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U.S. Supreme Court Awards $290M to i4i in Patent Dispute with Microsoft
On June 9th, the U.S. Supreme Court affirmed a judgment from the Court of Appeals for the Federal Circuit awarding i4i – a Toronto software company - $290M in a patent dispute with Microsoft. The lawsuit was filed by i4i in 2007 alleging that its patent on custom XML was being infringed in Microsoft Word.
From the start Microsoft asserted that the patent was invalid, and the ensuing dispute centered around the standard of proof necessary to invalidate a patent. The U.S. Patent Act does not stipulate a specific standard, stating only that “patents shall be presumed valid” and “the burden of establishing invalidity…shall rest on the party asserting such invalidity”. Microsoft unsuccessfully argued for a relaxation of the standard of proof, i.e. that invalidity need only be established on a “preponderance of evidence". The Supreme Court rejected that argument, reaffirming the existing (stricter) legal standard that a patent's legitimacy is "not to be overthrown except by clear and cogent evidence".
The decision brings an end to the battle between i4i and Microsoft, which was often described as “David versus Goliath”. In response to the decision, i4i stated that “Microsoft tried to gut the value of patents by introducing a lower standard for invalidating patents. […] While this ruling maintains the prevailing standard, the innovation community must be ever vigilant to defend its property rights.” A statement from Microsoft read: “While the outcome is not what we had hoped for, we will continue to advocate for changes to the law that will prevent abuse of the patent system and protect inventors who hold patents representing true innovation.”
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For a copy of the decision, visit:
http://www.supremecourt.gov/opinions/10pdf/10-290.pdf