The legal battle that began some 8 years ago between i4i and Microsoft ended Monday, July 6th at the Supreme Court. In 2003 a federal jury awarded $290 million to i4i, finding that Microsoft’s versions of Word (its word processing application) had infringed i4i's patent (Patent No. 5,787,449) relating to text manipulation software.
i4i’s claim was that it developed and patented its customized software. It sued Microsoft for incorporating the utility in Microsoft Word, alleging Microsoft willfully (at trial, it came out Microsoft knew of ‘449) violated i4i’s patent. Microsoft however, argued that i4i’s patent was invalid, which, as most know, is a fairly common opposition strategy.
Under the Patent Act of 1952, it was Microsoft’s burden to demonstrate invalidity. In this case, Microsoft wanted to prove the utility represented in ‘449 had been sold previously by i4i, as S4. Under patent law, if the patented software feature had been “sold” before, it is not patentable. Obviously, Microsoft wanted the provability bar set as low as possible, using a “preponderance of the evidence” standard.
i4i had argued that Microsoft should have to provide “clear and convincing evidence” that their patent was invalid. The trial court in this instance applied the customary higher standard; Microsoft lost and appealed.
As we have come to know, “presumed valid” is a common-law term. When Congress uses common-law terms (absent evidence to the contrary), the courts are bound to apply the “settled meaning” of those terms. Patents are presumed valid, and evidence must be presented to prove them invalid.
The USSC unanimously (with Chief Justice Roberts recused) explained that a simple “preponderance of the evidence” standard would be too easy to meet and that Congress intended to adopt the tougher “clear and convincing” evidentiary standard when it enacted the Patent Act in 1952.