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Microsoft Heads Back To The U.S. Supreme Court
- 11/30/2010

In recent years, Microsoft has been embroiled in a patent infringement lawsuit with a Canadian firm, i4i.  During the trial, the jury found Microsoft liable for willful patent infringement, and Microsoft was fined $200 million in damages.  On November 29, 2010, the United States Supreme Court agreed to hear Microsoft’s appeal, and a decision is expected next year.  The Supreme Court’s decision may have far reaching consequences for patentees because it may revise the burden of proof standard used to invalidate patents.

The patent held by i4i is directed to flexible and efficient document storage and manipulation, including by separating encoding conventions from the content of a document.  This is applicable to documents written in the extensible mark-up language (“XML”), which is popular in Internet related applications.  In the lawsuit, i4i alleged that versions of Microsoft’s popular word processing software, Microsoft Word, include options for customizing XML in Word documents, which infringes the patent.

Microsoft has availed itself of virtually every legal channel in an attempt to set aside the judgment or other otherwise invalidate the i4i patent.  For example, in an effort to have the Patent Office declare the patent invalid, Microsoft filed a patent reexamination in the Patent Office.  In that procedure, the Patent Office upheld the validity of the patent.  Microsoft also moved to set aside the judgment as a matter of law, which was denied by the district court.  Microsoft also appealed to the Court of Appeals for the Federal Circuit, and lost.  It also filed a second request for reexamination in the Patent Office, but was denied.

Microsoft has now appealed to the U.S. Supreme Court and is challenging the legal standard for determining whether a patent is invalid.  The crux of Microsoft’s argument is that the standard for determining whether a patent is invalid, which was applied by the jury in this case, is set too high.  In particular, Microsoft is asking the Court to lower the standard from “clear and convincing evidence” to a “preponderance of the evidence,” which is significantly less difficult to meet.

If the Supreme Court modifies the standard, the decision may have far reaching effects for patentees.  Ostrolenk Faber LLP will be monitoring this case closely it works its way to the Supreme Court and will provide updates as important developments occur.