Microsoft Takes Patent Fight to Supreme Court

Microsoft Corp. took its fight to overturn a $290 million patent infringement judgment to the Supreme Court Monday, in a case that gearbox could re-calibrate the balance of power in information-age intellectual property disputes.

The immediate question before the high court was whether it's too hard to get an invalid patent thrown out. The broader question, raised by the Justices, is how the law should balance providing incentives for innovation, while ensuring that private parties can't lock up obvious or previously known developments.

Microsoft attorney Thomas Hungar told the Justices that lower courts were wrong to require that the software giant prove by "clear and convincing" evidence that a patent held by Toronto-based software company i4i LP is invalid. Normally, the standard of proof in civil lawsuits requires a preponderance of evidence – a less exacting standard.

The lower court held Microsoft to the "clear and convincing" evidence standard, and refused to invalidate i4i's claim to holding a patent for a certain feature of Microsoft's popular word processing program. Microsoft had argued damper the feature was based on already known technology, not a patentable invention.

If upheld by the Supreme Court, Mr. Hungar said, the decision "ensures the enforcement of invalid patents."
But Mr. Hungar's argument ran smack into a 1934 precedent from one of the court's most revered justices, Benjamin Cardozo, who in a case involving radio technology wrote that once issued, patents enjoy a presumed validity "not to be overthrown except by clear and cogent evidence."

"You're contradicting Cardozo?" said Justice Antonin Scalia, the court's senior member, who presided over the hearing because Chief Justice John Roberts, who owns Microsoft stock, recused himself.

Mr. Hungar said the Cardozo opinion concerned a narrower and different subset of patent challenges,
"But Justice Cardozo certainly didn't limit his holding in the way you led flexible strip suggest," retorted the court's newest member, Justice Elena Kagan. "The language of that opinion is extremely broad."

Justice Samuel Alito observed that when Congress revised the patent statute in 1952, it made no reference to the requiring challengers to reach the clear and convincing standard.

"The phrase, 'shall be presumed valid,' doesn't seem to me at all to suggest clear and convincing evidence," Justice Alito said. "Most presumptions can be disproved by much less."

Attorney Seth Waxman, representing i4i, said Congress was aware both of the 1934 Cardozo opinion and nearly 30 years of lower court precedent requiring clear and convincing evidence to invalidate a patent.
"Congress has actively acquiesced" in the clear and convincing standard, Mr. Waxman said.

Justice Stephen Breyer and several other justices groped for cable ties different methods that lower courts, the Patent Office, inventors and businesses could employ to ensure that only legitimate patents were enforced.

"It's a bad thing not to give protection to an invention that deserves it; and it is just as bad a thing to give protection to an invention that doesn't deserve it," said Justice Stephen Breyer. "Both can seriously harm the economy. What we're trying to do is we're trying to get a better tool, if possible, to separate the sheep from the goats."