Monday, April 18, 2011

Microsoft v. i4i @ Supreme Court: Apple's position

The Supreme Court will hear oral arguments today in Microsoft Corporation v. i4i Limited Partnership, et al. The case is an appeal of a March 10, 2010 CAFC decision holding that Microsoft was required to prove its defense of invalidity under 35 U.S.C. § 102(b) by "clear and convincing evidence," even though the prior art on which the invalidity defense rested was not considered by the USPTO prior to the issuance of the asserted patent.  Cert. was granted November 29, 2010.

The question presented is:

Whether the court of appeals erred in holding that Microsoft's invalidity defense must be proved by clear and convincing evidence.

Apple and Intel, as parties with large patent portfolios, but also as frequent targets of NPE patent litigation, argued a middle-of-the-road position in their joint amicus brief:

The U.S. patent system is tilting out of balance. Like many other corporations, Apple and Intel encounter enormous costs defending against poor-quality patents. Non-practicing entities—entities with no business other than acquiring and asserting patents—frequently use the uncertainties of civil litigation as a primary bargaining chip. Yet legitimate innovations must continue to be protected by strong patents. A proper balance between upholding valid patents and invalidating obvious or anticipated patents is essential to the businesses of Apple and Intel and to the functioning of the patent system as a whole.

Specifically, Apple and Intel argue for providing deference to the USPTO when prior art was explicitly considered, but allowing a lower standard for proving a defense of invalidity in litigation when the art was not considered:

When the invalidity challenge is based on prior art that was considered by the Patent Office, there are strong arguments that a challenger of a patent should be required to overcome the presumption of validity by clear and convincing evidence. But several of these arguments conversely weigh in favor of a preponderance of the evidence standard when the prior art was not considered by the Patent Office. A different evidentiary standard thus may well be appropriate for each situation.

The brief on behalf of Apple and Intel was filed February 2, 2011 by Deanne E. Maynard, Seth M. Galanter, and Marc A. Hearron of  Morrison & Foerster LLP.

More to follow once oral arguments have been published.

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