Small Patent Holder's $290M Microsoft Award Upheld by Supreme Court - In House
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Small Patent Holder's $290M Microsoft Award Upheld by Supreme Court

Microsoft's hopes and dreams of world domination were partially dashed last week when the Supreme Court's ruling in Microsoft v. i4i upheld a $290 million verdict against the company--what it calls the largest patent award in history.

Though the software giant is used to avoiding patent liability, Microsoft's audacity to challenge a long-standing principle of patent law may have just severely limited its future options.

A small Canadian software company, i4i sued Microsoft, alleging that the company had infringed upon one of its patents in developing MS Word 97. A jury agreed with this assessment, and awarded it a $200 million in May 2009, with the judge adding another $90 million in enhanced damages.

Microsoft appealed to the Federal Circuit, and the award was upheld in an en banc decision. The company then appealed to the Supreme Court.

Instead of challenging the validity of i4i's patent, Microsoft challenged patent law unto itself.

As it stands, if a defendant in a patent infringement lawsuit wants to challenge the validity of the allegedly infringed upon patent, it must meet the "clear and convincing" evidence standard.

Microsoft believes that this standard is too high, and that it should only have to prove that that the patent is invalid by a preponderance of evidence.

Microsoft v. i4i, a unanimous decision, rebuffed this assertion, stating that a change to the existing standard, which has been in place for decades, will need to come from Congress.

The implication of this decision for Microsoft and other patent holders is twofold.

For one, it will be more difficult to challenge patents, as such a high standard implies validity. Furthermore, Microsoft v. i4i reiterates that the defenses to patent infringement are limited and will remain focused on the technological details, not the USPTO's decisions.

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