Microsoft Corp. v. i4i: Supreme Court Refuses to Lower the “Clear and Convincing” Standard for Proving Patent Invalidity

Historically, the “clear and convincing” evidentiary standard has applied to proving patent invalidity. But is the lower “preponderance of the evidence” standard the proper standard to apply instead for proving patent invalidity if the prior art before the jury was not before the U.S. Patent and Trademark Office (PTO) during a patent’s examination process?

The Supreme Court resoundingly answered “No” in its recent decision in Microsoft v. i4i. This ruling is significant because it keeps the heightened clear and convincing standard for proving invalidity and further strengthens the presumption of validity for issued patents. But, while rejecting the preponderance standard, the Court recognized that the clear and convincing standard is easier to meet for prior art not before the PTO, and approved instructing the jury to that effect.

The Clear and Convincing Standard for Proving Invalidity Applies to All Prior Art, Including Art Not Before the PTO

On June 9, 2011, the Supreme Court handed down a decision in Microsoft Corp. v. i4i L.P.¹that affirmatively ended any debate about the standard an opponent bears for proving a patent invalid. The 8-0 decision²holds that the party asserting patent invalidity must always persuade the jury by the clear and convincing standard—the lower preponderance of the evidence standard never applies for patent invalidity, even if the asserted prior art was never before the PTO during examination.

The Court, and Justice Sotomayor in delivering the opinion, relied heavily on Congress’ intent in drafting 35 U.S.C. § 282, which provides that “[a] patent shall be presumed valid” and “[t]he burden of establishing invalidity … rest[s] on the party asserting such invalidity.”³The Court understood Congress’ intent in including “a patent shall be presumed valid” as codifying the common-law presumption of a clear and convincing evidentiary standard for proving invalidity.⁴

The Court rejected Microsoft’s arguments that earlier decisions made an evidentiary distinction between prior art that had been before the PTO and new prior art in front of the jury.⁵Instead, the Court stated these earlier cases never made this distinction and, in fact, cited an earlier Supreme Court decision that held that the preponderance standard was too “dubious” of a standard to deem a patent invalid.⁶Further, the Court noted that if Congress intended to lower the clear and convincing standard where the evidence before the jury was different from that before the PTO, it would have done so expressly in the patent laws, i.e. in 35 U.S.C. § 282.

While There Is No Preponderance Standard, the Court Reaffirms that the Clear and Convincing Standard Is Easier to Meet for Art Not Before the PTO

While the Court specifically affirmed the clear and convincing standard, it also recognized that the standard is easier to meet where the asserted prior art was never before the PTO.⁷The Court adopted the Federal Circuit principle that “a challenger’s burden to persuade the jury of its invalidity defense by clear and convincing evidence may be easier to sustain” when asserting prior art not before the PTO and that this prior art may carry more weight in attacking patent validity.⁸

Following this logic, the Court endorsed jury instructions tailored to the effect of new art not before the PTO, instructing the jury to specifically consider the fact that the PTO had no opportunity to evaluate this new art.⁹In particular, the “jury may be instructed to consider whether new evidence before it is materially new, and if so, consider that fact when determining whether an invalidity defense has been proved by clear and convincing evidence.”¹⁰

This decision should not have a major impact on current or future patent litigation. Patent cases already operate under the higher clear and convincing standard for proving patent invalidity, and this decision does not affect that standard. But accused infringers should keep the Microsoft v. i4i decision in mind when evaluating invalidity positions tied to prior art not before the PTO, as this case does entitle an accused infringer to favorable jury instructions.

Justice Breyer’s Concurring Opinion Reiterates the Importance of Separating Legal and Factual Disputes in Determining Patent Invalidity

Justice Breyer’s concurrence, while not binding law, is a reminder of the important difference between questions of law and questions of fact in determining patent invalidity. The factfinder must use the clear and convincing standard solely for factual issues, “say, when a product was first sold or whether a prior art reference had been published.”¹¹But many patent invalidity tests are based upon how the law applies to the given facts—for example, the ultimate determination of obviousness is a question of law, and the clear and convincing standard only applies to the underlying facts, not the legal conclusion. Justice Breyer succinctly stated “[w]here the ultimate question of patent validity turns on the correct answer to legal questions—what these subsidiary legal standards mean or how they apply to the facts as given—today’s strict standard of proof has no application.”¹²

While Justice Breyer reiterated the correct legal standard, many courts blend the factual and legal issues of patent invalidity under the higher clear and convincing burden. It is important to remember that only the factual issues require the clear and convincing burden—any determination of law applying the facts does not require that higher burden. This concurrence should be kept in mind in arguing the correct legal process in evaluating patent invalidity.

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¹Microsoft Corp. v. i4i L.P., No. 10-290, 564 U.S. ___, slip op. at 2-3 (2011).

²Justice Thomas concurred, and Justice Roberts took no part in the consideration or decision of the case.

³Id. at 6.

⁴Id. at 7-8.

⁵Id. at 14-15.

⁶Id. at 8.

⁷Id. at 16.

⁸Id. at 17.

⁹Id.

¹⁰Id. at 18.

¹¹Id. at 1 (Breyer, J., concurring).

¹²Id.