Clear & Convincing: Supreme Court Affirms CAFC in Microsoft v. i4i

Justice Sonia Sotomayor

UPDATED: 6/10/2011 @ 12:28pm (see comments)

Earlier today the United States Supreme Court issued its decision in Microsoft v. i4i.  At stake in this closely watched case was whether a patent would continue to carry a strong presumption of validity during litigation or whether that presumption of validity would be significantly weakened.  More specifically, since the inception of the Federal Circuit the law has always been that to overturn the presumption of validity required by 35 U.S.C. 282 and 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 (NASDAQ:MSFT) 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 8-0 (with concurring opinions but no dissents, and with Chief Justice Roberts taking no part in the decision) 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.

The dispute between Microsoft and i4i was a long time in the making, as are practically all cases that reach the Supreme Court.  The beginning of the final Act of the dispute started on August 11, 2009, when the United States District Court Judge in the Eastern District of Texas issued its final order in the trial, finding Microsoft infringed U.S. Patent No. 5,787,449.  In addition to losing approximately $300 million, Microsoft was permanently enjoined from selling versions of ubiquitous word processing program Word that contained certain XML functionality that was found to infringe the i4i patent.

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.

Subsequently, Microsoft filed a petition for writ of certiorari with the United States Supreme Court. The Supreme Court granted certiorari in Microsoft Corporation v. i4i Limited Partnership on November 29, 2010, 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 prior to determining whether to take the case, choosing rather to accept the matter with no input from the U.S. government.  The oral argument was held on April 18, 2011.  Numerous amici briefs were filed, and in something of a game-changing event the Solicitor General of the United States filed a brief in support of retaining the clear and convincing standard.  See Amici Support i4i at Supreme Court in Microsoft Patent Case.

Today, Justice Sotomayor explained that Justice Cardozo’s opinion in Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U. S. 1 (1934), was authoritative and dispositive. Sotomayor wrote: “tracing nearly a century of case law from this Court and others, Justice Cardozo wrote for a unanimous Court that ‘there is a presumption of validity, a presumption not to be overthrown except by clear and cogent evidence.’” Sotomayor went on to quote the key passage from RCA, and then explained: “The common-law presumption, in other words, reflected the universal understanding that a preponderance standard of proof was too ‘dubious’ a basis to deem a patent

One of the issues that presented the most difficulty for members of the Supreme Court during oral argument was the distinction between a presumption, the burden of production and the burden of persuasion. Microsoft argued that the presumption of validity found in 35 U.S.C. 282 means that if a defendant were able to produce some evidence questioning the validity of a claim then the level of proof required would be the much lower preponderance of the evidence standard, not the heightened clear and convincing standard. On this point Justice Sotomayor wrote:

We recognize that it may be unusual to treat a presumption as alone establishing the governing standard of proof. But given how judges, including Justice Cardozo, repeatedly understood and explained the presumption of patent validity, we cannot accept Microsoft’s argument that Congress used the words “presumed valid” to adopt only a procedural device for “shifting the burden of production,” or for “shifting both the burden of production and the burden of persuasion.” Whatever the significance of a presumption in the abstract, basic principles of statutory construction require us to assume that Congress meant to incorporate “the cluster of ideas” attached to the common law term it adopted. And RCA leaves no doubt that attached to the common-law presumption of patent validity was an expression as to its “force,” —that is, the standard of proof required to overcome it.

(citations omitted).

The trouble with interpreting 35 U.S.C. 282 rests in the fact that it is poorly written to articulate its unambiguous meaning if you are finely aware of the idiosyncratic differences between a presumption, a burden of persuasion and a standard of proof. But how many are finely aware of those esoteric meanings? Probably not many lawyers and likely no Members of Congress.

Microsoft offered two distinct interpretations of 35 U.S.C. 282, both of which would favor the lower standard they sought, but both of which would render at least some language in 35 U.S.C. 282 superfluous. That was itself at the root of many of the questions asked during oral argument. There seems to be no way to interpret 35 U.S.C. 282 such that there are no redundancies and/or no superfluous language. On this Justice Sotomayor explained: “the kind of excess language that Microsoft identifies in §282 is hardly unusual in comparison to other statutes that set forth a presumption, a burden of persuasion, and a standard of proof.”

Having dispatched with Microsoft’s attempts to establish a preponderance of the evidence standard across the board, the Supreme Court turned to Microsoft’s alternative argument — the lower preponderance standard should apply at least in cases where the prior art asserted by the defendant was not before the Patent Office during examination of the patent application.  The Supreme Court didn’t bite, and refused to create such a two-tiered presumption.  Justice Sotomayor wrote:

Our pre-1952 cases never adopted or endorsed the kindof fluctuating standard of proof that Microsoft envisions.And they do not indicate, even in dicta, that anything less than a clear-and-convincing standard would ever apply to an invalidity defense raised in an infringement action. Tothe contrary, the Court spoke on this issue directly in RCA, stating that because the  heightened standard ofproof applied where the evidence before the court was“different”  from that  considered by the PTO, it applied even more  clearly where the evidence was identical.  293 U. S., at 8.  Likewise, the Court’s statement that a “dubious preponderance” will never suffice to sustain an inva-lidity defense,  ibid., admitted of  no apparent exceptions.Finally, this Court often applied the heightened standard of proof without any mention of whether the relevant prior-art evidence had been before the PTO examiner, in circumstances strongly suggesting it had not.

Justice Sotomayor then went on to dismiss those non-Federal Circuit cases that post-1952 imposed a lower standard, simply shrugging them off saying that was never endorsed by the Supreme Court and the Supreme Court now specifically refuses to endorse that view. She also went on to explain that the Federal Circuit has, in fact, struck the correct balance relative to prior art not before the Patent Office. More specifically, the Federal Circuit approach — that new evidence of invalidity may care more evidentiary weight — was characterized by the Supreme Court as a “commonsense principle.”

What does this decision mean moving forward?  Aside from the fact that the clear and convincing evidence standard remains even for prior art not considered by the Patent Office, the Supreme Court did explain that when there is new prior art asserted by a defendant during litigation the jury should ordinarily be given an instruction on that point.  Unfortunately for Microsoft, they did not request such an instruction at trial, which would appear to be either a blunder or more likely a very bad strategic decision (in hindsight).  Justice Sotomayor explained that the jury “may be instructed to consider that it has heard evidence that the PTO had no opportunity to evaluate before granting the patent.”  Ultimately giving the jury the ability to consider the presence of new evidence “when determining whether an invalidity defense has been proved by clear and convincing evidence.”

If you are keeping score this is the second decision this week where the Supreme Court not only affirmed the outcome of the Federal Circuit but also affirmed the reasoning, rule and entire decision.  Perhaps the Supreme Court is starting to get familiar enough with patent law to actually comprehend the law, or perhaps they are realizing that the Federal Circuit does know what they are doing (by and large), or perhaps they are just getting lucky.  Whatever the case may be, there has been a string of patent decisions now from the Supreme Court that seems to evidence they understand the intricacies of patent law.  Now if they would just revisit eBay v. MercExchance and KSR v. Teleflex we might actually get a stable set of patent laws that make sense, can be evenly applied and which don’t stifle innovation and investment therein.


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Join the Discussion

12 comments so far.

  • [Avatar for American Cowboy]
    American Cowboy
    June 14, 2011 12:05 pm

    Yep. First time in years that I have been pleased with Scotus.

  • [Avatar for patent enforcement]
    patent enforcement
    June 13, 2011 05:17 pm

    I’m quite pleased that the Justices defied pundits’ predictions and issued this ruling — I always thought i4i had the stronger arguments, not to mention many years of tradition and precedent on its side. Moreover, I think there’s a decent argument that a strong presumption of validity is indicated in the Constitution; and, on a policy note, in countries with weaker patent rights, there lurks always the danger that well-funded entities can use that lesser standard to bankrupt patentees, or even to deprive them of their IP altogether. Thank you, SCOTUS; well done.

  • [Avatar for Deep End Of Pool]
    Deep End Of Pool
    June 12, 2011 04:57 pm

    … Sotomayor is indicating a positive right to “use.”

    Thoughts? Okay. She’s in over her head here.

  • [Avatar for Gene Quinn]
    Gene Quinn
    June 10, 2011 12:30 pm

    Sean et al…

    Mea culpa. I just updated the article to reflect the 8-0 decision with Roberts taking no part in the decision. Thanks for catching that, and thanks for reading.


  • [Avatar for Sean Flaim]
    Sean Flaim
    June 10, 2011 10:33 am

    Minor quibble: the ruling was 8-0 not 9-0 as Roberts was recused.

  • [Avatar for Anon]
    June 10, 2011 08:49 am

    While in dictum, I find the comment of “Once issued, a patent grants certain exclusive rights to its holder, including the exclusive right to use the invention during the patent’s duration.</b” 564 U.S.___(2011), 2, (emphasis added) very interesting.

    It appears that even beyond the traditional negative right to exclude, Sotomayor is indicating a positive right to “use.” Patent professionals, however, realize that no such exclusive right to use actually exists because of, among other things, the possibility of patent interlocking (for example genus- species patents, or for example, an improvement patent that cannot be used on its own without permission of a (different) prime patent holder)


  • [Avatar for Gene Quinn]
    Gene Quinn
    June 9, 2011 11:11 pm


    I’m not sure Grandma was wrong about squinting being bad for the eyes, but it sure wasn’t good for Microsoft!



  • [Avatar for Steve M]
    Steve M
    June 9, 2011 11:04 pm

    . . . so grandma WAS wrong about squinting being bad for the eyes.

    Sorry grandma; but we of course still love ya’!

  • [Avatar for EG]
    June 9, 2011 05:49 pm


    We are of like mind. I too loved that line and paragraph.

  • [Avatar for jodi]
    June 9, 2011 04:51 pm

    >>> “What does this decision mean moving forward? Aside from the fact that the clear and convincing evidence standard remains even for prior art not considered by the Patent Office,”

    Any thoughts on how this affects various 3rd party community sites that attempt to find prior art for issued patents (and typically used to invalidate patents)? In other words, does today’s outcome make external findings of prior art less potent?

  • [Avatar for Gene Quinn]
    Gene Quinn
    June 9, 2011 03:05 pm


    Agreed. I particularly like the line: “Squint as we may, we fail to see the qualifications that Microsoft purports to identify in our cases.”



  • [Avatar for EG]
    June 9, 2011 02:53 pm


    Well, my reading of the oral argument transcript was correct: the Justices did not buy Microsoft’s position at all, including the “varying standard” depending upon whether or not the evidence of invalidity was or was not considered by the PTO. Pages 18-20 of Sotomayor’s opinion are particularly a “kick in the teeth” to the policy arguments by Lemley and company favoring reducing the standard to preponderance of the evidence.

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