Microsoft aims to rewrite patent law

Microsoft is in the Supreme Court this week aiming to overturn a near $300 million fine for patent violation. But it’s not just money at stake: instead the basis on which patent law works is also under discussion.

To sum up a lengthy case, Canadian firm i4i successfully sued Microsoft for violating a patent on a technology used for opening XML documents, in this case in Microsoft Word. XML is a document coding language that works in a similar way to HTML but allows tags that describe content rather than merely organizing its on-screen appearance.

In the initial ruling, i4i was awarded $200 million in damages plus another $90 million in costs, which included a hefty penalty for courtroom misconduct after a Microsoft lawyer irrelevantly likened the requested damages to the 2008 bank bailouts. Microsoft was also ordered to remove the facility from Word, which it eventually did before a deadline that would have seen copies removed from the shelves.

After failing in a series of appeals on both the merits of the case and the way it was handled, Microsoft successfully requested a Supreme Court hearing. That’s only allowed where there’s a significant dispute about a point of law.

In this case, the issue is Microsoft’s attempts to prove prior art: that is, to show a patented technology was already in use before the patent holder claimed to have created the technology, thus proving that the patent should not have been granted and should now be declared invalid.

Microsoft is challenging the current system under which prior art must be proven through “clear and convincing” evidence. It argues that the law should be revised so that prior art only needs to be shown on a “preponderance of evidence” — in short, to change the burden from clearly to probably.

And, of course, Microsoft believes its evidence of prior art in this specific case would indeed meet the preponderance of evidence.

The main arguments from Microsoft in this hearing is likely to be that it’s the norm for civil cases to be based on preponderance of evidence: indeed, somebody aiming to prove the original patent violation only has to meet this burden, making an unfair double standard.

In reply, i4i is expected to argue that it is appropriate to demand a higher standard for showing prior art because of the patent review process: as the US Patent & Trademark Office will have already examined the case, the legal assumption should be that its decision to approve a patent is correct until comprehensively and conclusively proven otherwise.