## Facts

- i4i Limited Partnership owned a patent claiming a method for editing documents using XML-based markup.
- i4i sued Microsoft in the Eastern District of Texas, alleging that custom XML functionality in certain versions of Microsoft Word infringed the patent and seeking damages and an injunction.
- Microsoft denied infringement and asserted invalidity under the on-sale bar, 35 U.S.C. § 102(b), contending i4i had sold a prior software product (“S4”) more than one year before the patent application and that S4 embodied the claimed invention.
- The parties agreed S4 was sold outside the statutory window but disputed whether S4 embodied the patented invention; the S4 materials had not been considered by the Patent and Trademark Office (PTO) during examination.
- The district court instructed the jury that Microsoft had to prove invalidity by clear and convincing evidence, rejecting Microsoft’s request for a preponderance instruction (or a reduced standard when the PTO had not reviewed the relevant evidence).
- The jury found willful infringement and found Microsoft failed to prove invalidity, awarding $200 million in reasonable-royalty damages; the district court entered judgment for i4i and issued a permanent injunction.
- The Federal Circuit affirmed, applying its rule that § 282’s presumption of validity can be overcome only by clear and convincing evidence.
- The Supreme Court granted review to decide the standard of proof for invalidity under § 282, including when the challenger relies on evidence not before the PTO.

## Issues

1. Whether 35 U.S.C. § 282 requires a challenger to prove patent invalidity by clear and convincing evidence.
2. Whether the standard of proof is lowered to a preponderance of the evidence when the invalidity evidence (including prior art) was not considered by the PTO.

## Decision

- The Supreme Court affirmed the Federal Circuit.
- The Court held that § 282 requires an invalidity defense to be proved by clear and convincing evidence.
- The Court rejected a categorical exception lowering the standard when the PTO did not consider the evidence.
- The Court stated that while the burden and standard remain fixed, a factfinder may consider whether the evidence is materially new and, if so, give less weight to the PTO’s earlier decision.
- A concurrence emphasized that the evidentiary standard applies to factual questions, not legal questions.

## Legal Principles

- Under 35 U.S.C. § 282, an issued patent is presumed valid, and the burden of establishing invalidity rests on the challenger.
- Congress’s use of the term “presumed valid,” understood against historical practice and precedent, incorporates a heightened standard requiring clear and convincing evidence to prove invalidity.
- The clear-and-convincing standard applies even when the challenger presents prior art or other evidence not before the PTO; the difference affects evidentiary weight, not the required level of proof.
- Policy-based arguments for lowering the invalidity standard are for Congress, not the courts, to implement.
- The clear-and-convincing standard governs factual predicates of invalidity; the ultimate validity determination remains a legal question.

## Conclusion

The Court held that § 282’s presumption of validity requires patent challengers to prove invalidity by clear and convincing evidence, and that the standard does not drop when the PTO did not consider the evidence, though materially new evidence may reduce the deference given to the PTO’s earlier evaluation.


Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S. 91 (2011)