30 years, Congress has left unchanged the clear and convincing standard of proof, even as it has altered other aspects of the patent law. That is all the more reason to leave the standard as it is.

Justice Sotomayor delivered the opinion of the Court, in which Justices Scalia, Kennedy, Ginsburg, Breyer, Alito, and Kagan joined.  Justice Breyer filed a concurring opinion, in which Justices Scalia and Alito joined.  Justice Thomas filed an opinion concurring in the judgment.  Chief Justice Roberts took no part in the consideration or decision of the case. 

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