News

Microsoft Argues Legal Standard Too High in Patent Cases

• By Kurt Mackie
• September 30, 2010

Microsoft gained some unlikely allies in an i4i software patent case that the company has been losing.

Microsoft's "friends of the court," announced yesterday, include the Apache Software Foundation, the Computer & Communications Industry, the Electronic Frontier Foundation (EFF), and Public Knowledge. Those organizations joined Microsoft in arguing that the legal standards for disproving patents in court cases have been set too high.

Such a position seems rather unlikely for Microsoft. The company benefits from intellectual property protections in its software battles. Recent examples include Microsoft's legal settlements with HTC and Salesforce.com, although there's no public record indicating that those companies tried to disprove Microsoft's patents.

But those two cases are winning examples for Microsoft. This new alliance finds Microsoft on the losing end of a patents skirmish.

The case involves Microsoft's court loses over "custom XML" technology patented by Toronto-based i4i. The Canadian company was awarded over $290 million after an East Texas jury found Microsoft to have willfully infringed i4i's patent in versions of Microsoft Word. Microsoft has subsequently lost many appeals in this case, and it finally took its appeal to the U.S. Supreme Court on June 8.

In its Supreme Court appeal, Microsoft is now arguing that the standard of proof to disprove patent claims is too high. EFF explains that Microsoft just wants the standard of proof to be the same for both proving and disproving a patent in a court of law.

"In court, parties have to prove their case by some 'standard of proof'," the EFF explained in a blog post. "In almost all civil cases, the standard is 'preponderance of the evidence' -- meaning it is more likely than not that the facts are true. When the question is invalidating a patent, however, the U.S. Court of Appeals for the Federal Circuit decided that a defendant trying to prove a patent invalid must do so by a higher standard than normal civil cases, that of 'clear and convincing' evidence."

Microsoft, in its legal court case with i4i, had to disprove i4i's patent via clear and convincing evidence, and it apparently failed to do so. That standard of proof was just too high, according to an amici curiae brief (PDF download) filed by Microsoft and its new allies.

The alliance seems peculiar for a couple of reasons. First, Microsoft typically relies on the legal system to uphold its patents, which protects the company's profits. So, lowering the burden of proof for patents might not seem consistent with Microsoft's corporate charter objectives. Second, Microsoft won't always align with public interest groups, especially if such alliances threaten its bottom line.

For example, the Apache Software Foundation is an advocate for open source technologies, including the free Linux operating system, which is a potential Windows competitor. However, Microsoft has lately established a series of alliances with the Foundation, including joining and funding it in 2008. It has also worked to make Windows more interoperable with Linux-based systems.

As for the EFF and Public Knowledge, both are public advocacy organizations. The EFF defends public speech and privacy issues, while Public Knowledge lobbies Washington on technology intellectual property issues.

The Computer and Communications Industry is less of a surprise. It advocates on behalf of major software firms, having spent 1.4 million last year on its lobbying efforts.

Certainly, Microsoft isn't going all of the way and arguing against software patents. The Supreme Court recently issued its decision on the Bilski v. Kappos case, which some organizations, such as the Free Software Foundation, had hoped would declare all software patents invalid. Earlier this week, open source software vendor Red Hat weighed in on the Bilski decision with the idea that the vagueness of software patents is just discouraging innovation in the software industry.

"Software is essentially nothing more than a set of mathematical algorithms expressed in a particular programming or machine language," Red Hat explained in a released statement. "As the Bilski Court recognized, mathematical algorithms, by themselves, are abstract ideas that are not patentable."

It's not clear that Microsoft would go so far as Red Hat, but the software industry likely wants far more clarity from the courts on what is, or is not, a patentable invention -- if only to avoid future legal costs.