Supreme Court queries Microsoft on patent law

The U.S. Supreme Court today pressed lawyers representing Microsoft about changing existing patent law as the software giant argued to overturn lower court rulings that it infringed on patents held by i4i, a tiny Toronto company.

The case has become one of the most important in patent law in years. Microsoft is hoping to create a precedent that would make it harder for companies with patent claims to prove infringement. Several large technology companies, including Apple, Google, Facebook, and Cisco, have filed friend-of-the-court briefs supporting Microsoft's arguments. At the same time, i4i's case has drawn support from big pharmaceutical companies, venture capitalists, universities, and the U.S. government.

As the heart of the case is the degree to which companies accused of infringing have to prove that a patent is invalid. In the i4i case, the district court ruled that Microsoft had to provide "clear and convincing evidence" that i4i's patent--covering the way XML, or Extensible Markup Language, is used in Microsoft Word--is invalid. Microsoft wants the court to lower the standard, requiring defendants to offer only a "preponderance of the evidence" to invalidate a patent.

A jury ruled in 2009 that Microsoft infringed on i4i's patent, awarding i4i $200 million. Microsoft lost a subsequent appeal. In November, the Supreme Court agreed to hear the case.

Just as Microsoft lawyer Thomas Hungar began presenting its arguments, Justices Antonin Scalia, Ruth Bader Ginsberg, and Elena Kagen pressed him on the legal precedent in a 1934 case that seemed to mandate using a higher evidentiary standard.

"The language of that opinion is extremely broad," Kagan said, according to a transcript. "And if you read that opinion, no one would gather from that opinion the kinds of limits that you're suggesting on it.

Ginsburg, too, seemed to read the earlier ruling as requiring a higher standard of evidence than Microsoft proposes.

"An infringer who assails the validity of a patent...bears a heavy burden of persuasion and fails unless his evidence has more than a dubious preponderance," Ginsburg said

Hungar argued that subsequent case law "rejected the proposition that there is a heightened standard." Indeed, Hungar argued that requiring juries to consider such detail in complex patent litigation strains the bounds of logic.

"The fundamental problem is imposing this heightened standard on the jury that has no moorings in the statute and no moorings in common sense," Hungar argued.

For its case, i4i argued that Congress has long understood the case law that requires the higher evidentiary standard and has chosen to allow case law to dictate patent protection, something i4i's lawyer Seth Waxman called "active acquiescence."

"This is not a statute that Congress enacted and then forgot about," Waxman argued. Congress "has been very active in this field, it is well aware of the clear and convincing evidence standard, and it has done nothing whatsoever to change it, [or] any effort to consider making such a sweeping change in long-standing doctrine."

Waxman was pressed less than Hungar, with some questions from Justices Scalia, Ginsburg, and Sonia Sotomayor focused on jury instruction in the case.

The case was heard by eight justices, with Chief Justice John Roberts not taking part because he owns more than $100,000 worth of Microsoft stock. The court will likely rule on the matter by the end of June.