Opinion · Supreme Court of the United States
Microsoft Corp. v. i4i Ltd. Partnership
131 S. Ct. 2238
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 2011-06-09
- Topic
- general
recognizing that it is “unusual to treat a presumption as alone establishing the governing standard of proof’ | recognizing that it is “unusual to treat a presumption as alone establishing 24 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION the governing standard of proof” | holding that patent invalidity defense under 35 U.S.C. § 282 must be “proved by clear and convincing evidence.” | holding that an invalidity defense must be proved by clear and convincing evidence | holding that an invalidity defense must be proved by clear and convincing evidence | holding that the presumption of validity incorporates a heightened clear-and-convincing 14 evidence standard | holding that an invalidity defense must be proved by clear and convincing evidence | recognizing that a patent may be invalidated only through “clear and convincing” evidence | holding that an invalidity defense must be proved by clear and convincing evidence | noting that “if the PTO did not have all material facts before it, its considered judgment may lose significant force” | holding that invalidity must be proved by clear and convincing evidence | holding that invalidity must be proved by clear and convincing evidence | holding Congress chose the “clear and convincing” standard of proof by stating in § 282 that a patent is “presumed valid” | recognizing that “basic principles of statutory construction require us to assume that Congress meant to incorporate ‘the cluster of ideas’ attached to the common-law term it adopted” (quoting Beck v. Prupis, capacity. Reply at 4; see 28 U.S.C. § 1365(a | noting that the “burden of proof never shifts to the patentee to prove validity” (citation omitted) | stating that “new evidence supporting an invalidity defense may ‘carry more weight’ in an infringement action than evidence previously considered by the PTO” | reaffirming that the clear and convincing evidence standard applies in all cases involving arguments of invalidity | explaining that preponderance of the evidence is too "dubious" a basis to deem a patent invalid and therefore "clear and convincing" is the proper standard | noting that the party challenging the patent bears the burden of proving invalidity by clear and convincing evidence | confirming that an invalidity defense must meet the clear-and-convincing evidence standard of proof | explaining that Section 2 of the FAA “preserves generally applicable contract defenses” | explaining that Section 2 of the FAA “preserves generally applicable contract defenses” | indicating that although the Patent and Trademark Office’s (“PTO”) failure to consider a specific prior art reference is relevant to the obviousness determination, there is always a presumption of validity that can only be overcome by clear and convincing evidence | relying on the common law to determine the standard of proof required to show a patent’s invalidity | declining to rely on the surplusage canon because “no interpretation” of the statute “avoids excess language” | declining to rely on the surplusage canon because “no interpretation” of the statute “avoids excess language” | stating claims not limited to embodiments in specification unless “clear intention to limit the claim’s scope” | finding a pre-verdict JMOL on anticipation insufficient to preserve the right to a post-verdict JMOL on a different theory (obviousness) or different prior art | declining to decide statute’s meaning based on redundancy where neither party’s interpretation “g[ave] effect to every word” | affirming “clear and convincing evidence” as the standard of proof by which the party with the burden of persuasion must convince the factfinder of patent invalidity | “Nothing in § 282’s text suggests that Congress meant . . . to enact a standard of proof that would rise and fall with the facts of each case.” | refusing to consider argument that the district court erred by failing to give an instruction when the appellant “failed to request an instruction along these lines from”
Citator
- Cited by
- 411 opinions
Respondents (collectively, i4i) hold the patent at issue, which claims an improved method for editing computer documents. After i4i sued petitioner Microsoft Corp. for willful infringement of that patent, Microsoft counterclaimed and sought a declaration that the patent was invalid under § 102(b)'s on-sale bar, which precludes patent protection for any "invention" that was "on sale in this country" more than one year prior to the filing of a patent application. The parties agreed that, more than a year before filing its patent application, i4i had sold a software program known as S4 in the United States, but they disagreed over whether that software embodied the invention claimed in i4i's patent. Relying on the undisputed fact that the S4 software was never presented to the Patent and Trademark Office (PTO) during its examination of the patent application, Microsoft objected to i4i's proposed jury instruction that the invalidity defense must be proved by clear and convincing evidence. The District Court nevertheless gave that instruction, rejecting Microsoft's alternative instruction proposing a preponderance of the evidence standard. The jury found that Microsoft willfully infringed the i4i patent and had failed to prove the patent's invalidity. The Federal Circuit affirmed, relying on its settled interpretation of § 282.Page 2Held:Section 282 requires an invalidity defense to be proved by clear and convincing evidence. Pp. 5-20.
(a) The Court rejects Microsoft's contention that a defendant need only persuade the jury of a patent invalidity defense by a preponderance of the evidence. Where Congress has prescribed the governing standard of proof, its choice generally controls.Steadmanv.SEC,450 U. S. 91,95. Congress has made such a choice here. While § 282 includes no express articulation of the standard of proof, where Congress uses a common-law term in a statute, the Court assumes the "term . . . comes with a common law meaning."Safeco Ins. Co. of Americav.Burr,551 U. S. 47,58. Here, by stating that a patent is "presumed valid," § 282, Congress used a term with a settled common-law meaning.Radio Corp. of Americav.RadioEngineering Laboratories, Inc.,293 U. S. 1(RCA), is authoritative. There, tracing nearly a century of case law, the Court stated,inter alia, that "there is a presumption of [patent] validity [that is] not to be overthrown except by clear and cogent evidence,"id., at 2. Microsoft's contention that the Court's pre-Act precedents applied a clear-and-convincing standard only in two limited circumstances is unavailing, given the absence of those qualifications from the Court's cases. Also unpersuasive is Microsoft's argument that the Federal Circuit's interpretation must fail because it renders superfluous § 282's additional statement that "[t]he burden of establishing invalidity . . . shall rest on the party asserting" it. The canon against superfluity assists only where a competing interpretation gives effect "`to every clause and word of a statute.'"Duncanv.Walker,533 U. S. 167,174. Here, no interpretation of § 282 avoids excess language because, under either of Microsoft's alternative theories — that the presumption only allocates the burden of production or that it shifts both the burdens of production and persuasion — the presumption itself would be unnecessary in light of § 282's additional statement as to the challenger's burden. Pp. 5-13.
(b) Also rejected is Microsoft's argument that a preponderance standard must at least apply where the evidence before the factfinder was not before the PTO during the examination process. It is true enough that, in these circumstances, "the rationale underlying the presumption — that the PTO, in its expertise, has approved the claim — seems much diminished,"KSR Int'l Co.v.Teleflex Inc.,550 U. S. 398,426, though other rationales may still animate the presumption. But the question remains whether Congress has specified the applicable standard of proof. As established here today, Congress did just that by codifying the common-law presumption of patent validity and, implicitly, the heightened standard of proof attached to it. The Court's pre-Act cases never adopted or endorsed Microsoft's fluctuatingPage 3standard of proof. And they do not indicate, even in dicta, that anything less than a clear-and-convincing standard would ever apply to an invalidity defense. In fact, the Court indicated to the contrary. SeeRCA,293 U. S., at 8. Finally, the Court often applied the heightened standard of proof without mentioning whether the relevant prior-art evidence had been before the PTO examiner, in circumstances strongly suggesting it had not. See,e.g.,Smithv.Hall,301 U. S. 216,227,233. Nothing in § 282's text suggests that Congress meant to depart from that understanding to enact a standard of proof that would rise and fall with the facts of each case. Indeed, had Congress intended to drop the heightened standard of proof where the evidence before the jury varied from that before the PTO, it presumably would have said so expressly. Those pre-Act cases where various Courts of Appeals observed that the presumption is weakened or dissipated where the evidence was never considered by the PTO should be read to reflect the commonsense principle that if the PTO did not have all material facts before it, its considered judgment may lose significant force. Cf.KSR,550 U. S., at 427. Consistent with that principle, a jury may be instructed to evaluate whether the evidence before it is materially new, and if so, to consider that fact when determining whether an invalidity defense has been proved by clear and convincing evidence. Pp. 14-18.
(c) This Court is in no position to judge the comparative force of the parties' policy arguments as to the wisdom of the clear-and-convincing-evidence standard that Congress adopted. Congress specified the applicable standard of proof in 1952 when it codified the common-law presumption of patent validity. During the nearly 30 years that the Federal Circuit has interpreted § 282 as the Court does today, Congress has often amended § 282 and other patent laws, but apparently has never considered any proposal to lower the standard of proof. Indeed, Congress has left the Federal Circuit's interpretation in place despite ongoing criticism, both from within the Federal Government and without. Accordingly, any recalibration of the standard of proof remains in Congress' hands. Pp. 18-20.598 F. 3d 831, affirmed.
SOTOMAYOR, J., delivered the opinion of the Court, in which SCALIA, KENNEDY, GINSBURG, BREYER, ALITO, and KAGAN, JJ., joined. BREYER, J., filed a concurring opinion, in which SCALIA and ALITO, JJ., joined. THOMAS, J., filed an opinion concurring in the judgment. ROBERTS, C. J., took no part in the consideration or decision of the case.Page 1
Many claims of invalidity rest, however, not upon factual disputes, but upon how the law applies to facts as given. Do the given facts show that the product was previously "in public use"?35 U.S.C. § 102(b). Do they show that the invention was "nove[l]" and that it was "non-obvious"? §§ 102, 103. Do they show that the patent applicant described his claims properly? § 112. Where the ultimate question of patent validity turns on the correct answer to legal questions — what these subsidiary legal standards mean or how they apply to the facts as given — today's strict standard of proof has no application. See,e.g., Grahamv.John Deere Co. ofKansas City,383 U. S. 1,17(1966);MinnesotaMining Mfg. Co.v.Chemque, Inc.,Page 2303 F. 3d 1294,1301(CA Fed. 2002);Transocean Offshore DeepwaterDrilling, Inc.v.Maersk Contractors USA, Inc.,617 F. 3d 1296,1305(CA Fed. 2010); cf.Markmanv.Westview Instruments, Inc.,517 U. S. 370(1996).
Courts can help to keep the application of today's "clear and convincing" standard within its proper legal bounds by separating factual and legal aspects of an invalidity claim, say, by using instructions based on case-specific circumstances that help the jury make the distinction or by using interrogatories and special verdicts to make clear which specific factual findings underlie the jury's conclusions. See Fed. Rules Civ. Proc.49and 51. By isolating the facts (determined with help of the "clear and convincing" standard), courts can thereby assure the proper interpretation or application of the correct legal standard (without use of the "clear and convincing" standard). By preventing the "clear and convincing" standard from roaming outside its fact-related reservation, courts can increase the likelihood that discoveries or inventions will not receive legal protection where none is due.Page 1
Nevertheless, I reach the same outcome as the Court. Because § 282 is silent as to the standard of proof, it did not alter the common-law rule. Seeante, at 6 ("[§ 282] includes no express articulation of the standard of proof"). For that reason, I agree with the Court that the heightened standard of proof set forth inRadio Corp. of Americav.RadioEngineering Laboratories, Inc.,293 U. S. 1(1934) — which has never been overruled by this Court or modified by Congress — applies.Page 1
- As originally enacted in 1952, the first paragraph of § 282 read: "A patent shall be presumed valid. The burden of establishing invalidity of a patent shall rest on a party asserting it."66 Stat. 812. Congress has since amended § 282, inserting two sentences not relevant here and modifying the language of the second sentence to that in the text. ↩
- Although not relevant here, the Court of Appeals modified the effective date of the permanent injunction that the District Court entered in favor of i4i.598 F. 3d 831,863-864(CA Fed. 2010). ↩
- i4i contends that Microsoft forfeited the first argument by failing to raise it until its merits brief in this Court. The argument, however, is within the scope of the question presented, and because we reject it on its merits, we need not decide whether it has been preserved. ↩
- A preliminary word on terminology is in order. As we have said, "[t]he term `burden of proof' is one of the `the slipperiest members of the family of legal terms.'"Schafferv.Weast,546 U. S. 49,56(2005) (quoting 2 J. Strong, McCormick on Evidence § 342, p. 433 (5th ed. 1999) (alteration omitted)). Historically, the term has encompassed two separate burdens: the "burden of persuasion" (specifying which party loses if the evidence is balanced), as well as the "burden of production" (specifying which party must come forward with evidence at various stages in the litigation).Ibid.Adding more confusion, the term "burden of proof" has occasionally been used as a synonym for "standard of proof."E.g.,Groganv.Garner,498 U. S. 279,286(1991).
Here we use "burden of proof" interchangeably with "burden of persuasion" to identify the party who must persuade the jury in its favor to prevail. We use the term "standard of proof" to refer to the degree of certainty by which the factfinder must be persuaded of a factual conclusion to find in favor of the party bearing the burden of persuasion. SeeAddingtonv.Texas,441 U. S. 418,423(1979). In other words, the term "standard of proof specifies how difficult it will be for the party bearing the burden of persuasion to convince the jury of the facts in its favor. Various standards of proof are familiar — beyond a reasonable doubt, by clear and convincing evidence, and by a preponderance of the evidence. See generally 21B C. Wright K. Graham, Federal Practice Procedure § 5122, pp. 405-411 (2d ed. 2005) (hereinafter Fed. Practice) (describing these and other standards of proof). ↩ - Among other cases, Justice Cardozo citedCantrellv.Wallick,117 U. S. 689,695-696(1886) ("Not only is the burden of proof to make good this defence upon the party setting it up, but . . . every reasonable doubt should be resolved against him" (internal quotation marks omitted));Coffinv.Ogden, 18 Wall. 120, 124 (1874) ("The burden of proof rests upon [the defendant], and every reasonable doubt should be resolved against him");The Barbed Wire Patent,143 U. S. 275,285(1892) ("[This] principle has been repeatedly acted upon in the different circuits"); andWashburnv.Gould, 29 F. Cas. 312, 320 (No. 17,214) (CC Mass. 1844) (charging jury that "[i]f it should so happen, that your minds are led to a reasonable doubt on the question, inasmuch as it is incumbent on the defendant to satisfy you beyond that doubt, you will find for the plaintiff"). ↩
- Microsoft objects that this reading of § 282 "conflicts with the usual understanding of presumptions." Reply Brief for Petitioner 4. In support, it relies on the "understanding" reflected in Federal Rule of Evidence301, which explains the ordinary effect of a presumption in federal civil actions. That Rule, however, postdates the 1952 Act by nearly 30 years, and it is not dispositive of how Congress in 1952 understood presumptions generally, much less the presumption of patent validity. In any event, the word "presumption" has often been used when another term might be more accurate. See Thayer 335 ("Often . . . maxims and ground principles get expressed in this form of a presumption perversely and inaccurately"). And, to the extent Congress used the words "presumed valid" in an imprecise way, we cannot fault it for following our lead. ↩
- In a similar vein, Microsoft insists that there simply was no settled presumption of validity for Congress to codify in 1952. Microsoft points to a handful of district court decisions, which "question[ed] whether any presumption of validity was warranted," or which "required the patentee to prove the validity of his patent by a preponderance of the evidence." Brief for Petitioner 24 (emphasis deleted; brackets and internal quotation marks omitted); see,e.g., Ginsbergv.Railway Express Agency,Inc.,72 F. Supp. 43,44(SDNY 1947) (stating, in dicta, that "[i]t may now well be said that no presumption whatever arises from the grant of patent"); see alsopost, at 1 (THOMAS, J., concurring in judgment).RCAmakes clear, however, that the presumption of patent validity had an established meaning traceable to the mid-19th century,293 U. S. 1,7-8(1934); that some lower courts doubted its wisdom or even pretended it did not exist is of no moment. Microsoft may be correct that Congress enacted § 282 to correct lower courts that required the patentee to prove the validity of a patent. SeeAmerican Hoist Derrick Co.v.Sowa Sons, Inc.,725 F. 2d 1350,1359(CA Fed. 1984). But the language Congress selected reveals its intent not only to specify that the defendant bears the burden of proving invalidity but also that the evidence in support of the defense must be clear and convincing. ↩
- For those of us for whom it is relevant, the legislative history of § 282 provides additional evidence that Congress meant to codify the judge-made presumption of validity, not to set forth a new presumption of its own making. The accompanying House and Senate Reports both explain that § 282 "introduces a declaration of the presumption of validity of a patent, which is now a statement made by courts in decisions, but has had no expression in the statute." H. R. Rep. No. 1923, 82d Cong., 2d Sess., 10 (1952) (hereinafter H. R. Rep.); S. Rep. No. 1979, 82d Cong., 2d Sess., 9 (1952) (hereinafter S. Rep.). To the same effect, the Reviser's Note indicates that § 282's "first paragraph declares the existing presumption of validity of patents." Note following35 U.S.C. § 282(1952 ed.).
Prior to 1952, the existing patent laws already incorporated the sum and substance of the presumption as Microsoft would define it — that is, they "assign[ed] the burden of proving invalidity to the accused infringer," Brief for Petitioner 14 (emphasis deleted). See 35 U.S.C. § 69 (1946 ed.) (providing that a defendant in an infringement action "may plead" and "prove on trial" the invalidity of the patent as a defense); see also Patent Act of 1870, ch. 230, § 61,16 Stat. 208(same); Patent Act of 1836, ch. 357, § 15,5 Stat. 123(similar); Patent Act of 1793, ch. II, § 6,1 Stat. 322(similar);Coffin, 18 Wall., at 124 (explaining that the Patent Act of 1836 "allowed a party sued for infringement to prove, among other defences, that the patentee was not the original and first inventor of the thing patented, or of a substantial and material part thereof claimed to be new" (internal quotation marks omitted)). The House and Senate Reports state, however, that § 282 established a principle that previously "had no expression in the statute." H. R. Rep., at 10; S. Rep., at 9. Thus, because the only thing missing from § 282's predecessor was the heightened standard of proof itself, Congress must have understood the presumption of patent validity to include the heightened standard of proof attached to it. ↩ - Microsoft cites numerous court of appeals decisions as support for its claim that a preponderance standard must apply in the event that the evidence in the infringement action varies from that considered by the PTO. We see no hint of the hybrid standard of proof that Microsoft advocates in these cases. Indeed, in some of these cases it appears that the court even evaluated the evidence according to a heightened standard of proof. SeeJacuzziBros.,Inc.v.Berkeley Pump Co.,191 F. 2d 632,634(CA9 1951) ("Although it is not expressly stated that th[e] conclusion [of invalidity] is based upon evidence establishing the thesis beyond a reasonable doubt, the Trial Court expressed no doubt. And the record shows that such conclusion was supported by substantial evidence");Western Auto Supply Co.v.American-National Co.,114 F. 2d 711,713(CA6 1940) (concluding that the patent was invalid where the court "entertain[ed] no doubt" on the question). ↩
- Not the least of the impracticalities of such an approach arises from the fact that whether a PTO examiner considered a particular reference will often be a question without a clear answer. In granting a patent, an examiner is under no duty to cite every reference he considers. 1 Dept. of Commerce, PTO, Manual of Patent Examining Procedure
§ 904.03, p. 900-51 (8th rev. ed. 2010) ("The examiner is not called upon to cite all references that may be available, but only the `best.' Multiplying references, any one of which is as good as, but no better than, the others, adds to the burden and cost of prosecution and should therefore be avoided" (emphasis deleted)); Manual of Patent Examining Procedure§ 904.02, p. 129 (1st rev. ed. 1952) (same), http://www.uspto.gov/ web/offices/pac/mpep/old/E1R3_900.pdf (all Internet materials as visited June 6, 2011, and available in Clerk of Court's case file); see also Brief for Respondents 45-46 (describing additional impracticalities). We see no indication in § 282 that Congress meant to require collateral litigation on such an inherently uncertain question. ↩
- See,e.g., FTC, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy 28 (Oct. 2003), http://www.ftc.gov/os/2003/10/innovationrpt.pdf (recommending that "legislation be enacted specifying that challenges to the validity of a patent be determined based on a preponderance of the evidence"); Alsup, Memo to Congress: A District Judge's Proposal for Patent Reform, 24 Berkeley Tech. L. J. 1647, 1655 (2009) (same); Lichtman Lemley, Rethinking Patent Law's Presumption of Validity, 60 Stan. L. Rev. 45, 60 (2007) (proposing "statutory amendment or . . . judicial reinterpretation of the existing statute and its associated case law" to lower the standard of proof to a preponderance of the evidence (footnote omitted)). ↩