The U.S. Supreme Court's decision to review a $290 million judgment against Microsoft could change how juries weigh evidence in patent disputes.
The U.S. Supreme Court’s decision Monday to review a $290 million judgment against Microsoft could change how juries weigh evidence in patent disputes.
Microsoft was ordered to pay the damages and make changes to Word after Toronto-based software developer i4i won a lawsuit claiming Microsoft had infringed on an XML editing feature.
A federal jury in Texas last year decided against Microsoft and awarded $200 million in damages, which was then raised to $290 million by a U.S. District Court judge who affirmed the decision.
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After a federal appeals court affirmed the lower court’s decision and denied Microsoft’s request for a review, the company appealed to the nation’s highest court, which agreed Monday to review the case.
“We are gratified by the court’s decision,” said Microsoft’s deputy general counsel, David Howard, in a statement. “It’s a clear affirmation that the issues raised in this case are critical to the integrity of our patent system.”
Loudon Owen, i4i’s chairman, said in a statement: “The attack on patent holders and the adverse implications from the standard Microsoft is proposing is unprecedented and would deal a devastating blow to any U.S. patent holder, large or small.”
He also pointed out that the U.S. Patent and Trademark Office last week denied Microsoft’s second request to review the patent in the lawsuit.
Several large companies filed amicus briefs in support of Microsoft, including some competitors: Apple, Google, Cisco, Intuit, Facebook, General Motors, Wal-Mart, Toyota, Netflix, Intel, Verizon, Hewlett-Packard, HTC, SAP and Teva Pharmaceuticals.
Several organizations also threw its support behind Microsoft, including the Electronic Frontier Foundation, which advocated for free and open-source software developers, and the Clearing House Association, which represents banks.
“Big companies feel like they’re losing a lot of suits unfairly because of this higher standard,” said Sean O’Connor, a law professor at the University of Washington who specializes in patent law.
Microsoft contends that in order to prove a patent is not valid, the Texas jury should have been asked to rule based on a “preponderance of evidence,” rather than the higher standard of proof, “clear and convincing evidence.” The patent office, Microsoft argues, had not considered new evidence when it granted i4i’s patent.
Microsoft said i4i forfeited its claim to the XML editing feature because the software had been sold more than a year before i4i filed the application.
Under patent law, an inventor has a year once a product is sold to apply for a patent. The patent office did not know about the sale when it granted i4i its patent, Microsoft said.
It argues that had the jury been asked to decide based on a “preponderance of evidence,” jurors would have backed Microsoft.
“It would make it somewhat easier for defendants to invalidate weak patents,” said Mark Lemley, a Stanford law professor who filed an amicus brief in support of Microsoft on behalf of business and law professors. “In part, we don’t know because we don’t know how much of a role the presumption of validity really plays in jury deliberations, but it might give courts more comfort in invalidating some patents pretrial.”
The UW’s O’Connor said it’s not clear what impact a Supreme Court ruling for Microsoft would have because it’s hard to quantify the difference between the two standards of proof.
“I’m not sure at the end of the day it will make that much of a difference.”
The Supreme Court said Chief Justice John Roberts isn’t participating in the case. Recent financial-disclosure reports show Roberts owns between $100,000-$250,000 worth of Microsoft stock, Dow Jones Newswire reported.
Sharon Pian Chan: 206-464-2958 or email@example.com