Microsoft v. i4i (SCOTUS 10-290) Justices Sotomayor (author), in which Scalia, Kennedy, Ginsburg, Breyer, Alioto, and Kagan joined. Justice Thomas filed a concurring opinion. Chief Justice Roberts has a vested interest in Microsoft, and recused himself.

[The quotes are from the syllabus.]

In asserting patent invalidity as a defense to an infringement action, an alleged infringer must contend with §282 of the Patent Act of 1952 (Act), under which "[a] patent shall be presumed valid" and "[t]he burden of establishing invalidity . . . shall rest on the party asserting" it. Since 1984, the Federal Circuit has read §282 to require a defendant seeking to overcome the presumption to persuade the factfinder of its invalidity defense by clear and convincing evidence.

Microsoft wanted to change the law to a lower level of bamboozlement, to make it easier to invalidate a patent with scratchy prior art.

Respondents (collectively, i4i) hold the patent at issue, which claims an improved method for editing computer documents. After i4i sued petitioner Microsoft Corp. for willful infringement of that patent, Microsoft counterclaimed and sought a declaration that the patent was invalid under §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 filing of a patent application. The parties agreed that, more than a year before filing its patent application, i4i had sold a software program known as S4 in the United States, but they disagreed over whether that software embodied the invention claimed in i4i's patent. Relying on the undisputed fact that the S4 software was never presented to the Patent and Trademark Office (PTO) during its examination of the patent application, Microsoft objected to i4i's proposed jury instruction that the invalidity defense must be proved by clear and convincing evidence. The District Court nevertheless gave that instruction, rejecting Microsoft's alternative instruction proposing a preponderance of the evidence standard. The jury found that Microsoft willfully infringed the i4i patent and had failed to prove the patent's invalidity. The Federal Circuit affirmed, relying on its settled interpretation of §282.

"Clear and convincing" stands pat for patent prior art validity. Microsoft's proposed "preponderance of evidence" standard is rejected, because "Congress has specified the applicable standard of proof."

(a) The Court rejects Microsoft's contention that a defendant need only persuade the jury of a patent invalidity defense by a preponderance of the evidence. Where Congress has prescribed the governing standard of proof, its choice generally controls. Steadman v. SEC, 450 U. S. 91, 95. Congress has made such a choice here. While §282 includes no express articulation of the standard of proof, where Congress uses a common-law term in a statute, the Court assumes the "term . . . comes with a common law meaning." Safeco Ins. Co. of America v. Burr, 551 U. S. 47, 58. Here, by stating that a patent is "presumed valid," §282, Congress used a term with a settled common-law meaning. Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U. S. 1 (RCA), is authoritative. There, tracing nearly a century of case law, the Court stated, inter alia, that "there is a presumption of [patent] validity [that is] not to be overthrown except by clear and cogent evidence," id., at 2. Microsoft's contention that the Court's pre-Act precedents applied a clear-and-convincing standard only in two limited circumstances is unavailing, given the absence of those qualifications from the Court's cases. Also unpersuasive is Microsoft's argument that the Federal Circuit's interpretation must fail because it renders superfluous §282's additional statement that "[t]he burden of establishing invalidity . . . shall rest on the party asserting" it. The canon against superfluity assists only where a competing interpretation gives effect " 'to every clause and word of a statute.' " Duncan v. Walker, 533 U. S. 167, 174. Here, no interpretation of §282 avoids excess language because, under either of Microsoft's alternative theories--that the presumption only allocates the burden of production or that it shifts both the burdens of production and persuasion--the presumption itself would be unnecessary in light of §282's additional statement as to the challenger's burden.

(b) Also rejected is Microsoft's argument that a preponderance standard must at least apply where the evidence before the fact-finder was not before the PTO during the examination process. It is true enough that, in these circumstances, "the rationale underlying the presumption--that the PTO, in its expertise, has approved the claim--seems much diminished," KSR Int'l Co. v. Teleflex Inc., 550 U. S. 398, 426, though other rationales may still animate the presumption. But the question remains whether Congress has specified the applicable standard of proof. As established here today, Congress did just that by codifying the common-law presumption of patent validity and, implicitly, the heightened standard of proof attached to it.

Affirmed, in a well-written ruling, albeit with a polite fiction of Congress' codification of the standard.

Justice Thomas, concurring in the judgment, got the history right.

I am not persuaded that Congress codified a standard of proof when it stated in the Patent Act of 1952 that "[a] patent shall be presumed valid." 35 U. S. C. §282... Because §282 is silent as to the standard of proof, it did not alter the common-law rule. For that reason, I agree with the Court that the heightened standard of proof set forth in Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U. S. 1 (1934)--which has never been overruled by this Court or modified by Congress--applies.

Justice Breyer, joined by Scalia and Alito, concurred with a cockeyed caveat: factual versus legal findings. The point is somewhat bizarre, but helpful guidance for the muddled on the bench. One "proves" a case by proper application of the law to facts, but burden of proof, whatever the standard, goes only to facts, upon which the law is then applied. There is no burden associated with a legal determination. That's pretty much what this concurring opinion is stating.

I believe it worth emphasizing that in this area of law as in others the evidentiary standard of proof applies to questions of fact and not to questions of law. See, e.g., Addington v. Texas, 441 U. S. 418, 423 (1979). Thus a fact-finder must use the "clear and convincing" standard where there are disputes about, say, when a product was first sold or whether a prior art reference had been published.

Many claims of invalidity rest, however, not upon factual disputes, but upon how the law applies to facts as given. Do the given facts show that the product was previously "in public use"? 35 U. S. C. §102(b). Do they show that the invention was "nove[l]" and that it was "nonobvious"? §§102, 103. Do they show that the patent applicant described his claims properly? §112. Where 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. See, e.g., Graham v. John Deere Co. of Kansas City, 383 U. S. 1, 17 (1966); Minnesota Mining & Mfg. Co. v. Chemque, Inc., 303 F. 3d 1294, 1301 (CA Fed. 2002); Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc., 617 F. 3d 1296, 1305 (CA Fed. 2010); cf. Markman v. Westview Instruments, Inc., 517 U. S. 370 (1996).

Courts can help to keep the application of today's "clear and convincing" standard within its proper legal bounds by separating factual and legal aspects of an invalidity claim, say, by using instructions based on case-specific circumstances that help the jury make the distinction or by using interrogatories and special verdicts to make clear which specific factual findings underlie the jury's conclusions. See Fed. Rules Civ. Proc. 49 and 51. By isolating the facts (determined with help of the "clear and convincing" standard), courts can thereby assure the proper interpretation or application of the correct legal standard (without use of the "clear and convincing" standard). By preventing the "clear and convincing" standard from roaming outside its fact-related reservation, courts can increase the likelihood that discoveries or inventions will not receive legal protection where none is due.

Patent prospector

June ,9 , 2011