Supreme Court Reaffirms Clear and Convincing Standard for Proof of Patent Invalidity

A unanimous Supreme Court on June 9, 2011, held that patent invalidity must be proved with clear and convincing evidence. Concurring opinions were filed by Justices Breyer and Thomas. Chief Justice Roberts did not participate in this case. (Microsoft Corp. v. i4i Limited Partnership, U.S., No. 10-290, 6/9/2011).

Writing for the Court, Justice Sotomayor explained that the heightened standard for proving invalidity is rooted in the common law, was confirmed long ago by Justice Cardozo in RCA v. Radio Engineering Labs., Inc., 293 U.S. 1 (1934), and was codified by Congress in 35 U.S.C. §282 with no subsequent modification. Although only the presumption of validity is expressly recited in Section 282, according to the Court, that presumption “encompassed not only an allocation of the burden of proof but also an imposition of a heightened standard of proof.” Justice Sotomayor explained as follows:

“Under the general rule that a common-law term comes with its common-law meaning, we cannot conclude that Congress intended to ‘drop’ the heightened standard proof from the presumption simply because §282 fails to reiterate it expressly. 

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,’ of for ‘shifting both the burden of production and the burden of persuasion.”

On the specific question of applying such a high burden where there is art that was not before the PTO, the Court said such circumstances have no effect on the standard but may indicate that the new evidence may carry more weight than evidence previously considered by the PTO, citing favorably Judge Rich’s opinion in American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350 (Fed. Cir. 1984). Justice Sotomayor added that a jury instruction on the effect of such new evidence can and generally should be given when requested.

The Court also noted that both sides devoted much of their argument to various policy issues–does the PTO grant too many undeserving patents, is deference to the PTO unwarranted, and are juries abdicating their fact finder role in patent validity. Without addressing those issues, Justice Sotomayor pointed out that the Federal Circuit for nearly 30 years has sustained the heightened standard, and that Congress has addressed the problem of “bad patents” on many occasions without addressing this standard of proof. Since enactment of the 1952 Patent Act, Congress has allowed the Federal Circuit’s interpretation to stand, Justice Sotomayor wrote, adding “Any re-calibration of the standard of proof remains in its hands.”

Concurring Opinions

Justice Breyer’s concurring opinion begins with the statement “I join the Court’s opinion in full,” but his opinion emphasizes that this heightened standard applies only to issues of fact, not issues of law. He urged courts to make the effort to keep fact and law separate for these purposes. Justice Thomas also agreed that the heightened standard applies, but declined to follow the conclusion that this common law standard was codified in Section 282.