Challenging Patent Validity: Microsoft Asks Supreme Court to Reduce “Clear and Convincing” Standard

Microsoft Corp. v. z4 Tech. (on petition for certiorari 2008)

After a jury verdict that z4’s patent was infringed and not invalid, the Eastern District of Texas district court ordered Microsoft to pay over $100M in damages to the patentee (a small Michigan company)  The award was affirmed by the Court of Appeals for the Federal Circuit (CAFC).

Now, Microsoft has asked the Supreme Court to hear its case. The appeal focuses on the CAFC’s hard-line stance of requiring “clear and convincing evidence” to invalidate a patent even when a defendant presents evidence of invalidity that was not considered by the PTO.  The question presented is:

When a defense of invalidity under Section 282 rests on documentary evidence that was not considered by the United States Patent and Trademark Office, whether the factual predicates of the defense must be proved by “clear and convincing evidence” or some lower burden of proof.

According to Microsoft’s brief (filed by Ted Olson), prior to the founding of the CAFC, “all twelve regional circuits” required a lower evidentiary burden when the invalidity argument “rests on evidence that the PTO never had an opportunity to consider.”  The petition also uses KSR as a hook — in that case, the Supreme Court stated in dicta that the “rationale underlying the presumption [of validity is] that the PTO, in its expertise, has approved the claim.” In KSR, the court found the rationale “seem[ed] much diminished” because the references were unavailable to the PTO during prosecution. 

In KSR, the Supreme Court truly did beg the question of whether the standard for proving invalidity should be lessened in certain cases. In its decision here, the the CAFC held the line, by quoting an old Uniroyal case: “The burden of proof is not reduced when prior art is presented to the court which was not considered by the PTO.”*

A weak point of Microsoft’s petition is that its claim for invalidity falls under 102(g). Microsoft is arguing that its own non-published prior invention should invalidate the z4 patent. (Specifically, Microsoft’s asserted prior art was included in a Brazilian version of Publisher). 102(g) cases provide additional rationales for a high evidentiary standard: 102(g) prior art is generally less trustworthy because the asserted prior art was not public but rather emerges from the accused infringer’s files at the opportune time. In addition, lowering the standard for 102(g) prior art encourages potential defendants to keep their developments in secret rather than publicly disclose them or present them to the PTO.  The same issues arise from non-documentary prior art, such as evidence of prior use.  In its question presented Microsoft attempts an end run around the issue by focusing on “documentary evidence.”

Related Notes:

67 thoughts on “Challenging Patent Validity: Microsoft Asks Supreme Court to Reduce “Clear and Convincing” Standard

  1. Microsoft’s petition for certiorari was dismissed on May 8, 2008 by consent of the parties, presumably because the case was settled. Either way, unfortunately, this important issue won’t be reviewed by the Supreme Court.

  2. It seems that everyone is on z4′s side because we all realize that especially microsoft is aware how patents are made. Why did they not file for one when they supposedly had all that knowledge that z4 did. It is simply because they stole his IP. We the people of the US are sick of big companys walking on the little guys. That is why the Bush administration is becoming more and more unpopular.

  3. Using a preponderance of the evidence standard post-issuance would deny the patentee of the right to further prosecute the invention into something that is patentable over the prior art. If the preponderance of evidence standard is to be applied post-issuance, then in those cases in which the patent is found invalid over newly found prior art, the applicant should be given a further opportunity at the PTO to amend the claims to distinguigh such prior art – a sort of remand to the PTO for further prosecution.

  4. David French writes:

    This is a very important case and I think the Supreme Court will be sure to hear it.

    The burden of proof is very important. Imagine the judge instructing the jury that they can only reverse an examiner’s ruling in favor of patentability if they feel that they have clear and convincing evidence before them that the examiner was wrong. In order to reverse the examiner, the jury has to understand the issues! Result: patent claims are valid.

    A split presumption of validity is fair. If the examiner looked at it, then keep the old presumption. If it’s new prior art, then the jury should be free to rule on the basis of a preponderance of the evidence.

    And to restrict huge IDS filings, the applicant should designate up to 10 prior art references for mandatory review by the examiner and therefore inclusion in the enhanced presumption of validity prior art. Beyond that, the higher presumption will not apply unless the examiner specifically indicates that he has reviewed a prior art reference. Some examiners already identify carefully reviewed prior art with an asterisk.

    Let’s see what the Supreme Court says!

  5. Dennis stated, “[i]n addition, lowering the standard for 102(g) prior art encourages potential defendants to keep their developments in secret rather than publicly disclose them or present them to the PTO.”

    I am not so sure. In order to qualify as 102(g) prior art, the cited invention with a prior reduction to practice relative to the claimed invention must not have been abandoned, concealed or supressed. MPEP 2130ish. Therefore, if defendants keep their inventions secret rather than disclose them, the prior invention will not be an anticipating refernece.

  6. SF you are absolutely correct …

    copyrights are more important than patents … my point was lost in translation, my fault, poor writing and a sense that this will come back to haunt me in some distant case …

    ill brush up on my constitutional history on why a copyright is emblematic of “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries” (mickey outlived my great grandparents) while patents require more vetting over validity … OR, could it be that there is no “deal” until the SCOTUS either decides to hear your case or not (nice way to circumvent a real free market) … even if it is perfectly reasonable by extension to argue that each patent is it’s own bundle of rights and perhaps each patent is a business method as defined by the claims in view of the specification if said patent is a reproducible bundle of bits that enables the patentee to get paid – AND z4 sought patent protection under a set of rules and conditions that are now less than transparent …

    can the public even explain the difference[s] between the two … is that the real “big difference”? if your answer is it doesn’t matter … then the infringer should pay now … the bargain between the public, the inventor and the infringer are all known today …

    can you point me to a case involving copyright or trademark with similar machinations that requires the attention of SCOTUS? not eldred (probably not your first choice, why not make copyright terms commensurate with the existing political climate?).

    how about something, not pedals in a vehicle or an obsolete on-line exchange, addressing the nature of an economy based on intangibles, namely *all* economically viable goods and services are easily and perfectly copyable bits (including, copyrights, patents, your personal ID, SSN, the contents of this blog, the data archived by the ISP each of us is using, et al.)?

    have you argued that the prevention of abuse of this digitized data is not novel and not non-obvious? why bother with patents if that is the case – let’s focus solely on the aspects of copying, right? or, since we only know that privacy is a “rebuttable” presumption of “the right to be left alone” – why not expense the cost of ID theft instead of prevent it in the first place by discouraging the z4′s of the world to invent?

    we can all live with a little piracy of privacy data and copyrighted data as well, right? EVEN if it is YOUR data or YOUR copyright. is that a fair proxy of validity? how much does the claim do what the claim says? perhaps that is an issue that SCOTUS should look into – the offset of privacy versus piracy – definitions, experts, even golden tickets might delight

    messaging, plain and simple … why should z4 have to wait another day?

    ill go one further than m. slonecker … in this environment is our government so politicized that in lieu of patent protection we should head down a path of industrial policy full of more government agencies and oversight in any number of industry verticals? you know one Dept of Ag rep in every county in the country protects our food supply and secures nice incomes for our poor farmers. why not a registration scheme? why not file patents and start the process of validity challenges upon publication, akin to babel boy’s point above, and arguments left elsewhere on this blog?

    a patent that enables one to get paid is as objective, useful and tangible as it gets … z4 might as well be itunes … which is now the largest music retailer in the US … is itunes a business method? a software? do they get paid more or less than a physical retailer? is a business method patent or software patent simply a grafting of existing non novel and obvious means of getting paid?

    itunes successfully competed against free, physical inventory, a major copyright cabal (even!), and the infringer of the z4 case (and there are presumably patents, copyrights and trade secrets to enable the service and assure that the copyright holder is paid and the consumer’s privacy is protected – to what extent, does it matter?) … is that more important than alleged “defects” in 282?

    ill bet one money carnie ticket that all of these legal arguments would be very suspect if you had to live by the following rule: one and done

  7. Is this hard?

    Megacorp that dislikes having to observe competing patents wants the standard for killing a patent lowered.

    EOS.

  8. Just because a patented anti-copying scheme is useful doesn’t make it novel and non-obvious. And it is not hypocritical to contest the validity of a patented anti-copying scheme.

    The big difference is that copyright exists when the software is created. It’s scope (whatever it is) is valid. Patents are defined by their claims, which do not have any automatically valid scope.

  9. i’ll raise this again :: “disputed patent rights” v. “undisputed copyright rights” – right, and the disputed patent makes possible the “assertion” that indeed a particular “copy” is attributable to party A versus a second copy being attributable to party B … (without which the “undisputed copyright rights” would be worth how much? according to whom? paid by whom?)

    the “alleged after losing on appeal” infringer *still* believes there is value in either preventing copying (assumption) or making unique a given copy so that “copies” can be counted …

    the decision[s] have interesting commentary … and, during the course of the case copyright has strengthened and patents have arguably not strengthened …

    >>There’s a big difference from z4′s disputed patent rights and MS’s undisputed copyright rights in its software.<<

    what if there was no way to count the copies? how “big” a difference would that make?

  10. Brilliant thought Ted Sichelman. Stiff test for “Is it prior art” and a lower standard for “Does that art invalidate”. Elegant way to rationalise how the (not common law) EPO always handles “Prior Use” in opposition proceedings.

  11. SF,

    Of course my comments are merely anecdotal and tongue in cheek…a somewhat cynical, editorial observation if you will.

    One aspect I do find somewhat remarkable is the attribution to Lemley that a lower standard is appropriate because as we all well know the USPTO does a poor job searching for prior art, i.e., substantial deference to agency fact finding is not warranted because of this specific agency’s puportedly poor record. However, can’t the same be said of many other federal agencies? Why single out just this one?

  12. Regarding the 102(g) concern–i.e., “102(g) cases provide additional rationales for a high evidentiary standard”–this fear can be allayed by focusing on the two separate determinations that must be made in any invalidity analysis: (1) Whether the asserted prior art falls under any provision of section 102; and, if so (2) Whether the prior art invalidates the claims-at-issue.

    The first and second steps do not necessarily call for the same standard of review. For instance, the evidentiary and policy-related concerns of 102(g) might call for a “clear and convincing” standard on step (1)–i.e., determining whether the evidence offered “clearly and convincingly” shows some (but not necessarily invalidating) invention made in this country before the date of conception by another inventor who had not abandoned, suppressed, or concealed it.

    However, once this step is satisfied, the reviewing court can adopt a less stringent standard–e.g., preponderance of the evidence–for the actual substantive invalidity analysis.

    This two-step process addresses any special concerns with 102(g). First, to the extent that there are questions on the reliability of the evidence supporting earlier conception (e.g., it is from the alleged infringer’s files), they would be resolved under the ordinary clear-and-convincing standard. Similarly, concerns about inappropriately keeping the invention secret would be resolved by using the same standard to test whether the invention had been abandoned, suppressed, or concealed.

    Second, the actual substantive determination of whether the prior art anticipates or renders obvious the claims-at-issue would be tested under a lower standard, e.g., preponderance, which would address the concern that the “rationale” for a presumption of validity is “much diminished” for art not previously examined.

    In sum, by splitting the invalidity analysis into two-steps–(1) Does the prior art qualify under 102?; and if so, (2) Does it invalidate the claims-at-issue?–any special concerns regarding 102(g) art fall away.

  13. “Since willfullness must be shown by clear and convincing evidence, I am surprised that MS is not advocating a higher standard for it as well as a lower standard for invalidity.”

    It’s not that surprising if you figure that you can’t willfully infringe an invalid patent and it may be easier (1) to argue for a lower standard of invalidity for documentary prior art not before an examiner than (2) to argue for a lower standard for willfulness across the board. Also, was the willfulness based on the recklessness standard we now have, or the prior standard (I haven’t looked back at the case to see)?

  14. SF,

    “… adjudicated, but not final with a legitimately appealable issue. Hence, it’s premature to equate z4 disputed rights with MS’s automatic copyright in its works.”

    True, but it is worth mentioning that z4 prevailed in the trial on the merits and on appeal, that MS was assessed attorney’s fees for certain indiscretions, and that willfullness was found and damages enhanced (albeit certainly not trebled).

    Since willfullness must be shown by clear and convincing evidence, I am surprised that MS is not advocating a higher standard for it as well as a lower standard for invalidity.

  15. “the ‘big difference’ – i’ll poke at that … this has been adjudicated … ”

    … adjudicated, but not final with a legitimately appealable issue. Hence, it’s premature to equate z4 disputed rights with MS’s automatic copyright in its works.

  16. Andrew: “uncorroborated oral testimony of an inventor to establish prior invention and sale cannot suffice for clear and convincing evidence”

    That’s a good point. Is it necessarily the case that such testimony would suffice to invalidate under a preponderance standard?

  17. SF & MaxDrei, your points are well-taken. I meant only to challenge the idea that there is not a practical difference between the two standards of proof. I think there is a very significant difference in the minds of judges and juries, assuming counsel on the benefit side of the C&C standard does his/her job to emphasize the difference.

  18. “”It is mildly amusing that MS wants to protect its rights, but takes umbrage at the fact that z4 wants to do the same.”

    You assume that z4 has patent rights. MS apparently believes that it can prove that z4 doesn’t have any patent rights, if only the standard of proof were lower. There’s a big difference from z4′s disputed patent rights and MS’s undisputed copyright rights in its software.”

    the “big difference” – i’ll poke at that … this has been adjudicated … for all the folks wanting to limit unnecessary litigation, what exactly is the argument here?

    they are seeking cert over an issue that itself is less likely to be held valid than the issues of the case already litigated … how many people want “their” IP protected? (everyone, no?) … what is a proper level of proof of valid property – trade secrets and copyrights can be excepted but let’s push back on 282? cafc has already upheld the district ct findings (have to agree with money about what exactly that standard looks like – is it a “do-over” or “really really clear”) … how many bites is fair?

    yes, everyone wants to be paid for their contributions … ask the ISO about the XML votes that came to pass this past week … we can see the z4 patents but as with so many allegedly logical “IFF’s” where is the beef, here? reduce cost at all costs? ignore value at all costs? discourage public notice so that we don’t know what the metes and bounds are?

    net net net

    given the related discussions about signal patentability and business methods … here is a case which raises all of those issues in turn … but pushes instead on validity …

    simply enabling people to get paid in an information economy – even if it means reducing “payment” to the purchase of a “key” not a “software” per se (meaning a string of binary data that is otherwise useless is “proof” of ownership over another string or set of strings of binary data – the software – as though it were >> boing boing “property”) is about as fundamental as it gets … wiretapping with routers? music tax for ISPs? anti-phishing legislation to protect trade names? issues that anyone who can read this rant may or may not be completely comfortable with …

    software that protects software … a new business method? well, not new … a “valid” business method, deserving of payment, even if the SCOTUS does grant cert and rules against z4?

    it just so happens that these patents slipped through (apparently) the cracks of massive investments in digital rights management (“drm”) that were made by a large number of companies, including the very public tryst with intertrust, which had over a billion dollars in licensing and litigation success for a patent portfolio of drm “patents” (the software never worked as promised … ive heard) …

    by extension, business methods based on how well you can meaure the difference between “piracy” and “marketing” (or itunes would *not* be the largest music retailer in the us today … another “business method” perhaps — based on software/signal “keys” – which are a family of functions/signals/software) are not concrete enough or tangible enough to merit patent protection?

    little stuff that one would assume is of higher interest to innovation and “promotion of the arts and sciences” than the historical fact that there were 12 circuits …

    happy happy and write your senators …

  19. Oh come on Sean. You are advocating a “Why is it true? Because I say it’s true” standard. That way lies bringing the patent system into disrepute. The other way is to reform your system of trying novelty and obviousness. Get yourself a straightforward objective definition of the state of the art, and of what is the ambit of the claim. Then, it’s straightforward for an experienced patents judge to say Novel Y/N and Obvious Y/N. It’s not rocket science. (At least, not in Europe)

  20. Regardless of whether there are any actual cases where the degree of proof would make a difference, doesn’t it make sense to have a “clear and convincing” standard to at least provide some level of certainty?

    Isn’t it better to know that the burden to invalidate is relatively high, rather than a mere coin toss?? Does everyone really want to litigate every issue, only to be right a mere 50% of the time? Sounds less than desirable to me.

    Seems like nearly everyone here is on MS’s side. They are the same force behind the proposed legislation that no one particularly cares for, and they probably have some sway regarding patent rules and judicial determinations as well. Everything is trending towards less certainty, when in actuality it is better to have more certainty (or at least some degree of certainty, even at the expense of flexibility).

  21. MM,

    That may be. I was not in fact advocating a lower standard be applied. I tend to agree that it appears that lip service is all that is applied to the clear and convincing standard. Patents seem to be invalidated pretty easily. Of course, not being a litigator, my view may be skewed by the particular cases that are taken to the CAFC or otherwise published. Perhaps a disproportionate number of those are over patents with serious questions of validity.

  22. True, Andrew Dhuey, but is that justification enough for skewing the balance, between the party wielding the patent gun, and the one staring down its barrel at oblivion? There’s another way, isn’t there?

  23. “there are important practical implications of the clear and convincing standard. For example, uncorroborated oral testimony of an inventor to establish prior invention and sale cannot suffice for clear and convincing evidence.”

    Microsoft’s question presented, however, deals with *documentary* prior art.

  24. Three cheers for Malcolm Mooney, and his flagging up, ahead of time, another manifestation of the “Law of Unintended Consequences”.

  25. Mr. Mooney, there are important practical implications of the clear and convincing standard. For example, uncorroborated oral testimony of an inventor to establish prior invention and sale cannot suffice for clear and convincing evidence.

  26. Hutz: “The standard fro proving invalidity should simply be lower. A mere preponderance of the evidence is what is being argued for.”

    Again, I don’t think in the patent context that the difference between “clear and convincing” and “preponderance of the evidence” is meaningful. I know that sometimes judges give lip service to the differences (e.g., when upholding a patent’s validity) but I really don’t see where an allegedly “lower” standard is going to change the way these cases are decided.

    If anything, lowering the standard for “non-addressed art” might have the effect of raising the standard for finding patents invalid over previously cited art. It’ll now require “really really clear and convincing evidence”. Or something.

  27. I also find it ironic that Microsoft, which vigorously enforces its IP in copyrights and trade secrets, neither of which has any novelty or non-obviousness standard nor any scrutiny by a government examiner, yet fights tooth and nail when caught infringing an examined patent.

    Moreover, patents are better forms of IP protection for software than copyrights and trade secrets, public policy-wise, because they do require disclosure, have a much shorter lifetime and have to pass muster under stricter standards and stricter scrutiny than either copyrights or trade secrets.

  28. “It is mildly amusing that MS wants to protect its rights, but takes umbrage at the fact that z4 wants to do the same.”

    You assume that z4 has patent rights. MS apparently believes that it can prove that z4 doesn’t have any patent rights, if only the standard of proof were lower. There’s a big difference from z4′s disputed patent rights and MS’s undisputed copyright rights in its software.

  29. Burden of proof aside, the cynic in me is compelled to note that this case involves the Product Activation feature embodied in most, if not all, of MS’s software products. MS apparently believes this is a useful feature to protect its rights in its products. z4 apparently has a patent that encompasses MS’s Product Activation feature. It is mildly amusing that MS wants to protect its rights, but takes umbrage at the fact that z4 wants to do the same.

    P.S. to Microsoft: Even a quick perusal of the internet will reveal at least one keygen that can be used to create serial numbers that will pass Product Activation with flying colors for all MS software products. This makes me wonder my MS even insists upon using the feature in the first place (unless, of course, it is to treat all of its legitimate customers as miscreants intent upon cheating MS out of its due).

  30. metoo,

    I have not read every post, but I do no think anyone here has argued, and nothing in the original post asserts anyone is arguing, for doing away with the presumpotion of validity. The standard fro proving invalidity should simply be lower. A mere preponderance of the evidence is what is being argued for.

  31. 2006-1638 at p. 19: “The testimony of Microsoft’s own witness, Mr. Hughes, indicates that the anti-piracy software found in the accused products was ‘virtually a complete rewrite’ of the software in BP 98. Additionally, an internal Microsoft e-mail dated November 18, 1998– more than five months subsequent to z4′s filing date- indicated a problem with the LVP software and documented an instance of the ‘same CD …’” (was that a “golden master disk” – “gobbledygook” – 271 arguments here -)

    2006-1638 at p. 20: “We also note that Microsoft failed to product the document containing the e-mail until the day before the trial started, and then only because z4 uncovered it during a last minute deposition, see JMOL Opinion at 40, resulting in the district court sanctioning Microsoft …”

  32. This becomes a question of statutory construction.

    102(g)(1) during the course of an interference conducted under section 135 or section 291, another inventor involved therein establishes, to the extent permitted in section 104, that before such person’s invention thereof the invention was made by such other inventor and _not_ abandoned, **suppressed, or concealed,** or (2) before such person’s invention thereof, the invention was made in this country by another inventor who had _not_ abandoned, **suppressed, or concealed** it. In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.

    Pennock v. Dialogue is the oldest case law that I know to be relevant on this topic. There, the patentee had secretly practiced their process for making a publicly sold product. If I remember correctly (busy & lazy to review the case), the Court ruled that the patented process *had* been “concealed” (not known to others), but that upholding the patent would unduly extend the patentee’s monopoly …

    Here, the patented process was *embodied in* the marketed product – outside the United States … seems like it was not *known to the public* thus would have been “concealed” or “suppressed” at least within the United States?

  33. Hats off to Microsoft’s trial counsel. I’m guessing they had a cert petition in mind from day one with that pretrial motion.

    We saw in Metabolite v. LabCorp how counsel in the courts below can fail to preserve an issue for Supreme Court review. That doesn’t appear to be a problem here.

  34. real anonymous: Even Lichtman and Lemley are NOT advocating that we do away with the presumption of validity. They are simply arguing that the standard should be a preponderance of the evidence rather than clear and convincing. From the document you linked to:

    “First, the strong presumption of patent validity that today is accorded every patent by default should be removed, replaced with a much weaker presumption that accused infringers could rebut under a “preponderance of the evidence” standard.”

    And Lionel, another poster has indeed suggested that we should do away with the presumption of validity.

  35. The presumption of validity and the clear and convincing evidence standard are important indicia of a patent being property. A property right is one you are supposed to have some confidence in and rely on to be able to make investment decisions. Funding new technology is a whole lot easier if the investor has confidence that the patent will hold up. If a patent can be blown away based upon the whims of a history major who got appointed to the Federal bench, how much would you want to invest in it?

    If we don’t treat patents like property, then we should quit calling patent lawyers that lofty title of “intellectual property” lawyer.

  36. metoo,

    I have not read every post, but I do no think anyone here has argued, and nothing in the original post asserts anyone is arguing, for doing away with the presumpotion of validity. The standard fro proving invalidity should simply be lower. A mere preponderance of the evidence is what is being argued for.

  37. The presumption of validity and the clear and convincing evidence standard are important indicia of a patent being property. A property right is one you are supposed to have some confidence in and rely on to be able to make investment decisions. Funding new technology is a whole lot easier if the investor has confidence that the patent will hold up. If a patent can be blown away based upon the whims of a history major who got appointed to the Federal bench, how much would you want to invest in it?

    If we don’t treat patents like property, then we should quit calling patent lawyers that lofty title of “intellectual property” lawyer.

  38. Can someone please explain to me why on earth it would ever be appropriate to do away with the presumption of validity? That’s absurd. All the presumption of validity does is place the burden of proving invalidity on the accused infringer – which is the way it should be. It’s merely procedural – it is not substantive at all. It’s no different than most issued in any other litigation. If a party asserts something, then they have the burden of proving it. Do away with the presumption of validity, and a patent owner would then have to not only prove infringement, but also that the patent is valid.

  39. The standard of proof probably decides many invalidity cases. How do you explain to management that there is a presumption that the patent is valid over prior art that the PTO never saw and that the burden to win with that art is in the 80%+ proof range instead of 50.000001%? The first question you get is “Are you serious?” followed by “What kind of a screwy system is this?”

  40. The standard of proof probably decides many invalidity cases. How do you explain to management that there is a presumption that the patent is valid over prior art that the PTO never saw and that the burden to win with that art is in the 80%+ proof range instead of 50.000001%? The first question you get is “Are you serious?” followed by “What kind of a screwy system is this?”

  41. The standard of proof probably decides many invalidity cases. How do you explain to management that there is a presumption that the patent is valid over prior art that the PTO never saw and that the burden to win with that art is in the 80%+ proof range instead of 50.000001%? The first question you get is “Are you serious?” followed by “What kind of a screwy system is this?”

  42. Does everyone here believe that the choice of a standard of proof really makes any difference in the patent context?

    I don’t believe it makes any difference.

  43. The argument that the 12 circuits used to have a different rule — is this a novel? It raises a point that one major reason USSCt grants cert is to resolve conflicts between the circuits, but with only 1 patent circuit the only conflicts are intramural. I wonder if any of our academics have analyzed what effect this has on the number or percentage of certs in patent cases.

    My pet wet dream is a patent prosecution more akin to the TM prosecution. No duty to disclose and no IDS. A preliminary exam (with 1 amendment allowed) for 101, 112, et al. non-art rejections prior to publication, then a post-publication period where anyone can file opposition PA. Then all of the oppositions consolidated into the final 102/103 examination with further amendments allowed.

    Let the opponents do the initial searching! They are the one’s who stand to win by the application getting sunk. If Bill Gates fails to file his opposition PA in a timely manner, he cannot then challenge the patent post-issue.

    This cuts out the bulk of examiner’s search responsibilities, it cuts out inequitable conduct problems and the idiocy of the applicant’s duty to disclose, and it greatly reduces court challenges. There could be a 5 to 7-year post-issue period in which art challenges in court are permitted, followed by a bullet-proof presumption of validity like a TM.

    It wouldn’t take a whole lot of brains or imagination to build a better patent system than the US currently has. Probably less than to draft a reasonably strong patent.

  44. so, does that not open the door to making the office accountable after issuance?

    what standard would the examiner be held to? a percentage of the damages? who would measure these things? GAO?

    as with FUD in the market, what would be the point of a patent if the standard was determining the quality of prosecution not a burden by the infringer during litigation & appeal?

    vaporware in a writ of cert … now about that golden master

  45. I could be wrong, but removing the presumption of validity of issued patents would only further cloud the state of IP affairs. Additionally, it would make the application process almost entirely meaningless, as there would be no presumption of validity until asserted and challenged in court, at which point the presumption of validity would stand only on the facts of the instant case. Moving the presumption of validity to a case-by-case basis would create an endless process of proving validity for a patentee, which would seemingly remove any monetary benefit of filing an application in the first place.

  46. Probably can’t go that far w/o Congress, although we probably should.

    SCOTUS could make the burden preponderence of the evidence AND allow litigants to show to a jury how badly the PTO does its job (something courts now won’t allow under 282).

    Keep the presumption if need be, but interpret it as rebuttable. Surely the SCOTUS can do that.

  47. Alan McD: You want SCOTUS to eliminate the statutory presumption of validity? On what grounds is 35 USC 282 unconstitutional?

  48. JAOI, it’s not a lot. The Supreme Court gets thousands of cert petitions each year. I haven’t seen a circuit-by-circuit breakdown, but every year there are several people who try to get the Supreme Court to take a patent case.

  49. Dear ExExaminer, thanks. and another thing. Pre-issue examn is ex Parte. You get the Applicant’s point of view but not that of his competitor. You should chat with EPO Exrs, who spend a small but significant part of their time adjudicating inter Partes post-issue oppositions. Example: Kimberly-Clark v Procter & Gamble. Every fortnight. Most every patent each gets, the other opposes. Then the Exrs go back to pre-issue ex Parte stuff, with sharpened insights, and clearer understanding of what the PHOSITA knows. Of course, all that inter Partes stuff is only economically feasible in a civil law jurisdiction. But it sure is fun for all concerned. The fancy litigators have been trying to muscle in on it for 30 years, over here in old mainland Europe. Just a thought for you to play with.

  50. If the SCOTUS takes this case, someone has to do an amicus brief devoted only to what the PTO REALLY does in examination, including the time constraints, search tools available, etc. to establish that there should be no presumption of validity, including over art the examiner considered (and possibly misread).

  51. From an Ex-examiner, I think this is a great issue for SCOTUS.
    The truth of the matter is, the clear and convincing standard required for invalidation at the CAFC is not in line with the realities of the miniscule amount of time Examiners at the USPTO have to review all relevant art, and make a determination of patentability. I think someone on this forum said it about a week ago, we have to live in the system as it currently exists, not the system we want to exist. The current system is that Examiners barely have enough time to read an application in an art like this, much less do a thorough prior art search and comparison of relevant art to the claims.

  52. Lost me there, Ironic. 1) What does your “No” mean? 2) Is it your thesis that any legislator always aims to Frustrate the Progress but is prevented from doing that, uniquely, in the USA because of the Constitution? and 3) Who is “them” that the European regulator is fining every day? In any event, what’s anti-trust legislation got to do with the question whether “clear and convincing” Promotes the Progress?

  53. I agree with the comment above about better defining what the examiner “considered.” The definition hasn’t mattered much in invalidity analysis because of the blanket C&C standard, but clearly defining it as encompassing the examiner’s search would go a long way toward easing my concerns about a lower standard for art that was not considered. The distinction between cited and uncited art is already raised in litigation anyway, no matter what the CAFC says, and most juries and many judges don’t really pay attention to levels of burdens beyond the question of who the burden falls on and the general sense that art that has already been examined is basically off limits except in rare circumstances.

    I would also submit that if the change goes forward, an uncited reference that shows a feature substantially the same as a feature in a considered reference should be deemed considered. It’s more work for everyone, but if you want to muck around with a nice bright line rule, that’s what you get. What if you find a non-cited research paper that discloses the same concept as a cited patent? What if it was left out of the IDS because it was cumulative? If practitioners are allowed to regain a C&C standard by arguing that a feature is duplicative of a feature in a cited reference, you’ll see a lot fewer complaints about the change.

    Another nice unintended side effect is the possibility that the increased attention to the examiner’s search criteria will shed some light on the content of the prior art and the level of ordinary skill. If I don’t get my C&C standard against a prior art reference from a field the examiner didn’t consider important, the fact that the examiner didn’t look there should weigh against the Graham factual determinations of obviousness. If you take away my sword, at least give me a shield. Or something.

    Any thoughts on the effect this would have on inequitable conduct determinations? If the PTO thinks IDS’s are long now, wait until the C&C standard for non-cited prior art is taken away. You’re going to see IDS’s listing entire subclasses and keyword searches, running for a hundred pages. But I guess that’s the point; anything that makes patents more expensive and less valuable helps the big players like Microsoft.

  54. NestOfRobins,

    I think including entire subclasses as considered goes a bit too far with respect to presumption of validity, but maybe not with respect to inequitable conduct and the failure to disclose.

    I think one of the reasons why the PTO gets large IDSs is because examiner’s aren’t on record as looking at references that aren’t on the 892 even though they may have stared at and refused to apply tons of such references.

    If practitioners could rely on a list of already considered references for inequitable conduct purposes, they might be less inclined to submit references that were probably but not clearly cumulative or otherwise not material.

  55. As examiners technically “consider” all patents and other references contained in each subclass searched, should the definition of “considered” references be amended to include each of these documents?

  56. no … max, we do have a constitution which spells out the responsibilities of the legislature with regards to promoting the arts and sciences … european regulators are simply fining them every day … would that be legislative, european-stye?

  57. they assert the BP 98 product twice … their own expert says the accused software was a “complete rewrite”, though … to anticipate under 102g they want a lower standard even when they did not reduce to practice (“reasonable diligence”) … instead, microsft “corporately both conceived and reduced to practice before colvin” … so a “corporation” need a lower standard of proof? absent not a single natural person’s testimony … and expressly contradicting the testimony of the expert that did provide testimony for you … why is this not the issue that needs to be reformed? how many bites of the apple before we get more “gobbledygook” (no that would be a “golden master” disk – of unpatentable software, of course)

  58. Mark, that’s not quite true here because, under the current law, 102(g) rejections in reexaminations must be based on prior art disclosed in a patent or printed publication. Thus, non-published 102(g) prior art usually cannot be used.

  59. Seems to me an excellent point to take to SCOTUS. If the Congress is helpless to remove any of the “rigidities” in US patent law, maybe SCOTUS and CAFC can do the business even without help from the legislator. For SCOTUS to take the case, and then decide that a patent duly issued by the USPTO is not always clearly and convincingly beyond validity attack, would be a common sense step back towards reality.

  60. JAOI,

    In the past, yes. But currently, this seems par for the course. Looks like Microsoft wants SCOTU to continue to “pile on” the Federal Circuit.

  61. I count at least 3 patent-case Petitions for Certiorari pending before the Supreme Court. Is that a lot?

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