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A Clear and Convincing Decision: Microsoft v. i4i LP

Earlier this month, the United States Supreme Court issued its long-awaited ruling in the seminal case of Microsoft v. i4i LP.  The case has been the subject of considerable attention and commentary since 2007 when i4i sued Microsoft alleging that Microsoft’s ubiquitous MS Word software infringed its US Patent No. 5,787,449.   In September 2009, an Eastern District of Texas trial court determined that Microsoft infringed the i4i patent and awarded i4i damages in the amount of $290,000,000, while enjoining Microsoft from selling certain versions of Word.

Microsoft appealed, challenging the long-standing proposition that a party seeking to establish patent invalidity must satisfy a “clear and convincing” burden of proof.  By granting cert and entertaining the case, the Supreme Court at least implicitly suggested that it would consider Microsoft’s argument that a more lenient “preponderance of the evidence” standard was appropriate—particularly in situations where the United States Patent and Trademark Office failed to consider relevant evidence before issuing the patent. The blogosphere was filled with articles celebrating or vilifying the potential outcome of the case.

After all of this buildup, however, the outcome of the case turned out to be relatively anticlimactic.  In an 8-0 written decision affirming the trial court’s ruling, the Court noted that the “clear and convincing” standard of evidence was effectively established in 1952 when the newly enacted Patent Act declared that “patents are presumed valid.”  The Patent Act itself represented a codification of long-standing common law providing that a party challenging a patent must overcome a “heavy burden of persuasion.”  Nonetheless, several discussion points are worth noting:

  • The Court provided that if relevant prior art was not disclosed to the PTO and/or the PTO did not have all “relevant material facts,” a party challenging the validity of a patent should “most often receive” a jury instruction related to the art that was not considered.
  • Here, the prior art in question was a previous version of i4i’s software which allegedly was offered for sale more than 1 year prior to the filing of i4i’s patent application before it was destroyed.  Since the PTO did not consider this alleged earlier version of the software, information related to the software was of critical importance to both parties ability to meet or refute the “clear and convincing” standard of proof.

First Pass Review Importance

From my perspective, the i4i decision underscores the importance of having a highly skilled first pass review partner who grasps the intricacies of a given matter and can effectively and quickly elevate critical information to counsel for review.  In addition to i4i’s counsel identification of critical information related to the alleged prior software offering as part of their due diligence and infringement/invalidity contention exchanges, it is also likely that critical documents related to this critically ultimate issue were contained within the general document collection and were first identified or flagged by a first pass document review team.

While trial attorneys were rightfully focused on the implications of legal precedent and the burden of proof, you can’t beat a good set of facts – which a proven review process can uncover.