Intellectual Property, Technology, and the Law

An Argument for the “Clear and Convincing” Standard

Earlier this week, on April 18, 2010, the Supreme Court heard oral arguments in the Microsoft v. i4i case. As with any patent related case that makes its way to the Supreme Court, the intellectual property community is eager to see what the outcome is, and what effect it might have on their day to day activities.

Unfortunately, as with most patent cases that make their way to the Supreme Court, the Court is likely to offer a very narrow opinion that leaves many important questions unanswered. Time will tell.

The issue at hand is best summarized by the question presented:

The Patent Act provides that “[a] patent shall be presumed valid” and that “[t]he
burden of establishing invalidity of a patent or any claim thereof shall rest on the party
asserting such invalidity.” 35 U.S.C. § 282. The Federal Circuit held below that Microsoft
was required to prove its defense of invalidity under 35 U.S.C. § l02(b) 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. The question presented is: Whether the court of appeals erred in
holding that Microsoft’s invalidity defense must be proved by clear and convincing

The “clear and convincing” standard lies somewhere between the “reasonable doubt” standard for criminal cases and the “preponderance of the evidence” standard for civil cases.

Microsoft is essentially arguing that during litigation regarding the validity of a patent, that prior art not considered by the examiner during prosecution of the patent should be subject to the lower “preponderance” standard. i4i, of course, argues that the existing “clear and convincing” standard should remain intact. The rationale behind the current standard is that a certain amount of deference is provided to the United States Patent and Trademark Office (USPTO). Put another way, merely getting more than 50% of the evidence on your side should not allow you to overcome the opinion of an expert body such as the USPTO.

Yours truly isn’t nearly the first to comment on this topic and take a side.

The New York Times published a column on the topic. It can be summarized as such:

It’s a critical issue: the current approach, under which juries are explicitly discouraged from questioning a patent’s validity, all too often means that dubious patents are nevertheless enforced. That inhibits innovation, the very thing that patent law is supposed to encourage.

The column then ends with the following:

With this reform in place, the patent system would still protect genuine inventions. But it would also give relief to the countless businesses that today find themselves vulnerable to patents that shouldn’t have been issued in the first place. After all, reform is not just about helping patent holders. Patent reform is also about protecting companies of all stripes from a patent system that would otherwise dangerously overreach.

At the risk of repeating many of the counter-arguments presented in an excellent piece on the “Patent Docs” blog, this thinking is flawed for many reasons:

Two Sides of a Coin

Sure, a dubious patent being enforced by its holder could stifle innovation. But what about the person who infringes upon a patent and then seeks to invalidate it in court? Does this not also retard innovation? The NYT piece picks up a tired cliche and fails to appreciate the nuance and delicate balance of patent law. It is a system that is not always perfect, and can be exploited from any number of directions and strategies in a manner that hurts overall innovation.

Dubious Patents and Patent Reform

There is absolutely no doubt that the patent system has its issues, many of which result in the issuance of “dubious patents.” The NYT piece calls a decision in favor of Microsoft a “reform” of “the patent system.” First of all, it is unlikely that a Supreme Court’s decision on a patent matter is ever going to resemble anything like reform. Second, comprehensive patent reform (called the “America Invents Act“) is finally reaching its last stages before being enacted into law.

If the patent reform bill is enacted substantially in its current form, the issue of dubious patents will have been addressed in the most meaningful manner since the Patent Act of 1952. I can’t say enough about the significance of the USPTO being able to keep its own fees, rather than its surpluses being allocated outside of the USPTO to cover the United States Government’s other problems. In being able to keep its own fees, the USPTO will generally be able to re-invest its money as it sees fit. This will presumably mean more meaningful review from examiners and better patents. I am certainly not in favor of several major components of the Act, but at least the fees issue will be resolved in a positive manner.


If the Supreme Court does indeed recommend the lower standard, what impact will this have on other areas? It could effectively render any agency’s ruling, opinion or action much weaker in light of a lower standard to overturn or invalidate.

The Consideration Problem

This case revolves around prior art that was not considered by the examiner. The only problem is, how do you truly know what the examiner considered? Imagine a scenario where an examiner, in good faith, noticed a potential prior art reference, wrote it off as completely irrelevant, and failed to include it in any documentation. What if, during a trial determining the validity of the eventual patent, that prior art reference is cited by the accused infringer? How does one know whether it was considered or not? Does this justify the standard dropping so low? While I don’t necessarily believe the commonly cited undesirable scenario where prior art references skyrocket in volume in patent applications as a result of a lower standard, I do think there’s a legitimate issue here that makes a lower standard problematic.


In conclusion, I humbly believe the clear and convincing standard should remain in place. I am hoping the Supreme Court feels the same way. Let’s see what happens.

Copyright 2011, Pav S. Athwal. All Rights Reserved.


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