.NET News Desk
Supremes Hear Microsoft-i4i Case
Established rules say Microsoft needed to offer “clear and convincing evidence” to knock i4i out of the box
By: Maureen O'Gara
Apr. 25, 2011 08:15 AM
Whether Microsoft has to pay little i4i what must now be about $300 million on interest alone for infringing its XML patent is now in the lap of the eight Supreme Court justices who heard oral arguments in the closely watched case Monday.
As the Seattle Times says, it "could potentially wipe out billions of dollars of value from existing US patents."
Microsoft and many of its fair-weather friends in Silicon Valley like Apple, Google, Cisco and Intel - not to mention folks like Wal-Mart and MasterCard - want the Supremes to overturn the jury verdict in favor of the Canadian company on the grounds that it should be easier to invalidate a patent.
Established rules say Microsoft needed to offer "clear and convincing evidence" to knock i4i out of the box.
Microsoft claims it should only need a "preponderance of the evidence," the same standard a patent holder uses to prove infringement.
Microsoft told the court that "When the Patent Office didn't even consider the evidence, it makes absolutely no sense" to demand the clear-and-convincing standard to defend widgetry that should never have been patented in the first place. It "ensures the enforcement of invalid patents."
Microsoft claims i4i destroyed code that would have nixed a patent if the PTO had seen it because it was already selling the product for more than a year before i4i put in its patent papers, in other words past the point of patentability - aside from being obvious.
The Dow Jones said the questions the Supremes posed indicate they're in a bind about changing a legal custom set by one of their own in 1934. Computerworld's sources think they're leaning toward Microsoft's position.
Justice Stephen Breyer was quoted as saying, "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."
"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."
The award is supposed to be the largest ever upheld by the Federal Circuit in a patent case and Microsoft had to change Word even though the peculiar document-editing slice of the widgetry was little used in the market.
Pharmaceutical companies, venture capitalists, universities and the Justice Department - which argued on behalf of the PTO in presuming an approved patent to be valid - are backing i4i, which claims it's gonna win.
After the hearing, i4i chairman Loudon Owen put out a statement saying, "In our view, Microsoft cannot overcome the prevailing law and sound policy of the clear-and-convincing standard based on its spin campaign that now seems to be focused on innuendo about i4i and an atrociously weak argument that weakening the patent system will encourage innovation. We are confident we will continue to prevail."
Microsoft could have a decision in two or three months. It needs five justices on its side.
Chief Justice John Roberts recused himself. He or his family owns Microsoft stock.
The companies have been litigating since 2007 and, if Microsoft wins, it would mean another trial at the lower standard.
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