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Microsoft win in i4i case will bring 'patent chaos'?

Nestor Arellano | April 20, 2011
Microsoft Corp.'s appeal yesterday before the U.S. Supreme Court to make it easier to challenge patent could cut both ways.

Microsoft Corp.'s appeal yesterday before the U.S. Supreme Court to make it easier to challenge patent could cut both ways and may hold perils for both patent holders and challengers, according to technology industry observers.

In April 2010, the U.S. Court of Appeals denied Microsoft's appeal after which a three-judge panel upheld a $290-million judgment over willful patent infringement. Toronto-based i4i sued Microsoft in May 2007 claiming it had patented the technology behind the XML in Word 2003 and 2007. The last chance for a successful appeal for Microsoft is at the Supreme Court level.

The Redmond, Wash.-based software giant yesterday argued that the court should reject the requirement that a defendant in a patent infringement case must prove by "clear and convincing evidence that a plaintiff's patent is invalid. A lower standard ought to be used instead, said Thomas Hungar, lawyer for Microsoft Corp, which is appealing before the U.S. Supreme Court a record $290 million jury verdict for infringing the software patent of i4i, a Canadian software company.

Microsoft wants the standards for challenges to the validity of a properly issued patent be based on mere "preponderance of evidence," according to i4i. Seth Waxman, lawyer for the Toronto-based i4i, said that Congress has accepted the standard which has been in effect for the last 28 years.

This is something that could potentially "cause chaos," says Loudon Owen, chairman of i4i.

"Microsoft is basically asking the court to move from seeking evidence beyond reasonable doubt to a mere flip of a coin," he said.

If patents are easier to invalidate, then the patent system will suffer overall, said Owen. "If anything can come up in 10-12 years that can invalidate your patent, then people are going to take mountains of information, they're going to dump the library of congress on the patent examiner and that's going to make it impossible to examine the patents," said Owen. "They're legal argument is fatally flawed."

"Tinkering with something that is fundamental to the entire patent system could result in disaster," Owen added.

He said "watering down" prevailing standards will "erode the confidence that patent filers have on the system."

One Canadian lawyer specializing in patents said he was baffled by Microsoft's petition.

"I am puzzled by Microsoft's position," said Euan Taylor, head of the patent practice group at Davis LLP in Vancouver. "One would imagine they (Microsoft) have lots of patents as well that they would want to protect."

If Microsoft gets its way, he said, there would be lots of concern among many patent holders. "It will simply make it harder for inventors to defend their patent," said Taylor.

In exchange for 20 years of exclusivity on an invention, patent holders are required to make public the details of their intellectual property so that others may benefit from it after the period of exclusivity has ran out, Taylor explained.


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