Tuesday, April 19, 2011

Patent Validity and How Much Evidence is Necessary to Invalidate Patents?: SCOTUS Oral Argument in Microsoft Corporation v. i4i Limited Partnership: Clear and Convincing Proof or Preponderance of Evidence?

The patent under discussion (otherwise in a software code environment)
--  is simply demonstrated with normal text:
  • Pre-invention tags:

    Color (red) each (blue) word (green) as (yellow) indicated (orange).
  • Post-invention tags:

    Text: Color each word as indicated.

    Tags: color-red, each-blue, word-green, as-yellow, indicated-orange.

  • $290 million please to the "inventor" of the post-invention tagging method! That is the way big money is made today. Why work?
The United States Supreme Court website has a page which contains the Supreme Court Building Cornerstone Address by once Chief Justice Charles Evans Hughes in "The republic endures and this is the symbol of its faith." It provides in part:
"Hamilton had written that through the practice of judicial review the Court ensured that the will of the whole people, as expressed in their Constitution, would be supreme over the will of a legislature, whose statutes might express only the temporary will of part of the people. And Madison had written that constitutional interpretation must be left to the reasoned judgment of independent judges, rather than to the tumult and conflict of the political process. If every constitutional question were to be decided by public political bargaining, Madison argued, the Constitution would be reduced to a battleground of competing factions, political passion and partisan spirit." ["so it is" emphasis added by LawPundit]
What about patents?
The Constitution speaks of DISCOVERIES.
The Federalist Papers speak of INVENTIONS.
Many patents issued today are neither discoveries nor inventions, but mere applications of the state of the art to a given situation.

As a result, the patent tsunami is under way with full force.

How far from reality do Justices operate when they make decisions on the U.S. Supreme Court that affect us all?

The following patent case will definitely "separate the sheep from the goats" to take a phrase used by Justice Stephen Breyer during oral argument of the case.

Involved here is yet another patent case in which some nameless jury and a judge whose name we have no interest in knowing awarded jillions of dollars ($200 million by jury, upped to $290 million by the judge) to an obscure Canadian company claiming a Microsoft patent infringement (via Word and XML coding) of its obscure patent for tagging text with meta commands outside the actual text content, as in our example at the top of this posting.

We can only shake our heads at the intransigence of the establishment as regards this kind of pea and shell game in the con game of patents. When will the legal system learn that these kinds of things should not be patentable subject matter?

The district judge in the case permanently (!) enjoined Microsoft from selling any Word products capable of opening certain files containing custom XML, i.e. ALL Word programs on sale at that time. Did someone say something about "activist" judges? LOL. How about delusions of grandeur on the Texas bench?

The case was filed in the District Court for the Eastern District of Texas, a court which has specialized in catering to patent trolls and their ilk, thereby making a mockery of the impartiality of the judicial system.

Talk about courts that lead to disrespect for judges and the law, that Texas court is ONE. Patent law out of control. Venue selection as con artistry.

Oral argument was held on Monday, April 18, 2011 in SCOTUS Case No. 10-290, Microsoft Corporation v. i4i Limited Partnership on the issue of what evidence should be required to invalidate a patent:1) clear and convincing evidence, or, 2) a preponderance of the evidence. The Justices are trying to find a useful standard.

Hey, how about "just the evidence, please" of whether there is a VALID patent or not. Skip the hair-splitting. Valid or invalid. The decision is simple.

The facts of the case, including correspondence by the founder of the i4i company, indicated that the founder of i4i had sold a software program called S4, implementing the alleged invention before it was filed for patent, thus "rendering the invention unpatentable under the “on-sale bar” of 35 U.S.C. § 102(b)".

Conveniently, however, the founder had since "destroyed" that software program, making it more difficult to prove by "clear and convincing evidence" that the software program had implemented the patented "invention".

As in the similar patent trolling Eolas Webrouser case, the original software program was no longer anywhere to be found. It is remarkable how recklessly negligent such allegedly valuable things are handled, whereas one would think that THE INVENTION would be the most important thing of all -- but in fact the only thing that matters in these cases is THE MONEY. And everyone is after the money of the big boys.

The Microsoft brief in this case gives us that further insight into the motivations of people involved in what has developed on a large scale at the USPTO into the patent tsunami [material in brackets by LawPundit]:
"The inventors insisted at trial ... that the prior-art S4 software did not practice the invention of the ’449 Patent because they had not yet conceived of that invention at the time S4 was developed.... Acknowledging that this testimony was inconsistent with [the i4i founder's] own pre-litigation letter to prospective investors stating that “[t]he basis of the patent” dated back to when S4 was being developed, [the i4i founder] claimed that he had lied in the earlier letter to further his financial interests. Id. at 161a-162a (“It’s an
exaggeration, and as I said, it could be said to be a lie.”); see also Pet. App. 187a (“[the founder] admitted on the stand that he lied to investors about the creation date of the [’]449 patent.”).
b. Microsoft’s ability to rebut the inventors’ testimony was hampered significantly by the fact that i4i had “discarded” the S4 source code before commencing this litigation. J.A. 168a-170a; see also Pet. App. 20a (noting that “the S4 source code was destroyed”). The standard of proof for Microsoft’s invalidity defense thus assumed critical importance.
Microsoft proposed an instruction that its “burden of proof with regard to its defense of invalidity based on prior art that the examiner did not review during the prosecution of the patent-in-suit is by preponderance of the evidence.” ... Over Microsoft’s objection (id. at 192a), the district court instead instructed the jury that “Microsoft has the burden of proving invalidity by clear and convincing evidence.” Pet. App. 195a; see also id. at 195a-196a.

Seizing on this heightened standard of proof, i4i argued that the destruction of the S4 source code precluded Microsoft from carrying its burden....
The jury concluded that Microsoft had infringed the ’449 Patent and that Microsoft had failed to prove by clear and convincing evidence that the patent was invalid...." [emphasis added by LawPundit]
To this observer, making this case turn on the abstract difference between "clear and convincing evidence" and "preponderance of the evidence" is splitting hairs while the patent tsunami is headed in the direction of the hair-splitters. This patent is not valid. The subject matter should not be patentable. Obvious. State of the Art. Prior Art. Period.

Why should there be any "presumption of validity" for patents at all,
as if the USPTO was manned by demigods?

Many mistakes are made in the patent offices, both in the USA and abroad -- and these mistakes cost economies billions of dollars by impeding legitimate competition.

Why should a mistakenly granted patent not be invalidated if it is not perfectly valid? A patent not perfectly valid is not valid. Either it is an invention or a discovery under the law or not. There should be no "in-between".

Pervasive monopolies should be granted and/or perpetuated for the duration of a patent life ONLY if there is clear and convincing evidence that the patent granted was actually valid, not the other way around.

How can the grant of a patent by a single overworked patent examiner lead to a "presumption of validity" for patents used as the base to amass ultimate monopoly fortunes running into billions of dollars?

Patents are competition-damping MONOPOLIES granted by the government -- nothing more.

The old argument that you need to give inventors patent motivation to invent is pure superstition, as not a single empirical study has proven that patent protection is essential for invention - none, quite the contrary (see e.g.  GPS or Speaking of Mouse Trap Economics, What About that Yarn that Patents Stimulate Invention: Les Earnest Testifies Before the USPTO).

In England the monarch abused monopoly patent power grants to raise money for himself. Monarchs granted monopolies as a source of income for the government, much like the USPTO brings in revenue today. They could care less about the public and economic consequences.

For reports and opinions on this case, see:

Justices Question Microsoft's Vision of Patent Law, by Grant Gross, IDG News

Microsoft Takes Patent Fight to Supreme Court - Jess Bravin, WSJ Technology

Microsoft v. i4i Limited Partnership - SCOTUSblog.com

Such is the stuff of patent law litigation today.

No real inventions or discoveries, but BIG MONEY

and Patent Trolls,

or what the FTC euphemistically labels Patent Assertion Entities or PAEs.

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