Intellectual Property 101: How to get – and challenge – a patent

As the Supreme Court prepares to cut the 'clear and convincing' standard for proving patent invalidity, it's worth examining the key steps of the patent process.

Peter Zura, in the 271 Patent Blog, notes, in Supreme Court Prepares to Chop Down “Clear and Convincing” Standard for Proving Patent Invalidity, that the Court has agreed to hear the appeal of the Microsoft Corp. v. i4i Ltd., case. In this case, i4i sued Microsoft for patent infringement and was awarded a $290M judgment, based on Microsoft’s use of XML in Word.

At issue here is the burden of proof Microsoft needs to satisfy to prove i4i’s patents invalid. Let me try to explain without getting overly legally technical. When a patent application is filed, the applicant is supposed to submit all the material prior art he is aware of. The patent office Examiner also does a search to try to find other prior art. He or she then examines the patent application in light of the prior art that is submitted and that found by the Examiner. If a patent eventually issues, then it is said to have a “presumption of validity”. A defendant can argue that the PTO made a mistake and “should not” have issued the patent–say, because it was obvious in view of some prior art–but he has the burden of proof–but it’s an uphill battle. If the defendant argues that the patent is obvious in view of prior art that the Examiner already considered (or that is similar to–cumulative with–prior art considered by the Examiner), then it’s even harder. If he finds prior art totally different from what the Examiner considered, maybe it’s easier to argue–you don’t have to argue the Examiner made a mistake, just that he didn’t see certain prior art.

Now, when you have the burden of proof there are various standards of proof, to-wit: preponderance of the evidence (more likely than not) and “beyond a reasonable doubt”, at two ends of the spectrum; with “clear and convincing evidence” being somewhere between. The question Microsoft put to the Supreme Court was which standard should be used to consider a patent’s validity, when there is new prior art submitted that has not yet been considered. If the Court says preponderance is sufficient (as they seem likely to do), this makes slightly easier to challenge a patent’s validity, in some situations (where prior art is found that is not the same as or cumulative to the prior art the Examiner considered). But the defendant still has the burden of proof; the patent is still presumed valid. And the defendant is going to make the same arguments for invalidity. It’s probably very rare when a given defendant in a given patent infringement suit would lose based on the C&C standard but win on the preponderance standard; these standards are not exact and a judge swayed by an argument for invalidity (or not) is likely to usually have the same conclusion regardless of the standard of proof.

Now, I hope the Court does side with Microsoft. This would be minor improvement in the law. Not a major one at all–the patent is still presumed valid; the defendant still has the burden of proving it invalid; the burden would be slightly less difficult to satisfy, but only in a narrow subset of cases where the argument is not that the Examiner made a mistake (failing to realize the patent was too similar to the prior art he considered) but that the Examiner didn’t have the relevant prior art in front of him. But it would be a good change–which is why I proposed in an earlier article, “Reducing the Cost of IP Law,” that the patent law be revised to “Remove the presumption of validity that issued patents enjoy.” That would be a real change, and a much better one than merely reducing one vague standard of proof to a slightly lower one in a narrow set of cases.

But as I noted in “Radical Patent Reform Is Not on the Way,” patent attorneys and others with vested interests describe even the smallest improvements in patent law (by which I mean changes that weaken it) as radical and drastic, hysterically predicting all manner of horrible fallout. In this case, one commentator calls this “the most important Supreme Court patent case of the new century.” The Chairman of i4i, the plaintiff, moans that a victory for Microsoft would “result in is tremendous uncertainty for anyone who owns a patent . . . It would be a sea change in the operations of the patent office and would be a dramatic body blow to the health of the U.S. patent industry and the value of patents.” What nonsense.

As Zura mentions in his post, “In the meantime, the USPTO applicants will likely inundate the USPTO with prior art submissions.” Yes, prior art submissions will increase to reduce the chance that a defendant will find prior art that had not yet been “considered”–although if you bury the PTO with prior art submissions it’s unlikely the Examiner can study them all. This is in fact one reason why the PTO has proposed rules in the past to require Applicants to explain the relevance of each submitted reference, in an “Examination Support Document,” if they submit more than some minimum number. (See Patent Baristas, Examination Support Document (ESD) Could Add $26,000 to Patent Costs.) In “Reducing the Cost of IP Law,” I proposed this change:

Require patent applicants to do a search and provide an analysis showing why their claimed invention is new and nonobvious (patent attorneys really hate this one).

They hate it because they hate being on record; they hate saying anything in writing that can later be used against the patent’s validity. They want to keep their options open. I say: it is patent applicants who are begging the state for a monopoly grant; the monopoly is supposed to be granted only if the invention claimed is novel and non-obvious over the prior art; the Applicant is supposed to submit all the material prior art he knows of; and the patent “prosecution” process is ex parte, not adversarial, meaning that the potential defendants are not present during patent prosecution so can’t represent themselves. Therefore it is only fair that the Applicant explain exactly why and how his proposed monopoly privilege grant satisfies the legal criteria. It would result in narrower and more reasonable claims and would help to fill the inevitable gaps in the quality of the examination.

So, if the Court does side with Microsoft, and this results in Applicants filing more IDSs (information disclosure statements), the increased burden on the PTO Examiner may well lead to renewed calls for an Examination Support Document requirement. This would be good. But, alas, also minor.

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