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Oral Argument in Microsoft v. i4i at US Supreme Court Today - Why FOSS Cares - Updated: Transcript
Sunday, April 17 2011 @ 03:14 PM EDT

Today is the day scheduled for oral argument before the US Supreme Court in the appeal of the i4i v. Microsoft patent litigation. The appeal is focused on an issue that matters to FOSS a great deal. EFF, Public Knowledge, and the Apache Foundation have filed an amicus brief [PDF] that explains to the court why it matters so much and with such particularity to the FOSS community. I've done it as text for you.

I'll let them explain the details, but the big picture is that US patent law, largely due to the Federal Circuit's broadening of plaintiffs' rights, is hard on defendants and harder still on FOSS defendants, because FOSS uses a development model that doesn't match the patent law as currently interpreted by the Federal Circuit.

The issue before the US Supreme Court is this, in plain English: how hard should it be to prove that a patent that the USPTO has issued is invalid? How about if you have evidence that the USPTO examiner never looked at? Should juries assume that the USPTO got it right? I smile just writing that. With FOSS software, it's almost impossible for an examiner to find prior art, unless it's been patented, which it almost never is, given the restrictions on what examiners can search through. And you may be surprised when you read what the courts require as proof. I am pretty sure that after you read this brief, you'll see how unbalanced the current system is, how it disadvantages FOSS defendants, and hopefully you'll notice some things you can do to help balance out the playing field. I hope the court sees the unfairness too, and I hope they care.

The bottom line for me remains that software and patents need to get a divorce. But anything that we or the courts or Congress can do to ameliorate the strange and damaging tilt toward patent plaintiffs to the detriment of defendants is to the good. The law is supposed to be fair to both plaintiffs and defendants, but with patent law, it absolutely isn't, as the brief will show you. The damage being done to innovation is enormous already, and with Microsoft on a march to rape and pillage FOSS and force the community -- most especially Android -- to pay royalties for patents that could be invalidated in a more fair system but which it can use as anticompetitive weapons unless something is done to short-circuit their strategy, this case is vitally important.

[ Update: Here's the transcript [PDF] of the oral argument. Thomas Hungar, on behalf of Microsoft, opens like this: "The Federal Circuit's clear and convincing evidence standard ensures the enforcement of invalid patents, even though this Court recognized in KSR that invalid patents stifle rather than promote the progress of liberal arts." To which we can all say, Amen.]

Please take particular note of the requirements for availability of prior art in the form of earliest versions of software code and how that works against the FOSS community. Do you retain all versions? How about email threads? No? Read this brief, then, and you'll see how hard it is to win unless you have all that. One snip:

FOSS's collaborative nature, while integral to its success, creates several problems when FOSS software is the subject of a patent lawsuit (or threat), even where the basis of the threat may be an invalid patent. First, 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. Second, the FOSS collaboration model makes it difficult to collect prior art in a format that can be used to challenge validity under current Federal Circuit guidelines. To fend off patent threats, FOSS projects often depend on the collective knowledge of their members and the sometimes haphazard 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. Specifically, 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 that source code to invalidate a patent. i4i Ltd. Partnership v. Microsoft Corp., 598 F.3d 831, 848 (Fed. Cir. 2010), Pet. App., 22a.

In the FOSS context, that full set may be difficult to assemble. The nature of software development tends to be informal. FTC Report, Chap. 3, at 54. Documentation likely takes the form of emails or postings to internet message boards and newsgroups that are much more informal than traditional academic research or industry publications. For example, the development of a particular piece of software may be documented primarily in emails exchanged between developers all over the world, each with different snippets of code and comments. Some of those developers may archive their email; others may not, or may not do so in an easily-searchable form. Further, more often than not, no party is tasked with creating explanatory materials of any kind, and the discussions that exist often get lost and become unobtainable at a later date when needed in litigation.

Thus, the Federal Circuit's inflated standard of proving invalidity means that patents that might be invalidated by FOSS technology are nonetheless impervious to ordinary legal challenge. That, in turn, threatens the public interest in promoting the innovative activities that would take place but for improper lawsuits and legal threats.

That's why FOSS cares about this case so much. It has established a bar that FOSS can't normally reach. Keep in mind that Open Invention Network has a program whereby you can establish prior art, if your innovation is related to the Linux ecosystem. Talk to them. Even if you don't wish to patent your innovations, at least you can prevent others from doing so. And hopefully the court will act.

I said hopefully.

Sometimes I see comments about how software patents are so evil FOSS companies and projects shouldn't get them. Please note how hard you make it for FOSS lawyers to defend you when you don't help by being realistic. Please, take practical steps to make sure your innovation isn't kidnapped by venal folks who will use it against the community. If there is one message I'd like to send before I leave, that would be it.

The case is at the final level now. It's Microsoft's last chance. If it loses here, there is no higher court. I'll post the oral argument transcript as soon as it's available. A decision is not expected until June.

If you'd like to see how Canadian media views this case, since i4i is a Canadian company, here's a sample:

If i4i loses, it will be a blow to inventors and creators, said Owen. "It's a turning point in patent law."

The U.S. government, inventors, venture capitalists and a number of biotech and pharmaceutical companies have lined up behind i4i, while Google, Apple, Intel Corp. and others are supporting Microsoft in its efforts to make it easier to invalidate patents.

Patent expert Alexander Poltorak said the case is a potential threat to long-established patent law in the United States.

"Their fight is somewhat of an epic for the future of U.S. patent law," said Poltorak, chairman and CEO of U.S.-based General Patent Corp. in New York.

He noted that about half of all patents issued in the United States go to non-U.S. residents.

"So it's an issue of global proportions," he said, adding that if i4i loses it would be "devastating for the entire intellectual property business in the United States."

Sounds good to me. And may I please ask for a favor? If half of all the US patents go to non-US residents, could pro-patent folks stop arguing that patents benefit the US economy?

Of course, there is no doubt in my mind, reading through all the court filings and the court orders, that i4i was badly treated by Microsoft. Partnering with Microsoft doesn't seem to pay off. But to destroy FOSS just for any private company's personal interests -- it doesn't seem proportional. The other day, a Senator working on revising US patent law proclaimed that it had to be fixed to protect modern innovation, like the Internet:

“This important legislation is long overdue. The last major patent reform was nearly 60 years ago," said House Judiciary chairman Lamar Smith (R-Texas), who has worked closely with Senate Judiciary chairman Patrick Leahy (D-Vt.) to usher the bill through Congress.

"Since then, American inventors have helped put a man on the moon, developed cell phones and launched the Internet. But we cannot protect the technologies of today with the tools of the past."

Sigh. The Internet is not patented. It is FOSS. The inventors deliberately chose not to patent it. And look at the incredible flowering of creativity and innovation that has resulted. So, you see, you don't need to protect the internet with patent laws. You need to protect it so patent laws don't destroy it or the what this incredible FOSS development model can produce next. Seriously. But do you see why education is so vital? We need to keep explaining over and over and over, until the courts understand that it's time to rethink from the fundamentals up, or real and irreversible damage will result.

Why, you may ask, would Microsoft argue on the same side as the FOSS community? Because it's been found a patent infringer, and unless it can prevail here, Microsoft has to pay a $290 million judgment to i4i.

And on the other side, or more precisely taking no side in the case, but a pro-patents position on this one, is IBM [PDF], which chose not to stand with FOSS on this issue, for reasons that may perhaps be discerned in this article on IPWatchdog.

Here's Microsoft's appeal brief [PDF], i4i's brief [PDF], and Microsoft's reply brief [PDF]. You'll find all the amicus briefs here on SCOTUSblog and/or on the American Bar Association's page. And i4i has them on its website too.

And here is Groklaw's earlier coverage of the case as it worked its way through the legal system, in chronological order, in case you want to review:

Here's EFF's amicus brief [PDF], as text:

*******************************

No. 10-290

________________________

IN THE
Supreme Court of the United States

_________________

MICROSOFT CORPORATION,
Petitioner,

v.

I4I LIMITED PARTNERSHIP, ET AL.,
Respondents.

______________

On Writ of Certiorari
To the United States Court of Appeals
For the Federal Circuit

===============================

BRIEF OF AMICI CURIAE
ELECTRONIC FRONTIER FOUNDATION,
PUBLIC KNOWLEDGE, 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, telephone, email]

Attorneys For Amici Curiae
[Additional Counsel Listed on Signature Page]

i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .................................iii

INTEREST OF AMICI CURIAE............................1

SUMMARY OF ARGUMENT ...............................3

ARGUMENT ......................................................6

I. THE CLEAR AND CONVINCING
EVIDENCE STANDARD IMPEDES THE
DEVELOPMENT OF OPEN SOURCE
SOFTWARE AND HARMS SMALL
SOFTWARE INNOVATORS .......................6

A. The Standard Impedes the Development
of Open Source Software ..................6

B. The Standard Harms Small Software
Innovators .....................................10

II. FINDING CLEAR AND CONVINCING
EVIDENCE OF PATENT INVALIDITY IS A
RECURRING PROBLEM IN COMPUTER
SOFTWARE PATENT CASES ..................13
A. Patent Owners Assert that Accused
Infringers Must Use the Prior Arts
Source Code to Prove Invalidity, But
That Source Code Is Often
Unavailable Years After the Fact ....13

B. The Growth in the Number of Issued
Patents and of Patent Lawsuits Since
the Formation of the Federal Circuit

ii

Exacerbates the Problem................18
III. THE COURT SHOULD INTERPRET
SECTION 282 OF THE PATENT ACT
ACCORDING TO ITS PLAIN MEANING AND
THE COURT'S PRECEDENTS.................23
A. The Federal Circuits Standard Exceeds
Congress' Statutory Mandate .........23

B. Traditional Rules Governing Standard
of Proof Should Apply ....................26

C. The Federal Circuits Standard Results
from a Misapplication of This Court's
Precedent.......................................28

CONCLUSION .................................................33

iii

TABLE OF AUTHORITIES

Page(s)

Cases

Am. Hoist & Derrick Co. v. Sowa & Sons, Inc.,
725 F.2d 1350 (Fed. Cir. 1984) ............. 28, 29, 30

Bilski v. Kappos,
561 U.S. __, 130 S. Ct. 3218 (2010) ........ 2, 20, 25

Connell v. Sears, Roebuck & Co.,
722 F.2d 1542 (Fed. Cir. 1983) .........................28

eBay Inc. v. MercExchange, L.L.C.,
547 U.S. 388 (2005).................... 2, 21, 22, 23, 25

Fonar Corp. v. General Electric Co.,
107 F.3d 1543 (Fed. Cir. 1997) .........................16

Grogan v. Garner, 498 U.S. 279 (1991)........24, 26

Herman & MacLean v. Huddleston,
459 U.S. 375 (1983)....................................26, 27

i4i Ltd. Partnership v. Microsoft Corp.,
598 F.3d 831 (Fed. Cir. 2010) ........... 9, 13, 16, 17

In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994) .....20

Jacobsen v. Katzer,
535 F.3d 1373 (Fed. Cir. 2008) .......................6, 7

KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111 (2004) ...............................24

iv

KSR Intl Co. v. Teleflex Inc.,
550 U.S. 398, 127 S. Ct. 1727 (2007) ...........2, 23

Markman v. Westview Instruments, Inc.,
517 U.S. 370 (1996)..........................................22

Microsoft Corp. v. AT&T Corp.,
550 U.S. 437, 127 S. Ct. 1746 (2007) ...............13

Northern Telecom, Inc. v. Datapoint Corp.,
908 F.2d 931 (Fed. Cir. 1990) ...........................16

Radio Corp. of Am. v. Radio Eng Labs., Inc.,
293 U.S. 1 (1934) ................................. 28, 29, 30

Russello v. United States, 464 U.S. 16 (1983) ....24

SEC v. C.M. Joiner Leasing Corp.,
320 U.S. 344 (1943)..........................................27

SSIH Equip. S.A. v. U.S. Intl Trade Commn,
718 F.2d 365 (Fed. Cir. 1983) ...........................28

State Street Bank & Trust Co. v. Signature
Financial Group, Inc.
,
149 F.3d 1368 (Fed. Cir. 1998) .........................20

Steadman v. SEC, 450 U.S. 91 (1981) ...............27

Uniloc USA, Inc. v. Microsoft Corp.,
Nos. 2010-1035, -1055, 2011 WL 9738 (Fed. Cir.
January 4, 2011) ..............................................31

United States v. Regan, 232 U.S. 37 (1914) .......27

v

Statutes

35 U.S.C. § 101 ..........................................20, 25

35 U.S.C. § 103 ................................................23

35 U.S.C. § 273 ..........................................24, 25

35 U.S.C. § 282 ................................ 5, 24, 25, 32

35 U.S.C. § 283 ................................................23

Other Authorities

Bruce Byfield, FOSS: Free and Open Source
Software, Datamation, May 30, 2010.................7

D. Crouch, Patent Litigation Statistics: Number
of Patents Being Litigated, Patently-O Blog,
March 17, 2008 ................................................19

D. Crouch, USPTO Patent Grant Numbers,
Patently-O Blog, August 19, 2010 .....................18

Federal Trade Commission, To Promote
Innovation: The Proper Balance of Competition and
Patent Law and Policy
(2003) .......... 4, 8, 9, 12, 16

H.R. REP. NO. 97-312 (1981) .............................22

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) .......................21

Josh Lerner, Small Businesses, Innovation, and
Public Policy in the Information Technology

vi

Industry, in Understanding the Digital Economy:
Data, Tools, and Research
201
(Erik Brynjolfsson and Brian Kahin,
eds., Cambridge: MIT Press, 2000)...............10-11

Kyle Jensen, Guest Post: Counting Defendants in
Patent Litigation, Patently-O Blog,
October 27, 2010..............................................19

Mark A. Lemley & Julie E. Cohen,Patent Scope
and Innovation in the Software Industry
,
89 CAL. L. REV. (2001) ........................... 15, 16, 20

Michael Meurer, Inventors, Entrepreneurs, and
Intellectual Property Law
,
45 HOUS. L. REV. 1201 (2008)......................10, 11

P.R. 3-4(a) for the Eastern District of Texas ......14

Patent L.R. 3-4(a) for the Northern District of
California .........................................................14

Thomas Claburn, Study Finds Open Source
Benefits Business, InformationWeek
(January 17, 2007) .............................................8

Webbink, Red Hat's Comments To The Joint
FTC-DOJ Hearing on Competition and Intellectual
Property Law, March 20, 2002.........................15

Yochai Benkler, The Wealth of Networks: How
Social Production Transforms Markets and
Freedom (2006). ............................................. 6-7

1

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 14,000 dues-paying members have a strong interest in helping the courts and policy-makers in striking the appropriate balance between intellectual property and the public interest. The Federal Circuits 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 consumers or the public interest generally.

2

As part of its mission, the EFF has often served as amicus in key patent cases, including Bilski v. Kappos, 561 U.S. __, 130 S. Ct. 3218 (2010); Quanta Computer, Inc. v. LG Electronics Corp., 128 S. Ct. 2109 (2008); KSR Intl Co. v. Teleflex Inc., 550 U.S. 398, 127 S. Ct. 1727 (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 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.

3

SUMMARY OF ARGUMENT

Allowing parties to lawsuits a fair chance to challenge the validity of 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. That review is essential to achieving the purposes of patent law. 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.

Improperly unbalanced standards of proof, such as that advanced by the Federal Circuit for invalidity, impede the ability of parties -- especially parties engaged in developing free and open source software and other small software innovators -- to present effective challenges to illegitimate patents. As a result, illegitimate patents do not receive appropriate review, and the traditional bargain between intellectual property and the public interest is betrayed.

Amici submit this brief to call the Courts attention to the disproportionate impact that the Federal Circuits improper standard of proof has had for two important innovation communities: Free and Open Source Software (FOSS) projects and small software innovators generally.

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.

4

Federal Trade Commission, To Promote Innovation: 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).

Small software companies also play an important role in fueling innovation in the information technology industry. Small innovators make crucial contributions to our nations economic growth.

Software patent litigation, which has exploded in recent years, threatens the ability of FOSS and small software innovators to grow their business and engage in valuable research and development. And the problem is exacerbated by the proliferation of patents of dubious validity that have been artificially strengthened -- and their holders emboldened -- by an inflated standard of proving invalidity. These otherwise invalid patents operate as a tax on innovation; their economic effect diverts resources from useful R&D to fund defensive patent programs, often crippling small and growing companies that lack the resources required by patent litigation.

Furthermore, the Federal Circuits heightened standard for proving invalidity creates an especially pernicious effect in computer

5

software patent cases. Software patent plaintiffs often argue that it is necessary to use the source code of a prior art software product to prove invalidity of a software patent. However, that source code is frequently unavailable when needed, often years after the life of the product in question. Thus, while software patent plaintiffs can use the accused infringers 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 often have free rein to argue that the alleged infringer cannot meet its heightened standard of proof without the source code.

What is worse, this uneven playing field has no basis in the Patent Act. The statutory language of 35 U.S.C. § 282 does not contain the Federal Circuits enhanced standard of proof. Following the statutes plain meaning and this Courts long-established rules of statutory interpretation, the proper standard of proving patent invalidity should be preponderance of the evidence.

Amici respectfully urge the Court to restore that standard, and thereby help ensure that patent law serves, rather than thwarts, the public interest in innovation.

6

ARGUMENT

I. THE CLEAR AND CONVINCING
EVIDENCE STANDARD IMPEDES THE
DEVELOPMENT OF OPEN SOURCE
SOFTWARE AND HARMS SMALL
SOFTWARE INNOVATORS

A. The Standard Impedes the
Development of Open Source
Software

Started several decades ago by a few core groups of programmers, free and open source software (FOSS) development takes a variety of forms. However, at heart FOSS embodies a process that 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, 1378-79 (Fed. Cir. 2008).

Over approximately the past decade in particular, FOSS has blossomed into a valuable and large segment of the information technology industry, with companies such as IBM Corporation, Novell, Sun Microsystems, and Red Hat offering products built on the FOSS development process. FOSS technologies are now widely used by public and private entities, from the United States government to private corporations such as IBM, Hewlett-Packard, and Google, Inc. See Yochai Benkler, The Wealth of Networks: How Social Production Transforms

7

Markets and Freedom 64 (2006);3 Bruce Byfield, FOSS: Free and Open Source Software, Datamation, May 30, 2010.4 FOSS has also become an integral and valuable part of today's scientific community. As one court noted:
Open source licensing has become a widely used method of creative collaboration that serves to advance the arts and sciences in a manner and at a pace that few could have imagined just a few decades ago. For example, the Massachusetts Institute of Technology (MIT) uses a Creative Commons public license for an OpenCourseWare project that licenses all 1800 MIT courses. Other public licenses support the GNU/Linux operating system, the Perl programming language, the Apache web server programs, the Firefox web browser, and a collaborative web-based encyclopedia called Wikipedia . . . . [which] has more than 75,000 active contributors working on some 9,000,000 articles in more than 250 languages.
Jacobsen, 535 F.3d at 1378.

8

In FOSS projects, unlike the closed and proprietary software developed by entities such as Petitioner, software develops openly and transparently. The public has full access to the conversations, the computer code, and each stage of development, maximizing access to scientific and industrial knowledge in the community and spurring further productivity and innovation.5 In addition, most FOSS collaborations involve contributors from a wide variety of companies, groups, and countries, many of whom are motivated to volunteer their time and ingenuity out of passion and dedication, rather than expectation of financial reward. One study found that open source programmers volunteer roughly $1 billion worth of labor per year. Thomas Claburn, Study Finds Open Source Benefits Business, InformationWeek (January 17, 2007).6 See also FTC Report, Chap. 3, at 48 (open source software has been hailed as an important organizational innovation).

FOSS's collaborative nature, while integral

9

to its success, creates several problems when FOSS software is the subject of a patent lawsuit (or threat), even where the basis of the threat may be an invalid patent. First, 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. Second, the FOSS collaboration model makes it difficult to collect prior art in a format that can be used to challenge validity under current Federal Circuit guidelines. To fend off patent threats, FOSS projects often depend on the collective knowledge of their members and the sometimes haphazard 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. Specifically, 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 that source code to invalidate a patent. i4i Ltd. Partnership v. Microsoft Corp., 598 F.3d 831, 848 (Fed. Cir. 2010), Pet. App., 22a.

In the FOSS context, that full set may be difficult to assemble. The nature of software development tends to be informal. FTC Report, Chap. 3, at 54. Documentation likely takes the form of emails or postings to internet message boards and newsgroups that are much more informal than traditional academic research or industry publications. For example, the

10

development of a particular piece of software may be documented primarily in emails exchanged between developers all over the world, each with different snippets of code and comments. Some of those developers may archive their email; others may not, or may not do so in an easily- searchable form. Further, more often than not, no party is tasked with creating explanatory materials of any kind, and the discussions that exist often get lost and become unobtainable at a later date when needed in litigation.

Thus, the Federal Circuit's inflated standard of proving invalidity means that patents that might be invalidated by FOSS technology are nonetheless impervious to ordinary legal challenge. That, in turn, threatens the public interest in promoting the innovative activities that would take place but for improper lawsuits and legal threats.

B. The Standard Harms Small
Software Innovators

The existing inflated standard of proof also harms small software innovators generally.

Small- and medium-sized firms play a major role in fueling innovation in the information technology industry. Indeed, small innovators are responsible for some of the most important technological advances of our day, benefiting our nation and the world by making crucial contributions to technological progress and economic growth. Michael Meurer, Inventors, Entrepreneurs, and Intellectual Property Law, 45 HOUS. L. REV. 1201, 1202 (2008); Josh Lerner,

11

Small Businesses, Innovation, and Public Policy in the Information Technology Industry, in Understanding the Digital Economy: Data, Tools, and Research 201, 202-03 (Erik Brynjolfsson and Brian Kahin, eds., Cambridge: MIT Press, 2000) (Lerner)7 (small firms often played a key role in observing where new technologies could be applied to meet customer needs and in introducing products rapidly).

Moreover, the proliferation of small companies, each taking a unique approach to a given problem based on their specific areas of expertise, in itself increases the likelihood that breakthrough innovations will occur. Meurer, 45 HOUS. L. REV. at 1212 (noting an important advantage to having diverse sorts of innovators with different experience or technical knowledge. Breakthrough innovations are sometimes realized as combinations of previously known techniques. In these cases, the probability of a breakthrough will increase with the diversity of potential innovators.).

Unlike their larger, more-traditional counterparts, small software startups primarily achieve their success by innovating, not by relying on patent protection. Most small software startups don't even need patent protection to procure financing. Id. at 1232.

However, the threat of patent litigation -- particularly when that litigation is based upon patents of dubious validity that have been

12

artificially strengthened by a high standard of proving invalidity -- hampers the ability of small software companies from doing what they do best: innovating. The time, effort, energy, and dollars that must be dedicated to litigation budgets all come at the expense of research and development, or else serve as a deterrent to entering the market at all. In essence, therefore, invalid patents operate as a tax on innovation. Their economic effect is to divert resources from R&D to fund their defensive patent programs. FTC Report, Chap. 3, at 52-53; Lerner at 208 (describing the innovation tax that afflicts some of Americas most important and creative small firms). This substantial burden affects some of the country's most important and creative small businesses.

Thus, the costs associated with trumped-up patent litigation disproportionately affect small companies that often do not have the capital to absorb such costs. See FTC Report, Chap. 3, at 51 (software patentability has introduced new costs, such as the cost of obtaining a patent, determining whether a patent is infringed, defending a patent infringement lawsuit, or obtaining a patent license, which may disproportionally affect small firms and individual programmers and the open source community.) (footnotes omitted). In fact, a 1990 survey of 376 firms found that the time and expense associated with intellectual property litigation was a major factor in decisions concerning the R&D agendas in almost twice as many firms with fewer than 500 employees compared to their larger counterparts. Lerner at 209.

13

Clarifying the proof standard for invalidity would take an important step toward leveling the playing field, and encourage small software companies to fight patents they believe to be invalid. At the same time, it would discourage companies from preying on their smaller competitors with patents of questionable validity. This, in turn, would allow small software innovators to use their time and money to focus on innovation rather than mounting prolonged defenses to invalid patent claims.

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

In this case, respondent i4i argued, and both lower courts agreed, that Microsoft could not prove its invalidity case absent access to the relevant prior art's source code.8 Microsoft cert.

14

petition at 9, 25; i4i v. Microsoft, 598 F.3d at 848, 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 i4i's expert that no one could assess whether S4 met the claims of the 449 patent without the relevant source code was compelling).

This scenario is both common and pernicious. In a software patent case, proof of infringement and/or validity will regularly involve an examination of the program's source code. For example, in many software patents, some claim limitations may be practiced by the source code. Therefore, the source code is compared to the claims in order to establish infringement or, as in this case, invalidity. Although the unavailability of the source code does not foreclose an invalidity defense, given the complex technical issues and the heightened standard, as a practical matter plaintiffs get free rein to argue that the alleged infringer cannot establish invalidity without the source code.

And that leads to a key problem. 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- 4(a) for the Northern District of California;9 P.R.

15

3-4(a) for the Eastern District of Texas10 (both requiring the accused infringer to produce its source code early in the case).

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 [f]requently, 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:

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.

16

Webbink, Red Hat's Comments To The Joint FTC-DOJ Hearing on Competition and Intellectual Property Law, March 20, 2002,11 at pages 2-3. What is worse, for confidentiality reasons, non-open source 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 1543, 1549 (Fed. Cir. 1997) (source code not needed to satisfy best mode requirement); Northern Telecom, Inc. v. Datapoint Corp., 908 F.2d 931, 941-43 (Fed. Cir. 1990) (source code not needed to satisfy enablement requirement); 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

17

relevant, years later, during a patent lawsuit. For example, as discussed previously, FOSS developers often do not create and/or retain explanatory materials that summarize and identify relevant parts of prior art source code. Thus, the mere passage of time means that many forms of source code likely will be difficult to find and introduce into evidence 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 is necessarily skewed against alleged infringers whether those defendants be from the FOSS community, small software innovators, or any other alleged infringer -- because they are simply unable to obtain all of the evidence that could be used in their defense.

As a result, software patent litigation can appear to be a game of gotcha. The patent owner argues that it proved infringement by a 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 argues that the accused infringer did not (and could not) prove invalidity because of the absence of the prior art source code. See, e.g., Pet. App., 138a-139a (i4i's expert attacked Microsoft's expert for rendering an invalidity opinion without reviewing the unavailable code). Moreover, even in cases where a defendant does not require source code to prove invalidity, the lack of that very code will allow the patent owner to prejudicially argue that the accused infringer cannot even offer the same quantum of proof of

18

invalidity as the patent owner did for infringement -- let alone meet the clear and convincing standard. 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).

Equalizing the standard of proof will not, of course, resolve the longstanding issue of identifying and preserving software prior art. However, leveling the playing field should at least help ensure that defendants who can marshal other types of evidence have a fair chance to challenge improper patents.

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 sharp increases in both the number of patents issued and the amount of patent litigation. The following table shows the number of issued patents per year since 1980:12

19

20

Moreover, in recent years, the number of defendants in each lawsuit also has grown dramatically.14

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 Co. v. Signature Financial Group, Inc., 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);15 Lemley &

21

Cohen, 89 CAL. L. REV. at 10-11.

One of the most serious consequences has been to discourage innovation, as software companies find themselves forced to devote more resources to litigation rather than development. As one study explained:

[T]he 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.
____________
__, 130 S. Ct. 3218 (2010). However, State Street permitted the issuance of broad software patents by being the law for more than ten years.

22

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 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

23

increase in software patent grants and resulting 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. As one example, in licensing negotiations, a level playing field will help licensees negotiate license terms that more fairly reflect the true value of the patent in question. This will lead to more settlements and reduce the amount of litigation.

III. THE COURT SHOULD INTERPRET
SECTION 282 OF THE PATENT ACT
ACCORDING TO ITS PLAIN MEANING
AND THE COURT'S PRECEDENTS

A. The Federal Circuit's Standard
Exceeds Congress' Statutory
Mandate

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 20-23 (1981). In practice, however, the Federal Circuit has undermined the patent system by exceeding the statutory mandates upon which that system rests.

For example, in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, the Court reviewed 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). This Court reversed that rule, relying on the plain language of 35 U. S. C. § 283, which states that if

24

a patent owner wins a trial, injunctions may issue in accordance with the principles of equity. This Court held that the Court of Appeals erred in its categorical grant of automatic injunctions. 547 U.S. at 394.

The Federal Circuit also had read into 35 U.S.C. § 103 a heightened standard for proving obviousness, under which a patent claim is only proved obvious if some motivation or 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. KSR Intl Co. v. Teleflex Inc., 550 U.S. 398, 407, 127 S. Ct. 1727, 1734 (2007). 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.

In 2007, this Court summarily rejected this rule, 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.

Here, the Federal Circuit has once again interpreted the Patent Act and relevant case law to include unnecessary legal requirements that disproportionately burden the defense. In this case, the relevant statute does not require invalidity to be proven 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

25

asserting such invalidity. Of course, if Congress wanted to create a clear and convincing standard for proving invalidity, it could have included that language in § 282. It did not.

Indeed, where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion. KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 118 (2004) (quoting Russello v. United States, 464 U.S. 16, 23 (1983)).

Here, § 282's silence on the standard of proof stands in stark contrast to another section of the Patent Act, 35 U.S.C. § 273. Section 273 provides a prior invention defense to business method patents. Section 273(b)(4) expressly states that a person asserting the defense under this section shall have the burden of establishing the defense by clear and convincing evidence. Section 273 illustrates that when Congress intended to impose a clear and convincing standard of proof, it knew how to do so. The omission of such a standard in § 282 means that the ordinary preponderance standard of proof should apply as a general rule. See Grogan v. Garner, 498 U.S. 279, 286 (1991) (the silence on the standard of proof was inconsistent with the view that Congress intended to require a special, heightened standard of proof.)

i4i argued that the use of § 273's express heightened standard as a rule of statutory construction does not apply here because § 282 and § 273 were enacted at different times. Brief

26

in Opposition to Petition for Certioriari, at 14 n.9.

i4i is wrong. Just last term, this Court rejected such a limitation on the use of § 273 to interpret another section of the Patent Act, namely 35 U.S.C. § 101. In Bilski v. Kappos, 561 U.S. __, 130 S. Ct. 3218, 3228-29, the Court used the presence of business methods in § 273 to conclude that the term process in § 101 could not exclude business methods -- or else § 273's reference to business methods would be meaningless. The Court reached this conclusion even though § 273 was enacted at a different time than § 101. 130 S.Ct. at 3229. In fact, § 101 and § 282 were both enacted at the same time (both before § 273's enactment), making Bilski directly on point.

Thus, the express inclusion of the clear and convincing standard in § 273(b)(4), and its absence in § 282, shows that the latter statute does not embrace a heightened standard of proof.

B. Traditional Rules Governing
Standard of Proof Should Apply

When interpreting the Patent Act, this Court has applied familiar or traditional rules of jurisprudence. See, e.g.. eBay, 547 U.S. at 391, 393-94.

Such traditional rules should apply here. The standard of proof in civil cases is normally just preponderance of the evidence. In Grogan, 498 U.S. 279, for example, the Court considered a section of the Bankruptcy Code 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

27

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 particularly 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.

Indeed, civil cases will rarely raise the particularly important interests with which the Court was concerned with in Grogan. In Herman & MacLean v. Huddleston, 459 U.S. at 389-90, the Court reviewed several cases where it had declined to affirm a clear and convincing standard even where there was a possibility that severe civil sanctions may be imposed. Id., citing, e.g., United States v. Regan, 232 U.S. 37, 48-49 (1914) (proof by a preponderance of the evidence suffices

28

in civil suits involving proof of acts that expose a party to a criminal prosecution); Steadman v. SEC, 450 U.S. 91, 95 (1981) (preponderance standard upheld in SEC administrative proceedings where the sanctions imposed in the proceedings included an order permanently barring an individual from practicing his profession); SEC v. C.M. Joiner Leasing Corp., 320 U.S. 344, 355 (1943) (preponderance of the evidence suffices to establish fraud under Section 17(a) of the 1933 Act).

Instead, the Court has affirmed such a standard only in the most extreme civil cases, such as proceedings to terminate parental rights or for involuntary commitments. See Herman & MacLean v. Huddleston, 459 U.S. at 389-90 (collecting cases).

No such interests exist here. A patent suit, while an important exercise in striking an appropriate balance between intellectual property and the public interest, does not implicate particularly important individual interests or rights. Id. Thus, the Federal Circuit's decision to disregard the normal evidence standard runs contrary to this Courts clear guidance.

C. The Federal Circuit's Standard
Results from a Misapplication of
This Court's Precedent

The Federal Circuit's clear and convincing standard appears to have originated in three of its early cases. Am. Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 135860 (Fed. Cir. 1984); Connell v. Sears, Roebuck & Co., 722 F.2d

29

1542, 1548-49 (Fed. Cir. 1983); SSIH Equip. S.A. v. U.S. Intl Trade Commn, 718 F.2d 365, 375 (Fed. Cir. 1983).17 Subsequent Federal Circuit cases generally cite one or more of those cases to apply the heightened standard in all circumstances.

But a careful review of those three cases shows that even they do not properly stand for the Federal Circuits broad clear and convincing rule. The first such case, SSIH Equip., 718 F.2d 365, did not expressly adopt a clear and convincing standard. Rather, the case just stated that we find it inappropriate to speak in terms of a particular standard of proof being necessary to reach a legal conclusion. Id. at 375. The court cited Radio Corp. of Am. v. Radio Engg Labs., Inc., 293 U.S. 1 (1934), merely for the proposition that certain facts in patent litigation must be proved by clear and convincing evidence, without saying what those certain facts were. SSIH Equip. nowhere held that clear and convincing evidence was a general rule.

In Connell, 722 F.2d 1542, the Federal Circuit discussed the district court's invalidity opinion. Id. at 1548-49. In the course of that discussion the appeals court assumed that the standard of proving invalidity was clear and convincing evidence, but the case cited no authority whatsoever for that principle. Id. at 1549.

The third case, Am. Hoist, 725 F.2d 1350,

30

relied on Radio Corp. for the clear and convincing standard. Am. Hoist claimed that Radio Corp. stood for the proposition that the clear and convincing standard never changes. 725 F.2d at 1359-60.

Thus, the question is whether Radio Corp. truly adopted the heightened standard as a general rule in all cases. It did not.

Radio Corp. arose out of an unusual, if not unique, set of facts having to do with the development of early radio technology. Edwin Armstrong, Lee De Forest, and two others were involved in contested interference proceedings in the Patent Office (i.e., unlike ordinary patent prosecution, the proceedings were adversarial). Both those interference proceedings and separate federal court litigation resulted in De Forest being adjudged the inventor. 293 U.S. at 2-5.

Armstrong thus had lost on multiple fronts, and was barred from relitigating the issue further. Nonetheless, Armstrong funded a separate company, Radio Engineering Laboratories, which was not bound by the prior judgments under res judicata principles. Id. at 7. Radio Engineering then launched a new challenge to the patents anyway, apparently based on nothing more than the same evidence on which Armstrong had already lost.

It was against this unusual background -- a patent whose inventorship had previously been determined in both administrative and judicial proceedings -- that this Court stated that Radio Engineering could not prove invalidity merely by a preponderance of the evidence. In a passage quoted in Am. Hoist (see 725 F.2d at 1359), this

31

Court stated:
Through all the verbal variances, however, there runs this common core of thought and truth, that one otherwise an infringer who a§ails 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. Am. Hoist, and subsequent Federal Circuit cases, relied on this statement to hold that the standard of proof is clear and convincing evidence in all cases -- even though this Court clarified immediately after the above quote that it was only talking about the unusual facts of Radio Corp. Specifically, the Court justified a higher standard of proof in that case since the respondent had merely used a privilege under the doctrine of res judicata to try the issues over again, based on substantial identity of evidence. 293 U.S. at 8-9. (emphasis in original).

Thus, Radio Corp. stands only for the proposition that clear and convincing evidence is needed when a defendant tries to relitigate an already-adjudicated patent using the same invalidity evidence. Radio Corp. most certainly does not stand for the proposition that the clear and convincing standard applies in all cases -- such as this case, where Microsoft is asserting invalidity based on new prior art not previously considered by the Patent Office, nor previously litigated. Yet, to this day, the Federal Circuit continues to rely on Am. Hoist for the proposition that the standard of proof is clear and convincing evidence in every case. See Uniloc USA, Inc. v.

32

Microsoft Corp., Nos. 2010-1035, -1055, slip opn. at 55, 2011 WL 9738, at *26 (Fed. Cir. January 4, 2011) (Microsoft has made this argument before, and we held that the statutory presumption of validity can be overcome only by showing invalidity by clear and convincing evidence, even where allegedly invalidating prior art was not before the patent office, citing solely this case and Am. Hoist).

i4i and its amici might argue that the clear and convincing standard should be retained because it supposedly comports with settled expectations of patent owners in a high standard of proof. The above analysis shows that any such expectations are not based on sound precedent.

33

CONCLUSION

In this case, the Federal Circuit has incorrectly interpreted a clear statute. This Court should correct the Federal Circuit's misreading of § 282 and hold that the standard of proving patent invalidity is a preponderance of the evidence.

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

Of Counsel:

Sherwin Siy
PUBLIC KNOWLEDGE [address, phone, email]

34

Lawrence Rosen
THE APACHE SOFTWARE
FOUNDATION
Rosenlaw & Einschlag
[address, phone, email]

February 1, 2011

_______________

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 submi§ion of this brief. No person other than the amici curiae, or their counsel, made a monetary contribution intended to fund its preparation or submi§ion. The parties have consented to the filing of this brief. Respondents blanket consent and petitioners blanket consent were filed with the Court on December 7 and 8, 2010, respectively. Web sites cited in this brief were last visited on January 25, 2011.

2 Available at:

http://www.ftc.gov/ os/2003/10/innovationrpt.pdf

3 Available at:

http://www.benkler.org/ Benkler_Wealth_Of_Networks.pdf

4 Available at:

http:// itmanagement.earthweb.com/osrc/article.php/ 3885101/FOSS-Free-and-Open-Source-Software.htm

5

“Free software is a matter of the users’ freedom to run, copy, distribute, study, change and improve the software.” “The Free Software Definition,” available at:

http://www.gnu.org/philosophy/ free-sw.html

6 Available at:

http://www.informationweek.com/news/software/infrast.ructure/showArticle.jhtml? articleID=196901596#. See also “Study on the Economic impact of open source software on innovation and the competitiveness of the Information and Communication Technologies (ICT) sector in the EU,” Final Report, November 20, 2006, at 10, available at:

http://ec.europa.eu/ enterprise/sectors/ict/files/ 2006-11-20-flossimpact_en.pdf.

7Available at:

http://mitpress.mit.edu/ books/BRYUH/09.lerner.pdf

8Source 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.

9 Available at:

http://www.cand.uscourts.gov/pages/56 and http://www.cand.uscourts.gov/ filelibrary/177/Pat4.pdf

10Available at:

http://www.txed.uscourts.gov/ page1.shtml?location=rules and http://www.txed.uscourts.gov/cgi-bin/view_document.cgi?document=1179&download=true

11 Available at:

http://www.ftc.gov/opp/ intellect/020320webbink.pdf

12 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/)

13 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

14 Kyle Jensen, "Guest Post: Counting Defendants in Patent Litigation, Patently-O Blog, October 27, 2010 (noting that the number of named defendants increased nearly 600% between 1990 and 2010), available at:

http://www.patentlyo.com/ patent/2010/10/ guest-post-counting-defendants-in-patent-litigation.html

15 State Street was probably overruled in part, at least sub silentio, by this Court in Bilski v. Kappos, 561 U.S.

16 Available at:

http://papers.ssrn.com/sol3/papers.cfm?abstract_i d=831685

17 Other Federal Circuit cases from 1983-84 dealt with validity issues, but without discussing the standard of proof.


  


Oral Argument in Microsoft v. i4i at US Supreme Court Today - Why FOSS Cares - Updated: Transcript | 229 comments | Create New Account
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[COMES] Comes v. MS transcripts
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The Dilemma
Authored by: complex_number on Monday, April 18 2011 @ 05:06 AM EDT
Quote
Of course, there is no doubt in my mind, reading through all the court filings and the court orders, that i4i was badly treated by Microsoft. Partnering with Microsoft doesn't seem to pay off. But to destroy FOSS just for any private company's personal interests -- it doesn't seem proportional.

This does pose a problem for many in the FOSS Camp. I am not alone in wanting Microsoft to be taken to the cleaners. They did steal 'stuff' from i4i so they should face the consequences.
However, the patent leglislation in the US and especially that related to Software & Obviousness need a big kick up the backside. It is totally outdated & outmoded.

Part of me wants i4i to win big here. Part of me wants the USSC or the US Gov to sort out the patent mess so that i4i would never have sued MS in the first place over patents. Theft of IP yes but patents? No...

That is the dilemma.

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Oral Argument in Microsoft v. i4i at US Supreme Court Today - Why FOSS Cares
Authored by: dio gratia on Monday, April 18 2011 @ 05:20 AM EDT

At P. 26:

Thus, the express inclusion of the clear and convincing standard in § 273(b)(4), and its absence in § 282, shows that the latter statute does not embrace a heightened standard of proof.
§ 273. Defense to infringement based on earlier inventor, versus § 282. Presumption of validity; defenses wherein (§ 282):
The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.
...
(2) Invalidity of the patent or any claim in suit on any ground specified in part II of this title as a condition for patentability,
Where PART II—PATENTABILITY OF INVENTIONS AND GRANT OF PATENTS.

The argument is that the heightened burden of proof found in § 273(b)(4) applies to a First Inventor Defense (Public Law 106-113), which appears to be a conflict over who the inventor is and not prior art (PART II > CHAPTER 10, § 102. Conditions for patentability; novelty):

(b) Defense to Infringement.--
``(1) In general.--It shall be a defense to an action for infringement under section 271 of this title with respect to any subject matter that would otherwise infringe one or more claims for a method in the patent being asserted against a person, if such person had, acting in good faith, actually reduced the subject matter to practice at least 1 year before the effective filing date of such patent, and commercially used the subject matter before the effective filing date of such patent.
As seen § 282 does not have that heightened burden of proof. When not claiming to be a prior inventor (first to invent) it would appear a lesser burden of proof should be required to prove invalidity based on part II of Title 35.

It would seem

Here, the Federal Circuit has once again interpreted the Patent Act and relevant case law to include unnecessary legal requirements that disproportionately burden the defense.
Indeed. Sort of like the butcher's thumb on the scale.

You'd think this would be a slam dunk. The law addresses two different defenses. And you could also imagine that the heightened burden of proof is prejudicial to the outcome of a jury deliberation.

While the burden of proof may have purportedly been set high for most of a century, it appears to have been 'normalized' for part II issues in 1999 (PL 106-113) if there were any question a priori. Someone has (a/some) smart lawyer(s). 1999 is just early enough to make it hard to casually find legislative intent, while this appears to be black and white.

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email threads
Authored by: maroberts on Monday, April 18 2011 @ 07:40 AM EDT
I have all important emails since 2004 and I'm sure I'm not unusual. Obviously
spam and trite nonsense gets chucked.

Emails to groups such as KDE are not saved as they archive anyway.

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The problem isn't software patents
Authored by: The Mad Hatter r on Monday, April 18 2011 @ 11:11 AM EDT
The problem is patents period, as I've explained several times in the past.

All of the issues which everyone has complained about (with the exception of
one) which apply to software, also apply to hardware. And it's a huge issue.

In my last job, one of my responsibilities was reading the patents that aspiring
vendors would send us to see if they really had anything worth buying. 99% of
the time that patent should not have been issued in the first place. I could, by
a simple search of the USPTO database, find an earlier patent FOR THE SAME
TECHNOLOGY. The USPTO is supposed to only issue patents for inventions that are
'NOVEL', but if they've already issued a patent for the invention before, it's
hardly novel.

And then of course there's all of the impossible devices. Perpetual Motion
Machines, Interstellar Radios, Reactionless Thrusters, and all sorts of other
devices that not only do not work, but cannot work. You can't fool Mother
Nature.

The USPTO is a disaster. It costs the American economy untold billions of
dollars per year. In fact it is probably responsible for lengthening the current
recession.

But it won't be shut down. There are people who don't believe in working. If
they can get a monopoly assigned to them, and collect rents on it... Think 'Pot
of Gold at the end of the Rainbow' or 'The SCO Group'.

As to the one point where software is different from hardware - it's math. And
math isn't allowed to be patented. Lawyers don't understand math. Lawyers don't
understand copyright either :)



---
Wayne

http://madhatter.ca/

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Wrong view of Canada
Authored by: jvillain on Monday, April 18 2011 @ 02:54 PM EDT
Canada does not currently allow software patents. Amazon is currently doing
every thing they can to have the courts sign off on them with this incredibly
novel patent they have called the "One Click". (vomit) If they succeed
and it looks like they might then they will have screwed it up for the rest of
us.

The USA is Canada's largest trading partner. So Canadian companies are forced to
play the American game if they want to play in that field. But keep in mind that
is the mind frame of corporations not every day Canadians.

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Supreme Court hearing transcript posted
Authored by: NobodyYouKnow on Monday, April 18 2011 @ 03:02 PM EDT

What the subject says (it's a PDF file):

Hearing Transcript

62 pages; seems to work with xpdf, but I haven't read it yet.

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Roberts recused himself
Authored by: SpaceLifeForm on Monday, April 18 2011 @ 03:35 PM EDT
Link

The case today was heard by the eight Associate Justices. The Chief Justice of the United States, John Roberts, recused himself from the case. For its appeal to be successful, Microsoft must win votes from five of the eight Associate Justices. i4i's legal team includes WilmerHale, McKool Smith, Finnegan Henderson, and Sterne Kessler. Written transcripts of the argument will be available online later today. A decision from the Court is expected by the end of June.

---

You are being MICROattacked, from various angles, in a SOFT manner.

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  • Why? - Authored by: Anonymous on Tuesday, April 19 2011 @ 02:53 AM EDT
    • Why? - Authored by: PJ on Tuesday, April 19 2011 @ 03:04 AM EDT
Mailing lists + Git == Good Defense?
Authored by: Anonymous on Monday, April 18 2011 @ 04:01 PM EDT
> Please take particular note of the requirements for availability of prior
art in the form of earliest versions of software code and how that works against
the FOSS community. Do you retain all versions? How about email threads? No?

Assuming one uses mailing lists, which usually have publicly searchable
archives, and they don't delete old versions from version control, many projects
should be good in that department.

Linux, for example, has a lot of the discussion on public mailing lists, for
which there are many archives. And I'm pretty sure there are archives of the
source all the way back to the first release. Then again, Linux is also
special.

PJ, perhaps you should write up a list of best practices for FOSS projects to
preserve this sort of evidence, just in case people have to defend themselves?

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Any patents on scientific/engineering software?
Authored by: Anonymous on Monday, April 18 2011 @ 09:41 PM EDT
Are there any patents on scientific and engineering software? I worked for over
40 years as an engineer and programmer at a government research and development
laboratory. We never had even a hint that there could be software patents on
the programs we used. There were some copyright issues. We put a dongle on one
of our programs that we distributed to a contractor. A high-end CADD program we
used ran on a server that allowed no more than four persons at a time use it.

All the software patents I read about seem to involve such things as operating
systems and browsers. There is no shortage of novel ideas for scientific
software. There are several journals devoted to algorithms. So why didn't I
hear about patents on scientific algorithms? I can think of some reasons.

Many of the most important algorithms came into use before there were software
patents. The FFT stands out.

We were a specialized laboratory. Most of the programs we used were developed
by us or by a few other R&D laboratories, all with government funding. Some
of the algorithms we devised were for processing the data from a single test
series. They were not prize-winning math.

The analysis and prediction programs we used were based on physical and chemical
laws that date back to the 19th century of earlier. The new algorithms solve
some very old equations. A computer just lets us analyze the physics with more
detail and accuracy than we could by hand. The algorithms published in journals
solve the physical equations faster, more accurately, or with less memory. They
are undeniably mathematics, which seems to be unpatentable.

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If a patent is found invalid, what is the price?
Authored by: Anonymous on Tuesday, April 19 2011 @ 01:28 AM EDT
IANAL but if through discovery (if there is any), a patent holder is found to
have known about prior art and withheld such knowledge from the patent office,
is there any legal ramifications larger than the patent being held invalid?

To me, it's just that it seems some patent hoarders display a willful intend to
use patents as a business weapon against someone in the future. If such a patent
hoarder knew the patent should have been invalid when they applied for it or
when they acquired it, isn't application of this business weapon mentality the
same as an attempt to defraud someone?

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Invalid Patents
Authored by: Anonymous on Tuesday, April 19 2011 @ 01:31 AM EDT
"The Federal Circuit's clear and convincing evidence standard ensures the
enforcement of invalid patents, even though this Court recognized in KSR that
invalid patents stifle rather than promote the progress of liberal arts."

Exactly -- "invalid patents" as opposed to "valid patents".
Invalid is Microsoft's patent of a computer in a car. (Or the patent on
double-clicking.)

As I've been asking all along: "What makes i4i's patents invalid?"
And why did Microsoft negotiate to license them, until they decided stealing
would be cheaper? (Especially since these patents are "supposed" to
be invalid?)

Didn't Microsoft already try to get these patents invalidated at the USPO --
twice? And since the USPO didn't invalidate them, how does that make them
"invalid" patents?

Is "valid" the new code word for "invalid"?

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Self-sabotage
Authored by: Anonymous on Tuesday, April 19 2011 @ 01:37 AM EDT
Sigh. The Internet is not patented. It is FOSS.
The Internet is certainly not FOSS. The Internet is a network of networks. As a network, it has hardware, software and protocols. Much of the hardware that it uses is no doubt protected by patents. The basic protocols are public domain. (Some standards for stuff on top is copyrighted.) The software is a combination of FOSS and proprietary and public domain software. The Internet is obviously a lot more than just FOSS.

You made some very good points in this article, but unfortunately you undermined them by jumping on your high horse again. Yes, it's tempting to try to make politicians look bad, but please don't be so eager to do it that you make yourself look bad in the process. Also, remember that not everything is about FOSS. Representative Lamar Smith also mentioned sending a man to the moon, but Neil Armstrong and the moon aren't FOSS either. (They also weren't patented, AFAIK.)

You go on:
The inventors deliberately chose not to patent [the internet].
Um, if "inventors" means the both US government and the contractors it hired, then I suppose that statement is true, but if it means the people who actually did the original inventing, they didn't have any choice in the matter. They were working as contractors for the US government (mostly the Department of Defense and the NSF) and their work belonged to the public domain. FWIW, originally they were working on what were supposed to be closed networks (ARPANET and NSFNET). Things were opened up later.

The important Internet software was in general not really FOSS, unless you count stuff written for the public domain and distributed without needing any license as FOSS. The original networking software for ARPANET ran on Interface Message Processors (IMPs), which connected to hosts running a variety of operating systems. According to Vinton Cerf in How The Internet Came to Be:
DARPA had invested time and energy to get BBN [the contractor that designed the IMPs] to build a UNIX implementation of TCP/IP and wanted that ported into the Berkeley UNIX release in v4.2. Once that happened, vendors such as Sun started using BSD as the base of commercial products.
Of course, BSD was released as FOSS but the Berkley sockets (the TCP/IP implementation) are apparently in the public domain (near the end of the page, it says that's why it was used for Junos).

Credit for the Internet really should go to the US government, which funded its development until it was commercialized. Fortunately, the results are available for the public's benefit.

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Microsoft wants to change patent law
Authored by: Anonymous on Tuesday, April 19 2011 @ 01:40 AM EDT
"(Reuters)An attorney for the world's largest software company argued that
the court should reject the long-held requirement that a defendant in a patent
infringement case must prove by clear and convincing evidence that a plaintiff's
patent is invalid."

Boy, if they get the law changed, that could really come back and bite 'em in
the butt.

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  • Yes and no - Authored by: Anonymous on Tuesday, April 19 2011 @ 10:50 AM EDT
    • Yes and no - Authored by: Anonymous on Tuesday, April 19 2011 @ 04:23 PM EDT
Not just the internet
Authored by: rhdunn on Tuesday, April 19 2011 @ 04:21 AM EDT
Think about where computers would be if there had been patents on them at that
point: no IBM compatible PCs (the clue is in the name) and no Apple or Microsoft
(who based their OS designs on the Xerox prototype). The pace of innovation was
huge back then as people collaborated and shared ideas -- the internet was an
example of sharing different ideas; the development of programming languages is
a collaborative/evolutionary model, where languages incorporate features/ideas
of other languages (C++98 inheriting from Smalltalk and C; Java from C++; C#
from Java and C++; Vala from C#; C++0x from Java and C#!).

Nowadays there isn't much of that going on, except in the FOSS world. Which is a
shame.

Modern example: the advancements in JavaScript performance on browsers as
Chrome, Firefox and Safari share code and ideas while still competing with each
other and pushing the performance bar higher. Even proprietary programs (Opera
and IE) are advancing as a result.

Patents would have killed that progress, or set it back 10-15 years, by which
time it would be too late.

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ITC Staff Recommends Siding With Nokia, HTC in Apple Case
Authored by: Anonymous on Tuesday, April 19 2011 @ 05:43 AM EDT
Yes, I know it's a NewsPick, but the argument on patents is apposite. The linked Bloomberg article is sparse on details of specific patents, but there is a comment that one patent is, not invalid, but moot:
“Advances in technology have made the patent moot,” [Nokia lawyer] Flinn said of the Apple patent for signal processing that’s asserted against both companies. “The Apple iPhone doesn’t practice the patent.”
Hmmm, wonder why Nokia are still using a "mooted" technology. Possibly for similar reasons to MS using the i4i markup instead of .odf?

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MS Love - Reminds me of Novell silliness
Authored by: Anonymous on Tuesday, April 19 2011 @ 09:19 AM EDT
So - does the opensource community LOVE MS, when the MS money and legal skill is
useful for an important opensource argument?

Kind of like Novell befriended MS when their money and market power was useful?

As a longtime SuSE user, I think I won't wait for any apologies from all the
folks who trashed my distro-of-choice over the last few years. They may end up
being too busy plucking the planks from their own eyes.

I can only stand by and wait for the day when SuSE detaches itself from the
ridiculous Novell/Attachmate/MS entanglements, and becomes a great Linux company
standing on its own again. Fortunately, SuSE developers have remained true to
their core distro-building principles throughout this insanity, and have not
slid off into "Unity" or other such iPhone cloning madness for their
desktop experience.

Andy Prough
Kyle, TX

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It's Possible that everyone could win. in the end.
Authored by: rsteinmetz70112 on Tuesday, April 19 2011 @ 10:55 AM EDT
It seems to me that if Microsoft were to win this appeal they may very well lose
on retrial, as their conduct was so egregious and obviously duplicitous.

While software patents may be undesirable and less deference to the Patent
Office is probably a positive development. It also seems to me in this case the
patents cover real innovations and might arguably be the kind of software
patents that the Supreme Court has been hesitant to completely rule out.

---
Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

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