Appraisers may recall the $290 million verdict that a small Canadian software provider won against mega-co Microsoft back in 2009. (See BVWire #85-1) After losing its 2010 appeal of the damages award to the U.S. Court of Appeals for Federal Circuit, Microsoft took its case to the Supreme Court. (For the complete digest of both i4i Ltd. v. Microsoft cases, see the Nov. 2009 and March 2010 BVU.) At issue is not the damages award (or its expert evidentiary support), but the standard by which defendants must prove that a patent is invalid. Currently, that standard is “by clear and convincing evidence.” Microsoft argues that standard should be lower to the one more common in civil cases—that is, “by a preponderance of the evidence.” Supporters say a lower standard will encourage legitimate innovation and reduce costly patent litigation, but detractors claim the higher standard protects innovation and lowers the cost of patent enforcement.
The Supreme Court began hearing arguments on the case on Monday. Its decision will be closely-watched by patent attorneys as well as the U.S. Government (which filed an amicus brief against Microsoft) and major U.S. companies on both sides of the question. A recent blog from a Seattle-based PI group says the case puts “patent law at a crossroads” and could very well turn out to be the “patent case of the decade.” Stay tuned….