Microsoft, on Thursday lost a hard-fought patent battle in the U.S. Supreme Court while trying to prevent $290 million jury verdict against it. Justice Sonia Sotomayor, held for a unanimous court that Microsoft (alleged infringers) who raised the defense that the patent at issue is invalid must prove it by clear and convincing piece of evidence.

In the case of Microsoft v. i4i, Sotomayor rejected the software giant’s arguments that a lesser standard of proof and preponderance of the evidence is the correct standard under the Patent Act of 1952, even when the U.S. Patent and Trademark Office has failed, in considering the patent application, to examine the so-called prior art. The ruling by the Supreme Court affirmed the decision by the U.S. Court of Appeals for the Federal Circuit, which has taken a bashing by the U.S. Supreme Court in recent years. i4i, a Canadian software consulting company, sued Microsoft in the present case for infringing i4i’s patent on a form of markup language called Extensible Markup Language (XML), which is used as a method for determining how the content of an electronic document will look.

Microsoft had incorporated the XML language into its 2003 and 2007 Word software by claiming that the patent of i4i was invalid because it had sold the product four years before receiving a patent. But the jury found that Microsoft was unable to prove by clear and convincing evidence that i4i’s patent was based on technology already in the marketplace and the decision was later upheld by the Federal Circuit.

Learned Judge Sotomayor noted that the Court, in a 1934 decision tracing the common-law presumption of patent validity, explained that an alleged infringer challenging a patent’s validity will fail “unless his evidence has more than a dubious preponderance.” The common-law presumption, she said, reflected “the universal understanding that a preponderance standard of proof was too ‘dubious’ a basis to deem a patent invalid.” By the time Congress enacted Section 282 of the Patent Act of 1952, establishing that a patent is presumed valid, she added, that presumption had long been a fixture of common law.
The Federal Circuit, she added, has interpreted Section 282 this way for nearly 30 years, and Congress has never considered a proposal to lower the standard of proof.

Justice Stephen Breyer, joined by justices Antonin Scalia and Samuel Alito Jr., filed a concurring opinion to emphasize that the clear and convincing standard applies only to factual disputes and not to legal questions. Justice Clarence Thomas concurred in the judgment, saying he did not believe Congress codified a standard of proof in the Patent Act, but he believed the clear and convincing standard was the common-law rule. Chief Justice John Roberts Jr. recused from the case because he holds Microsoft stock.

Report by Reuben