U.S. Supreme Court Orders Microsoft to Pay 290 Million in Patent Infringement Lawsuit

Four years ago, Microsoft was sued by a technology company for patent infringement. The Toronto-based company, i4i, won its patent lawsuit against the computer giant and were to receive a payment of $290 million for Microsoft’s wrongdoing. However, the payment by Microsoft had been held up by the appeals process Microsoft was engaged in to try and reverse the large settlement.

The Supreme Court recently issued its decision, affirming the lower court’s ruling in Microsoft Corp v. i4i Limited Partnership, 10-290. The main issue before the Court was the level of proof required. In patent lawsuits, courts assume that the patent, in this case held by i4i, is valid. Therefore, the burden of proof lies with the entity accused of violating that patent, which in this case is Microsoft.

The Canadian company, i4i, accused Microsoft of using technology developed by i4i when creating Word 2003 and Word 2007. Specifically, i4i stated that Microsoft has infringed on its patent setting out a new and improved method for editing documents. In the original jury trial, Microsoft was found guilty of willfully infringing on i4i’s patent and was ordered to pay $290 million to i4i and discontinue versions of Microsoft Word containing i4i’s technology.

While Microsoft has removed the challenged technology from its Word software, it has appealed the trial court’s decision. The main subject of Microsoft’s appeal was that a lower level of proof should have been applied when considering its case. When a jury or court rules on any type of lawsuit, there is a set level of “proof” that is considered in order to prove or disprove guilt.

In Microsoft, a fairly high level of proof was applied. In order to prove that it was not guilty of patent infringement, Microsoft had to provide “clear and convincing” evidence of its innocence. The standard for “clear and convincing” evidence is that it leaves no doubt about the truth of the evidence presented. Under this burden, the jury or court would need to be completely convinced that Microsoft was completely without fault in order to find it not guilty.

Obviously, this level of proof was not met by Microsoft, which led to its guilty verdict. However, Microsoft felt that it did provide ample evidence to meet a lower burden of proof, namely that of “preponderance of evidence”. Under this standard, the evidence is weighed based on whether or not it shows that something is more likely than not true.

Therefore, even though there could still be a possibility that something is not true, under the preponderance of evidence standard if it is at all more likely than not that Microsoft did not steal i4i’s technology, then it could not be found guilty. Microsoft felt that it had provided ample evidence to meet the preponderance standard and was therefore arguing that this level of proof should have been applied.

However, the trial court, the Appeals Court, and now the U.S. Supreme Court all disagreed. While patent law does not explicitly state which level of proof should be applied, the courts have always applied the “clear and convincing” evidence standard. In its decision, the Supreme Court supported this conclusion by citing the assumption that the patent is valid – if the courts are to assume a patent is valid, then it follows that it would require a high level of proof to overturn that assumption.

In her written opinion of Microsoft, Justice Sotomayor referenced the Supreme Court’s reluctance to overturn over thirty years of applying the “clear and convincing” standard. While Congress and the courts have made amendments to patent law over the last thirty years, there has never been any considerations made to lowering the standard for proof. Therefore, the Supreme Court was reluctant to do so now and denied Microsoft’s appeal.

Kreisman Law Offices has been handling Illinois product defect cases in and around Chicago and Cook County for more than 35 years, including the areas of Naperville, Glenview, Round Lake, Libertyville, Morton Grove, and Elmhurst.