Posts Tagged: "microsoft v. i4i"

This ruling cannot stand, and the CAFC needs to step back from the brink. The CAFC has vastly overreached in Soverain v. Newegg, and it is imperative that the Supreme Court hear the case and that Soverain prevail. This attack on patent-holders and the adverse implications from the change proposed by Newegg are unprecedented, and would deal a devastating blow to any U.S. patent-holder, large or small. The proposed change would alter the law and effectively eviscerate the patent system.

This month I have been running a series of articles on the United States Supreme Court. Today we switch things up a little and talk patents, focusing on one of the most important decisions the Supreme Court has made over the last generation — i4i v. Microsoft. I recently chatted with Michael Cannata. His is a name you might not know, but he was intimately involved in the i4i case. He is the manager of a fund that put up the capital for i4i to fight the battle. He consequently became a Director for i4i and was involved with co-managing the litigation for i4i.

icrosoft wanted to see that changed, with prior art not considered by the Patent Office requiring a lower evidentiary threshold to invalidate. To rule in Microsoft’s favor would have required the Supreme Court to throw away 30 years of well-settled Federal Circuit law, as well as overruling Supreme Court precedent in effect since at least 1934, but which traces back in some form from that date a further 100 years. That was a bridge too far for the Supreme Court, who ruled today 9-0 (with concurring opinions but no dissents) that in order to invalidate patent claims 35 U.S.C. 282 requires clear and convincing evidence regardless of whether the prior art was known by the Patent Office during prosecution of the patent application.

We talked about Peer to Patent, Watson on Jeopardy, where the Supreme Court is heading with patent law, the usual fun questions to get to know Schecter on a personal level and more. As we moved into the “fun stuff” you will learn that one famous IBM invention was tested out in the early stages by the inventors on a Thanksgiving turkey one year, proving that innovation never takes a holiday! We also learn that Schecter is something of a James Bond fan, and selected one recent Academy Award winning film as his favorite movie.

Hungar would go on to say that the clear and convincing standard “makes no sense,” which nearly immediately drew the first comment from the bench with Justice Ginsburg saying that it would be difficult to say the standard makes no sense when it was supported by Justice Cardozo and Judge Rich. Ginsberg would later, in a nearly annoyed way, say “then you have to be saying that Judge Rich got it wrong…” Hungar cut off Justice Ginsburg, not typically a wise move.

On April 4, 2011, I had the honor to interview Manny Schecter, the Chief Patent Counsel for IBM Corporation. I met Manny in October 2010 when I did a CLE presentation at IBM’s offices in Armonk, New York. Since that time I have worked to schedule a time to chat with him on the record, and we were recently able to coordinate and chatted on the record for approximately 60 minutes. During our conversation we talked about numerous topics, including patent reform, Microsoft v. i4i, Patent Office initiatives such as the Three Track initiative and Peer to Patent. We also discussed David Kappos, his former boss, as well as Watson’s Jeopardy triumph, the new IBM IP blog and the usual fun questions.

What becomes clear in reading these briefs (and the excerpts below) is that despite what you might have heard to the contrary the Supreme Court has already previously addressed this issue and has done so in support of a standard appreciably higher than the mere preponderance supported by Microsoft. The argument of those in support of Microsoft has been that at least some Circuit Courts of Appeal had a lower presumption of validity prior to when the Federal Circuit announced the clear and convincing standard of proof and thereby settled patent law. While that may be true it seems abundantly clear that law setting a preponderance standard was directly in conflict with the clear and unambiguous Supreme Court precedent directly on point. In fact, there is even Supreme Court precedent directly on point saying that more than a mere preponderance is necessary even when the prior art has not been previously considered. So perhaps i4i and the amici, including the U.S. government by and through the Solicitor General and the USPTO General Counsel Bernie Knight can convince the Supreme Court not to overrule its own prior decisions and keep an appropriately high standard.

Microsoft would like to have the standard for invalidating a patent claim lowered to a mere preponderance of the evidence standard. They say that prior art not considered by the Patent Office should not be afforded the same level of deference. I say — why not? Truthfully the standard for invalidating patent claims in court should be the same as it is when a patent is denied. The standard shouldn’t even be as low as “clear and convincing,” rather it should be “abuse of discretion.”

Don Dunner is a partner with Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, and he has argued over 150 cases before the Federal Circuit. Dunner was enormously candid, although many of the things I would have liked to ask him had to be off the table due to ongoing litigation. In fact, Dunner is involved in three exceptionally important cases: TiVo v. Echostar, Microsoft v. i4i and Uniloc v. Microsoft. Thankfully, Dunner did agree to return to talk to us further once these important cases finally resolve without further opportunity for appeal. We did, however, go in depth discussing eBay v. MercExchange, the dynmic between the Supreme Court and the Federal Circuit, how he approaches appeals generally and specifically blow-by-blow and which Federal Circuit Judges ask the toughest questions.

Today Barner is here to talk to us about what is going on at the USPTO. She is discussing the USPTO Strategic Plan, which she was primarily responsible for pulling together during her tenure. She also went on to discuss appeals to the BPAI, the IT system overhaul, patent reform, patent politics, Microsoft v. i4i and much more. As a former Deputy Director we are getting not only the facts, but her opinions as well. An excellent, informative and candid presentation.

It is impossible to know for sure, but it is reasonable to assume that the 1000+ page IDS Kappos referred to might be in response to what the Supreme Court will likely do. The Supreme Court doesn’t seem to like to apply changes in the law prospectively, even radical changes as this would be. So if they do lower the burden the changes will be applied retroactively and affect (and infect) issued patents and pending patent applications. With that in mind, those with patent applications pending might want to anticipate the worst and file “everything made by man under the sun” information disclosure statements. That way you will be protected if the Supreme Court says there is a reduced standard for invalidating patent claims when prior art was not submitted to the Patent Office.