Alert June 10, 2011

Supreme Court Decides Clear and Convincing Evidence Necessary for All Patent Validity Challenges

Yesterday, in Microsoft Corp. v. i4i Limited Partnership, U.S., No. 10-290, 6/9/2011, the U.S. Supreme Court unanimously decided that patent invalidity must be proved by clear and convincing evidence.
The Supreme Court’s opinion, authored by Justice Sotomayor, held that in enacting 35 U.S.C. § 282, the U.S. Congress adopted both the allocation for the burden of proof as well as the standard of proof existing in the common law for challenges to a patent’s validity. The Court reasoned that the requirement that patent invalidity be proved by the clear and convincing evidence was firmly grounded in the common law, as expressly stated by its decision in RCA v. Radio Engineering Labs, Inc., 293 U.S. 1 (1934).
In 1952, by enacting the presumption of validity in section 282, Congress formally adopted the common law understanding of that presumption, including the requirement that invalidity be established using the clear and convincing standard of proof. The Supreme Court noted that, over the years, Congress has made several amendments to section 282 and to other aspects of patent law in order to address the issue of “bad patents,” but it has never altered the language relating to the presumption of validity. Although recognizing that there was disagreement between the parties and several amici as to the continued benefit of applying the clear and convincing standard of proof, the Supreme Court stated that any “recalibration of the standard of proof” remained in the hands of Congress.
The Supreme Court also made clear that the clear and convincing standard of proof applies to every invalidity challenge, even those based on evidence not considered previously by the U.S. Patent & Trademark Office (“PTO”). The fact that evidence was not before the PTO may carry more weight with a factfinder, but the standard of proof remains unchanged. The Supreme Court noted that where there is a question of whether the invalidity evidence was before the PTO, the jury can and should “be instructed to evaluate whether the evidence before it is materially new, and if so, to consider that fact when determining whether an invalidity defense has been proved by clear and convincing evidence.”
Justice Breyer authored a concurring opinion that was joined by Justices Scalia and Alito. Although agreeing in full with the Court’s opinion, Justice Breyer noted that the clear and convincing standard of proof applies, like all standards of proof, to questions of fact and not to questions of law. Justice Breyer explained that “a factfinder 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” but not “[w]here the ultimate question of patent validity turns on the correct answer to legal questions.”
Justice Thomas filed a concurring opinion agreeing with the result, but on a different basis. Chief Justice Roberts took no part in the decision.