By Joshua Wolson
Special to the Legal
The U.S. Supreme Court's decision last week in Microsoft v. i4i appears, at least at first blush, to be a complete loss for Microsoft. Microsoft argued that a defendant in a patent infringement action should have to prove patent invalidity by a preponderance of the evidence. The Supreme Court disagreed and held that federal law requires proof by clear and convincing evidence. Microsoft argued that even if the general rule requires clear and convincing evidence, the rule should be modified if the evidence rendering the patent invalid was not before the Patent and Trademark Office when the patent was granted initially. The Supreme Court disagreed and held that the clear and convincing standard still applies. And the court affirmed a jury verdict against Microsoft.
So, yes, Microsoft lost, and the court's 8-0 vote wasn't even close.
At first glance, the decision seems to indicate the court's hostility to invalidity challenges (or at least reaffirms just how difficult it is to succeed on an invalidity challenge). But there is in the court's opinion a small silver lining for Microsoft and other infringement defendants that might just keep the ruling from being a total disaster.
The court, in rejecting Microsoft's argument that a lower standard applies in cases where the evidence of invalidity presented in court was never before the PTO, said, "Simply put, if the PTO did not have all material facts before it, its considered judgment may lose significant force."
Translation (or at least the translation that Microsoft and other defendants should cling to): The standard of proof is the same -- clear and convincing evidence -- but the import of finding evidence that was not before the PTO is arguably more important than it was before. In fact, in some cases, such evidence, on its own, might be the clear and convincing evidence needed to prove a patent invalid.
It remains to be seen, of course, what effect the court's decision will have on future invalidity arguments. Microsoft itself was able to show at the trial against i4i that some information was not before the patent examiner in the case. That, however, did not sway any of the courts that heard the case, including the Supreme Court. Even faced with such evidence, each court held that Microsoft had not proven that the information in question would or should have changed the examiner's decision.
Nonetheless, future infringement defendants would be wise to be mindful of the court's ruling and scour the universe for evidence outside of the PTO's files for evidence that an examiner was unaware of something relevant. Thus, the court's opinion has given Microsoft and other defendants a roadmap to an invalidity challenge, and with that, a small glimmer of hope.
At least, that's what Microsoft will have to tell itself to make the ruling sting a little less.
Joshua D. Wolson is a partner in the litigation department at Dilworth Paxson. He can be reached at 215-575-7295 or [email protected].
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