Microsoft Corporation, one of the largest software companies of the world, has posed an even larger question before the U.S. Supreme Court pertaining to Patent law. Patent law has been brought to an edge now, pending decision of the Supreme Court in the case of Microsoft Corporation v. i4i Limited Partnership, et al., Supreme Court No. 09A1195.

The issue pertains to the requirement of 35U.S.C. § 282 that “the burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.” What § 282 presents is a situation analogous to where a teacher sets the paper without prescribing the course! ‘The burden’ in § 282 knows no limits and it has been left for the courts to set standards, which they whole-heartedly do as well.

A common judicial interpretation [1] of § 282 is that the party challenging the patent must come forth with ‘clear and convincing evidence’ to invalidate an issued patent.

Not coming as any matter or surprise, recently, the United States Court of Appeals for the Federal Circuitin the case of Microsoft Corp. v. i4i Ltd. P'ship, 598 F.3d 831 (Fed. Cir. 2010), upheld this requirement yet again, stating that Microsoft (the party challenging i4i’s patent) was required to prove its defense of invalidity under by ‘clear and convincing evidence’, even though the prior art on which the invalidity defense rests was not considered by the Patent and Trademark Office prior to the issuance of the asserted patent. In this case, i4i sued Microsoft for patent infringement and Microsoft in-turn challenged the validity of the concerned patent.

Microsoft took a bid of challenging this decision before the Supreme Court immediately. What took the world by surprise was that the Supreme Court, on 29^th November 2010, issued certiorari to review the above decision. The question, has, thus been thrown open by the Supreme Court, rather directly. The term ‘directly’ is used here because it is not the first time that the Supreme Court is faced with this issue. It was only that in earlier cases, it was not obligatory upon the Court to deal with it.

The issue, thus, formulated for debate is: Whether the requirement of ‘clear and convincing evidence’ gets diluted (and a less stringent test may apply?) when the prior art on which the challenge for invalidity rests, was not considered by the Patent Office prior to the issuance of the concerned patent?

The above issue first came before the Supreme Court in KSR Int'l Co. v. Teleflex, Inc. [2]. This was a tangential decision, where the Supreme Court offered a suggestive dictum that “the rationale underlying the presumption – that the PTO in its expertise, has approved the claim –seems much diminished” where a piece of relevant prior art was not considered during prosecution. In this case, the Court avoided to determine whether the Patent Office’s failure or oversight to consider a prior art reference voided the presumption of validity, because it found the concerned patent invalid nonetheless. Microsoft surely will hinge its hopes on the passing reference in KSR, especially since it came from the Apex Court.

The Federal Circuit has met with this issue several times before andhas also been quite consistent in its approach that the ‘presumption of validity’ is absolute, even where the prior art being used to challenge the patent was never considered by the Patent Office [3]. In the ACS Hosp.Case, the Court expressed it very strongly that “the presumption is never annihilated, destroyed, or even weakened, regardless of what facts are of record”.

However, one recent judgment of the Federal Circuit in the case of Tokai Corp. v. Easton Enters. Inc. (Fed. Circuit, 31^st January 2011), may add more points to Microsoft’s kitty. The Court went on to hold that “although the standard of proof does not depart from that of clear and convincing evidence, a party challenging validity shoulders an enhanced burden if the invalidity argument relies on the same prior art considered during examination by the U.S. Patent and Trademark Office (“PTO”). For example, we have stated that, “‘[w]hen 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 [4].

This means in simpler terms that the Court commands higher degree of proof in case the Patent Office had an occasion to scrutinize the material being put before the Court as the basis of challenging validity of the relevant patent. This may be for two apparent reasons. Firstly, that the Court gives due weightage to the investigation that has been once carried out by the Patent Office, which is a government agency and secondly, despite being once it is disproved by the Patent Office, the Court is giving a second opportunity to the attacker on the same set of prior art/ evidence. Therefore, the attacker must present something more than what was not able to convince the Patent Office.

If however, the prior art being cited before the Court is a fresh one, which was never dealt by Patent Office, either suo moto or in opposition, during its scrutiny of the Patent concerned, the course that the Court should take in such a case gets tricky.

Microsoft v. i4ibefore the USSC

Till February 2011, the case has received amicus briefs from several corporate heavy weights, such as Google, Intel, Facebook, Teva Pharmaceuticals, Yahoo!, Apple, Hercules, Cisco, Timex Group, and many more—such is expected to be impact of the decision.

The case has become ripe for arguments, which have been set for 18^th April 2011. And we say— in this war of stalwarts, may we see the triumph of principles of Patent Law.

[1] Starting with Radio Corporation of America v. Radio Engineering Laboratories, 293 U.S. 1 (1934), ClevelandTrust v. Schriber-Schroth, 92 F.2d 330 (6th Cir. 1937), etc.

[2] 550 U.S. 398 (2007)

[3] See ACS Hosp. Sys. Inc. v. Montefiore Hosp., 732 F.2d 1572, 1575 (Fed. Cir. 1984); Metabolite Labs., Inc. v. Lab. Corp. of Am. Holdings, 370 F.3d 1354, 1365 (Fed. Cir. 2004), etc.

[4] PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299, 1304 (Fed. Cir. 2008)