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Clearly Convinced of the Clear and Convincing Standard

September 10, 2010

Recently, Microsoft petitioned for a writ of certiorai to the Supreme Court asking The Court to eliminate the “clear and convincing” evidentiary standard required to prove a patent invalid in court. Microsoft instead favors the preponderance standard that is common in most civil cases. Microsoft Corp. v. i4i Limited Partnership.

35 U.S.C. §282 requires that there be a presumption of validity given to patents, and places the burden of proving invalidity on the challenging party. However, the statute is silent on the evidentiary standard that the challenging party must pass. The Federal Circuit has held that the standard is “clear and convincing evidence,” but this seems to be based solely on policy considerations. This policy decision balances the importance of agency deference -the PTO examiners being respected as experts- with the public policy goal of preventing enforcement of invalid patents.

Upon balancing these policies, the clear and convincing standard is the proper standard because deference should be given, both to the PTO, and to the rigorous examination processes patents go through before issuance. The current standard helps keep decision of validity in the hands of the experts (PTO), and not uniformed juries and judges, while at the same time allowing factual issues (on sale date, etc.) to be fully fleshed out in a court.

In many cases evidence of invalidity is based on questionable evidence, such as oral testimony from a witness relating to actions that happened five, ten or even twenty years before. The clear and convincing standard helps prevent invalidity on this ground. In fact, the clear and convincing standard seems to have originally developed to combat this type of evidence in particular, and over time has been extended as a “bright-line” rule that is applied to all evidence of invalidity. The bright line rule is valuable in that it prevents the always difficult question of where to draw the line, and further, it provides predictability, allowing confident business decisions to be made in reliance on issued patents.

Finally, there is a tradition of deference to agencies by the courts in that courts typically are wary of overturning agency decisions. This deference can be exercised in different ways. For example, under the APA, agency decisions are reviewed by the arbitrary and capricious review standard. A standard of review is different from the evidentiary standard applied in patent invalidity cases, true, but both have the similar effect of deferring to agency decisions.

Those opposing a clear and convincing standard for proving invalidity point to the public policy against enforcing invalid patents, which the elevated clear and convincing standard may allow in some situations. An elevated standard suggests that if some evidence exists to show a patent is invalid, the patent might still be held valid. This result would be against public policy, and is a legitimate concern.

Despite the concern of allowing enforcement of invalid patents, the importance of agency deference, respect for the patent examining process, and prevention of a finding of invalidity based on questionable evidence, all override this concern, and favor a clear and convincing standard.

It has been said that it is better to let a thousand guilty men free than to condemn an innocent man. While certainly invalidating patents does not rise to the level of determining guilt or innocence, a similar policy applies: It is better to defer to the expertise of the PTO and enforce patents that are most likely valid, than to invalidate one valid patent on the basis of evidence that may not be reliable.

For more discussion on this issue, the comments on this Patently-O post are very helpful and raise multiple interesting points.

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2 Comments leave one →
  1. September 13, 2010 5:04 pm

    While I can understand that the price tag on the judgment might make Microsoft want to fight the recent ruling against it, I think the megacorp should just man up and end its quixotic bid for some sort of reversal. Maybe Microsoft’s management misjudged the weight that the company’s famous name would carry. Large corporations that infringe others’ patent rights must pay for their transgressions in patent enforcement actions, just like other infringers.

    • September 21, 2010 2:24 pm

      I agree entirely. Big corps can and should lose in an infringement suit just like a little guy. MS raises an interesting question, but in the end, it should fail. Thanks for the comment!

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