Microsoft V. I4i and Patent Invalidation
The United States Supreme Court recently agreed to hear a case that may profoundly alter the patent landscape.
In the past, if a party wanted to challenge the validity of a patent, it would have to overcome a presumption that the patent was valid because it was examined by the United States Patent and Trademark Office (USPTO).
As a result, the party must present "clear and convincing" evidence that the patent was invalid, a very high standard.
The Supreme Court agreed to hear Microsoft v.
i4i, where Microsoft argues that when presenting evidence that a patent is invalid, a lower evidentiary standard should be used for evidence that was not considered by the USPTO.
Because the Court took the case, it is quite likely it will change that evidentiary standard, and the dynamics of patent litigation.
Patent Examiners do an excellent job determining the validity of patent applications.
However, an Examiner only has a very limited time to search for evidence, usually referred to as prior art, that a patent is invalid.
As a result, some patents are issued that are probably invalid because they were anticipated by prior inventions or obvious combinations of other prior inventions.
The prior art that could invalidate a patent is simply too vast to be easily searched.
For example, I was once involved in a purchase negotiation where the other side boasted that they knew their patents could not be invalidated because they had spent $100,000 looking for evidence of invalidity, and could find none.
However, three days later, I serendipitously watched a movie that showed their inventive principle and that had been made before their invention, but had not been found in their very costly search.
Currently, this type of evidence still must meet a very high evidentiary standard.
However, if the Supreme Court lowers the standard, patents will be much more easily invalidated.
As a result, large patent holders are likely to be more willing to license their intellectual property for reasonable terms, rather than risk a court challenge.
In addition, litigation over the most valuable patents is likely to increase, as competitors so a new opportunity to eliminate a competitive barrier.
Of course, no one knows how the Court will rule.
However, because a change is likely, businesses would do well to carefully examine the dangers and opportunities that a change will create.
In the past, if a party wanted to challenge the validity of a patent, it would have to overcome a presumption that the patent was valid because it was examined by the United States Patent and Trademark Office (USPTO).
As a result, the party must present "clear and convincing" evidence that the patent was invalid, a very high standard.
The Supreme Court agreed to hear Microsoft v.
i4i, where Microsoft argues that when presenting evidence that a patent is invalid, a lower evidentiary standard should be used for evidence that was not considered by the USPTO.
Because the Court took the case, it is quite likely it will change that evidentiary standard, and the dynamics of patent litigation.
Patent Examiners do an excellent job determining the validity of patent applications.
However, an Examiner only has a very limited time to search for evidence, usually referred to as prior art, that a patent is invalid.
As a result, some patents are issued that are probably invalid because they were anticipated by prior inventions or obvious combinations of other prior inventions.
The prior art that could invalidate a patent is simply too vast to be easily searched.
For example, I was once involved in a purchase negotiation where the other side boasted that they knew their patents could not be invalidated because they had spent $100,000 looking for evidence of invalidity, and could find none.
However, three days later, I serendipitously watched a movie that showed their inventive principle and that had been made before their invention, but had not been found in their very costly search.
Currently, this type of evidence still must meet a very high evidentiary standard.
However, if the Supreme Court lowers the standard, patents will be much more easily invalidated.
As a result, large patent holders are likely to be more willing to license their intellectual property for reasonable terms, rather than risk a court challenge.
In addition, litigation over the most valuable patents is likely to increase, as competitors so a new opportunity to eliminate a competitive barrier.
Of course, no one knows how the Court will rule.
However, because a change is likely, businesses would do well to carefully examine the dangers and opportunities that a change will create.
