The United States Supreme Court has ruled against Microsoft in a $290 million patent infringement case related to Microsoft Word. Microsoft had argued that a patent examiner's decision to grant a patent should be given less deference when a jury is considering evidence that had never been considered by the examiner. The high court unanimously rejected this argument, holding that a century of precedents had specified a high standard of proof for invalidating a patent.
In a New York Times op-ed supporting Microsoft, UCLA law professor Doug Lichtman had argued that changing the standard of proof would "give relief to the countless businesses that today find themselves vulnerable to patents that shouldn't have been issued in the first place." A wide variety of companies and public interest groups, including Google, Red Hat, Walmart, the Electronic Frontier Foundation, and the Apache Software Foundation, filed briefs echoing that point. But the Supreme Court decided that whatever the merits of these policy arguments, they couldn't overrule the text of the patent law and the courts' long history of employing the higher standard.
The patent at issue in the case is held by i4i, a small Toronto software firm that develops "collaborative content solutions and technologies." In 1998, the company patented a method of manipulating the structure of a document separately from its content. The company sued Microsoft in the Eastern District of Texas, which is famous for its friendliness to patent plaintiffs. In 2009, a judge ruled that Microsoft was liable for $290 million in damages for infringing the patent. Microsoft appealed, and the issue reached the Supreme Court in April.
US law requires an inventor to file for a patent within one year of publicly disclosing the patent. Microsoft contends that i4i began marketing a product called s4 that uses the technique described in the patent more than a year before it filed for the patent. If true, this would invalidate the patent. However, i4i denies that s4 used the techniques described in the patent.
Unfortunately, the source code for the product is no longer available. Therefore, although Microsoft was able to produce witness testimony suggesting that s4 practiced the techniques in the patent, the jury held that none of this evidence met the high "clear and convincing" standard the judge had asked it to apply. Microsoft urged the high court to overturn the verdict on the grounds that the jury would have reached a different result under a lower "preponderance of the evidence" standard.
The eight justices who participated in the case (Chief Justice Roberts recused himself due to his large holdings of Microsoft stock) were unanimous in siding with i4i. Writing for six of her colleagues, Justice Sotomayor focused on the Supreme Court's 1934 decision of Radio Corporation of America v. Radio Engineering Laboratories, which held that patents had a "presumption of validity, a presumption not to be overthrown except by clear and cogent evidence."
When Congress overhauled patent law in 1952, it stated that "a patent shall be presumed valid," and that "the burden of establishing invalidity rests on the party asserting such invalidity." Although this language doesn't explicitly codify the "clear and convincing" standard established by previous court precedents, Sotomayor found no evidence that Congress intended to change it. She also noted that lower courts have employed the "clear and convincing" standard in the decades since the 1952 Act, and although Congress has frequently modified other areas of patent law, it has not considered changing the standard of proof for patent invalidation.
Justice Breyer, long known as a critic of strong patent protections, wrote a separate concurrence to emphasize that the majority opinion requires deference to the Patent Office on matters of fact, but not on matters of law. He was joined by Justices Scalia and Alito. Justice Thomas also wrote separately to say that he disagreed with the details of the majority's reasoning, but supported the higher standard of proof.
Today's decision is the second time this term that the high court has sided with patent holders. After Justice Roberts became Chief Justice in 2005, the Supreme Court handed down a series of rulings reining in decisions of the United States Court of Appeals for the Federal Circuit that favored patent holders. This year's decisions represent a departure from that pattern.
That's likely to be bad news for a software industry that's awash in patents of dubious quality. The complexity of software makes software patents particularly difficult for patent examiners to review. And the fast-changing nature of software means that crucial evidence about a technology may have been destroyed by the time it's needed for patent litigation. The high standard of proof, then, means that more low-quality patents will survive because defendants are unable to gather the evidence needed to invalidate them.
Listing image by Image by opensource.com
reader comments
64