The Federal Circuit wins again! Within a space of two weeks, the Court has affirmed all three of this term’s patent cases from the Federal Circuit. The decision on Thursday in No. 10-290, Microsoft Corp. v. i4i Limited Partnership, was by far the most significant. [Disclosure: Goldstein, Howe & Russell, P.C., which sponsors this blog, filed an amicus brief in support of i4i, but the author of this post was not involved in the case.]
The case came to the Court presenting a hot topic from contemporary legal scholarship: why should courts defer to the Patent and Trademark Office (PTO), requiring “clear and convincing evidence†to overturn a patent based on prior art that the PTO never considered? But in the course of briefing, Microsoft’s argument broadened so much that the case now involves the question why deference requires the clear and convincing standard even for issues that the PTO did consider.
The facts were also compelling, presenting just the kind of dispute that makes those who worry about overly broad patents pull out their hair: a nine-figure verdict, coupled with an injunction against the sale of Microsoft Word, based on a patent that applies to a functionality that ordinary users of Microsoft products have never noticed and could not understand if it were pointed out to them.
Justice Sotomayor’s opinion for the Court sidestepped the policy questions that have dominated recent opinions in cases like eBay, KSR, and Bilski. Instead, it relied almost entirely on precedent. The Court readily acknowledged that the statute establishes no particular standard of proof, but it concluded that Cardozo’s 1934 opinion in the RCA case adopted a clear-and-convincing standard, and that the Patent Act’s enactment in 1952 should be understood to incorporate that standard implicitly.
Although Microsoft presented a powerful argument in the briefing that the Court’s old cases involved limited factual circumstances not relevant in much of the modern context, the Court would have none of it. It explained that even with a “squint,†the Court could discern no such limitation in the language of the prior opinions. Repeatedly quoting Cardozo’s broad turns of phrase, the Court proceeded from the premise that the doctrine was clear in 1952 (at least at the Supreme Court level). With respect to Microsoft’s discussion of the long line of court of appeals cases and district court cases that recognized a lower standard before 1952, the Court’s perspective, implicitly, was that Congress would be assumed to have read the Court’s cases, but not those of the lower courts.
The Court offered a nice summary of the policy arguments on the two sides of the case, but it firmly abjured any willingness to accord those relevance in the decision: the contrast to the grand style of the policy-laden discourse in eBay and Bilski could not be more obvious. To the i4i Court, Congress’s frequent attention to patent law in recent decades strongly suggested that the Court should not step in to reject the Federal Circuit’s settled rule. This part of the opinion was particularly remarkable not only for the stylistic contrast to the Court’s pre-2011 patent cases, but also because of the Court’s frequent suggestions that little about the proper meaning of a statute can be gleaned from Congress’s failure to amend it.
As we near the end of the Term, I see the three patent cases of the last two weeks as marking the end of the Court’s willingness to let concerns about excessive patenting drive rejection of long-settled rules of patent law. On the merits of the briefing, Microsoft did a pretty good job of establishing that the Federal Circuit’s rule here is out of line with normal doctrinal standards for setting standards of proof. To the Court that decided eBay, a similar demonstration, buttressed by policy concerns about granting excessive power to patentees, motivated a forceful reversal of the Federal Circuit’s decision. Here, it did not garner a single vote. Similarly, in KSR, the Court noted that the requirement of clear and convincing evidence made little sense in cases involving evidence that the PTO never saw; here, the Court granted that point but not a single Justice voted to change the law to require the result that seemed so sensible at the time of KSR.
All in all, a great year for the Federal Circuit.
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