This spring, in Microsoft v. i4i, the United States Supreme Court will review an issue fundamental to the enforceability of patents – the proper evidentiary burden for proving that a patent is invalid. Microsoft is urging the Court to lower the challenger’s burden from a showing by “clear and convincing” evidence to a showing by a “preponderance” of the evidence.
The higher clear and convincing evidentiary burden for proving invalidity gives deference to the substantive analysis performed by the US Patent and Trademark Office (USPTO) during patent examination. Under this standard, patents provide a degree of certainty for rights holders, which is very important for innovative businesses whose assets are increasingly held in the form of intellectual property rights. The preponderance standard, on the other hand, would pit the challenger’s evidence equally against the patentee’s, as if the expert examiners at the USPTO had never seen the patent.
In our amicus brief in this case, we argue for targeted jury instructions to ensure all relevant information about patent validity – such as whether the challenger’s prior art had been considered by the USPTO during patent examination – is properly weighed by the jury and placed in the proper context, so invalid patents do not remain in force. A full and fair opportunity to invalidate patents is as important to promoting innovation as a patent system that provides incentives to inventors through valuable and stable patent rights.
Another approach originally presented by Microsoft is a “dual standard,” which applies a preponderance burden to invalidity challenges based on prior art not considered by the USPTO, while adhering to the clear and convincing burden for prior art that was already considered. As we explain in our amicus brief, we believe a dual standard is unworkable, in part because it would confuse jurors.
Some amici have argued that the lower preponderance burden is appropriate because the USPTO is struggling and issues “bad” or low-quality patents. But lowering the burden does not help the USPTO or improve the patent system. Improving patent quality should begin at the beginning, with high quality patent applications and patent examination. As regular readers of this blog know, IBM strongly supports initiatives such as Peer to Patent which are designed to improve the examination process and help the USPTO do what it is designed to do – issue valid patents.
For Supreme Court term that has taken on numerous patent cases, this case may be the one of the most important, and thus the most compelling reason to keep our attention on the Court this spring.
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Posted in Supreme Court on November 15, 2010 |
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The Supreme Court’s term is only one month old, and already it has agreed to hear two patent cases, Global-Tech v. SEB and Stanford v. Roche. Followers of the patent system are used to this by now–since 2005, the Court has entertained a steady stream of patent appeals covering a broad range of fundamental issues–from injunctions (eBay) to obviousness (KSR), and most recently patentable subject matter (Bilski). What does this say about the patent system, and what does it mean for the future?
Unlike other areas of law, appeals of patent cases go from the various Federal District courts to one appellate court — the Court of Appeals for the Federal Circuit (or more simply the Federal Circuit). Many have argued that the Court is so active because the Federal Circuit is making mistakes, and this is the only way to fix them. Others believe the rise of enforcement by non-practicing entities (discussed in Justice Kennedy’s concurrence in eBay) is a key motivator. The answer probably includes those factors, but the primary driver is almost certainly the overwhelming importance of intellectual property to our economy. As former Chief Judge of the Federal Circuit Paul Michel recently explained, job growth and economic health are linked to innovation, so it is critical to have a robust patent system. Any mistakes or imbalances in the system–however minor–often create costly pitfalls for business, and may disproportionately harm US commercial interests in an increasingly international economy.
The cases the Court will hear this term echo these economic concerns — for example, SEB addresses the proper standard for inducement infringement, where a business can be liable for infringement by another party based entirely on its “state of mind” even if its actions are lawful. Stanford covers issues under the Bayh-Dole Act, a case involving a dispute over ownership of a patent between a University government contractor and a private company having a collaborative research arrangement with the University. The outcome of these cases will affect the risks associated with developing and commercializing innovative products and services, and will–we hope–create an atmosphere of increased certainty for businesses and the patent community.
Despite all the activity over the past few years, it appears the Supreme Court is not losing interest in patent issues, and the long list of patent litigants currently seeking review means the Court will continue to have significant opportunities to shape patent law in the coming years. This is probably a good thing — our patent laws have not been comprehensively updated for over 50 years, and legislative efforts to amend them have been unsuccessful to date. Given the economic imperative, there must be some means to ensure that the law keeps up with modern business and technology innovations. So it seems we should get used to the Supreme Court’s prominent role in the development of patent law — it has become a regular part of the conversation, and its role may only get bigger.
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