Now I've seen everything. Wal-Mart is telling the US Supreme Court in an amicus brief that the US patent system is irrational and unfair. And it points the finger of blame straight at the Federal Circuit.
Can change in the patent system be far away *now*? Seriously, Google, Verizon, Dell, HP, HTC, and Wal-Mart, if you can believe it, have together filed an amicus brief [PDF] in support of Microsoft's petition for writ of certiorari [PDF] in the i4i patent litigation case Microsoft lost both at
the District Court level and on appeal to the Federal Circuit. HP and Dell submitted amicus briefs before in support of Microsoft, back when the case was being appealed to the Federal Circuit, but after Microsoft lost again there, the crowd in support has grown. And they all give the court an earful about just how messed up the patent system has become. It's a new day, ladies and gentlemen, when Wal-Mart gets it that the patent system is destructive to business and destroying innovation. A number of others have also filed amicus briefs, including EFF together with the Apache Software Foundation, Public Knowledge, and the Computer & Communications Industry Association.
You can find more amicus briefs in Nick Eaton's
article in the San Francisco Chronicle, but I thought you'd particularly like to see the Google brief, so I've done it as text, because Google uses the same firm that represents them against Oracle in the patent litigation regarding Java and Android, King & Spalding.
How in the world did Wal-Mart get into this group? I don't know. One of the lawyers at Google knows one of the lawyers at Wal-Mart, maybe, just like they probably now know folks at Verizon. Something like that anyway, as it's a grouping that seems new and different. What they tell the court is that everything tilts unfairly toward a patent-holder, even when it's inappropriate. And exactly when is it appropriate in civil litigation for either side to be favored, they inquire?
The USPTO is already "skewed heavily in favor of issuing patents," they write. Add on to that a presumption that the PTO examiner got it right, which they often do not, judging by litigation outcomes or even the PTO's own review process results, and then add the cherry on top -- the Federal Circuit's heightened burden of proof of invalidity -- and it's not a fair system: The
clear-and-convincing-evidence standard serves only
to tilt the playing field even further in favor of
patent holders, contrary to general principles of
law, the realities of the PTO's processes, and the
public interest in a balanced patent system. By heightened, they mean this: a registered copyright is presumed valid, but you can prove otherwise with a preponderance of evidence. Ditto a trademark. So why shouldn't patents also be in that same category, where a preponderance of evidence is sufficient to overcome validity? Congress didn't say it should be this way, this high a standard, so there's "no reason to adopt a burden of proof that favors one
side over the other, absent express statutory
language requiring that result."
Another amicus brief [PDF] filed by a large group of law professors (including, I notice, Professor Daniel B. Ravicher Cardozo Law School Yeshiva University), and represented by Mark A. Lemley at Stanford Law School, states the problem it would like the Supreme Court to fix in rather plain language: Deference to previous decisions is appropriate in instances where those previous decisions have a high likelihood of being accurate. But the initial process of patent review today is, unavoidably, often an inaccurate signal.
Put bluntly, PTO review is not always reliable and is unlikely to become so.
Before the creation of the Federal Circuit in 1982, all regional circuits recognized the limitations of evaluation by the PTO in one important situation: where the PTO had not had an opportunity to review the evidence in question at all. But for nearly thirty years, the Federal Circuit has required proof of invalidity by clear and convincing evidence even when, as in this case, the evidence in question was never before the PTO.
In KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007), this Court took the unusual step of raising the issue of appropriate deference in its opinion even though it was not briefed in that case. The Court “th[ought] it appropriate to note that the rationale underlying the presumption – that the PTO, in its expertise, has approved the claim – seems much diminished here” because the PTO did not have the relevant evidence before it. Id. at 426.
Notwithstanding that clear signal, the Federal Circuit has steadfastly hewed to the uniform rule it created, even in circumstances in which that rule makes no sense. This Court should grant the petition for certiorari to do what the Federal Circuit will not – apply a legal standard for the presumption of validity that reflects the realities of the modern patent system.
Microsoft presented prior art in court, prior art that the USPTO examiner had not seen or considered, but because of the deference to the examiner, it did them no good. Hence the appeal, or the hope of one anyway, to the US Supreme Court, asking that court to spank the Federal Circuit or at least make it stop. No one else can. Evidently, the i4i case has opened some eyes. It doesn't bother Microsoft that the patent system is unfair when it is threatening Linux, I notice. And i4i's patent is regarding XML, and Microsoft has XML patents itself, which I expect it wouldn't hesitate to use if it felt like it. But as I've told you before, legal questions are what you look at, not who the parties are. And post-i4i, I gather Microsoft sees the point now with intense clarity, now that it's on the receiving end, that the patent system isn't fair to defendants. Actually, who doesn't see it now? And yet, old ways persist. As Supreme Court Justice Ruth Bader Ginsburg said recently, “It takes time to break old ways of thinking."
Meanwhile, a lot of damage is being done.
Google et al tell the Supreme Court: Abusive patent suits based on invalid patents
have powerful coercive effects and are a scourge of
modern business. Indeed. I think they've misdiagnosed the problem, of course, to the extent that they mention patent trolls as a problem for buying and using patents in litigation without innovating themselves. I think the problem is much more fundamental -- that software shouldn't be patented in the first place by anybody, because software is math, abstract, and therefore should not be patentable. That would cut patent trolls off at the pass. But the amici don't go that far. They want patent trolls to have a steeper hill to climb, while presumably keeping the "good" patents. Meaning the ones they own, I'm guessing. But FOSS has to deal with trolls too, and everything that makes the process better helps. The education the briefs provide the court is valuable, in that they tell the court specifically what is wrong with a system that tilts so heavily in favor of patent owners, whether the patent is valid or not, telling the court that it's extremely hard to disprove the validity of even wrongfully issued patents:
Under ordinary
principles of law, the PTO's unbalanced and
incomplete review of patent applications is not
entitled to deference.... Indeed, under general principles of
administrative law, an agency commits reversible
error when it fails to consider an important aspect
of the problem before it. Motor Vehicles, 463 U.S.
at 43. For practical reasons, as discussed above,
the PTO's institutionalized procedures encourage
examiners not to consider all requirements for
validity. For the courts to give a heightened
presumption of validity to patents issued by that
process would turn basic administrative law
principles on their head. My. You don't see that every day in briefs heading to the US Supreme Court.
Yet another brief [PDF], this one by the Securities Industry and Financial Markets Association and the Clearing House Association, says the financial services industry is threatened by patents:
If the financial services industry continues to be burdened with a high evidentiary standard in invalidating such patents, the expense of defending such suits and the risk of losing despite a lengthy and costly litigation battle will likely stifle financial services industry innovation, which is to the detriment of everyone.
It is estimated that the cost of defending a patent dispute is minimally $1.5 million and may be greater than $4 million for each defendant. Steve Bills, The Tech Scene: Patent Case Settlements: Economics or Endgame? TECHNOLOGY, Vol. 173, No. 177, at 1 (Sept. 2008). Controlling costs is a vital component of innovation for the financial services industry where a lapse can have far-ranging implications. The financial services industry cannot continue to be placed in the position of having to engage in or settle frivolous patent disputes due to the risk of not being able to clear the hurdle represented by a clear and convincing standard when the patent may never have issued in the first place had the Examiner seen what is often the most relevant evidence....
The purpose of the patent system is to promote innovation, not to invite catastrophe or to encourage holders of questionable patents to turn an easy dollar. Leveling the playing field by reestablishing “preponderance of the evidence” as the standard of proof for prior art that was never before the Examiner will go a long way toward properly limiting risks to the financial services industry that otherwise could have a global impact.
The one you will like the most, I suspect, is the one by EFF and the Apache guys [PDF], because they highlight the extra burden on software, but you'll have to read it in the PDF, because if I try to copy and paste, it all looks like this:6JJ"Q??=G$ >"$ JBQGH?>G$ >"$ KDBJJ==G$ BGG
Stupidly annoying. And I don't have time to hand type it for you. But they make three points: 1) a larger proportion of patent litigation is now about software and computer-related patents, which means the harm is disproportionately greater for Free and Open Source Software projects, which tend to be individuals, not corporate entities, without litigation budgets; 2) the heightened standard of proof is hard for FOSS, because plaintiffs often argue that you have to use the source code of the prior art product to prove a software patent invalid, and FOSS isn't organized to save all that evidence; and 3) the statute doesn't contain the Federal Circuit's enhanced standard of proof.
Update: I see some comments once again saying that if software is math, so is hardware. However, the difference is that hardware isn't *just* math. And a lucid comment provides an illustration, taking it one more step:
No. Hardware is not math.
I've used this example before, and I'll use it again here.
Picture software which completely models the physical processes involved in a
lit candle. (This is math, and nothing but math.) Run that software.
Do you have a candle? No.
Do you have flame? No.
Do you have heat? No.
Now, take a candle. Light it.
Does it require math to burn a candle? No.
Math can *model* the physical universe, but it cannot *be* the physical
universe. That model is not the physical object though. That's the difference.
Update 2: Patently O has a brief description of all the amicus briefs in the article titled Challenging the Clear and Convincing Standard of Proof for Invalidating Patents in Court, and I'll just briefly highlight here the ones not covered in my article. He also explains a bit about the history of the case, and he has some news:
Eleven parties have filed amicus briefs supporting the petition for certiorari. Microsoft's counsel makes the point that the companies signing in their own name “employ more than three million people and the publicly-traded companies have a combined market capitalization of more than $1.2 trillion.” Briefs opposing the petition as well as i4i's opposition appear to be due on October 29, 2010.
Chief Judge Roberts has recused himself from the case.
A review of the briefs follow. Many of the briefs cover similar material and I have attempted to point out some of the differences. Of course, all of these briefs listed argue that the current evidentiary standard is too-high....
Brief by Acushnet, SAP, and Others: James Dabney and John Duffy collaborated to examine the history of invalidity defenses. The brief does an especially good job of spelling out different aspects of an invalidity argument that may need a higher standard of proof....
Teva, Cisco, and the Generic Pharma Association: ... The cost of invalidating a patent is so high that a patentee can usually obtain significant settlements even for a patent that should have never issued....
Yahoo!: “In requiring clear and convincing proof of facts bearing on patent invalidity, the Federal Circuit’s rule conflicts with this Court’s teaching that a heightened evidentiary standard should not apply where a statute does not prescribe the heightened standard.”
Intel: We have “a thicket of invalid patents that stifles competition and impedes further innovation.”...
Facebook, Netflix, et al.:...To harmonize with the reexamination statute, court's should at least lower the threshold for proving invalidity once a substantial new question of patentability is established....
Apple: ...”The clear and convincing standard shields a growing number of poor quality patents from the truthseeking function of our adversarial system.”
CTIA – The Wireless Association: The clear and convincing standard makes a difference in litigation — making it much more likely that a patent will survive validity attacks. This reality has created practical problems in dealing with holders of low-quality patents who seek large damage awards.
He has more analysis and all the documents there on Patently O.
And with that, here's the Google brief, as text, minus the cases and statutes, which you will need to get from the PDF (updated - a kind soul has done the EFF/Apache brief as text for us, so I've added it after the double row of stars, after the Google brief, and I see our friend Larry Rosen was representing the Apache Foundation in this matter:
***************************
NO. 10-290
________________________
In the
Supreme Court of the United States
________________
MICROSOFT CORPORATION,
Petitioner,
v.
I4I LIMITED PARTNERSHIP AND
INFRASTRUCTURES FOR INFORMATION INC.,
Respondents.
________________
On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Federal Circuit
________________
BRIEF OF GOOGLE INC., VERIZON COMMUNICATIONS
INC., DELL COMPUTER CORP., HEWLETT-PACKARD CO.,
HTC CORP., AND WAL-MART STORES, INC. AS AMICI
CURIAE IN SUPPORT OF PETITIONER
________________
PAUL D. CLEMENT
Counsel of Record
DARYL JOSEFFER
ADAM CONRAD
KING & SPALDING LLP
[address, phone]
Counsel for Amici Curiae
JOHN THORNE
GAIL F. LEVINE
VERIZON
COMMUNICATIONS INC.
[address, phone]
Counsel for Verizon
Communications Inc.
MICHELLE K. LEE
CATHERINE C. LACAVERA
TIMOTHY A. PORTER
JOHN L. LABARRE
GOOGLE INC.
[address, phone]
Counsel for Google Inc.
September 29, 2010
__________________________
Additional counsel:
PAUL H. ROEDER
HEWLETT-PACKARD CO.
[address, phone]
Counsel for Hewlett-Packard
Co.
QUESTION PRESENTED
Whether a party disputing a patent's validity
must prove invalidity by clear and convincing
evidence.
i
TABLE OF CONTENTS
TABLE OF AUTHORITIES....................................... iv
INTEREST OF AMICI CURIAE ................................ 1
INTRODUCTION AND SUMMARY OF
ARGUMENT................................................ 2
ARGUMENT ....................................................... 4
I. The Federal Circuit's Application Of The
Clear-And-Convincing-Evidence Standard
Puts Patent Law At Odds With Ordinary
Principles Of Law ................................... 4
A. The Patent Act Does Not Require A
Heightened Standard Of Proof...................... 5
B. The Nature Of The Patent Right Does
Not Warrant A Heightened Standard
Of Proof ........................................ 7
II. Deference To The PTO's Expertise Does
Not Warrant A Heightened Burden Of
Proof ................................................ 9
A. Federal Circuit Law And PTO
Practice Tilt The Scales Heavily In
Favor Of Granting Patent
Applications ..................................... 9
B. The PTO's Grant Of A Patent Should
Not Receive Deference Under
Ordinary Principles Of
Administrative Law .............................. 15
C. A Heightened Burden Of Proof Only
Enhances Lay Juries' Tendency To
ii
Defer Excessively To The PTO's
Issuance Of A Patent ........................... 20
III. This Court's Precedents Do Not Require A
Heightened Burden Of Proof.............................. 22
CONCLUSION .............................................. 25
iii
TABLE OF AUTHORITIES, STATUTES, OTHER AUTHORITIES
[SEE PDF]
iv-x
INTEREST OF AMICI CURIAE1
Amici include innovative leaders in the high-technology and
computer-related fields. Having
obtained a number of patents based on their own
extensive research and development efforts, and
having also been unfairly and repeatedly accused of
infringing others' patented technology, amici have
a strong interest in a fair and balanced patent
system that rewards rather than impedes actual
innovation. Amicus Wal-Mart Stores, Inc., one of
the world's largest retailers, has a similar interest
because it sells over 100,000 products that high-technology and other companies manufacture and
provide to it.
All too often, the requirement that a party prove
a patent's invalidity by clear and convincing
evidence skews the inquiry and causes courts and
juries to sustain invalid patents. Amici provide or
sell products and services incorporating large
numbers of components that can and do generate
numerous allegations of patent infringement.
Those allegations are often based on invalid
patents, but they are nonetheless costly and risky
to defend, in part because of the clear-and-convincing-evidence standard. Those costs and
risks often give issued patents a significant
2
settlement value even when they are invalid--a
reality that encourages the filing of abusive patent
suits and ultimately discourages and penalizes
actual innovation while increasing the cost of goods
and services without any corresponding value to
the consumer.
INTRODUCTION AND
SUMMARY OF ARGUMENT
1. In private civil litigation, a preponderance of
the evidence is the default burden of proof.
Because the Federal Circuit's clear-and-convincing-evidence requirement departs from that general
principle of law without any basis in the text of the
patent statute, this Court should grant review and
re-affirm that the same principles of law that apply
in all other areas of law also apply in patent cases.
Policy arguments alone cannot overcome the
law's default presumption that the standard of
proof in private civil litigation is a preponderance.
Nonetheless, it bears emphasis that the clear-and-convincing standard does not advance the broad
purposes of the Patent Act. That Act seeks to
strike a balance between two objectives: rewarding
genuine innovators with exclusive property rights,
but not deterring innovation by granting such
rights for subject matter that does not deserve
them. Especially in light of that balance, there is
no reason to adopt a heightened burden of proof
that favors one private litigant over another.
2. It is no answer that the Patent Act states
that patents are presumed to be valid. Outside of
patent law, such statutory presumptions are
3
routinely governed by the preponderance-of-the-evidence standard, not a heightened one.
Nor is a heightened standard justified by
notions of deference to the Patent and Trademark
Office's ("PTO's") issuance of a patent. Deference to
agency action is generally governed by the
substantive standards of review set forth in the
Administrative Procedures Act, 5 U.S.C. § 501 et
seq. ("APA"), not by ad hoc impositions of
heightened burdens of proof. Moreover, a proper
understanding of the PTO's role in issuing a patent
shows that deference notions are misplaced.
The PTO itself presumes that all patent
applications should be granted, and therefore
permits a patent examiner to reject an application
only if the examiner demonstrates invalidity. The
examiner bears that burden as part of an ex parte
procedure that generally relies on the applicant's
disclosures and the examiner's own research --
research that is greatly limited because of the
extreme time pressures that workload demands
impose on examiners. Moreover, examiners are not
expected to consider all of the requirements for
patentability, in part because it is impractical to
consider some of them as part of the ex parte
examination process.
Against that backdrop, deference is
unwarranted under settled principles of
administrative law. First, in part because of severe
constraints on the PTO's resources, the PTO's ex
parte consideration is too incomplete to warrant deference.
First, in part because of severe constraints on the PTO’s resources, the PTO’s ex parte consideration is too incomplete to warrant deference. Second, the PTO’s procedures are skewed heavily in favor of issuing patents. Third,
4
established administrative-law principles do not
support deferring to a result -- the PTO's issuance of
a patent -- without regard to whether the agency's
actual reasoning is sustainable, which is the
traditional focus of judicial review of agency action.
3. Even without the clear-and-convincing-evidence standard, juries take the presumption of
validity very seriously and are extremely reluctant
to second-guess the PTO's determination. The
clear-and-convincing-evidence standard serves only
to tilt the playing field even further in favor of
patent holders, contrary to general principles of
law, the realities of the PTO's processes, and the
public interest in a balanced patent system.
ARGUMENT
I. The Federal Circuit's Application Of The Clear-And-Convincing-Evidence Standard Puts Patent
Law At Odds With Ordinary Principles Of Law.
General principles of law that apply in all other
contexts also govern in patent cases. See, e.g.,
MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118
(2007) (declaratory judgment standard); eBay Inc.
v. MercExchange, L.L.C., 547 U.S. 388 (2006)
(permanent injunction standard); Dickinson v.
Zurko, 527 U.S. 150, 165 (1999) (standard of review
of agency action). There is little doubt about the
applicable general principles here: in civil suits,
the party that bears the burden of proof may
overcome that burden with a preponderance of the
evidence, unless Congress expressly requires a
higher standard or certain important liberty
interests are at stake. See, e.g., Grogan v. Garner,
498 U.S. 279, 286 (1991). Neither of those
5
exceptions even arguably applies here. Just like
the normal principles of law at issue in eBay,
MedImmune, and Zurko, normal burdens of proof
also apply in patent cases.
A. The Patent Act Does Not Require A
Heightened Standard Of Proof.
Nothing in the Patent Act requires a heightened
burden of proof for invalidity. The Act simply
states that "[a] patent shall be presumed valid. . . .
The burden of establishing invalidity of a patent or
any claim thereof shall rest on the party asserting
such invalidity." 35 U.S.C. § 282. While that
statute identifies who bears the burden of proof on
invalidity, it says nothing about the evidentiary
standard for carrying that burden. As explained
above, the default preponderance-of-the-evidence
standard therefore applies.
It is no answer that the statute also establishes
a presumption of validity. Such presumptions do
not affect the burden of proof, only the initial
burden of production, which is not at issue here.
Fed. R. Evid. 301. Indeed, all agency decisions are
"entitled to a presumption of regularity." Citizens
to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402,
415 (1971); see also Stuart Minor Benjamin & Arti
K. Rai, Who's Afraid of the APA? What the Patent
System Can Learn from Administrative Law, 95
Geo. L. Rev. 269, 281 n.53 (2007) (citing cases).
But that does not mean that they must all be
overcome by clear and convincing evidence.
To the contrary, numerous statutory
presumptions -- including the presumptions of
validity for copyrights and trademarks -- are
6
overcome by a preponderance of the evidence. See,
e.g., Medforms, Inc. v. Healthcare Mgmt. Solutions,
Inc., 290 F.3d 98, 114 (2d Cir. 2002) (copyright);
Material Supply Int'l, Inc. v. Sunmatch Indus. Co.,
146 F.3d 983, 990 (D.C. Cir. 1998) (trademark);
Bracic v. Holder, 603 F.3d 1027, 1034 (8th Cir.
2010) (fear of persecution in asylum proceedings).
Even the Federal Circuit has applied that default
rule to statutory presumptions outside the context
of patent law. See St. Paul Fire & Marine Ins. Co.
v. United States, 6 F.3d 763, 768-69 (Fed. Cir.
1993) (presumption that decisions of the Customs
Service are correct); Thomas v. Nicholson, 423 F.3d
1279, 1282 (Fed. Cir. 2005) ("presumption of service
connection for [veterans'] injuries that occur during
active duty").
Here, as in eBay, "[n]othing in the Patent Act
indicates that Congress intended . . . a departure"
from traditional principles. eBay, 547 U.S. at 391-92. When Congress intended to impose a clear-and-convincing evidentiary burden in the Patent Act, it
knew how to do so: "A person asserting the defense
under this section [concerning prior uses of
business methods] shall have the burden of
establishing the defense by clear and convincing
evidence." 35 U.S.C. § 273(b)(4). Congress's
specification of the clear-and-convincing-evidence
standard for that one defense, coupled with its
silence on that issue elsewhere, provides strong
evidence that Congress did not intend to require a
heightened burden of proof for other issues,
including invalidity. See Barnhart v. Sigmon Coal
Co., 534 U.S. 438, 452 (2002).
7
Nor does the legislative history express any
intent to deviate from traditional principles; the
committee reports do not even mention evidentiary
burdens. See H.R. Rep. No. 82-1923, at 10 (1952);
S. Rep. No. 82-1979 (1952). Congress's "silence is
inconsistent with the view that Congress intended
to require a special, heightened standard of proof."
Grogan, 498 U.S. at 286.
B. The Nature Of The Patent Right Does Not
Warrant A Heightened Standard Of Proof.
Absent explicit congressional direction, this
Court has permitted deviations from the baseline
preponderance standard only where interests
unlike those implicated by patent rights are at
stake. See id. Because the potential loss of liberty
is "more substantial than mere loss of money,"
"[t]he individual should not be asked to share
equally with society the risk of error" in such cases,
Addington v. Texas, 441 U.S. 418, 424, 427 (1979),
which include civil confinement, id. at 432-33;
denaturalization, Schneiderman v. United States,
320 U.S. 118 (1943); deportation, Woodby v. INS,
385 U.S. 276 (1966); and loss of parental rights,
Santosky v. Kramer, 455 U.S. 745 (1982).
In contrast, private patent litigation involves
the same types of economic injuries that are at
issue in "the typical civil case involving a monetary
dispute between private parties." Addington, 441
U.S. at 423. See eBay, 547 U.S. at 391 (money
damages are the norm in patent litigation absent
irreparable injury because "familiar principles
apply with equal force to disputes arising under the
Patent Act"). With respect to such injuries, there is
8
no reason to adopt a burden of proof that favors one
side over the other, absent express statutory
language requiring that result.
To be sure, society has an interest in a well
functioning patent system. But the public interest
is in a balanced patent system that rewards
genuine innovation with exclusive patent rights
without impeding innovation by granting such
rights to applicants that did not innovate. Bonito
Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S.
141 (1989). As this Court recently emphasized,
invalid patents "stifle, rather than promote, the
progress of useful arts." KSR Int'l Co. v. Teleflex,
Inc., 550 U.S. 398, 427 (2007). Thus, "the strong
federal policy favor[s] free competition in ideas
which do not merit patent protection." Lear, Inc. v.
Adkins, 395 U.S. 653, 656 (1969).
Abusive patent suits based on invalid patents
have powerful coercive effects and are a scourge of
modern business. See eBay, 547 U.S. at 396
(Kennedy, J., concurring). That problem has
become far worse in recent years as "non-practicing
entities" have bought up questionable patents for
the sole purpose of asserting them in litigation.
See, e.g., Patent Trolls: Fact or Fiction?, Hearing
Before the Subcomm. on Courts, the Internet, &
Intellectual Property of the House Comm. on the
Judiciary, 109th Cong. 2-3 (2006) (statement of
Rep. Berman). And the most dubious patents
benefit the most from the added protection of the
clear-and-convincing-evidence standard. Nothing
about the patent right warrants judicial imposition
of a standard of proof that favors patent holders
9
over other entities that are attempting to innovate
and compete.
II. Deference To The PTO's Expertise Does Not
Warrant A Heightened Burden Of Proof.
The Federal Circuit has treated its clear-and-convincing-evidence requirement as a means of
deferring to the PTO's issuance of a patent. See
Am. Hoist & Derrick, Co. v. Sowa & Sons, Inc., 725
F.2d 1350, 1359 (Fed. Cir. 1984). That mixes
apples with oranges. The Administrative
Procedures Act generally governs deference to
administrative agencies, including the PTO. Zurko,
527 U.S. at 152-154. The APA nowhere relies on
the burden of proof for deference; instead, it
requires a party challenging agency action to
satisfy certain substantive standards by showing
that agency action is, for example, contrary to law
or arbitrary and capricious. See 5 U.S.C. § 706.
The Federal Circuit's use of a heightened burden of
proof as a deference doctrine is more than just a
category mismatch; it obscures the fact that under
traditional deference principles, the PTO's issuance
of a patent is not entitled to any deference -- much
less the strong deference the Federal Circuit
accords it.
A. Federal Circuit Law And PTO Practice Tilt
The Scales Heavily In Favor Of Granting
Patent Applications.
Deference turns not on whether the PTO is
"do[ing] its job," Am. Hoist & Derrick, 725 F.2d at
1359, which it is, but on whether the job the PTO's
examiners are tasked with doing is the kind that
warrants deference. As the Federal Trade
10
Commission ("FTC") has determined, current law
and PTO procedure stack the deck heavily in favor
of issuing patents. See FTC, To Promote
Innovation: The Proper Balance of Competition
and Patent Law and Policy, Executive Summary at
9 (2003), available at http://www.ftc.gov/os/2003/10/
innovationrpt.pdf ("FTC Report"). Under ordinary
principles of law, the PTO's unbalanced and
incomplete review of patent applications is not
entitled to deference.
1. Ordinarily, an applicant bears the burden of
proving its entitlement to a government benefit or
privilege. See, e.g., Fagan v. Shinseki, 573 F.3d
1282, 1286 (Fed. Cir. 2009). But under Federal
Circuit precedent, patent prosecution takes the
opposite approach: the patent examiner "bears the
initial burden, on review of the prior art or on any
other ground, of presenting a prima facie case of
unpatentability." In re Oetiker, 977 F.2d 1443,
1445 (Fed. Cir. 1992); see also Manual of Patent
Examining Procedure § 716.01(d) ("MPEP").
In other words, the PTO presumes that it should
award an exclusive property right to anyone who
asks for it. If the examiner's initial review does not
result in "a prima facie case of unpatentability,
then without more the applicant is entitled to grant
of the patent." In re Oetiker, 977 F.2d at 1445
(citations omitted). For example, "[i]f the examiner
does not produce a prima facie case [of
obviousness], the applicant is under no obligation
to submit evidence of nonobviousness." MPEP
§ 2142. Thus, the PTO's favorable determination is
better understood as a non-denial rather than an
issuance subject to deference.
11
2. Moreover, a "plethora of [additional]
presumptions and procedures tip the scales in favor
of the ultimate issuance of a patent, once an
application is filed." FTC Report, Executive
Summary at 8. Under the PTO's institutionalized
procedures, examiners do not typically consider all
aspects of patentability. For example, "[t]he
examiner should assume that the best mode
[required by 35 U.S.C. § 112] is disclosed in the
application . . . ." MPEP ß 2165.03. In addition,
"[t]here is a strong presumption that an adequate
written description of the claimed invention is
present" in an application, MPEP § 2163, along
with a similar presumption concerning the
enablement requirement, MPEP § 2164.04.
Those guidelines concerning the various
requirements for patentability that are set forth in
35 U.S.C. § 112 mean that the PTO "rejects fewer
patent applications for § 112 disclosure problems
than for prior art problems and virtually never
provides a detailed analysis of claim language,
meaning that serious § 112 analysis is left for
litigation."
R. Polk Wagner, Understanding
Patent-Quality Mechanisms, 157 U. Pa. L. Rev.
2135, 2150 (2009). Likewise, examiners rarely
inquire into important non-documentary sources of
information, such as the knowledge of skilled
artisans, market demands, see KSR, 550 U.S. at
418, and public uses or commercial offers for sale,
see 35 U.S.C. § 102(b). The PTO can require an
applicant to disclose such information. See 37
C.F.R. § 1.105; MPEP §§ 704.10, 704.11. But such
inquiries present obvious challenges, especially in
an ex parte setting, and the PTO has not widely
12
required applicants to disclose such information.
See John R. Thomas, The Responsibility of the
Rulemaker, 17 Berkeley Tech. L.J. 727, 749-50
(2002).
3. The PTO procedures discussed above
produce a substantial risk of error in issuing
patents. That risk is compounded by the PTO's
limited resources. Despite the PTO's technical
expertise, it lacks the resources to review each
patent application thoroughly. This Court
identified that problem over four decades ago,
Graham v. John Deere Co. of Kansas City, 383 U.S.
1, 18 (1966), and the PTO's resources have been
stretched even further since then.
"Almost any patent lawyer will agree that the
U.S. patent system is currently overburdened:
there are too many patent applications and not
enough examiners to ensure that the merits of each
and every patent are properly assessed." Matthew
Sag & Kurt Rohde, Patent Reform and Differential
Impact, 8 Minn. J.L., Science, & Tech. 1, 16 (2007);
see also Warren K. Mabey, Jr., Deconstructing the
Patent Application Backlog, 92 J. Pat. &
Trademark Off. Soc'y 208 (2010); Mark A. Lemley & Bhaven Sampat,
Examining Patent
Examination, 2010 Stan. Tech. L. Rev. 2 (2010). In
2003, the FTC found that examiners "have from 8
to 25 hours to read and understand each
application, search for prior art, evaluate
patentability, communicate with the applicant,
work out necessary revisions, and reach and write
up conclusions." FTC Report, Executive Summary
at 10; see also Mark A. Lemley, Rational Ignorance
at the Patent Office, 95 Nw. U. L. Rev. 1495, 1500
13
(2001). The number of patent applications
submitted to the PTO has increased by 37% since
then, from 355,418 to 485,500 annually, making
the situation even worse. See Microsoft Pet. 19;
PTO, Performance and Accountability Report
Tables 1-3 (2009), http://www.uspto.gov/about/
stratplan/ar/2009/2009annualreport.pdf.
The PTO's lack of resources poses particular
problems in light of its ex parte examination
process. Without an adversary to aid the process
and expand the record, the PTO examiner often
lacks adequate time to develop a complete
understanding of the relevant technology and prior
art. Joseph Farrell & Carl Shapiro, Intellectual
Property, Competition, and Information Technology
(Working Paper 2004), at 33, available at
http://papers.ssrn.com/sol3/
papers.cfm?abstract_id=527782.
By contrast, when the PTO reexamines a
previously issued patent, its second look normally
reveals that the patent's original issuance was in
error. Whereas a single examiner undertakes an
initial examination and has to attempt to consider
a wide range of issues in a limited amount of time,
three experienced examiners from the PTO's
Central Reexamination Unit conduct a
reexamination that focuses on specific validity
issues. See generally MPEP § 2271 (2008). Inter
partes reexaminations also provide adversarial
guidance. See 35 U.S.C. § 314. Significantly, 92%
of the previously issued patents that go through
inter partes reexaminations are either cancelled or
re-issued only after the patentee amends some of
the claims. See PTO, Quarterly Review: Inter
14
Partes Reexamination Filing Data Review,
http://www.uspto.gov/patents/
IP_quarterly_report_June_30_2010.pdf. Patents involved in ex parte
reexaminations do not fare much better: only 23%
have escaped with all claims confirmed, and that
number has dropped in recent years to about 12%
last year. See PTO, Quarterly Review: Ex Parte
Reexamination Filing Data Review,
http://www.uspto.gov/
patents/EP_quarterly_report_June_30_2
010.pdf. The PTO's own reexaminations show that
resource constraints and the limits on its ex parte
examination process cause it to issue many patents
in error.
4. A growing number of scholars have
concluded that the PTO is issuing a large number
of patents of dubious validity. See, e.g., Doug
Lichtman & Mark A. Lemley, Rethinking Patent
Law's Presumption of Validity, 60 Stan. L. Rev. 45,
47 (2007); Joshua D. Sarnoff, Bilcare, KSR,
Presumptions of Validity, Preliminary Relief, and
Obviousness in Patent Law, 25 Cardozo Arts &
Ent. L.J. 995, 1050-52 (2008). Like the
reexamination results, litigation results support
that conclusion. When judges determine patents'
validity on summary judgment or following a bench
trial, they invalidate patents approximately half of
the time, notwithstanding the daunting burden of proof.
See Mark A. Lemley & Carl Shapiro,
Probabilistic Patents, 19 J. Econ. Persp. 75, 76
(2005); Adam B. Jaffe & Josh Lerner, Innovation
and Its Discontents 125 (2004). Under more
balanced standards, that number would
undoubtedly increase.
15
As the FTC concluded, "[i]t does not seem
sensible to treat an issued patent as though it had
met some higher standard of patentability." FTC
Report, Executive Summary at 10. "Whatever
greater technical expertise does exist [at the PTO]
. . . is counterbalanced by the greater time devoted
to validity in the litigation process." Lemley, 95
Nw. U. L. Rev. at 1510 n.64. Litigation permits an
in-depth review of issues that the examiner may
not have even been aware of, much less had time to
focus on.
The bottom line is that patent applicants receive
the benefit of favorable procedures and a resource-constrained review by the PTO and then assert
presumptively valid patents that, according to the
Federal Circuit, can be defeated only by clear and
convincing evidence. That serves only to insulate
patents of dubious quality from adequate scrutiny
at any stage.
B. The PTO's Grant Of A Patent Should Not
Receive Deference Under Ordinary
Principles Of Administrative Law.
The realities of the examination process
discussed above show that, under traditional
administrative-law principles, the PTO's issuance
of a patent is not entitled to deference, much less
the strong deference the Federal Circuit gives it.
The PTO's presumptions and procedures mean that
it does not approve patent applications so much as
it does not deny them unless a time-constrained
examiner discovers and develops a prima facie case
of unpatentability. This process of issuing effective
16
non-denials is not entitled to deference for at least
two reasons.
1. First, the amount of deference due to an
agency decision generally correlates with the
thoroughness of that decision. See Motor Vehicle
Mfrs. Assn. v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 42-44 (1983); Skidmore v. Swift & Co., 323
U.S. 134, 140 (1944). The practical constraints on
the time available for review of each ex parte
patent application, and the procedures that
constrain examiners' ability thoroughly to consider
all aspects of validity, demonstrate that the PTO is
not entitled to deference.
Indeed, under general principles of
administrative law, an agency commits reversible
error when it fails to consider an important aspect
of the problem before it. Motor Vehicles, 463 U.S.
at 43. For practical reasons, as discussed above,
the PTO's institutionalized procedures encourage
examiners not to consider all requirements for
validity. For the courts to give a heightened
presumption of validity to patents issued by that
process would turn basic administrative law
principles on their head.
Second, and most fundamentally, the PTO's
other pro-applicant presumptions and procedures
provide an additional reason for not deferring to its
issuance of a patent. When agencies systematically
place a thumb on the scale, courts often apply a
reduced level of deference. See, e.g., NLRB v. St.
Mary's Home, Inc., 690 F.2d 1062, 1067 (4th Cir.
1982); UPS Worldwide Forwarding, Inc. v. United
States Postal Serv., 66 F.3d 621, 638-39 (3d Cir.
17
1995); Spentonbush/Red Star Cos. v. NLRB, 106
F.3d 484, 492 (2d Cir. 1997). As discussed above,
the PTO does that in this context by presuming
that patent applications are patentable. One
leading commentator has concluded that the PTO
views "its mission to be 'helping our customers get
patents.'" Lemley, 95 Nw. U. L. Rev. at 1496 n.3
(citation omitted). Whether or not that is the case,
"the presumption of validity attached to a
determination of patentability made by the United
States Patent Office [must be] subject to searching
review by the courts." Howes v. Great Lakes Press
Corp., 679 F.2d 1023, 1028-29 (2d Cir. 1982)
(citations omitted).
2. The Federal Circuit's application of its clear-and-convincing-evidence standard also deviates
from ordinary deference doctrines by affording
deference without regard to the reasoning behind
the PTO's issuance of a patent. As this Court has
made clear, "an administrative order cannot be
upheld unless the grounds upon which the agency
acted in exercising its powers were those upon
which its action can be sustained." SEC v. Chenery
Corp., 318 U.S. 80, 95 (1943) (emphasis added).
Similarly, "the focal point for judicial review should
be the administrative record already in existence,
not some new record made initially in the
reviewing court" and not considered by the agency.
Camp v. Pitts, 411 U.S. 138, 142 (1973) (per
curiam) (emphasis added).
In the Federal Circuit's view, however,
deference is not tied to the reasons an examiner
issued a patent. Instead, the clear-and-convincing-
evidence standard always applies. Am. Hoist &
18
Derrick, 725 F.2d at 1359. And the basis for an
examiner's conclusion, as well as the examiner's
findings, are only non-exclusive factors for a court
to consider in making its own independent
determination of invalidity. See, e.g., Pfizer, Inc. v.
Apotex, Inc., 480 F.3d 1348, 1359-60 (Fed. Cir.
2007); Fromson v. Advance Offset Plate, Inc., 755
F.2d 1549, 1555 (Fed. Cir. 1985) (holding that
examiner's decision is merely "evidence the court
must consider"); Interconnect Planning Corp. v.
Feil, 774 F.2d 1132, 1139 (Fed. Cir. 1985) (holding
that court must make "independent conclusion"
while deferring to the PTO's "result"). For that
reason as well, the Federal Circuit's clear-and-convincing requirement bears little relationship to
established deference doctrines.
That conclusion is all the more clear in cases
where litigants raise evidence and theories that the
PTO did not consider. It is appropriate and
sometimes essential for a defendant to raise
invalidity issues or evidence that the patentee did
not disclose to the PTO. See Purdue Pharma L.P.
v. Faulding Inc., 230 F.3d 1320, 1329 (Fed. Cir.
2000). That further undermines the case for
deference under the administrative-law principles
discussed above. It also demonstrates that the
clear-and-convincing standard is not based on
deference to the PTO's actual determinations.
This Court has observed that the rationale
behind the presumption of validity is "much
diminished" where the examiner did not actually
review the relevant prior art or event. KSR, 550
U.S. at 426. The Federal Circuit has likewise
acknowledged that, "[w]hen new evidence touching
19
validity of the patent not considered by the PTO is
relied on, the tribunal considering it is not faced
with having to disagree with the PTO or with
deferring to its judgment or with taking its
expertise into account." Am. Hoist & Derrick, 725
F.2d at 1360 (emphases in original). But even
though deference to an administrative
determination is not at issue, because the PTO has
made no relevant determination, the Federal
Circuit still applies the clear-and-convincing-evidence standard in that and every other
circumstance. Id. The Federal Circuit even applies
its heightened burden of proof when the applicant
misrepresented the relevant prior art, obscured it
as part of a last-minute deluge of additional
documents, or provided it only in a foreign
language. See id. at 1359 (holding that the
clear-and-convincing standard always applies). The
Federal Circuit's across-the-board application of its
clear-and-convincing standard is proof positive that
the standard is not based on rational deference to
the PTO's determinations.
Indeed, the Federal Circuit applies its clear-
and-convincing-evidence standard even when the
PTO itself has called its issuance of a patent into
question. If the PTO has found that a substantial
new question of patentability warrants a
reexamination, the Federal Circuit still applies its
clear-and-convincing requirement in litigation
concerning the same patent. See Procter & Gamble
Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 848
(Fed. Cir. 2008). If the PTO examiners finally
reject a patent during reexamination, the Federal
Circuit applies the clear-and-convincing-evidence
20
requirement as long as appeals from the
reexamination are pending. See Callaway Golf Co.
v. Acushnet Co., 576 F.3d 1331, 1337 n.4, 1342
(Fed. Cir. 2009). There is no justification for
deferring to an examiner's initial issuance of a
patent when three examiners have since
determined on reexamination that the patent is not
valid. The Federal Circuit's contrary conclusion
underscores the indefensibility of its clear-and-convincing standard.
C. A Heightened Burden Of Proof Only
Enhances Lay Juries' Tendency To Defer
Excessively To The PTO's Issuance Of A
Patent.
The statutory presumption of validity and the
realities of jury trials already provide significant
advantages to patent holders. There is no legal or
policy justification for granting them an additional
advantage.
"Jurors are notoriously reluctant to second-guess patent examiners." Lemley, 95 Nw. U. L.
Rev. at 1528. "Jury research has indicated that
almost one out of every three jurors is unwilling to
undertake a task which they view [the PTO] to
have already accomplished. While almost all jurors
on voir dire will honestly state that they are willing
to look behind that which [the PTO] has already
done, many (if not most) will resort to the
presumption of validity once the issues become
complicated or difficult." Donald S. Chisum et al.,
Principles of Patent Law 1036-40 (3d ed. 2004)
("side bar" of William F. Lee). Even without the
clear-and-convincing-evidence standard, therefore,
21
lay juries face an enormous temptation to defer to
the PTO instead of having to master the sometimes
daunting complexity of technical details on which
an alleged infringer's case often depends. Id.
Especially in complex patent cases, the clear-and-convincing requirement can often dictate the
outcome because "it is very difficult to ever make
the evidence 'clear and convincing' to a group of
people who do not have the necessary training and
education to understand it." Jaffe & Lerner, supra,
at 196. "Thus the 'clear and convincing evidence'
standard combined with decision-making by juries
makes it likely that the patentee will win on
validity questions" regardless of whether the patent
is actually valid. Id.
Indeed, the evidence shows that juries are twice
as likely as judges to find patents valid. Id. at 125;
see also Kimberly A. Moore, Judges, Juries, and
Patent Cases, 99 Mich. L. Rev. 365, 390 (2000).
Imposing a clear-and-convincing-evidence burden
only enhances the significant risk of error that is
already built into the system.
The clear-and-convincing standard has also had
a corrosive effect on patent law itself. For example,
this Court has long held that patent claims must
"clearly circumscribe" their scope in order to satisfy
the definiteness requirement for patentability.
United Carbon Co. v. Binney & Smith Co., 317 U.S.
228, 236 (1942). The Federal Circuit, however, has
held that claims may be ambiguous so long as they
are not "insolubly ambiguous." Datamize, LLC v.
Plumtree Software, Inc., 417 F.3d 1342, 1347-48
(Fed. Cir. 2005). And it has cited the need to
22
"follow" its clear-and-convincing requirement as a
reason for adopting that more permissive standard.
Id. In that respect as well, the clear-and-convincing standard is skewing outcomes to favor
the most questionable patents.
III. This Court's Precedents Do Not Require A
Heightened Burden Of Proof.
The Federal Circuit has concluded that this
Court's precedents support a clear-and-convincing-evidence requirement. See, e.g., Am. Hoist &
Derrick, 725 F.2d at 1359. They do not.
1. An older line of cases holds that, when a
party relies only on oral testimony for the
proposition that a patent is invalid because of a
prior use, the oral testimony must prove the prior
use "beyond a reasonable doubt." Adamson v.
Gilliland, 242 U.S. 350, 352-53 (1917); The Barbed
Wire Patent, 143 U.S. 275, 284 (1892); Cantrell v.
Wallick, 117 U.S. 689, 693-695 (1886); Coffin v.
Ogden, 85 U.S. 120, 124 (1873). This Court
explained that "oral testimony tending to show
prior invention as against existing letters patent is,
in the absence of models, drawings or kindred
evidence, open to grave suspicion." T.H. Symington
Co. v. Nat'l Malleable Castings Co., 250 U.S. 383,
386 (1919); see also The Barbed Wire Patent, 143
U.S. at 284; Adamson, 242 U.S. at 353.
That elevated evidentiary burden is irrelevant
because it relates to the nature of a particular type
of evidence (uncorroborated oral testimony
concerning a prior use, which tends to be uniquely
within the knowledge of the witness), not to the
nature of validity more generally. Thus, this Court
23
has not required a heightened burden of proof for
invalidity challenges generally. In The Barbed
Wire Patent, for example, this Court resolved
invalidity defenses based in part on documentary
evidence without applying a heightened standard;
it then articulated and applied the "beyond a
reasonable doubt" standard only for purposes of
uncorroborated oral testimony about prior uses.
143 U.S. at 284. In other cases, this Court likewise
held patents invalid without applying, or even
mentioning, a heightened evidentiary standard.
E.g., Pfaff v. Wells Elecs., Inc., 525 U.S. 55 (1998);
Sakraida v. Ag Pro, Inc., 425 U.S. 273 (1976);
Graham, 383 U.S. 1.
The Federal Circuit itself has read The Barbed
Wire Patent line of cases to require corroboration of
oral testimony. See Juicy Whip, Inc. v. Orange
Bang, Inc., 292 F.3d 728, 740 (Fed. Cir. 2002);
Finnigan Corp. v. ITC, 180 F.3d 1354, 1366-69
(Fed. Cir. 1999). That corroboration requirement
fully addresses the concerns discussed in this
Court's cases; there is no reason to impose a clear-and-convincing-evidence standard on top of it.
2. The Federal Circuit has also cited Radio
Corp. of Am. v. Radio Eng'g Labs., 293 U.S. 1
(1934), in support of its clear-and-convincing-evidence standard. Am. Hoist & Derrick, 725 F.2d
at 1359. After citing the cases discussed above,
Radio Corp. stated in dictum that "one otherwise
an infringer who assails the validity of a patent fair
upon its face bears a heavy burden of persuasion,
and fails unless his evidence has more than a
dubious preponderance." 293 U.S. at 8.
24
Significantly, Radio Corp. did not concern a
patent issued by the PTO following only an ex parte
examination. Instead, it concerned a claim of prior
inventorship -- a question that had previously been
litigated multiple times between the purported
inventors, both in inter partes proceedings before
the PTO and in district court litigation. 293 U.S. at
3-7. When assignees of the prevailing patentee
brought suit for infringement, and the defendant
attempted to relitigate priority of inventorship yet
again, this Court held that the defendant could not
overcome the prior determinations. Id. at 8.
The inter partes priority proceedings at issue in
Radio Corp. are far removed from the PTO's typical
ex parte examination of a patent application.
Moreover, this Court's discussion of the appropriate
evidentiary standard in Radio Corp. -- "more than a
dubious preponderance" -- was pure dictum. See id.
The defendant in that case could not have
surmounted any burden of proof by refighting a lost
battle. Perhaps for that reason, this Court was less
than clear about what it meant by "more than a
dubious preponderance." And as noted above, this
Court has not typically applied a clear-and-convincing-evidence standard to invalidity. See p.
23, supra.2
25
Before the creation of the Federal Circuit, at
least two regional circuits determined that the
traditional preponderance-of-the-evidence standard
applies to validity challenges "in the usual case."
Rains v. Niaqua, Inc., 406 F.2d 275, 278 (2d Cir.
1969); see also Dickstein v. Seventy Corp., 522 F.2d
1294, 1297 (6th Cir. 1975). Numerous other
circuits agreed that the clear-and-convincing-evidence standard should not apply where, as in
this case, the PTO did not consider the relevant
prior art. Microsoft Pet. 15-18. Those courts
correctly recognized that this Court's precedents do
not mandate a clear-and-convincing-evidence
standard. Instead, the question is governed by
traditional principles of law, the text of the Patent
Act, and the practical realities of the patent
system, all of which confirm that there is no such
requirement.
CONCLUSION
For the foregoing reasons, this Court should
grant the petition for a writ of certiorari.
26
Respectfully submitted,
PAUL D. CLEMENT
Counsel of Record
DARYL JOSEFFER
ADAM CONRAD
KING & SPALDING LLP
[address, phone]
Counsel for Amici Curiae
JOHN THORNE
GAIL F. LEVINE
VERIZON
COMMUNICATIONS INC.
[address, phone]
Counsel for Verizon
Communications Inc.
MICHELLE K. LEE
CATHERINE C. LACAVERA
TIMOTHY A. PORTER
JOHN L. LABARRE
GOOGLE INC.
[address, phone]
Counsel for Google Inc.
PAUL H. ROEDER
HEWLETT-PACKARD CO.
[address, phone]
Counsel for Hewlett-Packard
Co.
September 29, 2010
______
1 Pursuant to Sup. Ct. R. 37.2(a), amici timely notified the parties of
their intent to file this brief. The parties have consented to the filing of
this brief in letters submitted herewith or on file with the Clerk. No
counsel for any party authored this brief in whole or in part, and no
person or entity, other than amici and its counsel, made a monetary
contribution intended to fund the preparation or submission of this
brief.
2 This Court's recitation of the reasonable-doubt standard in Mumm v.
Jacob E. Decker & Sons, 301 U.S. 168, 171 (1937), was likewise
dictum. Mumm held only that plaintiffs need not plead validity because
it is an affirmative defense; the Court mentioned the evidentiary
standard by which a defendant must overcome its burden of proof only
in passing dictum. Id.
27
*******************************************
*******************************************
No. 10-290
In The
Supreme Court of the United States
Microsoft Corporation,
Petitioner,
v.
I4I Limited Partnership, et al.,
Respondents.
On Petition for a Writ of Certiorari
To the United States Court of Appeals
For the Federal Circuit
BRIEF OF AMICI CURIAE
ELECTRONIC FRONTIER FOUNDATION,
PUBLIC KNOWLEDGE, COMPUTER &
COMMUNICATIONS INDUSTRY
ASSOCIATION, AND APACHE SOFTWARE
FOUNDATION IN SUPPORT OF PETITIONER
Michael Barclay
Counsel of Record
Julie P. Samuels
Corynne McSherry
James S. Tyre
ELECTRONIC FRONTIER FOUNDATION
[address, phone, email]
Attorneys For Amici Curiae
[Additional Counsel Listed on Inside Cover]
Of counsel:
Sherwin Siy
PUBLIC KNOWLEDGE
[address, phone, email]
Matt Schruers
COMPUTER & COMMUNICATIONS
INDUSTRY ASSOCIATION
[address, phone, email]
Lawrence Rosen
THE APACHE SOFTWARE FOUNDATION
Rosenlaw & Einschlag
[address, phone, email]
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES....................................iii
INTEREST OF AMICI CURIAE...............................1
SUMMARY OF ARGUMENT...................................3
ARGUMENT ..............................................................
5
I. THE CLEAR AND CONVINCING EVIDENCE
STANDARD IMPEDES THE
DEVELOPMENT OF OPEN SOURCE
SOFTWARE .................................................... 5
II. FINDING CLEAR AND CONVINCING
EVIDENCE OF PATENT INVALIDITY IS A
RECURRING PROBLEM IN COMPUTER
SOFTWARE PATENT CASES.......................8
A. Patent Owners Assert that Accused
Infringers Must Use the Prior Art's
Source Code to Prove Invalidity, But
that Source Code is Often Unavailable
Years After the Fact..............................8
B. The Growth in the Number of Issued
Patents and of Patent Lawsuits Since
the Formation of the Federal Circuit
Exacerbates the Problem.....................12
III. THE COURT SHOULD INTERPRET
SECTION 282 OF THE PATENT ACT
ACCORDING TO ITS PLAIN MEANING
AND THE COURT'S PRECEDENTS..........17
i
CONCLUSION........................................................20
ii
TABLE OF AUTHORITIES
Page(s)
Cases
Bilski v. Kappos, 561 US_,
130 S. Ct. 3218 (2010)..............................................
19
eBay Inc. v. MercExchange,
L.L.C., 597 U.S. 388 (2005).......................... 16, 17, 18
Fonar Corp. v. General Electric Co., 107 F.3d 1593
(Fed. Cir. 1997).........................................................
11
Grogan v. Garner,
998 U.S. 279 (1991)............................................ 18, 19
Herman & MacLean v. Huddleston, 959 U. S. 375
(1983) ........................................................................
20
i4i Ltd. Partnership v. Microsoft Corp., 598 F.3d 831
(Fed. Cir. 2010)...............................................9, 11,
12
In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994)
................................................................................
.. 19
Jacobsen v. Katzer,
535 F.3d 1373 (Fed. Cir. 2008)..................................5
KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 127 S. Ct.
1727 (2007)......................................................... 17,
18
Markman v. Westview Instruments, Inc., 517 U.S.
370 (1996).................................................................
17
Microsoft Corp. v. AT&T Corp., 550 U.S. 437, 459,
127 S. Ct. 1746
(2007)..........................................8
iii
Northern Telecom, Inc. v. Datapoint Corp., 908 F.2d
931 (Fed. Cir. 1990)............................
11
State Street Bank & Trust v. Signature Financial
Group, 149 F.3d 1368 (Fed. Cir. 1998).................... 14
Statutes and Legislative Authorities
35 U.S.C. §
101.................................14
35 U.S.C. §
103.................................17
35 U.S.C. § 282...................... 5, 18, 20
35 U.S.C. § 283................................17
Federal Trade Commission, To Promote Innovation:
The Proper Balance of Competition and Patent Law
and Policy (2003)................................. 3, 7, 11
H.R. Rep. No. 97-312 (1981)............................. 17
Other Authorities
James Bessen & Michael J. Meurer, The Patent
Litigation Explosion, Boston University School Of
Law Working Paper Series, Law And Economics
Working Paper No. 05-18 (2005)............................ 16
John Allison, et al, Valuable Patents, 92. Geo. L.J.
435
(2004)...................................................................3 Patent Scope and
Innovation in the Software Industry, 89 Cal. L. Rev.
(2001)............................................................ 10, 11,
14
iv
Yochai Benkler, The Wealth of Networks:
How Social Production Transforms Markets and
Freedom
(2006)...........................................................5
v
INTEREST OF AMICI CURIAE*1
The Electronic Frontier Foundation ("EFF") is a nonprofit civil
liberties organization that has worked for more than twenty years to protect
consumer interests, innovation, and free expression in the digital world. EFF
and its more than 19,000 dues-paying members ha8e a strong interest in helping
the courts and policy-makers in striking the appropriate balance between
intellectual property and the public interest. The Federal Circuit's requirement
that an accused infringer prove patent invalidity by "clear and
convincing" evidence undermines the traditional patent bargain between
private patent owners and the public and threatens to impede innovation and the
dissemination of knowledge. These are issues of critical importance to consumers
and the public interest. As an established advocate for the interests of
consumers and innovators, EFF has a perspective to share that is not represented
by the parties to this appeal, neither of whom speaks directly for the interests of
1
consumers or the public interest generally.
As part of its mission, the EFF has often served as amicus in key patent cases,
including Bilski v. Kappos, 130 S. Ct. 3218 (2010); Quanta Computer, Inc. v. LG
Electronics Corp., 128 S. Ct. 2109 (2008); KSR Int'l Co. v. Teleflex Inc., 550
U.S. 398 (2007); and eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388
(2005).
Public Knowledge is a non-profit public interest organization devoted to
protecting citizens' rights in the emerging digital information culture and
focused on the intersection of intellectual property and technology. Public
Knowledge seeks to guard the rights of consumers, innovators, and creators at
all layers of our culture through legislative, administrative, grassroots, and
legal efforts, including regular participation in patent and other intellectual
property cases that threaten consumers, trade, and innovation.
The Computer & Communications Industry Association ("CCIA") is a
non-profit trade association dedicated to open markets, open systems and open
networks. CCIA represents companies in the high technology products and services
sectors, including computer hardware and software, electronic commerce,
telecommunications and Internet products and services. More information on CCIA
members is available online at http://www.ccianet.org/members.
The Apache Software Foundation (ASF) is a non-profit 501(c)(3) corporation that
produces software projects under a pragmatic open-source license for the public
good.
2
SUMMARY OF ARGUMENT
Properly understood, a patent is a distinct statutorily-created and limited set
of rights, designed to encourage inventors to disclose their inventions to the
public, thereby promoting scientific and industrial progress. Illegitimate
patents inhibit that progress, the sharing of knowledge, and the pace of
innovation.
Allowing parties to lawsuits to challenge patents asserted against them serves
as a necessary check on illegitimate patents and helps ensure that improper
patents receive independent review in a court of law. Artificially high
standards of proof, such as that advanced by the Federal Circuit, undermine the
effectiveness of this review by impeding the ability of parties—especially
parties engaged in developing free and open source software—to present effective
challenges. As a result, the system, and the important bargain between
intellectual property and the public interest, suffers.
This amicus brief makes three points. First, software and computer-related
patents have started to make up a larger percentage of litigated patents. See
generally, John Allison, et al, Valuable Patents, 92. Geo. L.J. 435, 472 (2004).
This development in turn disproportionately harms Free and Open Source Software
(together, "FOSS") projects, both of which tend to lack substantial,
stand-alone litigation budgets. In recent years, FOSS projects—which involve the
open development and exchange of source code—have become mainstream and are now
critical to computer and Internet technology. Federal Trade Commission, To
Promote Innovation:
3
The Proper Balance of Competition and Patent Law and Policy ("FTC
Report") Chap. 3, at 51 (2003)*2 ("software
patentability has introduced new costs, such as the cost of obtaining a patent,
determining whether a patent is infringed, defending a patent infringement suit,
or obtaining a patent license . . . may disproportionally affect small firms and
individual programmers and the open source community"). By impeding FOSS
growth in particular, the upward trend in patent litigation serves as a
detriment to innovation in general.
Second, the Federal Circuit's heightened standard of proof of invalidity creates
an especially pernicious effect in computer software patent cases. Software
patent plaintiffs often argue that it is necessary to use the source code of the
prior art software product to prove a software patent invalid. However, that
source code is frequently unavailable when needed, which is often years after
the product in question was in use. While software patent plaintiffs can use the
accused infringer's current source code to prove infringement by a preponderance
of the evidence, if the prior art source code is unavailable it will be
difficult for the defendant to prove invalidity by that same preponderance, let
alone by clear and convincing evidence. Although the unavailability of the
source code does not foreclose an invalidity defense, given the complex
technical issues and the heightened standard, the practical effect is that
plaintiffs are given free rein to argue that the alleged infringer cannot meet
its heightened standard of proof without
4
the source code.
The sharp increase in the number of issued patents and number of patent lawsuits
since the Federal Circuit's creation exacerbates this problem and further
inhibits innovation in the software industry.
Third, the statutory language of 35 U.S.C. § 282 does not contain the Federal
Circuit's enhanced standard of proof. Following the statute's plain meaning and
this Court's precedent, the proper standard of proving patent invalidity should
be preponderance of the evidence.
ARGUMENT
I. THE CLEAR AND CONVINCING
EVIDENCE STANDARD IMPEDES THE
DEVELOPMENT OF OPEN SOURCE
SOFTWARE
Started several decades ago by a few core groups of programmers, FOSS has
blossomed into a valuable and large segment of the information technology
industry, with companies such as IBM, Novell, Sun Microsystems, and Red Hat
offering products built on the FOSS development process. That process
"invite[s] computer programmers from around the world to view software code
and make changes and improvements to it. Through such collaboration, software
programs can often be written and debugged faster and at lower cost than if the
copyright holder were required to do all of the work independently."
Jacobsen v. Katzer, 535 F.3d 1373, 1379 (Fed. Cir. 2008). FOSS technologies are
now widely used by public and private entities, from
5
the
United States
government to private corporations such as IBM Corporation, Sun Microsystems,
and Google, Inc. See Yochai Benkler,The Wealth of Networks: How Social
Production Transforms Markets and Freedom 64 (2006).
In FOSS projects, unlike the closed and proprietary software developed by
Petitioner, software develops openly and transparently. The conversations, the
computer code, and each stage of development are accessible and open to the
public, maximizing access to scientific and industrial knowledge in the
community and spurring further productivity and innovation. In addition, most
FOSS collaborations involve contributors from a wide variety of companies,
groups, and countries, many of whom volunteer their time and ingenuity out of
passion and dedication instead of financial reward.
And therein lies the rub. Because these collaborations are forged primarily
through community rather than capital investment, many FOSS projects lack the
funding to pay for patent counsel, much less litigation. The FOSS business model
ensures that FOSS developers generally do not make the kind of money required to
successfully mount patent litigation defenses, especially when those defenses
require the search for long-lost or arcane source code.
Even if the FOSS community had the resources to litigate, FOSS developers face
an additional hurdle: the FOSS business model makes it nearly impossible to
collect prior art in a format that makes it useful as potentially invalidating
under current Federal Circuit guidelines. To fend off
6
patent threats, FOSS
projects often depend on the collective knowledge of their members and the
documentation of the projects as prior art, to the extent that such documents
exist.
Much of this collective knowledge, however, arguably could not be considered as
evidence under the Federal Circuit's current standard requiring alleged
infringers to provide invalidity by "clear and convincing" evidence.
Indeed, the opinion below may be read to hold that, without obtaining a full set
of source code, a party could not rely on evidence of the operation of the
source code to invalidate a patent.
In the FOSS context, that full set may be extremely difficult to assemble. For
example, consider various emails exchanged between developers all over the
world, each with different snippets of code and comments. Some of those
developers may archive their email; other will not, or will not do so in an
easily searchable form.
Moreover, if the culture of software development tends to be informal, FOSS
development is still more informal. FTC Report, supra, Chap. 3, at 54.
Documentation is likely to take the form of emails or postings to internet
message boards and newsgroups that are much more informal than traditional
academic research or industry publications. Further, more often than not, no
party is tasked with maintaining copies of the source code that makes up the
FOSS and it often gets lost and becomes unobtainable at a later date when needed
in litigation.
Thus, holders of patents that are unnecessarily virtually indestructible because
of the inflated standard for proving invalidity pose a
7
particular threat to
FOSS. That, in turn, threatens the public interest in promoting the innovative
activities that would take place but for these lawsuits and the mere threat of
these suits.
II. FINDING CLEAR AND CONVINCING
EVIDENCE OF PATENT INVALIDITY IS
A RECURRING PROBLEM IN COMPUTER SOFTWARE PATENT
CASES
A. Patent Owners Assert that Accused
Infringers Must Use the Prior Art's
Source Code to Prove Invalidity,
But that Source Code is Often
Unavailable Years After the Fact
The problems Microsoft faced in this case are both common and pernicious. In a
software patent case, proving whether an accused program infringes or whether a
prior art program invalidates can involve an examination of the program's source
code.3 In many software patents, some claim limitations may be practiced by the
source code. Therefore, the source code is compared to the claims to establish
infringement or, as in this case, invalidity. Although the unavailability of the
source
8
code does not foreclose an invalidity defense, given the complex
technical issues and the heightened standard, the practical effect is that
plaintiffs are given free rein to argue that the alleged infringer cannot meet
its heightened standard of proof without the source code.
For example, in this case, respondent i4i argued, and both lower courts agreed,
that Microsoft was unable to prove its invalidity case without the relevant
prior art's source code. Microsoft cert. petition at 9, 25; i4i Ltd. Partnership
v. Microsoft Corp., 598 F.3d 831, 848 (Fed. Cir. 2010), Pet. App., 22a (i4i's
expert "opined that it was impossible to know whether the claim limitation
was met without looking at [the prior art's] source code."); see also Pet.
App., 139a (district court stated that the testimony of i9i's expert "that
no one could assess whether S9 met the claims of the '449 patent without the
relevant source code was compelling").
In most cases, the patent owner can easily get the accused infringer's current
source code in discovery, and prove infringement by a mere preponderance that
way. See, e.g., Patent L.R. 3-9(a) for the Northern District of California;*4
P.R. 3-9(a) for the Eastern District of Texas*5 (both requiring the accused
infringer to produce its source code early in the case).
9
In contrast, the source code for prior art is often unavailable. First,
"undocumented prior art" in software is not published as in other
scientific fields, and in fact "[frequently, the source code itself is
never released at all." Mark A. Lemley & Julie E. Cohen, Patent Scope
and Innovation in the Software Industry, 89 Cal. L. Rev. 1, 13, 42-44 (2001)
("Lemley & Cohen"). As one software company explained in a public
hearing:
Unlike most other technologies—such as pharmaceuticals,
chemicals, and industrial design—there are no extensive, comprehensive databases
where software prior art can be reliably found. In the computing arts,
particularly in the open source community, a great amount of innovation has been
and is produced by individuals who never publish in industry journals. . . .
Thus, diligent searches for business methods and software are often unreliable
and costly. . . . the burden typically falls to the public and small-scale
innovators to consider expensive and time-consuming
litigation.
Webbink, "Red Hat's Comments To The Joint FTC-DOJ Hearing on Competition
and Intellectual Property Law," March 20, 2002,*6 at pages 2-3. What is
worse, for confidentiality reasons, non-open source
10
third-party companies (or
even parties who later litigate these issues) often carefully guard their source
code as valuable trade secrets.
Even when a software company does patent its technology, such patents often do
not disclose the source code. The Federal Circuit has held that a high-level
functional description will suffice, thereby negating the need to disclose
source code, flowcharts, or detailed descriptions of the patented program. See
Fonar Corp. v. General Electric Co., 107 F.3d 1593, 1599 (Fed. Cir. 1997);
Northern Telecom, Inc. v. Datapoint Corp., 908 F.2d 931, 941-42 (Fed. Cir.
1990); Lemley & Cohen, 89 Cal. L. Rev. at 24-25; FTC Report, Chap. 5 at 7
("difficulties are particularly acute when non-patent prior art is
important and in new areas of technology, e.g., software and biotechnology, and
new fields of patenting activity, e.g., business methods").
Further, while the open source code discussed above is not kept secret at the
outset, it, too, can be difficult to locate when it becomes relevant during a
patent lawsuit. Thus, for all forms of source code, the mere passage of time
means that such source code will be difficult if not impossible to find and
introduce as possible prior art. See, e.g., i4i v. Microsoft, 598 F.3d at
846-47, Pet. App., 20a (source code was destroyed before the litigation began).
Thus, software patent litigation will necessarily be skewed against alleged
infringers, because they will simply be unable to obtain all of the evidence
that could be used in their defense.
All of the above tends to reduce software patent litigation to a game of
"gotcha." The patent owner argues that it proved infringement by a
11
preponderance of the evidence, using the very source code the accused infringer
was required to produce in discovery. At the same time, the patent owner
prejudicially argues to the jury that the accused infringer did not (and cannot)
prove invalidity because the prior art source code isn't available. See, e.g.,
Pet. App., 138a-139a (i4i's expert attacked Microsoft's expert for rendering an
invalidity opinion without reviewing the unavailable code). Even in cases where
source code is not necessary to prove invalidity, when the code isn't available
the patent owner will prejudicially argue that the accused infringer can't even
offer the same quantum of proof of invalidity as the patent owner did for
infringement — let alone provide the added proof that is clear and convincing.
That is what the lower courts concluded here. i4i v. Microsoft, 598 F.3d at 848,
Pet. App., 22a (Microsoft failed to meet the clear and convincing standard of
proof because the source code was missing).
B. The Growth in the Number of
Issued Patents and of Patent
Lawsuits Since the Formation of
the Federal Circuit Exacerbates
the Problem
The creation of the Federal Circuit in 1982 coincides with both a sharp increase
in the number of patents issued and in the amount of patent litigation. The
following table shows the number of issued patents per year since
1980:*7
12
The number of patent lawsuits likewise
showed a “dramatic” increase since the early 1980’s:*8
13
The increase in issued patents and patent litigation has had serious
consequences for the software industry, particularly after the Federal Circuit
expanded patent protection for software. In re Alappat, 33 F.3d 1526 (Fed. Cir.
1994); State Street Bank & Trust v. Signature Financial Group, 149 F.3d 1368
(Fed. Cir. 1998), cert. denied, 525 U.S. 1093 (1999) (both Alappat and State
Street greatly expanded the definition of patentable subject matter under 35
U.S.C. § 101 so as to include computer software);*9Lemley
& Cohen, 89 Cal. L. Rev. at 10-11.
Principal among these consequences has been disincentive to innovation, as
software companies find themselves forced to devote more resources to litigation
rather than development. As one study explained:
14
Most of the rapid increase in patent litigation hazards over
the 90s cannot be explained by firm patenting rates, R&D spending, firm
value or industry composition. Looking at a variety of explanations, we conclude
that legal changes may be the dominant factor driving this increase. This
implies that the increase in patent litigation represents a growing disincentive
to R&D that is not likely offset by growth in the number or value of
innovations. Furthermore, we find evidence that this disincentive is borne by
firms not only in their roles as patent holders, but also as innovators having
to defend against patent lawsuits. We find that the more R&D a firm
performs, the more likely it is to be sued. In most industries, this pattern of
litigation is inconsistent with the view that most defendants in patent lawsuits
are simple pirates or imitators. Instead, patent defendants are, to a large
degree, innovators themselves, spending as much on R&D as the plaintiffs. .
. .Thus an important part of the burden of patent disputes falls on defending
firms. . . . Also, as Lanjouw and Schankerman (2004) find, the risk of
litigation falls disproportionately on small
firms.
James Bessen & Michael J. Meurer, The Patent Litigation Explosion, Boston
University School Of Law Working Paper Series, Law And Economics
15
Working Paper
No. 05-18 (2005), 10 at 27-28.
These effects are exacerbated by the many non-practicing entities (sometimes
called "patent trolls") that have built a cottage industry in
obtaining spurious patents and then using them to extract settlements. Justice
Kennedy's concurring opinion in eBay Inc. v. MercExchange, L.L.C., described the
practice:
An industry has developed in which firms use patents not as a
basis for producing and selling goods but, instead, primarily for obtaining
licensing fees. See FTC, To Promote Innovation: The Proper Balance of
Competition and Patent Law and Policy, ch. 3, pp. 38-39 (Oct. 2003), available
at http://www.ftc.gov/os/2003/10/innovationrpt.pdf (as visited May 11, 2006,
and available in Clerk of Court's case file). For these firms, an injunction,
and the potentially serious sanctions arising from its violation, can be
employed as a bargaining tool to charge exorbitant fees to companies that seek
to buy licenses to practice the patent.
547 U.S. 388, 396 (2005).
One way of mitigating the impact of this increase in software patent grants and
resulting
16
litigation would be to level the playing field for challenging
improper patents. An even-handed standard for proving validity would be a step
in the right direction.
III. THE COURT SHOULD INTERPRET
SECTION 282 OF THE PATENT ACT
ACCORDING TO ITS PLAIN MEANING
AND THE COURT'S PRECEDENTS
Congress created the Federal Circuit in order to "strengthen the United
States patent system." Markman v. Westview Instruments, Inc., 517 U.S. 370,
390 (1996), citing H.R. Rep. No. 97-312, at 2023 (1981). However, it is
essential to ensure that, in carrying out this task, the Federal Circuit does
not exceed Congress' statutory mandate.
For example, in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2005), the
Court reversed the Federal Circuit's implementation of its "general rule
that courts will issue permanent injunctions against patent infringement absent
exceptional circumstances." 401 F.3d 1323, 1339 (2005). Instead, this Court
relied on the plain language of 35 U. S. C. § 283, which states that if a patent
owner wins a trial, injunctions "may" issue "in accordance with
the principles of equity" and held that "the Court of Appeals erred in
its categorical grant" of automatic injunctions. 547 U.S. at 394.
Later, in KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 127 S. Ct. 1727 (2007),
the Court considered the obviousness standard in 35 U.S.C. § 103. The Federal
Circuit had read into § 103 a heightened standard, "under which a court
will only find a patent claim obvious if 'some motivation or
17
suggestion to
combine the prior art teachings' can be found in the prior art, the nature of
the problem, or the knowledge of a person having ordinary skill in the
art." Id. at 407, 127 S. Ct. at 1734. In its roughly 20-year history in the
Federal Circuit, this standard greatly favored patent owners; it was often
difficult or impossible for an accused infringer to prove obviousness by showing
a "teaching, suggestion, or motivation."
This Court unanimously reversed, holding that the Federal Circuit's
"fundamental misunderstandings" of the Patent Act led the lower court
to analyze the obviousness standard "in a narrow, rigid manner inconsistent
with § 103" and this Court's precedents. Id. at 422, 428, 127 S. Ct. at
1743, 1746.
As with its eBay and KSR rulings, the Federal Circuit has once again interpreted
the Patent Statute and relevant case law to include an unnecessary heightened
standard that disproportionately burdens the defense. In this case, the relevant
statute does not require the standard of proving invalidity to be by clear and
convincing evidence; rather, 35 U.S.C. § 282 merely states that the "burden
of establishing invalidity of a patent or any claim thereof shall rest on the
party asserting such invalidity." Of course, if Congress wanted to require
proving invalidity by clear and convincing evidence, it could have included that
language in § 282. It did not.
Normally, the standard of proof in civil cases is preponderance of the evidence.
In Grogan v. Garner, 498 U.S. 279 (1991), for example, the Court considered a
section of the Bankruptcy Code
18
providing that a debtor would not be discharged
from a debt obtained by actual fraud. The question was whether a creditor
seeking to prevent discharge had to prove his claim of fraud by clear and
convincing evidence, or by a preponderance of the evidence.
As here, the code section was silent on the standard of proof. Id. at 282. The
Eighth Circuit held that the standard was one of clear and convincing evidence.
Id. This Court reversed, id. at 286, stating:
Because the preponderance-of-the-evidence standard results in
a roughly equal allocation of the risk of error between litigants, we presume
that this standard is applicable in civil actions between private litigants
unless "particularly important individual interests or rights are at
stake," citing Herman & MacLean v. Huddleston, 459 U. S. 375, 389-390
(1983). The Court found no such "important" interests in Grogan, even
though it dealt with the desirable goal of permitting a debtor to obtain a
"fresh start" under the Bankruptcy Code. 498 U.S. at
286-87.
The same result should obtain here because, in the normal course, a civil action
between private parties over the validity of a patent also will not raise the
"important" interests with which the Court was concerned with in
Grogan. In Herman & MacLean v. Huddleston, for example, the Court compared
the types of cases where important interests were involved (such as proceedings
to terminate parental rights or involuntary
19
commitment proceedings) with cases
where they were not (such as securities fraud). 459 U. S. 375, 389-390 (1983). A
patent suit, while an important exercise in striking an appropriate balance
between intellectual property and the public interest, clearly falls into the
latter category, where the preponderance of the evidence standard
applies.
In this case, the Federal Circuit has incorrectly interpreted a clear statute.
This Court should grant certiorari to correct the Federal Circuit's misreading
of § 282.
CONCLUSION
The standard of proving patent invalidity is an important issue of nationwide
importance. The petition for a writ of certiorari should be granted.
Respectfully submitted,
Michael Barclay
Counsel of Record
Julie P. Samuels
Corynne McSherry
James S. Tyre
ELECTRONIC FRONTIER FOUNDATION
[address, phone, email]
Attorneys for Amici Curiae
Electronic Frontier Foundation
20
Of Counsel:
Sherwin Siy
PUBLIC KNOWLEDGE
[address, phone, email]
Matt Schruers
COMPUTER & COMMUNICATIONS
INDUSTRY ASSOCIATION
[address, phone, email]
Lawrence Rosen
The APACHE SOFTWARE
FOUNDATION
Rosenlaw & Einschlag
[address, phone, email]
September 29, 2010
____________________
1
No counsel for a party authored this brief in whole or
in part, and no such counsel or party made a monetary
contribution intended to fund the preparation or submission of
this brief. No person other than the amici curiae, or their
counsel, made a monetary contribution intended to fund its
preparation or submission. (Petitioner Microsoft Corp. is a
member of CCIA, but did not author this brief in whole or in
part, or make a monetary contribution intended to fund its
preparation.) Pursuant to Supreme Court Rule 37.2(a), amici
curiae provided at least ten days’ notice of their intent to file
this brief to counsel of record for all parties. The parties have
consented to the filing of this brief. Petitioner’s blanket
consent and respondents’ blanket consent were filed with the
Court on September 13 and 17, 2010, respectively.
*2Available at:
http://www.ftc.gov/os/2003/
10/innovationrpt.pdf
*3
Source code is the “‘human readable’ programming
language” in which computer programmers write their
programs. Source code “is then generally converted by the
computer into a ‘machine readable code’ or ‘machine language’
expressed in a binary format.” Microsoft Corp. v. AT&T Corp.,
550 U.S. 437, 459, 127 S. Ct. 1746, 1760 (2007) (Alito, J.,
concurring). Commercial software companies such as Microsoft
generally distribute their programs in machine readable code,
not source code.
*4
Available at:
http://www.cand.uscourts.gov/
cand/LocalRul.nsf/fec20e
529a5572f0882569b6006607e0/
5e313c0b7e4cd680882573e2006
2dbcf?OpenDocument
*5
Available at:
http://www.txed.uscourts.gov/Rules/LocalRules/Docume
nts/Appendix%20M.pdf
*6
Available at:
http://www.ftc.gov/opp/
intellect/020320webbink.pdf
*7
D. Crouch, “USPTO Patent Grant Numbers,”
Patently-O Blog, August 19, 2010, available at:
http://www.patentlyo.com/
patent/2010/08/uspto-patent-
grant-numbers.html.
(The Patently-O Blog is recognized as one of the leading
patent law blogs, if not the leading blog. See, e.g.:
http://blawgit.com/2009/08/
11/50-best-patent-blogs/ and
http://ipwatchdog.com/
2009/02/11/the-top-25-patent-blogs/id=2015/)
*8 D. Crouch, “Patent Litigation Statistics: Number of
Patents Being Litigated,” Patently-O Blog, March 17, 2008
(noting “an increasing trend to include more defendants in a
single complaint”), available at:
http://www.patentlyo.com/
patent/2008/03/patent-litigati.html
*9 State Street was probably overruled in part, at least
sub silentio, by this Court in Bilski v. Kappos, 561 US __, 130 S.
Ct. 3218 (2010). However, State Street permitted the issuance
of broad software patents by being the law for over 10 years.
*10 Available at:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=831685
21
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