When Microsoft Corporation filed a certiorari petition with the U.S. Supreme Court in August seeking to reverse a $290 million patent infringement award won by Canadian software maker i4i Inc., the software giant asked the Court for a ruling that would fundamentally alter the patent litigation landscape.

On Wednesday, Microsoft lined up some major reinforcements—11 amicus briefs filed in support of its bid to have the Supreme Court take the case. Microsoft’s appellate team includes lawyers from Weil, Gotshal & Manges and Gibson, Dunn & Crutcher as well as in-house attorney Andy Culbert.

Those backing Microsoft—represented by a Murderer’s Row of law firm talent—comprise a large swath of the economy and include such Microsoft rivals as Apple Inc. and Google Inc. All the briefs ask for the Court to revise the standards for determining a patent’s validity in a way that benefits defendants in infringement cases.

A decision by the court to take the case could lead to a historic realignment in the patent litigation arena. Current rules require a standard of “clear and convincing” evidence to invalidate patents—a standard nearly as old as the U.S. Court of Appeals for the Federal Circuit itself. In its cert petition, Microsoft argues there’s no basis for that high evidentiary standard, and the court should allow defendants to bust patents with the less-onerous “preponderance of the evidence” standard—often expressed as simply meaning “more likely than not.”

That’s the same standard that is required for a patent-holding plaintiff to prove that defendant has infringed the patent. Microsoft and its allies assert that making both parties in a patent dispute adhere to “preponderance” standard would “level the playing field.”

If the cert petition is granted, companies that tend to be on the enforcement side of patent disputes, such as branded pharmaceutical companies and licensing companies like Tessera, may well end up supporting i4i.

In its brief, Microsoft argues that before 1982—when patent appeals were controlled by regional circuit courts, rather than a specialized patent court—those appellate courts universally instructed juries to apply the “preponderance” standard when considering evidence that examiners at the U.S. Patent and Trademark Office hadn’t see before issuing the patents at issue.

The revelation of such evidence in trials is not unusual. The PTO typically examines issued patents for less than twenty hours, while the companies accused of infringement spend millions of dollars researching and fighting over the patents at the heart of those claims. The disparity, Microsoft and its backers says, puts defendants at a serious disadvantage.

Some of the amicus briefs—including one signed by Google, Verizon, Hewlett Packard, and other large tech companies, as well as one signed by 35 law professors—goes further, saying that the “preponderance” standard should be used at all times, whether or not the evidence was already considered by the Patent Office.

“For the whole high-tech community, this issue of bad patents being asserted by trolls is a huge issue,” said John Thorne, deputy general counsel at Verizos. “More patents are issuing, products are getting more complicated, and lawsuits are increasing.”

In a world in which defendant companies are constantly defending themselves against infringement accusations, defendants have to have a fair shot at proving the patents invalid, said Catherine Lacavera, head of patent litigation at Google—a relatively young company that has been sued for patent infringement more than 70 times.

“Not all patents are invalid, but some of them are, and we think we are burdened with a greater number of patents that ought not to have been issued,” said Lacavera. “This is more about balancing the scale. Plaintiffs can still assert their patents, and defendants can defend where appropriate.”

Each amicus to side with Microsoft offered its own take why it’s important for the Supreme Court to consider—and change—the “clear and convincing” standard. Key points from nine of nine of the 11 briefs appear below.

Brief filed by a group of professors of law, economics, and business [PDF]

The authors of this brief argue that the “great deference” federal courts show to overworked PTO examiners is a mistake. “Put bluntly, PTO review is not always reliable and is unlikely to become so,” write the professors. Examiners spend 16-17 hours, over the course of several years, reviewing the typical patent application, and typically do not see, or simply ignore, non-patent prior art, such as scientific journal articles or products already on the market.

In any case, the law professors argue, patent examination is a process conducted partly in secret, and “no examiner will ever know as much or be as motivated as a true market rival.” The Supreme Court should recognize the flaws in this process and lower the burden on defendants who wish to invalidate issued patents.

The brief is signed by 35 law professors, including Mark Lemley of Stanford, Peter Menell of University of California, Berkeley, Katherine Standburg of New York University Law School, and Joshua Sarnoff of DePaul University College of Law.

Brief filed by Google Inc, Verizon Communications Inc., Dell Computer Corp., Hewlett-Packard Co., HTC Corp., and Wal-Mart Stories, Inc. [PDF]

This brief argues that the “clear and convincing” standard gives special treatment to patent grants, which is out of line with established principles of administrative law. The “preponderance of evidence” standard is the “default burden of proof” in private civil litigation, and there’s no reason to give the Patent Act special treatment, argue the companies signing this brief.

Lay juries, the amici argue, already “face an enormous temptation to defer to the PTO instead of having to master the sometimes daunting complexities of technical details” in a patent case; there’s no reason to give patent plaintiffs the additional advantage of a “clear and convincing” standard they don’t deserve.

The brief is signed by John Thorne and Gail Levine of Verizon, Michelle Lee and Catherine Lacavera of Google, and Paul Clement of King & Spalding.

Brief filed by CTIA — The Wireless Association [PDF]

This brief emphasizes the effects of the “clear and convincing” standard in the courtroom and beyond. Studies conducted on the success of patents after the Federal Circuit adopted the “clear and convincing” standard have found that patents survived validity challenges in between 54 and 64 percent of cases, compared to a pre-Federal Circuit rate of 35 percent.

The CTIA argues that success rate created a rush to acquire and litigate patents, and actually increases the frequency of patent disputes. The Federal Circuit’s “judge-made standard” affects not just trials, but the negotiations and settlements that precede them.

The brief is signed by Michael Altchul of CTIA, and Michael Kellogg of Kellogg, Huber, Hansen, Todd, Evans & Figel.

Brief filed by Securities Industry and Financial Markets Association (SIFMA) and The Clearing House Association [PDF]

This brief emphasizes that in light of the increasing issuance of business-method patents over the past decade, banks increasingly find themselves in the crosshairs of so-called patent trolls. The financial services industry is a “favorite target of patentees holding questionable patents, including patentees whose entire business model is solely premised on acquiring and enforcing patents.” Holding patents solely for enforcement “betrays the purpose of the patent system” to promote science.

With the financial system increasingly reliant on software and electronics, the brief’s authors write, it has also become uniquely vulnerable to patent litigation. The brief raises the specter of a patent dispute that could jar the whole system: “It is not difficult to surmise the havoc an injunction awarded based on a questionable patent could wreak on the financial markets.”

The brief is signed by John Squires of Chadbourne & Parke, in addition to lawyers from The Clearing House and SIFMA.

Brief filed by Facebook, Inc., Intuit Inc., Netflix Inc., Newegg Inc., Toyota Motor Corp., and Trimble Navigation Ltd. [PDF]

The Federal Circuit, this group of amici argues, applies a “strict, unyielding rule that catapults the interest of certain patent owners above the broader interests of the public as a whole.”

When Congress created rules for patent reexaminations, it ordered new challenges to patents to be considered “without undue deference to the original grant,” in order to protect the public domain from unwarranted patent grants. But the Federal Circuit’s “clear and convincing” standard “violates this balance” and creates inconsistency in the patent system. Courts should follow the “preponderance of the evidence” standard instead—the same one used by the PTO itself.

The brief is signed by Professor Joseph Miller of Lewis & Clark Law School and John Vandenberg of Klarquist Sparkman.

Brief filed by Intel Corp. [PDF]

The “clear and convincing” standard is hugeful influential, Intel notes: “Invalidity is a defense in almost every litigation, and accused infringers almost always cite prior art or grounds of invalidity that the PTO did not consider.” The relevant section of law, part of the 1952 Patent Act, has nothing in it to suggest that Congress wanted a “heightened evidentiary standard” in patent cases. Pre-1952 case law “was far from clear,” with courts imposing higher or lower evidentiary standards as they saw fit.

Intel maintains that the Federal Circuit’s steadfast insistence on a “clear and convincing” standard is inappropriate, despite being given “a golden opportunity to revisit its jurisprudence” when the Supreme Court issued its ruling in KSR v. Teleflex. The KSR ruling made it easier to prove patents obvious, rejecting the obviousness test long used by the Federal Circuit.

The brief is signed by Tina Chappell of Intel Corp., and Dan Bagatell of Perkins Coie Brown & Bain.

Brief filed by Yahoo Inc. [PDF]

Yahoo’s brief states that the “clear and convincing” standard is inappropriate, since the statute itself is silent on the issue. Like some other briefs, it notes that the elimination of invalid patents is in the public interest, as well as that of defendant companies.

The brief is signed by Kevin Kramer of Yahoo, as well as William Rooklidge and Jason White of Howrey.

Brief filed by the Electronic Frontier Foundation, Public Knowledge, Computer and Communications Industry Association, and Apache Software [PDF]

This brief notes that the “clear and convincing” standard is particularly dangerous to open-source developers. (Co-author Apache Software is an open source software foundation.) Free and open source software projects typically “lack funding to pay for patent counsel, much less litigation.”

These amici argue that plaintiffs often insist that defendants can’t prove their patents are invalid unless they get source code that demonstrates invalidity precisely; yet that source code is often unavailable. In this case, i4i argued, and both lower courts agreed—that because of the high “clear and convincing” standard, Microsoft couldn’t prove invalidity without the source code of the relevant prior art, which was an earlier i4i product. The problems Microsoft faced in trying to dis-prove the patented i4i invention “are both common and pernicious” in litigation, writes the EFF.

The brief was written by Michael Barclay of the Electronic Frontier Foundation, and joined by lawyers from Public Knowledge, the Computer and Communications Industry Association, and Apache Software.

Brief filed by Apple Inc. [PDF]

“The U.S. patent system is tilting out of balance,” Apple lawyers write. The company’s brief offers two specific cases in which the “clear and convincing” standard was “too high a barrier to patent invalidation”: OPTi v. Apple, a lawsuit that saw a defunct chipmaker win a $19 million jury verdict from Apple, and Uniloc v. Microsoft, in which Uniloc won a $388 million verdict later set aside by the judge overseeing the case.

Apple’s brief suggests that both cases might have ended up as defense wins if the burden for proving a patent invalid had not been inappropriately high, and warns that “these cases are not isolated examples.”

The brief is signed by Deanne Maynard of Morrison Foerster.

Two additional briefs were not available by press time: one was filed by Teva Pharmaceuticals USA, Inc., the General Pharmaceutical Association, and Cisco Systems, Inc.; and one filed by Acushnet, Pregis, SAP, and General Motors.

Source:http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202472695453&Patent_Litigation_Extra_Heavy_Hitters_Back_Microsoft_Supreme_Court_Bid_in_ii_Case