Supreme Court to Review Presumption of Validity

A defense to a claim of patent infringement is that the patent is invalid for failure to comply with one or more sections of the Patent Act.  These provisions include lack of novelty, obviousness, or violation of the written description or enablement requirement.  An accused infringer may have a patent claim declared invalid by a court for violation of these provisions.

Yet, the Patent Act also contains a provision that would seemingly help the patent owner.  “A patent shall be presumed valid.”  35 U.S.C. § 282.  What exactly does that mean?  The courts have interpreted this statutory provision to mean that, in order for a challenger to prove that a patent is invalid for violating one of the provisions of the Patent Act, he must make such proof by clear and convincing evidence.

Standards of Proof

In the law, there are a number of standards of proof that are used in particular cases.  In criminal cases, the prosecution must prove the elements of a crime were committed by the accused “beyond a reasonable doubt.”  This generally means that the trier of fact (the court or the jury) is convinced of the truth of the facts to the point where it would be unreasonable to doubt their veracity. 

In most civil cases, including patent infringement, the party seeking to prove a fact must do so by a “preponderance of the evidence.”  This means that the trier of fact must be convinced that the facts are more likely true than not true.

In a few instances, such as when attempting to prove that a patent claim is invalid, the party seeking to prove a fact must do so by “clear and convincing evidence.”  This standard is a bit uncertain, but it is a higher standard than simply more likely than not; it does not, however, reach the level of beyond a reasonable doubt.  It has been defined as a “strong belief” in the truth of the fact.

Presumption of Validity

Why did Congress grant patents a presumption of validity?  Why must invalidity be proven by clear and convincing evidence?  The rationale behind this statutory provision is that the PTO is a Federal agency that has already passed on the validity of the patent claims.  Patent examiners are presumed to be experts in the subject matter of reviewing and granting patents.  Thus, for the initial Federal review by an expert to have any meaning, a challenger must present evidence that reaches a higher level than merely more likely than not.

For some time now, there has been a discussion as to whether this presumption of validity should only cover issues that were actually considered by the patent examiner and not to newly raised issues.  For example, should the presumption of validity cover prior art references (to prove the patent claim is not novel or is obvious) that were not found or considered by the patent examiner?  Or should invalidity based on previously undiscovered references be determined by the trier of fact on the more likely than not standard of review?

On the one hand, the patent examiner is presumed to have searched for and discovered the most relevant prior art.  Perhaps he found the prior art presented by the accused infringer as new, but didn’t consider it pertinent or material enough to consider it with respect to the patent claims.  Is it really newly discovered or not?  Should it matter if the PTO passed on the patent claims?  Should a court or jury be allowed to second-guess the PTO?

On the other hand, sometimes the expertise of the patent examiner is overblown.  We know that examiners have little time to review each patent application.  They couldn’t possibly discover every pertinent piece of prior art in the world.  Accused infringers have strong incentives to discover such prior art.  We shouldn’t hamstring the trier of fact by the higher standard of proof required to invalidate the patent.

Microsoft v. i4i

Yesterday, the Supreme Court granted certiorari in Microsoft v. i4i.  The Court will consider the question:

Whether the court of appeals erred in holding that Microsoft’s invalidity defense must be proved by clear and convincing evidence.

The Federal Circuit, following long standing precedent, ruled that Microsoft was required to prove invalidity by clear and convincing evidence even when the prior art had not been considered by the patent examiner.  The prior art in this case being a sale made by i4i more than one year before it filed the patent application.

A number of parties filed amicus briefs where they urged the Supreme Court to review this case.  It seems likely that the Supreme Court will lower the standard of proof from clear and convincing evidence.  The main question the justices must decide then is:  what does the statutory presumption of validity mean?  Simply lowering the standard to a preponderance of the evidence would render the presumption of validity a nullity.

Is this case important?  How often will an accused infringer not be able to prove invalidity by the clear and convincing standard, but still be able to prove it by a preponderance of the evidence?  Do juries even understand the difference?  Does anyone?  Juries usually don’t indicate that they would find a patent invalid under the lower standard, but because they are constrained by the higher standard they don’t find it invalid.

The case is important because the presumption of validity and the higher standard of proof required provide a psychological barrier to invalidity arguments, especially for juries.  A ruling in Microsoft’s favor may indeed result in more patents being declared invalid in litigation.

The Court will hear arguments in the case in the spring.  A decision is expected by the end of the Court’s current term in June.  The Chief Justice recused himself from the case, so it will be decided by the remaining 8 justices.

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3 Responses to “Supreme Court to Review Presumption of Validity”

  1. Commissioner Stoll Speaks at GRIPLA Holiday Party « INVENTIVE STEP Says:

    [...] INVENTIVE STEP A blog dedicated to a discussion of patent law issues and strategies « Supreme Court to Review Presumption of Validity [...]

  2. Here We Go Again « INVENTIVE STEP Says:

    [...] The US also has a fairly unique system of requiring applicants to submit material prior art, such as foreign search reports, to the PTO.  The applicant has a duty to submit such information during the entire pendency of the application.  A patent application is pending from the time it is filed until it issues or is abandoned.  Applicants will sometimes get foreign search reports after an application has been allowed.  The only way to get this art considered by the examiner is to file an RCE.  To permit the patent to issue without consideration of the art in the search report would cast a cloud over the patent.  This situation is set to get worse when the Supreme Court changes the standard for challenging patents based on prior art that has not been considered by the …. [...]

  3. Burden of Proof for Patent Challenges « INVENTIVE STEP Says:

    [...] v. i4i regarding the proper burden of proof for challenging the validity of an issued patent.  I previously covered the issues in this case, including the meaning of the various standards of proof discussed [...]

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