U.S. Supreme Court Holds That Section 282 of the Patent Act Requires a Patent Invalidity Defense To Be Proved by Clear and Convincing Evidence

June 9, 2011

On June 9, 2011, the Supreme Court in Microsoft Corp. v. i4i Limited Partnership, 564 U.S. ___ (2011), held that a party seeking to establish the invalidity of a patent must prove such invalidity by clear and convincing evidence.  Slip op. 1.  The Court emphasized, however, that the standard may be more easily met when the evidence of invalidity presented in court was not considered by the Patent and Trademark Office ("PTO") in issuing the patent.  Id. at 17.

At issue in i4i was the meaning of § 282 of the Patent Act of 1952, 35 U.S.C. § 282.  Section 282 provides that "[a] patent shall be presumed valid" and "[t]he burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity."  Acknowledging that § 282 "includes no express articulation of the standard of proof," slip op. 6, the Court focused its analysis on Congress’s use of the term "presumed valid."  According to the Court, that term had a "settled meaning at common law," id. at 7, under which it "encompassed not only an allocation of the burden of proof but also an imposition of a heightened standard of proof," id. at 8.  On the assumption that Congress intended to codify the common-law presumption when it enacted § 282, the Court concluded that § 282 requires an invalidity defense to be proved by clear and convincing evidence.  Id. at 9.

The Court made clear that the standard of proof is the same in all cases, even when new evidence of invalidity, never considered by the PTO, is presented to the jury.  Id. at 16-17.  The Court acknowledged, however, that "if the PTO did not have all the material facts before it, its considered judgment [that the patent is valid] may lose significant force."  Id. at 17.  Accordingly, the Court explained, "the challenger’s burden to persuade the jury of its invalidity defense by clear and convincing evidence may be easier to sustain."  Id.  The Court noted that "a jury instruction on the effect of new evidence can, and when requested, most often should be given."  Id.  Thus, "[w]hen warranted, the jury may be instructed to consider that it has heard evidence that the PTO had no opportunity to evaluate before granting the patent."  Id.  Furthermore, the Court noted, "[w]hen it is disputed whether the evidence presented to the jury differs from that evaluated by the PTO," the jury may be instructed to consider "whether the evidence before it is materially new."  Id. at 17-18.

Justice Sotomayor delivered the opinion of the Court, which was joined by Justices Scalia, Kennedy, Ginsburg, Breyer, Alito, and Kagan.  Justice Breyer, joined by Justices Scalia and Alito, wrote separately to emphasize that the heightened standard of proof in § 282 applies to questions of fact, not questions of law.  Id. at 1 (Breyer, J., concurring).  Noting that "[m]any claims of invalidity rest . . . not upon factual disputes, but upon how the law applies to facts as given," id., Justice Breyer urged courts to use instructions, interrogatories, and special verdicts to "prevent[] the ‘clear and convincing’ standard from roaming outside its fact-related reservation," id. at 2.

Justice Thomas concurred only in the judgment.  He disagreed with the Court that Congress codified a standard of proof in § 282, but explained that because § 282 did not alter the common-law presumption of validity, he agreed with the Court’s outcome.  Chief Justice Roberts took no part in the consideration or decision of the case.

The Court’s decision in i4i does not alter the standard of proof that lower courts have been applying to claims of patent invalidity.  The Federal Circuit already applies a heightened standard to such claims.  See slip op. 3-4 (majority opinion).  The Court’s decision does, however, make clear to district courts that they "can" and "most often should" instruct juries on the effect of new evidence in cases in which invalidity defenses are raised.  Id. at 17.  i4i thus seriously undermines, if not abrogates, the Federal Circuit’s decision in z4 Technologies, Inc. v. Microsoft Corp., 507 F.3d 1340 (Fed. Cir. 2007), which upheld a district court’s refusal to instruct a jury that the burden of proving invalidity is "more easily carried" when the relevant evidence was not considered by the PTO.  Id. at 1355 (internal quotation marks omitted).

Finally, Justice Breyer’s observation that the heightened standard applies only to questions of fact may encourage patent defendants to seek, and district courts to give, instructions that help the jury distinguish an invalidity claim’s factual aspects from its legal ones.  See slip op. 2 (Breyer, J., concurring).  His concurrence may also encourage the use of detailed interrogatories and special verdicts "to make clear which specific factual findings underlie the jury’s conclusions."  Id.  If heeded, Justice Breyer’s admonition to keep application of § 282’s strict standard of proof within its proper bounds may go a long way toward ensuring that "discoveries or inventions will not receive legal protection where none is due."  Id.

Gibson, Dunn & Crutcher LLP   

Gibson Dunn represented Microsoft Corp. in i4i before the Supreme Court.

If you have any questions about i4i, or would like to talk with one of our lawyers about a patent appeal, please contact Thomas G. Hungar (202-955-8558, [email protected]) or Matthew D. McGill (202-887-3680, [email protected]).  These partners, resident in our Washington office, have participated in virtually every recent patent case in the Supreme Court and in many of the leading cases in the Federal Circuit.

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