News

Microsoft Takes 'Patent Reform' Arguments to U.S. Supreme Court

• By Kurt Mackie
• April 18, 2011

Eight U.S. Supreme Court justices heard oral arguments from Microsoft on Monday, the latest turn of events in the company's long-running patent infringement dispute with Canada-based i4i LLP.

Microsoft's arguments relate to its court losses in an intellectual property case involving plaintiff i4i, which had sued Microsoft in 2007 over allegedly infringed patents in Microsoft Word. In August 2009, a Texas federal jury found Microsoft guilty of "willful infringement" of i4i's patent on custom XML technology, and ordered the company to pay i4i more than $290 million in damages.

The custom XML technology was found to have been used in older versions of Word. Microsoft has since removed the technology in U.S. markets, but hasn't paid the assigned penalty.

Microsoft's oral arguments about evidential standards in patent cases were heard by all justices on Monday except John Roberts, who recused himself.

Microsoft's Supreme Court appeal (PDF) could affect the penalties in the i4i case, perhaps leading to another trial to reconsider them. However, Microsoft's efforts before the Supreme Court go further. The company's attorneys are arguing that the "clear and convincing evidence" requirement to disprove a patent is too high of a legal standard when the U.S. Patent and Trademark Office lacked "prior art" evidence disproving the patent. Microsoft wants the burden of proof to be lowered to "preponderance of evidence" when disproving a patent.

This position was described on Monday in a Microsoft blog post by Brad Smith, Microsoft's senior vice president and general counsel, who was joined in that opinion by attorneys from Apple, Cisco and Facebook. Microsoft has amicus curiae support from a number of tech companies, as well as the Electronic Frontier Foundation.

On the other side, i4i has 22 friend-of-the-court briefs filed, including several by U.S. government agencies. Government attorneys are backing i4i's position that the burden-of-proof standard in patent cases should not be changed.

Microsoft's blog post claims that i4i was selling its technology before the U.S. Patent and Trademark Office considered it for a patent. Microsoft also claims that the evidence it needed in the i4i case was "discarded" by i4i, making it harder to disprove the patent.

i4i's Chairman Loudon Owen said that Microsoft's argument on the burden-of-proof standard in patent cases should be dismissed by the Supreme Court.

"In our view, Microsoft cannot overcome the prevailing law and sound policy of the clear-and-convincing standard based on its spin campaign that now seems to be focused on innuendo about i4i and an atrociously weak argument that weakening the patent system will encourage innovation," Owen said in a released statement. "We are confident we will continue to prevail."

Microsoft has taken its "patent reform" arguments to the U.S. Congress as well, and it has progressed halfway toward that end. Legislation backed by Microsoft called the America Invents Act was passed in the U.S. Senate in March; it's currently awaiting consideration at the U.S. House of Representatives. One of the changes sought by Microsoft is to replace the current "first to invent" patent rule with a "first to file" approach.