Microsoft Corp. v. i4i Limited Partnership

PETITIONER: Microsoft Corporation
RESPONDENT: i4i Limited Partnership, et al.
LOCATION: U.S. Court of Appeals for the Federal Circuit

DOCKET NO.: 10-290
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: United States Court of Appeals for the Federal Circuit

CITATION: 564 US (2011)
GRANTED: Nov 29, 2010
ARGUED: Apr 18, 2011
DECIDED: Jun 09, 2011

ADVOCATES:
Malcolm L. Stewart - Deputy Solicitor General, Department of Justice, for the United States as amicus curiae, supporting the respondents
Seth P. Waxman - for the respondents
Thomas G. Hungar - for the petitioner

Facts of the case

The owner of a patent for a computer language, i4i Limited Partnership brought suit against Microsoft Corp., alleging that the custom XML editor in certain versions of Microsoft Word, Microsoft's word-processing software, infringed i4i's patent. The jury found Microsoft liable for willful infringement, rejecting the company's argument that the patent was invalid, and awarded $200 million in damages to i4i.

The U.S. District Court for the Eastern District of Texas denied Microsoft's motions for a new trial. And the U.S. Court of Appeals for the Federal Circuit upheld the district court order, finding that Microsoft needed to offer "clear and convincing evidence" to overcome the traditional presumption that patents approved by the U.S. Patent and Trademark Office are valid.

Question

Must a challenge to a patent's validity offer clear and convincing evidence as proof?

Media for Microsoft Corp. v. i4i Limited Partnership

Audio Transcription for Oral Argument - April 18, 2011 in Microsoft Corp. v. i4i Limited Partnership

Audio Transcription for Opinion Announcement - June 09, 2011 in Microsoft Corp. v. i4i Limited Partnership

Sonia Sotomayor:

The second case is a patent case that comes to us from the Court of Appeals for the Federal Circuit.

i4i, respondents in this Court hold that the patented issue which claims an improved method for editing computer documents.

i4i, sued petitioner Microsoft, claiming that certain Microsurf -- Microsoft Word products infringe on behalf.

Microsoft counterclaim, seeking a declaration that i4i's patent was invalid under Section 102(b)'s on-sale bar which precludes patent protection for any invention that was on sale in this country more than one year prior to the patent applications.

The parties agreed that i4i had sold the software program known as S4 more than one year prior to its patent application.

They disagreed as to whether S4 embodied the invention claimed in i4i's patent.

Because the S4 software was not considered by the U.S. Patent and Trademark Office, the PTO, Microsoft requested a jury instruction that it was required to prove its in -- invalidity defense only by a preponderance of the evidence.

The District Court, however, instructed the jury that Microsoft was obligated to prove the defense by clear and convincing evidence.

The jury found that Microsoft willfully infringed i4i's patent and that Microsoft failed to prove invalidity.

The Federal Circuit affirmed, relying on its settled precedent that Section 282 of the Patent Act of 1952 requires invalidity to be proved by clear and convincing evidence.

The question before the Court is whether this interpretation of Section 282 is correct.

Section 282 provides that "a patent shall be presumed valid" and "the burden of establishing invalidity of the patent shall rest on the party asserting such invalidity."

Thus, by its expressed term, Section 282 establishes a presumption of patent validity and it provides that a challenger must overcome that presumption to prevail an invalidity defense.

But while the statute states the burden of proof, it includes no express articulation of the standard of proof.

According to site -- Microsoft, this means that Section 282 does not specify the applicable standard of proof, we disagree.

Where Congress uses a common law term in a statute, we assume the term comes with a common law meaning.

Here, by stating that a patent is presumed valid, Congress used a term with a settled meaning in the common law.

As we explained in an opinion filed with the clerk of the Court today, by the time Congress enacted Section 282, the presumption of patentability have long been a fixture of the common law.

According to its settled meaning, an invalidity defense required proof by clear and convincing evidence.

We cannot conclude that Congress intended to drop the heightened standard of proof from the presumption it codified simply because 282 fails to reiterate the standard expressly.

We just -- we reject Microsoft's arguments to the contrary -- contrary.

We also reject Microsoft's argument that a lower standard of proof should apply when an invalidity defense rest on evidence that the PTO never considered like the S4 software here.

The hybrid standard of proof that Microsoft envisions was not a part of the common law presumption of patent validity and nothing in 282 indicates that Congress intended to adopt it.

We note however that most often, a jury instruction should be given when requested and warranted, directing the jury to evaluate whether the evidence before it is materially new, and if so, to consider that fact in determining whether invalidity has been proved by clear and convincing evidence.

We are in no position to judge the parties opposing views as of the wisdom of the clear and convincing evidence standard.

Congress specified the applicable standard of proof in 1952, 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.

The judgment of the Court of Appeals for the Federal Circuit is affirmed.

Justice Breyer has filed the concurring opinion in which Justices Scalia and Alito joined.

Justice Thomas has filed an opinion concurring in the judgment.