Microsoft Corp. v. i4i Ltd. Partnership
180 L. Ed. 2d 131, 2011 U.S. LEXIS 4376, 564 U.S. 91 (2011)
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Rule of Law:
Under 35 U.S.C. § 282, a patent is presumed valid, and a party asserting an invalidity defense in an infringement action must prove invalidity by clear and convincing evidence. This heightened standard of proof applies regardless of whether the evidence of invalidity was previously considered by the U.S. Patent and Trademark Office (PTO).
Facts:
- i4i Limited Partnership holds a patent for an improved method of editing computer documents.
- More than one year before filing its patent application, i4i sold a software program called S4 in the United States.
- Microsoft Corporation later incorporated a similar editing method into its Microsoft Word products.
- i4i claimed that Microsoft's Word products infringed its patent.
- Microsoft argued that the prior sale of the S4 software rendered i4i's patent invalid under the 'on-sale bar' of 35 U.S.C. § 102(b), contending that S4 embodied the patented invention.
- The S4 software and its sale were never disclosed to or considered by the PTO examiner during the prosecution of i4i's patent application.
- The source code for the S4 software had been destroyed years before the litigation between i4i and Microsoft began.
Procedural Posture:
- i4i sued Microsoft for willful patent infringement in the U.S. District Court for the Eastern District of Texas.
- Microsoft counterclaimed, asserting that i4i's patent was invalid under the on-sale bar.
- At trial, Microsoft requested a jury instruction applying a 'preponderance of the evidence' standard for invalidity because its evidence had not been reviewed by the PTO.
- The District Court rejected Microsoft's request and instructed the jury that invalidity must be proven by 'clear and convincing evidence.'
- The jury found that Microsoft willfully infringed the patent and had failed to prove the patent was invalid.
- Microsoft's post-trial motions challenging the jury instruction were denied by the District Court.
- Microsoft, as appellant, appealed to the U.S. Court of Appeals for the Federal Circuit, which affirmed the District Court's judgment.
- The U.S. Supreme Court granted certiorari to review the Federal Circuit's decision.
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Issue:
Does 35 U.S.C. § 282 require a defendant asserting a patent invalidity defense to prove that defense by clear and convincing evidence, even when the invalidity argument is based on evidence that was not before the U.S. Patent and Trademark Office during the patent's examination?
Opinions:
Majority - Justice Sotomayor
Yes. A defendant asserting a patent invalidity defense must prove that defense by clear and convincing evidence. Section 282's statement that a patent is 'presumed valid' codified the established common-law rule which, at the time of the statute's enactment in 1952, included a heightened standard of proof. The Court’s precedent, particularly in Radio Corp. of America v. Radio Engineering Laboratories, Inc., established that a challenger bears a 'heavy burden of persuasion' and must provide more than a 'dubious preponderance' of evidence. This heightened standard does not fluctuate or decrease even when the invalidity defense is based on prior art or evidence that the PTO never considered. While new evidence may carry more weight with the jury and make the challenger's burden easier to sustain, it does not change the legal standard of proof itself.
Concurring - Justice Breyer
Yes. While the clear and convincing evidence standard applies, it is crucial to recognize that this evidentiary standard applies only to questions of fact, not to questions of law. For instance, a factual dispute over when a product was first sold must be proven by clear and convincing evidence. However, the ultimate legal question of whether those established facts render a patent invalid (e.g., for non-obviousness) is a question of law to which the heightened evidentiary standard does not apply. Courts should use tools like special jury interrogatories to separate factual findings from legal conclusions, thereby ensuring the heightened standard is not misapplied.
Concurring - Justice Thomas
Yes. Although the 'presumed valid' language in § 282 was likely not a settled 'term of art' in 1952 sufficient to codify a standard of proof, the statute is silent on the standard. Because the statute did not alter the existing common-law rule, the rule established in this Court's precedent remains in force. That precedent, set forth in Radio Corp. of America, requires a heightened, clear-and-convincing-evidence standard for proving patent invalidity, and that standard therefore applies.
Analysis:
This decision solidified the 'clear and convincing evidence' standard as the uniform requirement for all patent invalidity challenges in district court litigation, unequivocally rejecting a lower or fluctuating standard. By holding that the standard remains high even when challengers present prior art the PTO never saw, the Court significantly strengthened the presumption of validity and made it more difficult to invalidate issued patents. This reinforces the deference given to the PTO's initial examination and provides patent holders with greater certainty, while increasing the burden on accused infringers seeking to challenge weak or 'bad' patents. The Breyer concurrence provides an important caution for lower courts to properly segregate questions of fact from questions of law to avoid misapplication of the standard.
