I took the time to do the oral argument transcript [PDF] of Microsoft v. i4i before the US Supreme Court yesterday as text for you, because I know a lot of you don't open PDFs unless it's life or death, and there are some interesting tidbits I want to be sure you don't miss. I've marked those sections in blue.
I know, though, that for many of you, you read a transcript like this and feel like you've landed on the moon. Upside down. Donald Knuth once in an interview with Dr. Dobb's Journal talked about that, how people drawn to computer science don't think like lawyers or like poets. And the reverse is true too, which is one important reason why software patents are even allowed. They are so destructive to innovation and creativity in computer science, I doubt you can find three computer scientists to stand next to each other on the side of software patents. That's hyberbole, but the truth is simply this: most computer scientists are against software patents. I wish judges and lawyers would think about why that is so. They really should give weight to the experts in that field, I think, at least asking them what they think. That has yet to happen. It's still lawyers talking to other lawyers and judges. But I live in hope that someday a case will arrive that is stage front and center about the patentability of software, and my dream is that the court will appoint experts to explain to them why software patents are so harmful.
Meanwhile, let me try to "translate" a bit of what happened at the event, so you will understand when a decision arrives why the judges reached whatever decision they end up reaching.
Here's what Knuth said about lawyers and programmers thinking differently:
DDJ: What distinguishes a "computer scientist" from a "computer programmer?" Did you notice that lawyers and programmers don't think the same way? That may help you to understand why it feels so alien to you programmers when you read legal documents. It's in a different vein, on another channel. That's what Groklaw is for, obviously, to try to explain to each group what the other is talking about.
Donald Knuth: The difference between a computer programmer and a computer scientist is a job-title thing. Edsgar Dijkstra wants proudly to be called a "computer programmer," although he hasn't touched a computer now for some years. He wrote his really terrific essay on the Humble Programmer discussing this. To me, "computer programmer" is an honorable term, but to some people a computer programmer is somebody who just follows instructions without understanding what he's doing, one who just knows how to get through the idiosyncrasies of some language.
To me, a computer scientist is somebody who has a way of thinking, which resonates with computer programming. The way a computer scientist views knowledge in general is different from the way a mathematician views knowledge, which is different from the way a physicist views knowledge, which is different from the way a chemist, lawyer, or poet views knowledge.
There's about one person in every fifty who has this peculiar way of viewing knowledge. These people discovered each other at the time computers were born. There's a profile of different intellectual capabilities which makes somebody resonate, which makes somebody really in tune with computer programming.
There were computers in the 19th century, the 17th century... I imagine there are computer scientists in the pygmy forest. I haven't really carried this out as an experiment, but I imagine that people may not have machines but one in fifty of them, wherever you go, has this profile, this ability. I'm not a sociologist, nor an anthropologist, but reading publications, reading literature, I can sense how much people think like I do, even if they were writing from a different century.
This is the true explanation of why computer science became a university department so fast all around the world. The reason is not that computers are important tools for mankind, or something like that. The reason is that there were these people out there who had this way of thinking that never had a home before. They get together, they can communicate high bandwidth to each other, the same kind of analogies are meaningful to them. All of a sudden they could come together and work much more efficiently, not in someone else's territory that wasn't for them.
There was a time when there were no physics departments, there was "Natural Philosophy," which combined all kinds of different skills. Over the years, these strong areas of focus materialize, become recognized, and then they get a name. "Computer Science" happens to be one of the more recent ones to crystallize in this way.
Here's some legal commentary by others to help you understand the discussion, but this is from the point of view of how lawyers saw the oral argument:
You've seen how the media covers it, from the items I've been putting in News Picks. Basically, the media wants to know who will win. You do too, but since I don't predict such things, what I want to focus on instead here is the various aspects that the judges have to consider, what their role is, and what it can't do.
Because the important issues that were before the court, as I read the transcript, are these: The two parties to the litigation disagree about what the proper standard is for identifying invalid patents. In this case, Microsoft found prior art that had not been viewed by the USPTO. It issued the patent without that knowledge. What happens now? Normally, a patent that has issued is presumed valid. The USPTO is supposedly the expert. In real life, of course, they don't know as much as one would hope about programming, and some incredibly silly patents have issued. And they are forced to really hurry in their work. They can't look just anywhere for prior art, and they miss pretty much all FOSS prior art, because it isn't collected in the places where they do look.
So the question this case raised is,
is the patent system so messed up that a lot of bad patents are issuing and if so, what is the solution? Is there a solution that the court can implement, or does it require the Congress to do something?
Keep in mind that Congress has the responsibility to come up with laws, like patent laws. Judges don't have that assignment. But when another court comes up with an interpretation of how things ought to be, if they get it wrong, the US Supreme Court does have the authority to realign everyone with what they believe is correct.
Underpinning everything in the discussion is the more fundamental question of whether software patents are helping the economy to the degree that a few bad patents are acceptable for the overall good of granting strong protection to patents; or whether something needs to change to fix a system that has issued so many bad patents that they are actually hurting innovation and the country's economy. The folks who argued for i4i and for the US government, which positioned itself on i4i's side, held to the former position, while Microsoft held to the latter [Microsoft has a blog post on what's at stake in this case].
The issue of mindset is important to understand. Otherwise when you read what they said, it will frustrate and infuriate you. Once folks accept and then live with the belief that something is wonderful, like patents, it's very hard for them to see it when it goes over the edge and becomes damaging. Some of the judges seem to be in that general mindset too, as you'll see, but others, like Justice Breyer, understand that protecting invalid patents is damaging.
Nobody understands that software patents are intrinsically and invariably damaging, that they need to get a divorce, so don't expect that. Education is by degrees. It's hard to turn ingrained ideas around, and it's rarely on a dime. So here, all you can expect and hope for is that they'll at least see that invalid patents are not worth high-level protection.
The fact that this is the issue, and that highly qualified and skilled attorneys went in and actually argued on behalf of high protection for invalid patents is weird enough that I wanted to warn you in advance that this is the issue being discussed and evaluated.
That's the Alice in Wonderland part. Programmers reading this want to speak out and say, "But this makes no sense." And it doesn't. But it's like a discussion about motherhood or the flag or something full of emotion. It can get away from pure logic. You've probably experienced that plenty in your life. I remember Richard Stallman once saying that when he'd listen as a child to people chit chatting, small talk, he couldn't understand why they found it the least bit interesting.
So there are different kinds of people, different ways to think about things, and to some degree we are all trapped in our own ways. So try to be broad-minded as you read what they are saying, because I know before we begin that it will make you want to put your head through a wall. Just know that they mean well, probably, and even if they don't, legal issues have requirements and limitations, and everyone must stay inside those four corners. So be thinking about how to help them to comprehend what you already know.
You can't win, for example, by telling the judges that the law is stupid and they should rewrite it. They can't. They can interpret the law that Congress passed, or declare it unConstitutional, etc. but they are not all-powerful, even if they thought like you do, which they don't.
What the judges are thinking about is what is the law? What does it say? What was the Congressional purpose in writing the law? How have other courts interpreted the law? Is there a way, even if we think there needs to be a change, that we can make it happen without going outside our authority? You'll see that when the judges ask about various possible solutions, like giving juries different instructions. That's what they are thinking about, what exactly are they allowed to do?
If that is your focus, you can see that the idea that software shouldn't be patentable subject matter isn't even on the table here in this case. Hopefully there will be a case one day, and I hope then the arguments will be before them to help them understand that issue, that it was a court that decided that, not Congress, but this isn't that case. All that is before them in this case is how hard should it be to identify and overturn an invalid patent after the USPTO has issued it.
I hope these introductory remarks will help you to read the transcript with deeper understanding. The PDF is the official transcript. I've removed line numbers, so those who rely on readers won't have to listen to a computer voice reading out numbers all the time in the middle of sentences. That would drive me bananas, so it's just a thoughtful thing I like to do for those who have visual challenges. We're not using the transcript for legal purposes, just to understand what was said. So removing distractions is OK for that. But this is a reminder to check the PDF for anything that truly matters regarding accuracy, as any transcribing effort can introduce errors. We strive for perfection, but being human is always a drawback when that is your goal.
Also, I've added links to some of the legal cases mentioned, so you can read what they are talking about. That's not in the PDF. The cases matter to everyone there, because everyone is looking for the ruler's edge, what is the right interpretation. If you take time to read the cases, you will definitely understand the discussion better.
If the Supreme Court has issued a ruling, it's very hard to argue that it was all wet. You can, and sometimes a later court will correct an earlier ruling, but it's a higher mountain to climb to prove that the court was wrong than it is to prove a lower court like the district court misread the law.
Microsoft is essentially saying that the Federal Circuit, where patent appeals are heard, has messed up, going so overboard in love with patents since its establishment in the 1980s, that this specialty court keeps making patent law more and more favorable to patent owners and harder and harder for defendants to survive litigation, even to the point that now the court wants the evidentiary burden on defendants to be clear and convincing evidence, not just preponderance of the evidence. Even when a defendant finds new prior art that the USPTO examiner never saw, the patent should be presumed valid, according to the Federal Circuit, and it is only overturnable with clear and convincing evidence.
Everyone here at Groklaw is saying at this point, That can't be the law. It makes no sense. Patent trolls already make a living from weak and bogus patents because of this tilt away from reasonableness and simple fairness.
But if i4i stands, it *is* the law.
That's why there were so many amicus briefs, on both sides, because no matter what decision is reached, the impact will be huge.
i4i isn't a patent troll, by the way. Far from it. But the issue is bigger than i4i. It would like patents to be strong and hard to overturn, and you'll see the arguments they use, which are not irrational. If you believe that patents on software are acceptable and even desirable, their arguments do make sense. If you think patents inspire the small businesses and entrepreneurs to dare to compete against folks like Microsoft, then you would want a strong patent system as protection. Heaven only knows everyone would like protection from Microsoft, I'd opine. Read the district court's memorandum opinion and order [PDF] or this i4i filing and you'll see what i4i went through at Microsoft's hands. It's appalling.
But the question is deeper than i4i and Microsoft and also smaller than who treated who badly. It's about what the evidentiary standard should be. Not who was right or wrong in actions in the case. You know how I always tell you that you can't decide who should prevail in litigation based on who you like? This is Exhibit A. I hope Microsoft prevails, even though I despise their business practices so much I won't use their products any more. But court rulings are not just about the two parties. They will apply to everyone, and that takes us to a bigger picture, and that is what you have to analyze before you think about who you want to prevail. You don't have to like a company to hope they win a particular case.
On educating judges, I wanted to show you one quick excerpt from a hearing transcript in another case, where the judge in the Paul Allen patent litigation, Interval Licensing v. Google et al, spoke to the lawyers for the parties about trying to understand patents and tech so he can reach better decisions:
THE COURT: Markman hearings. I have handled a fair number of patent cases. They are not my favorite, mostly because I am always feeling very inadequate to the job. When I feel inadequate to the job, I can't do a great job for you. I am your pupil; you are the teachers. I don't know anything about how
these patents work. I can barely do e-mail. Although I have gotten a reputation for being a tech judge, that doesn't physically know how to do it. I know how to order other people how to do it.
Isn't that a bit scary? No disrespect, but lawyers are, in my experience, the caboose on the innovative tech train. And that is, sadly, who must explain tech to judges who can barely do email, as this judge frankly admits.
When you approach me, you need to treat me like your brighter-than-average middle schooler. In other words, I have the brain power to learn just about anything you want to teach me, but what I don't have is the experience to know how to put that in context. Don't ever assume, oh, gee, everybody knows that, we don't need a tutorial. You probably do. I will feel more confident about the decisions that I give you if you will work with me from the basics up.
A couple of things about being a good teacher is that you have to basically start where your student is. Don't be teaching physics to Ph.D candidates when what you really need is seventh grade science. I will tell you when you get too basic. But for the most part, if we learn a common vocabulary and common principles, we will be on the same page.
The second thing I would tell you is, you are the teachers, I am the pupil. If you overwhelm me, in other words, if you drop the library on me rather than the best book available, I am likely to be discouraged. You need to pick out the best material that you want me to read in order to get ready.
If 12 of you decide you are going to teach me about a particular concept needed for the Markman, I am not going to be able to absorb twelve different points of view. By necessity, if you want me to understand, you have to come at it with a common teaching point.
I will work hard to understand what you try and tell me. I am not shy about speaking up when I don't understand. You shouldn't consider that a problem.
When I first started doing patents, there was a complicated
patent that involved the evolution of the internet itself, and the lawyers gave me a book to read, a single 180-page book and I read it, and then we started on the tutorial. I think the tutorial lasted for a day and a half. I said at the end of it, well, have you taught me everything that an average middle schooler might know about the internet? No, Judge, we got you beyond that. I said, well, have I gotten to high school yet? Well, Judge, we think we got you to high school. I said, did I get to college? The response was junior college, Judge, junior college. That's where we are.
Now do you see why things like software being allowed to be patented comes from? I wish courts deciding what should and shouldn't be patented and what the standard for invalidation should be would seriously realize they need experts, computer experts, not just experts in the law, to explain issues to them, so they can reach solutions that actually work not just for lawyers and the companies they represent in the particular case but for everyone in the technical field, who must live with decisions made by folks who seriously are not experts in this area of skill. I can't understand why that isn't understood as a basic requirement. For example, is software math? Courts need to figure that out, because if it is, on what basis is it patentable? What is in software code that is not an algorithm and hence patentable? I put that question out some time back, and no one has an answer yet. What good is it to pass laws that conflict with reality? It can only result in problems.
The reason it matters so much to answer that question is what Justice Breyer says during this oral argument:
JUSTICE BREYER: All those first principles are along the lines of how important patents are and
what a disaster is it is to the person once they're invalidated. Okay. I think the other side will say: In today's world, where nobody really understands this technology very well, a worse disaster for the country is to have protection given to things that don't deserve it because they act as a block on trade, they act as monopolies, and they will tie the country up in individual monopolies that will raise prices to consumers, et cetera. You can imagine my spelling out this argument. That is the right question. The problem is, he's asking the wrong people, in my view, and it's not true that "nobody really understands this technology very well." Nobody in *courtrooms* understands it very well, with a few exceptions. But if the lawyers and judges would ask the people who *do* understand it very well, they could get meaningful and useful answers to what is puzzling them. Something this important ought not to be decided on guesswork.
MR. WAXMAN: Yes.
JUSTICE BREYER: So I can't work out in my own mind whether in today's world these first principles cut for the patentee or cut for the challenger to the patent.
IN THE SUPREME COURT OF THE UNITED STATES
i4i LIMITED PARTNERSHIP, ET AL.
Monday, April 18, 2011
The above-entitled matter came on for oral
argument before the Supreme Court of the United States
at 11:03 a.m.
THOMAS G. HUNGAR, ESQ., Washington, D.C.; on behalf of
SETH P. WAXMAN, ESQ., Washington, D.C.; on behalf of
MALCOLM L. STEWART, ESQ., Deputy Solicitor General,
Department of Justice, Washington, D.C.; on
behalf of the United States, as amicus curiae,
1 Official - Subject to Final Review
ORAL ARGUMENT OF PAGE
THOMAS G. HUNGAR, ESQ.
On behalf of the Petitioner . . . . . . . . 3
ORAL ARGUMENT OF
SETH P. WAXMAN, ESQ.
On behalf of the Respondents ...............21
ORAL ARGUMENT OF
MALCOLM L. STEWART, ESQ.
On behalf of the United States, as
amicus curiae, supporting Respondents .......... 36
REBUTTAL ARGUMENT OF
THOMAS G. HUNGAR, ESQ.
On behalf of the Petitioner ............45
Official - Subject to Final Review
P R O C E E D I N G S
JUSTICE SCALIA: We'll hear argument now in
Case No. 10-290, Microsoft Corporation v. i4i Limited
Mr. Hungar, you may proceed.
ORAL ARGUMENT OF THOMAS G. HUNGAR
ON BEHALF OF THE PETITIONER
MR. HUNGAR: Thank you, Justice Scalia, and
may it please the Court:
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. Under this Court's decisions Grogan
and Huddleston, the default preponderance standard
should govern in all cases because section 282 does not
specify a heightened standard of proof.
And as this Court suggested in KSR, it makes
no sense to have a heightened standard of proof when the
relevant prior art evidence was never even considered by
PTO. Under any view, it was error to require clear and
convincing proof of invalidity in this case.
JUSTICE GINSBURG: It would be hard to
argue, Mr. Hungar, that it makes no sense, but it made
sense to Cardozo and Judge Rich.
MR. HUNGAR: Your Honor, Justice Cardozo was
not addressing a case in which the evidence at issue had
not been considered by the Patent Office. To the
contrary, the Court made clear -
JUSTICE SCALIA: Well, you can't keep
shifting horses, now. Are you going to argue for all
the time, in which case, you can appeal to the general
rule that we always apply, or are you going to say, oh,
yes, we won't apply it normally but only when the prior
art hadn't been considered? I mean, you -- you can't
ride both horses. They're going in different
MR. HUNGAR: Your Honor, our position and
our view of the correct interpretation of the statute is
that Grogan and Huddleston approach. The statute does
not specify a heightened standard; therefore,
preponderance, the default standard; applies.
I was attempting to answer Justice
Ginsburg's question about the RCA case. And the RCA
case didn't address the question that was discussed in
KSR, but we believe, as I said, that the -- that the
preponderance standard should govern across the board.
JUSTICE SCALIA: So, you're contradicting
MR. HUNGAR: To the extent that -- that
Justice Cardozo was discussing a heightened standard in
the limited context of priority inventions, we think
that that's not consistent with section 282, which, of
course, came later. Moreover, I would note that the
concerns that undergirded the Court's heightened
standard in priority of invention cases, where -- those
concerns were addressed to the -- the problem of
primarily oral testimony being offered to substantiate
priority of invention claims.
The Federal Circuit has separately addressed
that issue by means of its corroboration requirement,
which operates separate and independent of the clear and
convincing evidence standard, so the concerns that
undergirded RCA are -- are completely taken care of by
that as well.
JUSTICE KAGAN: But Justice Cardozo
certainly didn't limit his holding in the way you
suggest. The language of that opinion is extremely
broad. And if you read that opinion, no one would
gather from that opinion the kinds of limits that you're
suggesting on it.
MR. HUNGAR: Actually, Your Honor, I agree
that there is some grand language used in dictum in that
case. Certainly, the holding doesn't extend beyond
the -- what was presented before the Court. But,
actually, if you read the language carefully, you'll see
again and again he refers to the fact that it's a
question of -- of prior invention. He says when the
defense is a prior invention, and then he quotes the
heightened standard on page 7. Again, on page 8, he
talks about the defense of invention by another.
So he -- and every single one of the cases
that he cites there, without exception in that
discussion on pages 7 to 8, is a priority of invention
case, The Barbed Wire Patent case being the leading
example which had explained this rationale for a
heightened concern in that specific context. But you
don't have cases applying -- Supreme Court cases
applying the heightened standard in other contexts.
And, indeed, you have many cases decided after RCA that
don't mention any heightened standard in viewing
JUSTICE GINSBURG: But just taking RCA
itself, Cardozo said through all the verbal variances
there runs this common core of thought and truth, that
one otherwise an infringer who assails the validity of a
patent bears -- upon its face, bears a heavy burden of
persuasion and fails unless his evidence has more than a
MR. HUNGAR: Yes, Your Honor. And read -
taken out of context, that could have broad
implications, but the sentences before and after clearly
make -- indicate that he's talking about priority of
invention. He talks about the title of the true
inventor and so forth. So -- so, again, that's what
those cases said, and that's what a fair reading of RCA
But, regardless of the best reading of RCA,
we -- the -- the question here is what did Congress do
in 1952? And we know that Congress in 1952 could not
possibly have understood the law to be an
across-the-board clear and convincing evidence standard.
JUSTICE GINSBURG: Then you -- then you have
to be saying that Judge Rich got it wrong because he
does deal with the -
MR. HUNGAR: Well, certainly -- yes, Your
Honor, certainly we think American Hoist is wrong,
although I would note that Judge Rich, in American Hoist
decision, says that the cases prior to 1952 were all
over the map.
But -- but the relevant question is what
would Congress have thought the state of the law was in
1952. If you think that there's any merit at all to the
judicial codification argument, it's perfectly clear
that Congress could not have thought in 1952 that the
law was an across-the-board heightened standard, because
case after case after case rejected the proposition that
there is a heightened standard or that the presumption
was unaffected when the evidence was not considered by
the Patent Office.
The -- we've cited numerous cases in our
brief at pages 34 through 36. The -- and we also in the
reply brief at footnote 3 reference a list of over 200
cases, some from before 1952 and some from after 1952,
all recognizing that the presumption of validity was
weakened or eliminated when the prior art evidence was
not considered by the Patent Office. So, you just -
JUSTICE KAGAN: Well, Mr. Hungar, it seems
to me that RCA would matter, even under your view of the
world, because if you think that Congress did not codify
the existing state of the law as to the standard of
proof and you think that Congress -- that -- that
section 282 was essentially silent as to the standard of
proof, then the question is, what do we do? And one
answer to that question is we go with our prior
precedent, which is RCA.
MR. HUNGAR: Well, first of all, again,
because RCA in context was a case where there was a
priority of invention dispute that had been adjudicated
in the Patent Office on the same evidence previously
resolved by the Court, a priority of defense dispute,
where the heightened standard cases had some
application, it clearly wouldn't affect the standards in
this case. But, more fundamentally, that's not what
Congress thought in 1952, and when you don't have a
clear rule to be codified, the default rules of
statutory construction apply. The default rule of
statutory construction in a -- on this question, in
Grogan and Huddleston, the preponderance standard
And, moreover, while the statute does not
specify a heightened standard, it does actually speak to
and -- and preclude the argument that i4i makes, because
the first sentence refers to patents being presumed
valid under this Court's precedent, a presumption shifts
the burden of going forward, and the second sentence of
the original statute refers to the burden of proof.
Under their interpretation, presumption does all the
work. The first sentence not only shifts the burden of
going forward, also shifts the burden of proof, and does
so under a heightened standard, which has never been how
presumption is interpreted generally in the law, and it
renders the second sentence entirely superfluous.
There's no need for it.
JUSTICE GINSBURG: It's -- it -- it is true
that the Federal Circuit has been consistent now since
almost the beginning, since that court came on the
scene, and it does have a monopoly on appeal in patent
cases since 1984. Because the -- the Federal Circuit
has consistently taken this position, one would have
expected that there would have been bills proposed to
change it. Were there any?
MR. HUNGAR: No, Your Honor, not that I'm
aware of. But I would note that this is, I think, i4i's
congressional acquiescence argument, if you will, and
that argument fails for numerous reasons.
First of all, if there could be any
acquiescence, and we don't think that the -- this
Court's extremely high requirements for such a claim
have been satisfied here, but if there could be any
acquiescence at all, the first 30 years after enactment
of the statute would be the most relevant consideration
in determining what Congress had acquiesced in, and it's
perfectly clear that the regional circuits all rejected
the across-the-board heightened standard that i4i is
So if Congress acquiesced in anything, it
was not an across-the-board heightened standard.
JUSTICE SOTOMAYOR: Counsel, I -- I -
having read some of those cases that you've cited that
you claim weakened or eliminated the burden of proof
standard, most of them didn't quite eliminate it.
Virtually all of them added an instruction to the jury
of some sort that said that the application of the
standard should take into account the fact that the PTO
did not consider evidence -- did not consider the prior
art relied upon in the invalidity challenge.
You didn't ask for such an instruction in
this case; is that correct? And if you didn't, why
isn't that adequate to convey the point that you're
trying to convey, that a jury should, in fact, consider
that the PTO never got to see that prior art?
MR. HUNGAR: Your Honor, if I understand
the -- the question correctly, first of all, I would
disagree with the characterization of the cases, but
with respect to the preservation issue, we objected to
the clear and convincing evidence instruction, and we
also said that if -- if any instruction on the
heightened standard is going to be given, it needs to
reflect that -- the fact that, at least with respect to
prior art combinations that were not considered by the
Patent Office, the standard should be a preponderance.
And, indeed, that's true of all of the prior art
combinations that were at issue in the case.
JUSTICE SOTOMAYOR: But other judges give a
slightly different standard. They give a clear and
convincing standard, and they add a separate instruction
that tells the jury, in applying that standard, you
should consider the fact that the PTO did not see this
evidence. You didn't ask for that?
MR. HUNGAR: We didn't ask -
JUSTICE SOTOMAYOR: You just asked for the
preponderance of the evidence charge?
MR. HUNGAR: But, Your Honor, we did object
to the clear and convincing evidence instruction, and so
if -- we don't think that's the right answer, the more
easily satisfied instruction, if that's what Your Honor
is referring to. But if that were the court's
conclusion, that that is in fact what the law requires,
then our objection to the clear and -- the unmodified
clear and convincing evidence instruction would justify
a new trial here. But more fundamentally, even the
Federal Circuit -
JUSTICE SOTOMAYOR: Why?
MR. HUNGAR: Because that in effect -
JUSTICE SOTOMAYOR: I mean, you said to the
judge below: All you have to charge is preponderance of
the evidence. You never told him: Please explain to
the jury that under clear and convincing they can take
into account -
MR. HUNGAR: Your Honor, that construction
would not solve the fundamental problem, which is that
when the Patent Office didn't even consider the
evidence, it makes absolutely no sense, as the KRS
court indicated, to have this heightened deference. The
statute requires a degree of deference by shifting the
burden of proof and the burden of going forward, but for
i4i to say that we need to go beyond what the
presumption is, the normal default standard of
preponderance, you need some heightened reason for that.
There's absolutely none, particularly when the Patent
Office didn't consider the evidence, didn't make a
decision, there was no decision and no evidence
considered going to the relevant question. That's
JUSTICE BREYER: I have one question here I
would like to get your view on. I'll assume that the
language is open enough in the history so that we could
make what would be a change, I think it would be a
change. The reasons as I get from the brief for doing
that are because there are two types of errors: It's a
bad thing not to give protection to an invention that
deserves it; and it is just as bad a thing to give
protection to an invention that doesn't deserve it.
Both can seriously harm the economy.
And you are also saying that the Patent
Office is out of control, not through its own fault, but
there are too few people and too many inventions. And
therefore type two error is a real risk.
So I'm turning you to and say: Well, what
should we do about it? I know your proposal. But we
have also seen in these briefs the following proposal:
One, somebody who thinks there is a type two error, go
back to the Patent Office and ask for reconsideration.
That's pretty good. We get the experts to look at it
And then that's coupled with: Tell the
district judges to stick very closely to their job,
allow the clear and convincing standard to apply to
facts, and by that we mean brute facts, and let them
decide the brute facts, but let the judge decide whether
that amounts to obviousness, novelty, or any of the
Now, I've gotten that out of the amicus
briefs, some of which say they support you but they
really don't. So I would like -- I would like your
views on those two suggestions as being sufficient to
cure the problem that you point to.
MR. HUNGAR: Yes, Your Honor. First of all,
with respect to re-exam, re-exam is not a solution to
the problem or an answer to the absence of justification
for a heightened standard, for several reasons. First
of all, re-exam is limited in scope. It can only
consider certain types of prior art evidence and issues.
It couldn't, for example -- it was not available for the
issue that we're talking about here, the on-sale bar.
There are various issues, the section 112 issues, such
as written description and best mode and the like, are
not susceptible of re-examination. Statutory subject
matter is not susceptible of re-examination. Many kinds
of prior art, anything other than actual patents or
publications, cannot be referenced in the examination.
So it is a limited mode of inquiry that does
not address many types of prior art that come up in many
types of important cases, technology cases in
particular. So that's one reason why the re-exam
solution is not a problem, and of course it can't
possibly be used to infer some intent on the part of
I4i and the government try to suggest that
this was part of the scheme of Congress and this is why
clear and convincing makes sense. But re-exam was
enacted in 1980, long after the '52 act, so it doesn't
shed light on Congress's intent in enacting section 282.
And it was enacted before the Federal Circuit had
created its heightened standard, so it can't possibly
have been an attempt to address the problems created by
an across-the-board heightened standard that did not
exist at the time. In 1980 the law was clear that a
preponderance standard governed in most or all cases and
a preponderance standard, of course, governs in re-exam
as well. So re-exam is not a solution. The more easily
satisfied instruction or that type of approach. If
that's what I understand -
JUSTICE BREYER: I'm getting that out of the
American Intellectual Property Law Association. I don't
blame them for my phrasing of it, but that is what
struck the thought in my mind that careful instructions
limiting the juries to brute facts and giving the judge
the notion, the job of characterizing that -- you heard
what I said -- that that will go a long way towards
curing the problem you're worried about.
MR. HUNGAR: Your Honor, I don't think it
addresses the problem because the fundamental problem is
imposing this heightened standard on the jury that has
no moorings in the statute and no moorings in common
sense, particularly in a case like this one where the
relevant evidence was not only not considered by the
Patent Office but withheld from the Patent Office.
Under those circumstances -
JUSTICE BREYER: It might not in your
situation. But the problem is in principle as it's put
to us that the office and the Federal Circuit emerge
giving protection to things that aren't really novel,
that aren't really advances on the prior art, et cetera.
Now, if that's the problem, and you carefully instruct
the jury, the bad fake patents will go away because the
judge will say: Look, this metal case called a battery
leakproof is not really novel.
MR. HUNGAR: But, Your Honor, if that were
-- the judge can't give an instruction like that.
JUSTICE BREYER: No, no. The judge says: I
want you to find if this metal container is leak proof.
Jury: Yes. Now it's up to the judge.
MR. HUNGAR: Your Honor, I think in many of
these cases it would be extremely difficult or
impossible for judge to fashion at that level of
specificity the factual issues to be considered by the
jury. But more fundamentally, if you're getting into
that level of detail and addressing questions that the
Patent Office didn't even consider or certainly did not
have an opportunity to consider with the full array of
procedural advantages that litigation and discovery
offer, it just makes no sense to impose a heightened
standard. As one of Your Honor's earlier questions
pointed out, the fundamental problem here is that the
interests on the i4i side of the equation, the policy
interests, are outweighed if anything by this Court's
repeated recognition that invalid patents stifle
innovation and competition and are very harmful.
JUSTICE GINSBURG: Mr. Hungar, could we go
back to the statute that was enacted in 1952. Before
that the burden of proof on the issue of validity of the
patent or the effect of the patent, that was on the
challenger. So when Congress added a presumption of
validity, it must have had in mind something more than
the defendant would have the burden of proof and the
normal standard is preponderance. So by adding a
presumption of validity, must Congress have intended to
do something more than simply repeat that the defendant
has the burden of proof?
MR. HUNGAR: No, Your Honor. The law
actually before 1952 was quite unsettled on that
question, as we noted in our brief and as Judge Rich, I
believe, noted in the American Hoist case, there were
actually cases prior to 1952 saying that the burden was
on the patent HOLDER to establish a validity. So what
JUSTICE KENNEDY: Burden of going forward or
burden of persuasion?
MR. HUNGAR: I believe -- you know, the
cases aren't crystal-clear on that. I think certainly
they were talking about the burden of persuasion and
presumably also the burden of going forward. But I
don't think -- I don't recall that they speak to that
level of specificity.
But certainly there are cases saying the
burden is on the patent holder. Congress overturned
those cases by imposing -- by stating in the second
sentence that the burden of proof would be on the
defendant. But it only makes sense, as I indicated
earlier, for Congress to have added that sentence if it
didn't view the presumption sentence as shifting the
burden of proof to the defendant, let alone shifting it
under a heightened standard, so -
JUSTICE ALITO: If the challenger has the
burden of persuasion, wouldn't it almost go without
saying that the challenger would also have the burden of
production on the issue of invalidity? So what would be
added then by -- what role is played then by that
sentence, a patent shall be presumed valid?
MR. HUNGAR: I think that's unclear, Your
Honor. Certainly there are circumstances in which the
party with the ultimate burden of proof does not bear -
does not have the burden of persuasion at every stage.
And Congress -- there were also cases prior to 1952
suggesting that the presumption had gone away, that
there was no longer a presumption of validity or that
the presumption went the other way.
And so again, Congress wanted to be clear;
it was saying there is a presumption which shifts the
burden of going forward under this Court's precedence,
and there is a burden of proof on the defendant, and
that's all it did. To infer that it did something much
more, much more than the pre-1952 cases authorized -
there are literally dozens of pre-1952 cases cited in
that list of 200 cases referenced at footnote 3 of our
brief, from prior to 1952, rejecting the notion that
there's an across-the-board heightened presumption of
validity; saying, no, if the evidence was not considered
by the Patent Office or in some -- the Western Auto
case, for example, from the Sixth Circuit says well,
there's this -- the exception for oral testimony of
prior invention, that's the RCA case; but everything
else is preponderance. So there's no -- there's no
heightened presumption of validity in any other circumstance.
So I think the law was clear, and the
treatises we cite at page 9 of our reply brief also make
clear the treatise writers understood, there was no
across-the-board heightened presumption that it was
weakened or eliminated when the evidence was not before
the Patent Office. And some of the cases said -
actually RCA itself cites with approval two court of
appeals cases that we note in our reply brief, the
Studie case and the Wilson case, which rejected the
notion of a heightened standard across the board. They
said well, that's true when the issue was adjudicated
before the Patent Office, but here where the Patent
Office did not adjudicate the issue that doesn't apply.
So again you just can't get out of the pre-1952 case law
-- the rule that i4i is urging.
If the Court has no further questions, I
would like to reserve my time.
ORAL ARGUMENT OF SETH P. WAXMAN
ON BEHALF OF THE RESPONDENTS
MR. WAXMAN: Justice Scalia, and may it
please the Court.
JUSTICE SCALIA: Mr. Waxman.
MR. WAXMAN: The long-settled, clear and
convincing evidence standard is correct, one, as a
matter of statutory interpretation, two, as a matter of
stare decisis in a field in which stability is
particularly important, and, three, as a matter of first
As to one, in 1952 Congress codified a long,
uniform line of decisions from this Court holding that
the presumption of validity imposes a heightened burden
of proof, a burden of proof that this Court in RCA
unanimously described as, quote, "clear and cogent
evidence." And for the past 28 years Congress has
actively acquiesced in the Federal Circuit's consistent
holding expressly drawn from RCA that the standard is
"clear and convincing."
JUSTICE GINSBURG: How actively do we
JUSTICE SCALIA: Yes, I would like that
notion of active acquiescence.
MR. WAXMAN: I thought that might get a rise
out of you.
MR. WAXMAN: I hope I'll get a chance to go
to first principles, but having made that provocative
statement, the point is -
JUSTICE SCALIA: It's like passive activity,
MR. WAXMAN: I may want to submit a
supplemental brief on that point.
MR. WAXMAN: What I mean to say is that this
is not a statute that Congress enacted and then forgot
about. This is a statute in which beginning in 1980,
even before the Federal Circuit was created, Congress
started amending the law to address the problem of
low-quality patents, with the first re-examination
procedure in 1980, any number of amendments, including
to section 282, the creation of interparties
re-examination in 1999, and the current consideration of
a post-grant review process.
So Congress has been very, very active in
this field, and what I mean by active acquiescence is it
has been very active in this field, it is well aware of
the clear and convincing evidence standard, and it has
done nothing whatsoever to change it, even make any
effort to consider making such a sweeping change in
JUSTICE KAGAN: Mr. Waxman -
JUSTICE ALITO: If I could take you back to
first principles, which is where you started, I have
three problems in seeing your interpretation in the
language of section 282.
First, the statute says the burden of
establishing invalidity of a patent, et cetera, et
cetera, shall rest on the parties asserting such
invalidity. If Congress wanted to impose a clear and
convincing burden, why in the world would they not have
said that expressly in that sentence?
Number two, if the first sentence, "a patent
shall be presumed valid," means that -- is talking about
the burden, then it's superfluous, because that's dealt
with in the second sentence.
And, third, the phrase "shall be presumed
valid" doesn't seem to me at all to suggest clear and
convincing evidence. A presumption normally doesn't
have anything to do with clear and convincing evidence.
Most presumptions can be disproved by much less than
clear and convincing evidence. So how do you read that
in -- your -- your position into the language of the
MR. WAXMAN: Well, as to presumptions
generally, I found particularly persuasive your opinion
for the Third Circuit in GI Holding. But more -
JUSTICE ALITO: I've gotten a lot smarter
MR. WAXMAN: More directly to the point, and
with all due deference to the sensibilities of the
presiding Justice for this argument, when Congress
enacted section 282 in 1952, the revisers note the House
Committee report, the Senate committee report said that
they were, quote, "codifying the existing presumption of
patent validity," and this Court had unanimously said -
and this is language from RCA that Microsoft does not
address -- on pageof its opinion says, quote, "even
for the purpose of a controversy of -- with strangers
there is a presumption of validity, a presumption not to
be overthrown except by clear and cogent evidence.
Now, to be sure, that was dicta in the sense
that the case in itself involves a priority issue. But
it was the holding of the Courtyears later in Smith
v. Hall; it was repeated on the very same day in Mumm,
and it was -- the Court spent an entire page, I think
page, the better part of page and of its opinion,
explaining that -- enunciating a general principle of
the law, and it would be a cruel joke on Congress to
have said, we are, when it said we are codifying the
existing presumption, that that presumption was not
exactly what the Supreme -- the Supreme Court
unanimously had said, which is a presumption not to be
overthrown by clear and convincing evidence.
Now, that's -- it's not that the first
sentence uses the word presumption. It uses the word
essentially presumption of patent validity, which is a
feature, a uniform feature of the Supreme Court's
jurisprudence since the Court first started addressing
this issue in 1873, and indeed when Justice Story first
decided the Washburn v. Gould case, there is -- their
argument is the standard is a preponderance.
There is not one opinion, there is not one
sentence, there is not one phrase in any of this Court's
line of decisions that supports that proposition -- and
when Judge Rich said in 19 -- shortly after 1952 that
there was some disarray in the courts' opinions, he
was -- and you can look at his opinion in context. He
was talking about lower court decisions that had either
ignored or misinterpreted this Court's very clear
holdings -- holdings which, by the way, refute not only
their argument for a universal standard, preponderance
standard, but directly refute their argument that there
somehow is some other standard of proof that applies
with respect to evidence that assertedly was not before
the Patent Office.
That was true of most of this Court's cases
decided before RCA, and for that matter after RCA.
JUSTICE GINSBURG: Would you agree, looking
to Judge Rich's opinions, that it would have been in
order for the judge to instruct, if the judge had been
asked to do so, that the evidence would carry more
weight if it hadn't been presented, defendant's evidence
would carry more weight if it hadn't been presented to
the Patent Office?
MR. WAXMAN: Yes, and the Federal Circuit
has said that over and over and over again. I mean, I'm
going to quibble with the word "would" because I think
the actual language of the instruction can't invade the
province of the jury. But you could -- certainly could
say that the defendant contends that the patent is
invalid because the law presumes that a patent issued by
the PTO is valid, the defendant bears the burden of
proving invalidity by clear and convincing evidence, and
in deciding whether the defendant has met that burden,
you may find it more easily met with evidence that you
conclude the Patent Office did not consider in
That is the long-standing established rule
of the Federal Circuit. It was stated, as was
recognized in American Hoist, in 1984, and the
explanation for it, Judge Rich's explanation is exactly
the same in cite that this Court's statement's in KSR
is, which is that there -- there are -- there are
reasons independent of deference to a particular PTO
decision that warrant a clear and convincing evidence
standard, and -- and this is key -- there is no case
from this Court, to my knowledge, in Anglo-American
jurisprudence, that creates or sanctions a regime in
which there are different standards of proof with
respect to a particular issue that a jury has to decide.
The question -- when there is -
JUSTICE KENNEDY: Well, there are case -
there are cases in which the presumption disappears?
MR. WAXMAN: Well, there -- are you
referring to cases of this Court?
JUSTICE KENNEDY: Yes. Well, I mean,
there -- there -- there are instances in which a
presumption disappears and then the -- the parties begin
again with burden of persuasion, et cetera.
MR. WAXMAN: Well, okay. I'm -- I'm talking
here about -- the argument here is about the standard of
proof, that is, a jury has to be instructed is it beyond
a reasonable doubt, is it preponderance, is it clear and
convincing? I'm not aware of any instance in
Anglo-American jurisprudence, and certainly Microsoft
and its amici have not cited one in which the jury is
told that depending on the weight you ascribe to the
evidence you heard, you should apply a different
standard of proof.
The issue goes to the weight of the
evidence. I mean, imagine a case in -- a regime in
which you said, well, you've heard eyewitness testimony.
If you, ladies and gentlemen of the jury, find that the
eyewitness really had an unimpeded view, the standard is
preponderance, but if you think that the view was
impeded or obscured, the standard is clear and
The -- the assertion that there was evidence
that the jury -- that the PTO didn't hear, and as the
briefs point out it is far from black and white what the
PTO does or doesn't consider. And in addition the -
it's far from clear whether the unconsidered evidence
is, quote, more pertinent than evidence that was
considered. Even assuming that, the jury is told, for
reasons of first principles, that I will articulate in a
moment if left to my own devices, that the burden of
proof is clear and convincing evidence, but you may find
that burden more easily met if you find that there was,
in fact, evidence relating to validity that was not, in
fact, considered by the PTO when it issued this property
Now, the first -
JUSTICE SOTOMAYOR: Isn't there a lower
court that has ruled that that standard, in the manner
that you've articulated, could confuse a jury as to what
clear and convincing evidence means?
MR. WAXMAN: The -
JUSTICE SOTOMAYOR: In fact, it's not clear
and convincing evidence if you phrase it that way, that
it's something less than that.
MR. WAXMAN: Well, I mean, a lot -
JUSTICE SOTOMAYOR: And so, the amici here
have suggested alternatives to that language that you're
MR. WAXMAN: There -- there are -- there are
any number of formulations that trial courts have given.
I think the one that would be clearest would be one that
says in deciding whether the defendant has met his
burden, you may give added weight to evidence that you
find the PTO didn't consider in deciding validity.
The case I think you're referring to was
Microsoft's earlier case involving z4, where unlike this
case, Microsoft did ask for an instruction but it was
rejected by the court -- it was -- it was rejected by
the court and found not to be an abuse of discretion.
The key point with respect to that instruction goes to
the articulation that was suggested earlier, because in
that case the instruction said you -- you make -- I
instruct -- I don't have it in front of me, but it was
essentially a mandatory instruction to give greater
weight or that the burden would be more easily met.
JUSTICE SCALIA: Of course the instruction
that you've proposed to the jury, like your adversary's
proposition, would require determining what it was that
the Patent Office considered. So you -- you haven't
avoided the -- the -- the problem of litigating an -- an
issue that -- that would better be avoided.
MR. WAXMAN: Well -
JUSTICE SCALIA: You have to do it for your
instruction just as -- as he will have to do it for his.
MR. WAXMAN: There is a -- there is a great
difference, Justice Scalia, between telling individual
jurors what amount of weight they may or may not give to
certain evidence in creating a dual standard of proof
which would, for reasons that -- that Microsoft's own
amici point out, requires -- would require the jury
first to determine whether this evidence was or wasn't
considered and was or wasn't more pertinent -
JUSTICE SCALIA: Yes, but your -- but your
instruction requires that, too. You're inviting the
parties to litigate that issue so that the jury can be
instructed. If you -- if you find that it wasn't
considered, you can give it -
MR. WAXMAN: Justice Scalia, as -- as I
think all the parties agree, and we reflect the -- we
reflect the -- the research, I believe, on footnote 12
of our brief, the -- this point is argued in many, many,
many cases. That is -- and it was true in this case.
Evidence is put on that the jury -- that the PTO didn't
consider this particular prior art, although, you know,
in this case the file wrapper shows that there were five
prior art rejections based on other art before the
patent was allowed, and counsel argue it to and fro to
the jury, as the Allison and Lemley article points out,
the statistics bear out the common sense, which is that
juries are, in fact, very influenced by the fact that
there was art going to or questioning validity that was
not considered by the PTO.
In other words, the instruction, whether the
instruction is necessary or not, juries get it, and
juries apply it. What they're not required to do is
apply two different standards of proof following all
sorts of predicate determinations that they would have
May I simply list the first -- the first -
JUSTICE GINSBURG: But -- but why -- why -
why not, Mr. Waxman? If the whole reason for this extra
deference, for this clear and convincing standard is a
Patent Office is expert and so we defer juries similarly
to defer to their judgment, but if they haven't judged
anything, what is the justification for continuing to
have the clear and convincing standard?
MR. WAXMAN: There -- here are four
independent principles that justify the clear and
convincing evidence standard across the board regardless
of what the jury considered.
Number one, an infringer's validity
challenge is a collateral attack on a government
decision that has already been made, quite unlike Grogan
and Huddleston, that bestows property rights by written
Number two, the harm from an erroneous
determination is hugely asymmetrical. A single holding
of invalidity by a single lay jury vitiates for all time
the patent and all of the reliance interest by the
inventor and the investors and the licensees who have
relied upon that ex ante.
Third, this grant of property rights not
only induces reliance, which lack, like the land patent
cases induce reliance, this is a grant of a property
right that under the Constitution is specifically
designed to induce reliance in exchange for the
inventor's honoring her half of the patent bargain, that
is public disclosure of her intellectual property for
the public benefit, and the commitment of capital by
investors and licensees that's necessary to bring into
fruition for the public benefit.
JUSTICE KAGAN: Isn't there a limited amount
of reliance that any patent holder can have, given the
MR. WAXMAN: Yes, and the fact -- yes, the
re-examine system -- I think your point actually, I wish
I had thought to make this point myself. Re-examine is
often invoked by the patent holder. That is, because
re-exam is done by the expert agency and allows the
patent -- allows the agency not to have a binary choice
of yes, the patent's fine or no, it's invalid for all
time, but can narrow the scope of the patent in re-exam,
many re-exams are requested by the patent holder.
And more -- and also, when you request
re-examination or when the PTO makes a re-exam decision,
that decision is good for all time, whichever way it
goes, unlike the stark asymmetry in trial court
litigation where the patent holder has to win 100
percent of the time. If the patent holder loses once,
the patent under nonmutual offensive collateral
estoppel, Blonder-Tongue, the patent is out. And I
should point out that this Court's opinion in
Blonder-Tongue, which of course was a case about patent
JUSTICE BREYER: All those first principles
are along the lines of how important patents are and
what a disaster is it is to the person once they're
invalidated. Okay. I think the other side will say:
In today's world, where nobody really understands this
technology very well, a worse disaster for the country
is to have protection given to things that don't deserve
it because they act as a block on trade, they act as
monopolies, and they will tie the country up in
individual monopolies that will raise prices to
consumers, et cetera. You can imagine my spelling out
MR. WAXMAN: Yes.
JUSTICE BREYER: So I can't work out in my
own mind whether in today's world these first principles
cut for the patentee or cut for the challenger to the
MR. WAXMAN: Those are policy arguments that
JUSTICE BREYER: And the first are not?
MR. WAXMAN: Excuse me? No, the fact that
-- the fact that it's a collateral challenge on a
government decision bestowing property rights by written
instrument, no. The fact that the harm from an
erroneous decision is totally asymmetrical, no. The
fact that what Congress intended was that this grant of
property rights actually induced reliance, and
finally -- and this is my final first principle, I
suppose -- that changing this long-standing standard
would marginalize the PTO, the expert agency that we
know Congress created to superintend the issuance and
re-examination of patents, and to the extent that there
are significant policy concerns which I agree with -
may I finish my sentence?
JUSTICE SCALIA: Finish your sentence.
MR. WAXMAN: - which I agree with: A,
Congress is on the job; and, B, there is -- those policy
reasons say nothing about what Congress thought about
the Patent Office in 1952 when it applied this Court's
JUSTICE SCALIA: Thank you, Mr. Waxman.
ORAL ARGUMENT OF MALCOLM L. STEWART
ON BEHALF OF THE UNITED STATES,
AS AMICUS CURIAE, SUPPORTING THE RESPONDENTS
JUSTICE SCALIA: Mr. Stewart, we'll hear
from you now.
MR. STEWART: Justice Scalia, and may it
please the Court:
I would like to begin by addressing briefly
this Court's decision in RCA, because I think it's
important to notice not only that Justice Cardozo used
fulsome and extensive language that was intended to
sweep broadly and that was intended to announce a
categorical rule; the other thing is the discussion in
RCA was intended and was set forward as a recapitulation
of prior doctrine. That is, Justice Scalia -- Justice
Cardozo did not purport to announce for the first time a
rule as to the weight that should be given a prior
patenting decision. He explained that this is what the
Court had done since the latter part of the 19th century
and in fact it had been done by Justice Story riding
circuit in the early part of the 19th century.
And the court in RCA said a patent is
presumed to be valid until the presumption has been
overcome by convincing evidence of error. The
requirement of heightened proof was part and parcel of
the presumption itself in the same way that I think most
lawyers in this country would say that the requirement
of proof beyond a reasonable doubt is part and parcel of
the presumption of innocence in criminal cases. If a
new criminal statute were enacted saying that the
defendant is presumed innocent, but the presumption can
be overcome by a preponderance of the evidence, that
might be a presumption of innocence, but it wouldn't be
the presumption of innocence as it's historically been
understood in our country.
The second thing I would say about
Congress's presumed intent when it acted in 1952 was
that, at least when this Court's precedents are clear,
Congress when it uses words that come right from those
cases should be presumed to have codified this Court's
holdings, not the decisions of lower courts that may
have deviated from this Court's instructions. And I
think the presumption that Congress acts against the
background of existing law, it's less a prediction or an
assessment of what percentage of the legislature were
actually aware of the details of RCA. It's more a
method of making the system work, by telling
conscientious legislators: If you do read up, if you do
understand the contours of Supreme Court's decisions,
you can be confident that your words will be -
JUSTICE SOTOMAYOR: Counsel, the problem
with your argument, assuming its validity, is why do you
need the second sentence? If Congress was intending to
sweep up in the use of the word "presumption" the need
to overturn it by clear and convincing evidence, why did
you need the second sentence saying that the other side
now bore the burden of persuasion?
MR. STEWART: I think there is a belt and
suspenders quality to the statute, no matter how you
parse it, but I think that Microsoft has essentially the
same problem, because they have constructed a theory
under which the second sentence does something that the
first has not, does not, but they haven't constructed
any theory as to why the first sentence is not
superfluous. That is, given the second sentence to the
effect that the burden of establishing invalidity is on
the challenger, there's no more work to be done by the
The other thing I would say in response to
Justice Alito's question, which also goes to the natural
meaning of the statute, Justice Alito asked, I think,
basically, if these precedents were not on the book and
we were just looking fresh at the language, what would
we assume the standard to be? And I think we would say,
let's look at what the defendant is asking the judge or
jury to do. The defendant is asking the judge or jury
to set aside a decision that has been made by then the
Patent Office, now the PTO, and we would ask what sort
of standard of proof ordinarily applies when a litigant
asks a court to set aside an administrative decision.
In a sense, this court had a variant of that
problem a few years ago in Dickinson v. Zurko, which
dealt with direct court of appeals review of a denial by
the PTO of a patent applicant's application, and the
statute clearly authorized judicial review in the
Federal Circuit, but said nothing about what standard
would apply. And the Court said in the absence of a
conflicting standard imposed by the statute, we will
look to background principles and administrative law,
and the standard will be substantial evidence. And
that's basically what this Court said back in 1894 in
Morgan v. Daniels. It said the reason that we apply a
heightened standard when an individual attacks the
validity of an issued patent is that that litigant is
asking the Court to set aside a decision made by the
appropriate executive branch agency.
JUSTICE ALITO: But that ground doesn't
carry very much weight when the matter was never
considered by the PTO.
MR. STEWART: I think you are correct that
if Congress had focused specifically on the category of
cases in which the only evidence brought forward to show
invalidity had not been considered by the PTO, it might
have addressed that separately. In our view there are
three independent reasons that it makes sense to apply a
heightened standard even in that category of cases. The
first two have to do with the interests of the patent
applicant, the third has to do with the interests of the
The first one is that the patent -- the
grant of a patent has historically been understood to
reflect a quid pro quo between the applicant and the
government, and the applicant's part of the bargain was
disclose that which might otherwise be maintained as a
trade secret, and the government's part of the bargain
was give a period of exclusivity.
And I think there is a thread in this
Court's cases, especially in the barbed wire patent
cases, to the effect that once the patent applicant has
honored his part of the bargain a court should be
hesitant to essentially deprive him of the benefit for
which he contracted unless the evidence is clear. The
court in the barbed wire patent cases said that whatever
doubts there may be as to whether the patentee was
actually the first inventor should be resolved in the
patentee's favor because without question he was the one
who first disclosed the information to the public, made
it available to the public through the patent
application process itself.
[PJ: What about if the patent is invalid, though? Then there is a contract that hasn't been fulfilled by the "inventor" if there is no valid invention.
The second is related to the patentee's
reliance interests, but is more instrumental. That is,
independent of our concerns for fairness to the patent
applicant, Congress could reasonably determine that
there are enough uncertainties along the way to getting
a patent, to having it overturned on various other
grounds that in an invalidity suit the patent -- the
patentee should have reasonable confidence that it won't
be overturned unless the evidence is clear.
And I would like to respond briefly to Your
Honor's question, Justice Kagan, about why isn't that
diminished by the re-examination process. I think it is
diminished somewhat. Re-examination is different both
because it's done by the expert agency and because it's
more nuanced. There is. The option to narrow the
claims to revise the language. It's not a blunderbuss
tool, like setting it aside. But I would still
acknowledge the force of your observation that to some
extent, the patent holder's confidence would be greater
if there were no re-examination process at all. And I
guess I would say this is just one aspect of the patent
law's balancing of competing interests in a way that
doesn't serve either to the exclusion of the other; and
to use an obvious analogy, the current term of patent
protection is 20 years from the -- the date of the
application. Obviously Congress thought 20 years was
better than 10 and presumably that was because 20 years
gives greater incentive to innovation. If somebody
JUSTICE ALITO: Why is -- why is
re-examination sufficient to answer the concerns that
Justice Breyer mentioned, when re-examination can't
consider certain issues, and a case such as this doesn't
necessarily have to be stayed while re-examination takes
MR. STEWART: It's not fully sufficient to
resolve all challenges to the -- the validity of an
issued patent. Now Congress now has it before it
legislative proposals, one of which has passed the
Senate, one of which has been voted out of committee in
-- in the House, and is currently pending before the
court -- the full -- full House of Representatives, that
would expand the availability of post, what we now call
post-grant review proceedings, where for a limited
window of time after a patent is issued, people who
oppose the issuance of the patent can come in and object
on any ground. And that wouldn't be limited to the -
the grounds that are specified in the current
So this would -- it reflects Congress's
understanding that there is a problem with patents that
should not have been issued, but its desire to create
additional mechanisms for the PTO to address that
problem, rather than to have it be done through
litigation. But that -- the point I was going to make
about the 20 and the 10 years is somebody could ask,
well if 20 years is better than 10, why wouldn't 30 be
better than 20? And the only answer is 30 presumably
would give the patentee even more -- or the potential
patentee even more incentive to invent, but at a certain
point Congress decides that countervailing
considerations require an end.
And it has essentially done something of the
same thing with re-examination. It said we're not going
to go so far in the direction of protecting patent
holders' reliance interests as to preclude the PTO from
reassessing what it's done, but that doesn't mean that
reliance interests aren't important.
And the third thing I would say is even when
a defendant in an infringement suit comes forward with
prior art that was not itself considered by the PTO,
there's always the possibility that that prior art will
be substantively equivalent to prior art that the PTO
did consider; and so in cases like this, in form the
defendant would be asking the jury to make a
determination that the PTO had never made, but in
substance, what the defendant would be asking the jury
to do is conclude that what the PTO thought was a
patentable advance really was not so.
JUSTICE SCALIA: Thank you, Mr. Stewart.
Mr. Hungar, you have 8 minutes for rebuttal.
REBUTTAL ARGUMENT OF THOMAS G. HUNGAR
ON BEHALF OF THE PETITIONER
MR. HUNGAR: Thank you, Justice Scalia. A
few points that I would like to make.
First of all, with respect to the suggestion
that the jury should be instructed on the weight to be
given various forms of evidence, I note that in the z4
case that's been discussed, the Federal Circuit rejected
the very, quote, "more easily carried," closed quote,
instruction that i4i suggests as the solution, and it
did so because it would confuse the jury about what the
Having effectively three standards of proof
in patent cases rather than two is hardly a solution to
the problem; but more fundamentally, whatever
instructions might or might not be appropriate regarding
the particular evidence before the jury, there has to be
a justification for departing from this default
preponderance standard, and no sufficient justification
has been offered.
The statute doesn't provide for it, the
legislative history doesn't reference it, the pre-1952
case law can't reasonably be read in that way. That the
-- i4i and its amici do not point to a single case in
the -- in the years leading up to 1952, the 15 or so
years prior where a court of appeals or any court or any
commentator said that the rule is clear and convincing
evidence across the board. No one understood that to be
the rule. No one read RCA that way. Congress would not
have done so, either, so you can't get there under
codification. You certainly can't get there under
principles of administrative deference. Even the
government admits those that principles don't justify a
JUSTICE BREYER: What about the rule where
-- I'm trying this on, I don't buy it necessarily -- the
-- the heightened standard exists where the Patent
Office did consider it or could have considered it had
the infringer asked for reconsideration?
In other words, put the burden on the
infringing party to use this procedure, and if he does
use it, it's going to get a heightened burden if he
MR. HUNGAR: Well, first -
JUSTICE BREYER: And if he doesn't use it,
it should get a heightened burden because he should have
MR. HUNGAR: First of all, Your Honor, I
don't see that any way you can get that out of the
statute. But it also wouldn't work, because re-exams -
JUSTICE BREYER: The statute itself doesn't
-- we're all going on history here, I mean, and history
brought up to date with the words of the statute I don't
think cover it either way. They talk about presumption,
but put that to the side.
MR. HUNGAR: Well, there -
JUSTICE BREYER: I wanted your opinion on
that as the validity or a useful instruction for juries.
MR. HUNGAR: Well, Congress certainly
couldn't have intended that in 1952 because it hadn't
yet created re-examination.
JUSTICE BREYER: I'm not asking that
question. I'm asking the question of whether in your
experience as a patent lawyer or -- would -- what we're
trying to do is we're trying to get a better tool, if
possible, to separate the sheep from the goats. That's
what we're after, I think, and so what is that better
MR. HUNGAR: Your Honor, as you know,
re-exam is not available for many of the types of
invalidity issues that arise. But in any event, if -
if -- if the Court had such a rule, the problem is,
re-exam takes a long time, patents plaintiffs generally
oppose stays of litigation for re-examination, because
they want to get to the jury because they know that
juries are much more likely to uphold patents than
either judges or the Patent Office on re-exam. So they
want to get the case litigated as quickly as possible so
you get through the court system before the re-exam has
So to the -- in fact if it were true, as
some of the amici argue, that a patent applicant -
patent holders are afraid of juries and want the experts
at PTO to resolve the questions, which we don't think as
a -- as a factual matter is accurate, but if that were
true, the patent applicant, the patent holder has the
absolute right to initiate re-exam themselves, and they
could certainly go to the court and say please stay
proceedings pending re-examination. Normally when -
courts refuse to stay proceedings, because they don't
want to prejudice the plaintiff, who is opposing a stay,
but if the plaintiff is asking for a stay, there's not
going to be any problem.
So the system already permits patent holders
to -- to -- to follow that procedure and get
re-examination if they want it. The problem is they
usually don't. And in fact a preponderance standard
would encourage that.
With respect to the reliance arguments, the
re-examination problem we think addresses that. The
fact that this is a procedural rule under this Court's
precedence makes clear that reliance interests are
lessened. In any event, the reliance interests aren't
nearly as strong as the same arguments made by many of
the same parties in KSR, and MedImmune and eBay where
this Court was not persuaded. It should not be
persuaded here, either.
With respect to the legislative history that
they rely on, if you're going to look at the legislative
history, what it actually says is that Congress is
referring to the presumption as stated by the courts,
plural -- not the Supreme Court, courts plural -- so if
you're going to look at legislative history it actually
makes clear that Congress was not looking only at the
RCA case which is not even referenced in the legislative
history, but was looking at rule as it was understood to
exist in 1952, which is not the rule that i4i urges.
With respect to the -- the presumption
point, the presumption clearly does serve a purpose, the
presumption language in the statute, by overturning the
courts -- the prior to 1952 decisions that had rejected
the presumption, and by making clear that the burden of
going forward is on the defendant, so the plaintiff
doesn't have the burden that it would otherwise have of
pleading and putting forward evidence at trial of
For all these reasons, we ask that the
judgment of the court of appeals be reversed.
JUSTICE SCALIA: Thank you, Mr. Hungar.
The case is submitted.
(Whereupon at 12:02 p.m., the case in the
above-entitled matter was submitted.)
[PJ: For the Index - see PDF]