Maintaining the clear and convincing evidence standard for patent invalidity challenges in Microsoft Corp. v. i4i Limited Partnership, 131 S. Ct. 2238 (2011)

Harvard Journal of Law and Public Policy

Volumn 35, Issue 1, 2012, Pages 439-452

  Oberman, Irina ^a  

^a NONE

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EID: 84859881345     PISSN: 01934872     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (101)

1. Microsoft Corp. v. i4i Ltd. P'ship, 131 S. Ct. 2238, 2245 n. 4 (2011)
2. (quoting Schaffer v. Weast, 546 U. S. 49, 56 (2005));
3. see also FED. TRADE COMM'N, TO PROMOTE INNOVATION: THE PROPER BALANCE OF COMPETITION AND PATENT LAW AND POLICY 8-10(2003), available at http://www.ftc.gov/os/2003/10/innovationrpt.pdf (stating that the clear and convincing evidentiary standard is "unjustified" and calling for a preponderance of the evidence standard);
4. Doug Lichtman & Mark A. Lemley, Rethinking Patent Law's Presumption of Validity, 60 STAN. L. REV. 45, 49 (2007) (arguing that the clear and convincing evidence standard does not "accurately reflect the realities of current patent practice" and should be replaced with a preponderance of the evidence standard);
5. David O. Taylor, Clear but Unconvincing: The Federal Circuit's Invalidity Standard, 21 FORDHAM INTELL. PROP. MEDIA & ENT. L. J. 293, 318 (2011) ("To correct for the significant problems associated with the Federal Circuit's standard for proving invalidity-including its logical shortcomings, incorrect assumptions, perverse incentives, negative effects on patent quality, unjust rewards, and unnecessary transaction costs-that standard, which requires clear and convincing evidence of invalidity in every circumstance, should be replaced with a preponderance burden of proof when the U. S. Patent and Trademark Office did not consider material prior art.").
6. 35 U. S. C. § 282 (2006).
7. See Radio Corp. of Am. v. Radio Eng'g Labs., Inc. (RCA), 293 U. S. 1, 7 (1934) ("A patent regularly issued, and even more obviously a patent issued after a hearing of all the rival claimants, is presumed to be valid until the presumption has been overcome by convincing evidence of error.").
8. E.g., ALZA Corp. v. Andrx Pharm., LLC, 603 F.3d 935, 940 (Fed. Cir. 2010);
9. Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1327 (Fed. Cir. 2008);
10. Ultra-Tex Surfaces, Inc. v. Hill Bros. Chem. Co., 204 F.3d 1360, 1367 (Fed. Cir. 2000);
11. Greenwood v. Hattori Seiko Co., 900 F.2d 238, 240-41 (Fed. Cir. 1990);
12. Am. Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360 (Fed. Cir. 1984).
13. See, e.g., Tech. Licensing Corp., 545 F.3d at 1326-27.
14. See generally Christopher B. Mueller & Laird C. Kirkpatrick, Federal Evidence § 3.5 (3d ed.) ("Normally the burden of persuasion in civil cases is defined in terms of a preponderance of the evidence. This standard applies unless there is some special reason to prefer a higher one....").
15. See i4i, 131 S. Ct. at 2243 (noting the presumption of validity is based upon the "'basic proposition that a government agency such as the [PTO] was presumed to do its job'")
16. (quoting Am. Hoist, 725 F.2d at 1359);
17. see also RCA, 293 U. S at 7 ("A patent regularly issued... is presumed to be valid until the presumption has been overcome by convincing evidence of error.")
18. Morgan v. Daniels, 153 U. S. 120, 125 (1894) ("[W]here the question decided in the Patent Office is one between contesting parties as to priority of invention, [that decision is] controlling upon that question of fact in any subsequent suit between the same parties, unless the contrary is established by testimony which in character and amount carries thorough conviction. ");
19. Cantrell v. Wallick, 117 U. S. 689, 695 (1886) (stating that where the PTO already had considered the prior art submitted, "[t]he burden of proof is upon the defendants to establish [the invalidity based on prior invention] defence. For the grant of letters patent is prima facie evidence that the patentee is the first inventor of the device described in the letters patent and of its novelty.").
20. See 35 U. S. C. § 102 (a) (2006).
21. See, e.g., 37 C. F. R. § 1. 104 (2010);
22. U. S. PTO Manual of Patent Examining Procedure ("MPEP") § 706, available at http://www.uspto.gov/web/offices/pac/mpep/documents/0700-706. htm ect706 ("After the application has been read and the claimed invention understood, a prior art search for the claimed invention is made. With the results of the prior art search, including any references provided by the applicant, the patent application should be reviewed and analyzed in conjunction with the state of the prior art to determine whether the claims define a useful, novel, nonobvious, and enabled invention that has been clearly described in the specification. ").
23. See 131 S. Ct. at 2244, 2252-53.
24. I4I Limited P'ship v. Microsoft Corp., 598 F.3d 831, 839 (Fed. Cir. 2010).
25. see also 35 U. S. C. § 102 (b) (2006).
26. Microsoft Corp. v. i4i Ltd. P'ship, 131 S. Ct. 2238, 2243-44 (2011). The parties disputed, however, whether S4 embodied the invention claimed in i4i's patent because S4's source code had been destroyed long before the suit was commenced.
27. 550 U. S. 398 (2007). In KSR, the Supreme Court did not reach the question of whether the failure to disclose prior art during the prosecution of the patent voided the presumption of validity but nevertheless explicitly noted that "the rationale underlying the presumption [of validity]-that the PTO, in its expertise, has approved the claim-seems much diminished here."
28. 725 F.2d 1350, 1359-60 (Fed. Cir. 1984) ("When an attacker, in sustaining the burden imposed by § 282, produces prior art or other evidence not considered in the PTO, there is, however, no reason to defer to the PTO so far as its effect on validity is concerned. Indeed, new prior art not before the PTO may so clearly invalidate a patent that the burden is fully sustained merely by proving its existence and applying the proper law....").
29. See i4i, 131 S. Ct. at 2244.
30. I4I Limited P'ship v. Microsoft Corp., 598 F.3d 831, 839 (Fed. Cir. 2010).
31. (citing Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1311-16 (Fed. Cir. 2009)).
32. i4i, 131 S. Ct. at 2253. Justice Sotomayor delivered the opinion of the Court. Justices Scalia, Kennedy, Ginsburg, Breyer, Alito, and Kagan joined in the opinion. Justice Breyer filed a concurring opinion in which Justices Scalia and Alito joined. Justice Thomas filed a separate opinion concurring in the judgment. Chief Justice Roberts took no part in the decision.
33. (citing RCA, 293 U. S. 1, 2, 8 (1934)).
34. See Brief for Petitioner-Appellant at 31 n. 2, Microsoft Corp. v. i4i Ltd. P'ship, 131 S. Ct. 2238 (2011) (No. 10-290).
35. i4i, 131 S. Ct. at 2250-51.
36. (quoting Am. Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360 (Fed. Cir. 1984)). In addition, the Court noted that the jury may be instructed to take into consideration whether the evidence before them has never been evaluated by the PTO when determining whether an invalidity defense has been proved by clear and convincing evidence.
37. 35 U. S. C. § 102 (b) (2006).
38. i4i, 131 S. Ct. at 2253.
39. (quoting 35 U. S. C. § 282 (2000)).
40. cf. Bruesewitz v. Wyeth LLC, 131 S. Ct. 1068, 1076-77 (2011).
41. i4i, 131 S. Ct. at 2254.
42. (majority opinion) (quoting Beck v. Prupis, 529 U. S. 494, 501 (2000)).
43. Addington v. Texas, 441 U. S. 418, 423 (1979).
44. see also Santosky v. Kramer, 455 U. S. 745, 758-59 (1982) (finding a higher evidentiary standard appropriate for interests, here parental rights, that are "far more precious than any property right");
45. cf. Grogan v. Garner, 498 U. S. 279, 286-87 (1991) (rejecting higher evidentiary standard for insolvent debtors who had perpetrated fraud because higher standard only applies where "particularly important individual interests or rights are at stake").
46. See JOHN LOCKE, TWO TREATISES OF GOVERNMENT 287-88 (Peter Laslett ed., 2d ed. 1967).
47. i4i, 131 S. Ct. at 2246
48. (citing Radio Corp. of Am. v. Radio Eng'g Lab., 293 U. S. 1, 8 (1934)).
49. (citing Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U. S. 141, 150-51 (1989)).
50. Santosky v. Kramer, 455 U. S. 745, 758-59 (1982) (discussing the right to take care of one's children).
51. For trademarks, for example, see 15 U. S. C. §§ 1057 (b), 1115 (a) (2006);
52. Cold War Museum, Inc. v. Cold War Air Museum, Inc., 586 F.3d 1352, 1356 (Fed. Cir. 2009) ("A party seeking to cancel a registration must overcome the registration's presumption of validity by a preponderance of the evidence."). For copyrights, for example
53. see 17 U. S. C. § 410 (2006);
54. Medforms, Inc. v. Healthcare Mgmt. Solutions, Inc., 290 F.3d 98, 114 (2d Cir. 2002) (holding that district court did not err by instructing the jury that defendants in copyright infringement case could rebut the presumption of validity by a preponderance of the evidence).
55. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U. S. 417, 439 (1984).
56. i4i, 131 S. Ct. at 2243
57. (citing Am. Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1359 (Fed. Cir. 1984)).
58. See, e.g., KSR Int'l Co. v. Teleflex Inc., 550 U. S. 398, 426 (2007) (finding that where the patentee had failed to disclose prior art, "the rationale underlying the presumption [of validity]-that the PTO, in its expertise, has approved the claim" was "much diminished");
59. Am. Hoist, 725 F.2d at 1359 ("When no prior art other than that which was considered by the PTO examiner is relied on by the attacker, he has the added burden of overcoming the deference that is due to a qualified government agency presumed to have properly done its job.");
60. cf. Purdue Pharma L. P. v. Faulding Inc., 230 F.3d 1320, 1329 (Fed. Cir. 2000)
61. ("[D]eference... takes the form of the presumption of validity that is accorded to issued patents under 35 U. S. C. § 282").
62. See, e.g., 35 U. S. C. § 102 (b) (2006); companying text.
63. For example, the patent must satisfy the requirements of eligibility in 35 U. S. C. § 101 (2006).
64. See Bilski v. Kappos, 130 S. Ct. 3218, 3221 (2010)
65. See 35 U. S. C. § 102 (2006).
66. See, e.g., Am. Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1359-60 (Fed. Cir. 1984) ("When an attacker, in sustaining the burden imposed by § 282, produces prior art or other evidence not considered in the PTO, there is, however, no reason to defer to the PTO so far as its effect on validity is concerned. Indeed, new prior art not before the PTO may so clearly invalidate a patent that the burden is fully sustained merely by proving its existence and applying the proper law....");
67. Ludlow Corp. v. Textile Rubber & Chem. Co., 636 F.2d 1057, 1059 (5th Cir. 1981) ("A patent is presumed valid.... The presumption of validity, however, is not conclusive. It is weakened when pertinent art has not been considered by the Patent Office.") (citation omitted);
68. Nordell v. Int'l Filter Co., 119 F.2d 948, 950 (7th Cir. 1941) ("[T]here can be no presumption of validity over... prior art which the Examiner did not note.");
69. Nat'l Elec. Prods. Corp. v. Grossman, 70 F.2d 257, 258 (2d Cir. 1934) (holding that the "presumption of validity does not extend beyond the record before the Examiner");
70. Am. Soda Fountain Co. v. Sample, 130 F. 145, 149 (3d Cir. 1904) ("[T]he force of th[e] presumption is much diminished, if not destroyed, by the lack of any reference by the Examiner to, or consideration of, [allegedly invalidating] patents.").
71. 550 U. S. 398, 426 (2007).
72. Microsoft Corp. v. i4i Ltd. P'ship, 131 S. Ct. 2238, 2247
73. (quoting Beck v. Prupis, 529 U. S. 494, 501 (2000)).
74. See id., 131 S. Ct. at 2254 (Thomas, J., concurring) (asserting that Congress's use of a word that is similar to a term of art does not necessarily codify the term of art)
75. (citing Bruesewitz v. Wyeth LLC, 131 S. Ct. 1068, 1076-77 (2011)).
76. 130 S. Ct. 3218, 3226 (2010)
77. (citing Diamond v. Diehr, 450 U. S. 175, 182 (1981));
78. see also Diamond v. Chakrabarty, 447 U. S. 303, 308 (1980) (reading the term "manufacture" in § 101 of the Patent Act in accordance with dictionary definition).
79. 35 U. S. C. § 282 (2006).
80. See i4i, 131 S. Ct. at 2246-47 (majority opinion);
81. see also JAMES BRADLEY THAYER, A PRELIMINARY TREATISE ON EVIDENCE AT THE COMMON LAW 336-39 (1898);
82. JOHN HENRY WIGMORE, SELECT CASES ON THE LAW OF EVIDENCE 1068-71 (2d ed. 1913).
83. i4i, 131 S. Ct. at 2247
84. (quoting Beck v. Prupis, 529 U. S. 494, 501 (2000)). The Court found that the attached "cluster of ideas" was the standard proof required to overcome the presumption of validity.
85. Diehr, 450 U. S. at 182 (internal quotation marks omitted).
86. SUBCOMM. ON PATENTS, TRADEMARKS, AND COPYRIGHTS OF THE COMM. ON THE JUDICIARY, 86TH CONG., COURT DECISIONS as GUIDES TO PATENT OFFICE 5-6 (Comm. Print 1960) ("[The] presumption [of validity] is strongest where the Patent Office records includes the most pertinent prior patents and/or publications adduced in support of a defense of invalidity for lack of patentable invention. The presumption of validity is weakened where the patents and/or publications adduced in court present a significantly stronger case of lack of patentable invention than do the patents and/or publications cited by the Patent Office. When the presumption is so weakened, the burden of proof... is reduced from a burden of proof beyond a reasonable doubt to a burden of proof by preponderance of the evidence.") (emphasis added).
87. See Grogan v. Garner, 498 U. S. 279, 286 (1991) ("[Congress's] silence is inconsistent with the view that Congress intended to require a special, heightened standard of proof.");
88. see also Bilski v. Kappos, 130 S. Ct. 3218, 3226 (2010) (asserting that a few traditional deviations from the ordinary meaning of terms in the Patent Act do not give "the Judiciary carte blanche to impose other limitations that are inconsistent with the text and the statute's purpose and design").
89. Bilski, 130 S. Ct. at 3231;
90. see also Jennifer K. Bush et al., Six Patent Law Puzzlers, 13 TEX. INTELL. PROP. L. J. 1, 19 (2004) ("[T]he requirement of proof by clear and convincing evidence to rebut the presumption of validity appears unique to patent law. Although the presumption of validity is statutory, the resulting proof burden was judicially imposed. Consequently, the Federal Circuit, sitting en banc, could enact the FTC's recommendation to reduce the quantum of proof required to rebut the presumption without legislation. ");
91. Dan L. Burk & Mark A. Lemley, Policy Levers in Patent Law, 89 VA. L. REV. 1575, 1659 (2003) ("[The Federal Circuit] could, if it wished, make the presumption one that could be overcome by preponderance of the evidence, rather than by clear and convincing evidence. Alternatively, the Federal Circuit could change its rule so that the presumption did not apply to prior art that was not considered by the PTO.").
92. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U. S. 141, 148 (1989)
93. (quoting Letter from Thomas Jefferson to Isaac McPherson (Aug. 13, 1813), in THE WRITINGS OF THOMAS JEFFERSON 326, 335 (Albert Ellery Bergh ed., Memorial ed. 1904)).
94. See Louis Kaplow, Rules Versus Standards: An Economic Analysis, 42 DUKE L. J. 557, 569 (1992).
95. See Randy J. Kozel & David Rosenberg, Solving the Nuisance-Value Settlement Problem: Mandatory Summary Judgment, 90 VA. L. REV. 1849, 1858 (2004);
96. see also Robert P. Merges, One Hundred Years of Solicitude: Intellectual Property Law, 1900-2000, 88 CALIF. L. REV. 2187, 2190-91 (2000) ("There is a fine line, after all, between a meritorious property right and an odious government enforced rent.");
97. Michael J. Meurer, Controlling Opportunistic and Anti-Competitive Intellectual Property Litigation, 44 B. C. L. REV. 509, 509-10 (2003) ("[Intellectual property law] promotes harmful rent-seeking by owners of IP rights who undertake opportunistic and anti-competitive lawsuits. Some IP owners value their property rights chiefly as 'tickets' into court that give them a credible threat to sue vulnerable IP users.").
98. See Mark A. Lemley, Rational Ignorance at the Patent Office, 95 NW. U. L. REV. 1495, 1521 (2001) ("[T]he costs of licensing and litigation are imposed not just on patent owners, but also on accused infringers and, indirectly, on the public.");
99. see also U. S. FED. TRADE COMM'N, supra note 1, at 6 ("If the competitor chooses to negotiate a license to and pay royalties on the questionable patent, the costs of follow-on innovation and commercial development increase due to unjustified royalties.").
100. See Microsoft Corp. v. i4i Ltd. P'ship, 131 S. Ct. 2238, 2251 (2011) ("[N]ew evidence supporting an invalidity defense may 'carry more weight' in an infringement action than evidence previously considered by the PTO."
101. citing Am. Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360 (Fed. Cir. 1984))).