The briefing in Microsoft v. i4i (Supreme Court 2011), has begun. As discussed at length previously, Microsoft has sought Supreme Court review of the following issue:
Whether the court of appeals erred in holding that Microsoft’s invalidity defense (which rested on prior art never considered by the USPTO) must be proved by clear and convincing evidence.
Interestingly, Microsoft has already tested the preponderance of the evidence standard in ex parte patent reexamination for certain prior art at issue in the i4i dispute. To date, Microsoft has failed in both attempts. First, in 90/010,347 all claims were confirmed and exited patent reexamination in July of 2010. Subsequently, a second request (90/011,198), was outright denied by the USPTO.
Microsoft, has now submitted it’s brief to the Supreme Court, and several amicus briefs have been filed taking various positions on the issue.
In their opening brief to the SCOTUS, Microsoft argues that the clear and convincing standard is essentially a creature of the CAFC, based upon the CAFC’s flawed reading of 35 U.S.C. § 282. In closing, Microsoft notes that the USPTO itself uses a preponderance of the evidence standard in patent reexamination for prior art never before considered by the agency.
So, why does the USPTO use a different standard?
Microsoft’s brief, as well as several of the supporting amicus briefs, cite to In re Etter,756 F.2d 852 (Fed. Cir. 1985) for the proposition that there is no presumption of validity at the USPTO in patent reexamination. Based upon this, the briefs conclude that if this lower standard is good enough for the USPTO, then why not the courts?
Absent in any of these briefs is the explanation in Etter that explains the rationale behind the difference, namely:
In litigation, where a patentee cannot amend his claims, or add new claims, the presumption, and the rule of claim construction (claims should be construed to save them if possible), have important roles to play. In reexamination, where claims can be amended and new claims added, and where no litigating adversary is present, those rules and their rationale simply vanish. (emphasis added) Etter at 859.
So, if Congress has provided for the very relief Microsoft is requesting via patent reexamination, how is the intent of Congress not crystal clear in this respect? Can the SCOTUS provide the seemingly legislative remedy sought by Microsoft?
Perhaps anticipating the argument that the patent reexamination statutes reinforce the CAFC’s reading of § 282, and demonstrate a Congressional intent to provide an alternative forum for prior art not previously considered, several amicus briefs go beyond Microsoft’s passing discussion of patent reexamination.
In one supporting brief, it is argued that a final determination in a litigation under 35. U.S.C. § 317(b) would estopp the same litigant from invalidating a patent in inter partes patent reexamination. The argument is that such estoppel results in a litigant being exclusively held to the clear and convincing standard, despite the existence of the lower patent reexamination standard. It is argued that such a result is inconsistent with the legislative intent to “correct governmental mistakes,” that is, unless the standards are made the same in both proceedings.
This is a very strange take on inter partes estoppel.
The very point of the estoppel provisions is to thwart the conduct suggested in the brief, namely, serial attacks on a patent in different forums by a same party (i.e., harassment). Third parties should not be “resorting” to inter partes patent reexamination after losing a litigation, but instead, seeking such relief in the first instance. Further, ex parte patent reexamination is unaffected by § 317(b).
The ultimate decision will likely focus on how the CAFC divined the clear and convincing standard from § 282 in the first instance. Still, the creation of the inter partes patent reexamination statutes, as well as the pending reform legislation would seem to provide ample fodder for arguing that Congress is well aware of the CAFC’s jurisprudence in this regard.
For another interesting take on the interplay of patent reexamination to the § 282 dispute, note the example jury instructions in the IBM brief.
This case is going to be very very interesting.