Hopefully, Microsoft Will Win Its Patent Infringement Appeal.

Microsoft just argued before the U.S. Supreme Court, hoping to overturn a $290 million jury verdict against it in a patent infringement dispute with the Toronto-based software company, i4i.

Hopefully, Microsoft will prevail and make the world less safe for patent trolls.  What does the i4i case have to do with patent troll-related litigation?  Actually, quite a bit....

i4i's patent describes a way to manipulate a document by separating the document's architecture from its content; in other words, the technology deconstructs a document from whatever structure it was created in.  The technology is apparently used in Microsoft Word (thus, the patent infringement case).

At trial, Microsoft argued that i4i's patent was invalid and unenforceable, and that it only needed to prove this fact by a "preponderance of the evidence."  The court, however, instructed the jury that in order to rule in Microsoft's favor, Microsoft had to show "clear and convincing" evidence that i4i's patent was invalid--a much tougher standard to meet.

The jury ruled against Microsoft.  Microsoft appealed, and lost (again)..

Now the key issue on appeal before the U.S. Supreme Court is whether Microsoft was required to show "clearly and convincingly" that i4i's patent was invalid, or whether Microsoft only needed to show "by a preponderance of the evidence" that i4i's patent was invalid.

How does this impact technology companies and their ongoing efforts to deal with patent trolls?  Good question. (Glad I asked.)

If the Court favors the tougher standard (i.e., "clear and convincing"), then it will be tougher to overturn invalid patents, and patent trolls will have an easier time extorting (or, rather, "requesting") license fees from innocent patent infringers.  And with patent troll litigation on the rise, anything that could help reduce the amount of (mostly frivolous) troll litigation would be a good thing.

My opinion: this case could go either way, but the Court should adhere to the lower standard (i.e., "preponderance of the evidence"). While we certainly want to protect patent owners' rights, the simple fact of the matter is that there are so many invalid patents floating around out there, we need to reverse the tide a bit and not make it too difficult for companies to challenge invalid patents.

Justice Breyer summed it up well during oral arguments in the case: “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.”

Amen, Justice Breyer, amen.