The following was sent in by Gene Quinn, of IPWatchdog and Practice Center Contributor.
Yesterday, the United States Supreme Court granted certiorari in Microsoft Corporation v. i4i Limited Partnership, with Chief Justice John Roberts taking no part in the decision or petition. The Supreme Court did not request the views of the Solicitor General, choosing rather to accept the matter with no input from the United States government. The decision to grant cert. comes only days after the United States Patent and Trademark Office refused to grant reexamination of the patent in question.
Microsoft had filed an ex parte reexamination request on the patent in question, US Patent No. 5,787,449. The ‘449 patent exited reexamination unchanged. Microsoft then filed a second ex parte reexamination request, and it is this second request that was denied by the Patent Office on Wednesday, November 24, 2010. The denial of this second request means that the Patent Office did not believe there to be a substantial new question of patentability.
The request for the Supreme Court to take the case is based upon Microsoft’s urging the Supreme Court to chip away at the presumption of validity enjoyed by a patent. Microsoft would prefer a rule that prior art not considered by the Patent Office should be treated differently than prior art considered by the Patent Office. Presently, in order to invalidate a patent claim there needs to be clear and convincing evidence presented at trial, regardless of whether the prior art offered at trial was considered by the Patent Office.
Microsoft would like to see that changed, with prior art not considered by the Patent Office requiring a lower evidentiary threshold to invalidate. Regardless, whether the evidentiary threshold changes or not it would appear as if Microsoft will still have its back up against a wall because if the Patent Office allowed the ‘449 patent to exit reexamination and then denied the second reexamination request, this suggests that even references not originally considered by the Patent Office are of no help to Microsoft.
In terms of the history of this case, it was back on August 11, 2009, that the United States District Court Judge in the Eastern District of Texas issued its final order. In addition to losing approximately $300 million, Judge Leonard Davis also entered a permanent injunction that was to become effective 60 days from the judgment date, ordering Microsoft to cease selling the ubiquitous word processing program Word. On August 21, 2009, the United States Court of Appeals for the Federal Circuit issued an Order granting Microsoft an expedited appeal of its patent infringement loss to i4i Limited Partnership. The Federal Circuit granted the stay of the permanent injunction on September 3, 2009, pending hearing of the appeal. Oral arguments were also granted in expedited fashion, and were held on September 23, 2009. On December 22, 2009, the Federal Circuit issued its decision upholding Judge Davis’ decision with one small exception. The Federal Circuit found the 60 day period in which the injunction was to become effective too short, instead preferring to give Microsoft 5 months to comply with the permanent injunction, which meant that the permanent injunction went into effect on January 11, 2010. For more see: i4i Victorious at CAFC, Microsoft Word Enjoined Jan. 11, 2010 and CAFC Puts Coal in Microsoft’s Stocking by Affirming $240 Million Damage Award and Permanent Injunction
This is Microsoft’s last hope in the i4i case. While I think a ruling as requested by Microsoft would lead to a great number of unintended consequences, I think there is a better than even chance that the Supreme Court will indeed rule that prior art not considered during prosecution can be considered de novo during litigation proceedings. I personally believe it is rather ridiculous to presume a patent valid based on prior art never considered, but such a rule would enormously complicate patent prosecution and make patent attorneys more likely to bury the Patent Office with references than ever before. There would be no winners, only losers, but that hasn’t stopped the Supreme Court from doing the wrong thing in the past.
For a discussion of the issues that will be before the Supreme Court please see my interview with Mark Lemley, who is a Professor of Law at Stanford University. Lemley filed a brief arguing that the Supreme Court should take the issue. I have always believed that the Supreme Court would take the case, even more so after I read Lemley’s brief. Now I fear they will do the wrong thing and further whiddle away at the value of a patent by chipping away at the fundamental presumption of validity. While that could make sense as part of a comprehensive patent reform effort that would at some point settle the rights of the patent and make the claims no longer susceptible to challenge after a prescribed number of years, what is needed is a thoughtful approach that takes into consideration the realities of inventing, the realities of preparing and prosecuting patent applications, the burdens already placed upon the Patent Office and the need for innovators to have a certain and settled right that is quieted from challenge. The Supreme Court cannot undertake such a comprehensive reform in only one case limited by the facts and procedural realities.
We need to address the issues raised, and a good many others, as part of real and legitimate patent reform, not hodge-podge nonsense that is all but certain to come from a Supreme Court decision on a rather narrow evidentiary matter that will have enormous and ill-understood consequences. The ripple effect through patent law will be akin to a tsunami. The worst part is that any ruling in favor of Microsoft won’t likely benefit Microsoft in terms of a positive ultimate outcome to this case in any event.
Based on the fact that Microsoft is alleging invalidity of the i4i claims pursuant to a 102(b) on-sale bar, See Microsoft’s Petition for Writ of Certiorari, it seems a stretch to believe they could have prevailed even under a lower threshold given that they were unable to produce evidence regarding the alleged prior sale. To be sure, the lack of evidence was as the result of i4i not being able to produce the source code of the alleged 102(b) prior sale, but a lack of evidence is a lack of evidence it seems to me whether the standard is clear and convincing or something less. Of course, that will be front and center in the case at the Supreme Court.
