No.

IN THE

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_______________

MICROSOFT CORPORATION,
Petitioner,
v.

I4I LIMITED PARTNERSHIP AND

INFRASTRUCTURES FOR INFORMATION INC.,
Respondents.
_______________
On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Federal Circuit
_______________

PETITION FOR A WRIT OF CERTIORARI

_______________
MATTHEW D. POWERS THEODORE B. OLSON
WEIL, GOTSHAL & THOMAS G. HUNGAR
MANGES LLP Counsel of Record
201 Redwood Shores Parkway MATTHEW D. MCGILL
Redwood Shores, CA 94065 SCOTT P. MARTIN
(650) 802-3000 GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, N.W.
T. ANDREW CULBERT Washington, D.C. 20036
ISABELLA FU (202) 955-8500
MICROSOFT CORPORATION thungar@gibsondunn.com
One Microsoft Way
Redmond, WA 98052
(425) 706-6921
Counsel for Petitioner
[Additional Counsel Listed on Inside Cover]
KEVIN KUDLAC
AMBER H. ROVNER
WEIL, GOTSHAL &
MANGES LLP
700 Louisiana, Suite 1600
Houston, TX 77002
(713) 546-5000
 QUESTION PRESENTED
The Patent Act provides that “[a] patent shall be
presumed valid” and that “[t]he burden of establish-
ing invalidity of a patent or any claim thereof shall
rest on the party asserting such invalidity.” 35
U.S.C. § 282. The Federal Circuit held below that
Microsoft was required to prove its defense of inva-
lidity under 35 U.S.C. § 102(b) by “clear and convinc-
ing evidence,” even though the prior art on which the
invalidity defense rests was not considered by the
Patent and Trademark Office prior to the issuance of
the asserted patent. The question presented is:
Whether the court of appeals erred in holding
that Microsoft’s invalidity defense must be proved by
clear and convincing evidence.
 ii

RULE 29.6 STATEMENT

Pursuant to this Court’s Rule 29.6, undersigned
counsel state that Microsoft Corporation has no par-
ent company and that no other publicly held com-
pany owns 10% or more of its stock.
 iii

TABLE OF CONTENTS
Page
OPINIONS BELOW ....................................................1
JURISDICTION ..........................................................1
STATUTORY PROVISIONS INVOLVED..................1
STATEMENT ..............................................................2
REASONS FOR GRANTING THE PETITION ........12
I. THE FEDERAL CIRCUIT’S DECISION BELOW
DISREGARDS THIS COURT’S DECISION IN KSR
AND CONFLICTS WITH DECISIONS OF ALL
TWELVE REGIONAL CIRCUITS ..............................13
A. THE DECISION BELOW CONFLICTS WITH
THE UNAMBIGUOUS TEACHING OF KSR.......13
B. THE DECISION BELOW CONFLICTS WITH
THE UNANIMOUS PRE-1982 DECISIONS
OF THE REGIONAL COURTS OF APPEALS ......15
II. THE SELECTION OF AN APPROPRIATE
STANDARD OF PROOF FOR INVALIDITY IS
ESSENTIAL TO AVOID DISTORTING THE
PATENT SYSTEM ..................................................19
III. THE STANDARD-OF-PROOF ISSUE IS CLEANLY
PRESENTED AND RIPE FOR REVIEW BY THIS
COURT .................................................................23
CONCLUSION ..........................................................26
 iv

APPENDIX A: Amended Opinion of the

United States Court of Appeals for the
Federal Circuit .....................................................1a
APPENDIX B: Opinion of the United States
Court of Appeals for the Federal Circuit ..........58a
APPENDIX C: Memorandum Opinion and
Order of the United States District Court
for the Eastern District of Texas.....................112a
APPENDIX D: Order of the United States
Court of Appeals for the Federal Circuit
Denying Rehearing En Banc ...........................189a
APPENDIX E: Order of the United States
Court of Appeals for the Federal Circuit
Granting Panel Rehearing ..............................191a
APPENDIX F: Relevant Jury Instructions .........194a
 v

TABLE OF AUTHORITIES
Page(s)
CASES
Am. Hoist & Derrick Co. v. Sowa & Sons, Inc.,
725 F.2d 1350 (Fed. Cir. 1984) ..................2, 22, 23
Baumstimler v. Rankin,
677 F.2d 1061 (5th Cir. 1982)........................16, 25
Bilski v. Kappos,
130 S. Ct. 3218 (2010)..........................................20
Campbell v. Spectrum Automation Co.,
513 F.2d 932 (6th Cir. 1975)................................18
Cont’l Can Co. v. Old Dominion Box Co.,
393 F.2d 321 (2d Cir. 1968) .................................17
Dickstein v. Seventy Corp.,
522 F.2d 1294 (6th Cir. 1975)..............................18
Environ Prods., Inc. v. Furon Co.,
215 F.3d 1261 (Fed. Cir. 2000) ............................24
Futorian Mfg. Corp. v. Dual Mfg. & Eng’g, Inc.,
528 F.2d 941 (1st Cir. 1976) ......................3, 17, 24
Grogan v. Garner,
498 U.S. 279 (1991) ........................................14, 18
Henry Mfg. Co. v. Comm. Filters Corp.,
489 F.2d 1008 (7th Cir. 1972)..............................18
Holmes Group, Inc. v. Vornado Air
Circulation Sys., Inc.,
535 U.S. 826 (2002) ..............................................15
In re Bilski,
545 F.3d 943 (Fed. Cir. 2008) ..............................20
 vi

In re Winship,
397 U.S. 358 (1970) ..............................................21
Jaybee Mfg. Corp. v. Ajax Hardware Mfg. Corp.,
287 F.2d 228 (9th Cir. 1961)................................17
KSR Int’l Co. v. Teleflex Inc.,
550 U.S. 398 (2007) ...................................... passim
Lear, Inc. v. Adkins,
395 U.S. 653 (1969) ..............................................21
Leggett v. Standard Oil Co.,
149 U.S. 287 (1893) ..............................................14
Lucent Techs., Inc. v. Gateway, Inc.,
580 F.3d 1301 (Fed. Cir. 2009) ............................11
Mfg. Research Corp. v. Graybar Elec. Co.,
679 F.2d 1355 (11th Cir. 1982)................16, 17, 25
Marston v. J.C. Penney Co.,
353 F.2d 976 (4th Cir. 1965)................................17
Plastic Container Corp. v. Cont’l Plastics
of Okla., Inc.,
708 F.2d 1554 (10th Cir. 1983)............................18
Preformed Line Prods. Co. v. Fanner Mfg. Co.,
328 F.2d 265 (6th Cir. 1964)................................17
Rains v. Niaqua, Inc.,
406 F.2d 275 (2d Cir. 1969) .................................18
Ralston Purina Co. v. Gen. Foods Corp.,
442 F.2d 389 (8th Cir. 1971)................................17
Tech. Licensing Corp. v. Videotek, Inc.,
545 F.3d 1316 (Fed. Cir. 2008) ............................11
Turzillo v. P. & Z. Mergentime,
532 F.2d 1393 (D.C. Cir. 1976) ............................17
 vii

U.S. Expansion Bolt Co. v. Jordan Indus., Inc.,

488 F.2d 566 (3d Cir. 1973) .................................17
Uniroyal, Inc. v. Rudkin-Wiley Corp.,
837 F.2d 1044 (Fed. Cir. 1988) ............2, 12, 14, 24
Zenith Elecs. Corp. v. PDI Commc’n Sys., Inc.,
522 F.3d 1348 (Fed. Cir. 2008) ............................11
CONSTITUTIONAL PROVISIONS
U.S. Const., art. I, § 8, cl. 8 .........................................4
STATUTES
28 U.S.C. § 1254 ..........................................................1
35 U.S.C. § 102 ............................................................3
35 U.S.C. § 122 ..........................................................20
35 U.S.C. § 282 ..........................................2, 15, 18, 24
OTHER AUTHORITIES
John R. Allison & Mark A. Lemley,
Empirical Evidence on the Validity of
Litigated Patents, 26 AIPLA Q.J. 185
(1998) ....................................................................21
Stuart M. Benjamin & Arti K. Rai, Who’s
Afraid of the APA? What the Patent
System Can Learn from Administrative
Law, 95 Geo. L.J. 269 (2007) ...............................23
B.D. Daniel, Heightened Standards of
Proof in Patent Infringement Litigation:
A Critique, 36 AIPLA Q. J. 369
(Fall 2008) ............................................................22
Alan Devlin, Revisiting the Presumption
of Patent Validity, 37 Sw. U. L. Rev.
323 (2008) .............................................................22
 viii

Matthew D. Henry & John L. Turner, The

Court of Appeals for the Federal
Circuit’s Impact on Patent Litigation,
35 J. Legal Stud. 85 (2006) ..................................21
Mark A. Lemley & Bhaven N. Sampat,
Examiner Characteristics and the Patent
Grant Rate (Stanford Law & Econ. Olin
Working Paper No. 369, 2009) ............................19
Mark A. Lemley & Carl Shapiro,
Probabilistic Patents, 19 J. Econ.
Persp. 75 (2005)....................................................19
Doug Lichtman & Mark A. Lemley,
Rethinking Patent Law’s Presumption
of Validity, 60 Stan. L. Rev.
45 (2007) ............................................. 19, 20, 21, 22
Glynn S. Lunney, Patent Law, the Federal
Circuit, and the Supreme Court:
A Quiet Revolution, 11 Sup. Ct. Econ.
Rev. 1 (2004).........................................................21
Sara Schaefer Munoz, Patent
No. 6,004,596: Peanut Butter and Jelly
Sandwich, Wall St. J., Apr. 5, 2005 ....................20
Nat’l Research Council, A Patent System
for the 21st Century (2004) ..................................19
U.S. Fed. Trade Comm’n, To Promote
Innovation: The Proper Balance of
Competition and Patent Law and
Policy (2003) .........................................4, 20, 21, 22
USPTO Performance and Accountability
Report (2009)........................................................19
 PETITION FOR A WRIT OF CERTIORARI

Microsoft Corporation respectfully submits this

petition for a writ of certiorari to review the judg-
ment of the United States Court of Appeals for the
Federal Circuit.
OPINIONS BELOW
The opinion of the court of appeals (App., infra,
1a-57a) is reported at 598 F.3d 831. An earlier opin-
ion of the court of appeals (App., infra, 58a-111a) is
reported at 589 F.3d 1246 but was withdrawn by the
court. The opinion of the district court (App., infra,
112a-188a) is reported at 670 F. Supp. 2d 568.
JURISDICTION
The judgment of the court of appeals was ini-
tially entered on December 22, 2009. In response to
Microsoft’s petition for panel rehearing and rehear-
ing en banc, the panel on March 10, 2010, withdrew
its opinion, issued a revised opinion, and referred
Microsoft’s petition for rehearing en banc to the en
banc court. App., infra, 191a-192a. The court of ap-
peals denied the petition for rehearing en banc on
April 1, 2010. Id. at 189a-190a. Justice Stevens ex-
tended the time in which to file a petition for a writ
of certiorari to and including August 27, 2010. See
No. 09A1195. The jurisdiction of this Court rests on
28 U.S.C. § 1254(1).
STATUTORY PROVISIONS INVOLVED
Section 102 of the Patent Act, 35 U.S.C. § 102,
provides, in relevant part:
A person shall be entitled to a patent unless
. . . (b) the invention was . . . on sale in this
country, more than one year prior to the date
 2

of the application for patent in the United

States . . . .
Section 282 of the Patent Act, 35 U.S.C. § 282, pro-
vides, in relevant part:
A patent shall be presumed valid. . . . The
burden of establishing invalidity of a patent
or any claim thereof shall rest on the party
asserting such invalidity.
STATEMENT
For over a quarter-century, the Federal Circuit
has interpreted the presumption of validity codified
in 35 U.S.C. § 282, which specifies no particular
standard of proof, to require that a person challeng-
ing the validity of a patent prove invalidity by clear
and convincing evidence rather than by a preponder-
ance of the evidence. See, e.g., Am. Hoist & Derrick
Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1359 (Fed.
Cir. 1984). The Federal Circuit adheres to this view
even when the invalidity defense is based on prior-
art evidence that was never presented to or consid-
ered by the Patent and Trademark Office (“PTO”) in
issuing the patent. See Uniroyal, Inc. v. Rudkin-
Wiley Corp., 837 F.2d 1044, 1050 (Fed. Cir. 1988); see
also, e.g., App., infra, 23a.
In KSR International Co. v. Teleflex Inc., 550
U.S. 398 (2007), however, this Court expressed a far
more pragmatic view of the statutory presumption of
validity. There, the Court “th[ought] it appropriate
to note that the rationale underlying the presump-
tion—that the PTO, in its expertise, has approved
the claim—seems much diminished” where an inva-
lidity defense rests on evidence that the PTO never
had an opportunity to consider. Id. at 426. That ob-
servation was in accord with the conclusion reached
 3

by all twelve regional circuits before the Federal Cir-

cuit assumed jurisdiction of most patent matters in
1982. See, e.g., Futorian Mfg. Corp. v. Dual Mfg. &
Eng’g, Inc., 528 F.2d 941, 943 (1st Cir. 1976) (affirm-
ing an instruction that the jury could find invalidity
by a preponderance of the evidence because “to the
extent patent office attention has not been directed
to relevant instances of prior art the presumption of
validity arising from the issuance of a patent is
eroded”).
The Federal Circuit has repeatedly disregarded
KSR’s invitation to reconsider its heightened eviden-
tiary standard. Instead, it has clung to its pre-KSR
caselaw and continued to apply the clear-and-
convincing-evidence standard even to invalidity de-
fenses based on prior-art evidence that the PTO
never considered. App., infra, 23a.
The consequences of the Federal Circuit’s rigidity
are dramatic, as this case—the largest patent in-
fringement verdict ever to be affirmed on appeal—
well illustrates. Respondents i4i Limited Partner-
ship and Infrastructures for Information Inc. (collec-
tively, “i4i”) alleged that certain versions of Micro-
soft’s word-processing software, Microsoft Word, in-
fringed i4i’s patent. App., infra, 3a. At trial, Micro-
soft contended that i4i’s patent is invalid because the
disclosed invention had been embodied in a software
product sold in the United States more than a year
before the patent application was filed, id. at 19a-
22a, thus rendering the invention unpatentable un-
der the “on-sale bar” of 35 U.S.C. § 102(b). That
prior-art software was never considered by the PTO
during prosecution of the patent. App., infra, 184a.
Yet because i4i had destroyed the source code for its
early software before filing its action against Micro-
soft, i4i’s technical expert and counsel were able to
 4

stress to the jury repeatedly that Microsoft could not

prove by clear and convincing evidence that the soft-
ware embodied the patented invention. Ultimately,
the jury concluded that Microsoft had failed to sus-
tain this heightened standard of proof, and the dis-
trict court subsequently entered a permanent injunc-
tion and a money judgment against Microsoft in ex-
cess of $290 million. C.A. J.A. 1-4. This case thus
places in stark relief the distortive consequences of
the Federal Circuit’s clear-and-convincing-evidence
standard.
As the Federal Trade Commission has recog-
nized, litigation over the validity of patents advances
our patent system by “weeding out . . . those patents
that should not have been granted.” U.S. Fed. Trade
Comm’n, To Promote Innovation: The Proper Balance
of Competition and Patent Law and Policy, ch. 5, at
28 (2003) (“FTC Report”) (noting that “there is no
persuasive reason why the level of th[e] burden
should be clear and convincing evidence”), available
at http://www.ftc.gov/os/2003/10/innovationrpt.pdf.
If the standard of proof in such litigation is not cali-
brated carefully, it will “stifle, rather than promote,
the progress of useful arts.” KSR, 550 U.S. at 427
(citing U.S. Const., art. I, § 8, cl. 8). The question
presented is thus important not only to every person
and company affected by the erroneous grant of an
invalid U.S. patent, but also to the effective function-
ing of our patent system.
1. The patent at issue in this litigation—U.S.
Patent No. 5,787,449 (the “’449 Patent”)—relates to a
technology called markup languages. At its most ba-
sic level, a markup language is a way of indicating
how text should be displayed—which words are in
boldface, for example, or what should be centered, or
where line breaks should appear. App., infra, at 5a.
 5

In general, a markup language inserts “tags” that

indicate how the text between those tags should look
on a computer screen. Ibid. For example, <Para> is
a computer markup code that indicates the start of a
paragraph, and </Para> indicates the end of a para-
graph. Using so-called “custom XML,” users can cre-
ate and define their own markup codes. Ibid. The
’449 Patent refers to markup codes as “metacodes.”
Ibid.
Markup languages for computers have existed
and, indeed, have been standardized for decades.
C.A. J.A. 5367, 5527. Computer programs for creat-
ing and editing these markup languages also have
existed for decades, including one—embedded in a
system called S4—that the inventors of the ’449 Pat-
ent developed and sold to SEMI, a client of i4i’s
predecessor, over a year before applying for the ’449
Patent. App., infra, at 20a, 137a. S4 was not before
the PTO when the ’449 Patent was prosecuted. See
id. at 184a (“There is . . . no dispute that the S4 sys-
tem was not specifically disclosed in the [’]449 patent
application and that it is prior art.”); C.A. J.A. 239
(listing prior-art references before the PTO); see also
id. at 862-64, 2072.
The invention claimed by the ’449 Patent is an
improved method for editing markup-language
documents by storing the document’s content sepa-
rately from its metacodes. App., infra, 5a. The pat-
ent teaches that the metacodes are stored in a
“metacode map,” which permits the user to deter-
mine where each metacode belongs in the stream of
content. Ibid. This allows the user to edit the struc-
ture of the document (i.e., the metacodes) by access-
ing only the metacode map, without ever needing to
access (or have access to) the content. Id. at 6a.
 6

2. Since 2003, Microsoft Word has allowed users

to edit documents containing custom XML. App., in-
fra, at 6a. In 2007, i4i sued Microsoft in the United
States District Court for the Eastern District of
Texas, alleging that Word users infringe the ’449
Patent when they use Word to open files of certain
formats—.xml, .docx, or .docm—that contain custom
XML. Id. at 6a, 167a. i4i asserted that, when used
in this manner, Word separates the custom XML
metacodes from content and stores them in the man-
ner claimed by the ’449 Patent. Id. at 28a.
a. In addition to denying infringement, Microsoft
argued that the ’449 Patent was invalid because the
S4 system—which both parties agreed had been sold
to SEMI more than a year before the patent applica-
tion was filed—embodied the claimed invention.
App., infra, 19a-20a, 184a. The only dispute between
the parties with respect to Microsoft’s on-sale-bar de-
fense was whether S4 practiced the invention dis-
closed in the ’449 Patent. Id. at 20a.
Microsoft presented considerable evidence to
support its contention that S4 did, indeed, practice
i4i’s patented invention. Shortly after i4i filed its
patent application, Michel Vulpe—one of the named
inventors and i4i’s founder—touted the pending pat-
ent in a funding application to the Canadian gov-
ernment, noting that “[t]he initial implementation [of
the ’449 Patent] is embedded into [i4i’s] S4 product”
and that the ’449 Patent’s “single metacode model”
was “implemented in i4i flagship product S4.” C.A.
J.A. 3759, 3770, quoted in App., infra, 187a. This is
consistent with what Vulpe told potential investors
in a letter explaining, before the patent application
was filed, that he was “currently exploring the pat-
enting of some fundamental ideas used in the [i4i]
technology” and that “[t]he basis of the patent . . .
 7

precedes [i4i].” Id. at 2882, quoted in App., infra,

187a. Vulpe admitted at trial that, because i4i was
founded contemporaneously with the development of
S4, his letter informed these potential investors that
the basis for the ’449 Patent dated back to when S4
was being developed. Id. at 1695-99.
That S4 practiced the invention of the ’449 Pat-
ent was also confirmed by a former employee of both
SEMI and i4i, Scott Young. Young testified that
Vulpe told him the ’449 Patent application was filed
to cover the S4 program. C.A. J.A. 1977-81. Young
also testified that, after he left SEMI to join i4i, he
and Vulpe touted the patenting of the S4 software in
attempting to obtain funding for i4i’s business. Id. at
1979-81, 1983-85.
Young confirmed that the S4 software provided a
mapping between the content and tags (i.e., meta-
codes) of a document opened by a user of the SEMI
system, as claimed in the ’449 Patent. C.A. J.A.
1971-74. Consistent with Young’s testimony, the S4
user guide showed that the software was—just as the
system described and claimed in the ’449 Patent—a
system for creating, opening, editing, and storing
documents containing metacodes, and that it allowed
the metacodes to be manipulated separately from the
content. See, e.g., id. at 3472-74, 3572-73, 3578-82.
In fact, the same hardware platform described in the
S4 manual is the very hardware platform described
in the ’449 Patent as the preferred embodiment. Id.
at 251, 829-31, 3480.
The inventors insisted, however, 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 the software was sold. See
App., infra, 20a; see also C.A. J.A. 839, 1682-84. Ac-
 8

knowledging that this conception testimony was in-

consistent with the contemporaneous documentary
record, including Vulpe’s own pre-litigation letter to
prospective investors in i4i stating that “[t]he basis
of the patent” dated back to when S4 was being de-
veloped, Vulpe claimed that he had simply lied in
that letter to further his financial interests. Id. at
1697 (“It’s an exaggeration, and as I said, it could be
said to be a lie.”); see also App., infra, 187a
(“Mr. Vulpe admitted on the stand that he lied to in-
vestors about the creation date of the [’]449 patent.”).
b. Microsoft’s ability to rebut the inventors’ tes-
timony was hampered by the fact that i4i had “dis-
carded” the S4 source code before this litigation be-
gan. C.A. J.A. 1771-72; see also App., infra, 20a (not-
ing that “the S4 source code was destroyed”). The
standard of proof for Microsoft’s invalidity defense
thus assumed critical importance.
Microsoft had proposed an instruction to the jury
that “Microsoft’s burden of proof with regard to its
defense of invalidity based on prior art that the ex-
aminer did not review during the prosecution of the
patent-in-suit is by preponderance of the evidence.”
Revised Joint Proposed Final Jury Instructions,
D.E. 301-2, at 7 n.8; see also id. at 37 n.56; Joint
Proposed Final Jury Instructions, D.E. 284-2, at 9,
42. In support of this instruction, Microsoft invoked
KSR to argue that “the heightened burden does not
apply as to prior art not considered by the Patent Of-
fice.” Revised Joint Proposed Final Jury Instruc-
tions, D.E. 301-2, at 7 n.8; see also id. at 37 n.56;
Joint Proposed Final Jury Instructions, D.E. 284-2,
at 8 n.8, 9 n.9, 39 n.58, 40 n.61.
i4i objected to Microsoft’s proposed instruction as
an “inaccurate statement of the law” under Federal
 9

Circuit precedent. Joint Proposed Final Jury In-

structions, D.E. 284-2, at 9 n.10. Over Microsoft’s
objection (C.A. J.A. 2264), the district court agreed
with i4i and instructed the jury that “Microsoft has
the burden of proving invalidity by clear and con-
vincing evidence.” App., infra, 195a; see also id. at
195a-196a (“Microsoft must prove that a patent
claim is invalid by clear and convincing evidence.”);
id. at 195a (instructing the jury that “the clear and
convincing evidence standard requires a greater de-
gree of persuasion than is necessary for the prepon-
derance of the evidence standard”).
Seizing on this heightened evidentiary standard,
i4i argued that the destruction of the S4 source code
precluded Microsoft from carrying its burden. Its
technical expert, for instance, dismissed Microsoft’s
reliance on the S4 user manual by claiming that the
manual “does not provide the level of detail neces-
sary to form a clear and convincing opinion about
what’s actually being done by the SEMI system when
its software is executed.” C.A. J.A. 2301. During
closing argument, i4i’s counsel similarly emphasized
the clear-and-convincing-evidence standard, arguing
that the jury should reject Microsoft’s invalidity de-
fense “if you believe that Microsoft has failed to
prove by clear and convincing evidence the patent is
invalid.” Id. at 2447-48.
The jury concluded that Microsoft had infringed
the ’449 Patent and that Microsoft had failed to
prove by clear and convincing evidence that the pat-
ent was invalid. App., infra, 7a. The jury awarded
$200 million in damages to i4i. Ibid.1

1 The jury’s damages calculation was based on 46 responses

to a telephone survey of 988 businesses. App., infra, 38a. Only
[Footnote continued on next page]
 10

c. Microsoft moved for a new trial, arguing that

the district court “improperly instructed the jury
that Microsoft bore the burden of proving invalidity
in light of the SEMI S4 system by clear and convinc-
ing evidence.” Motion for New Trial, D.E. 359, at 21.
Microsoft argued that, “[b]ecause the SEMI S4 sys-
tem was never disclosed to the patent office, the ap-
propriate standard should have been proof by the
preponderance of the evidence.” Ibid. “This instruc-
tion was clearly prejudicial,” Microsoft urged, “par-
ticularly in view of i4i’s heavy reliance on the sup-
posed lack of evidence concerning how the SEMI S4
system worked.” Ibid.
The district court denied Microsoft’s motion. Be-
cause “the KSR Court did not specifically hold that
the clear and convincing standard was inapplicable
when the PTO did not consider the particularly rele-
vant prior art,” the court instead relied on Federal
Circuit precedent requiring the defendant to “prove

[Footnote continued from previous page]

19 of the responses reported any use of Word’s custom XML
functionality, but i4i’s damages expert nonetheless extrapolated
that, at the time of trial, 2.1 million installations of Word 2003
and Word 2007 had been used to open and save custom XML
documents in the relevant file formats. Id. at 38a-39a & n.4.
To determine a “reasonable royalty,” the damages expert ap-
plied Microsoft’s profit margin to the $499 list price of a special-
ized third-party XML editor, XMetaL, and concluded that Mi-
crosoft would have been willing to pay i4i $98 per user—25% of
the hypothetical profits it might have earned if it had charged
$499 for Word (i.e., roughly three times the retail price of most
versions of Word). Id. at 33a. Thus, i4i’s damages expert
claimed that, in a hypothetical negotiation, Microsoft would
have agreed to pay i4i approximately 60% of the retail price of
the professional edition of Word 2007.
 11

invalidity by clear and convincing evidence.” App.,

infra, 146a.
Separately, the district court awarded $40 mil-
lion in “enhance[d] damages” under 35 U.S.C. § 284
based on the jury’s finding of willful infringement.
App., infra, 163a. The district court entered judg-
ment against Microsoft for $290 million, including
interest and post-verdict damages. C.A. J.A. 1-2.
The district court also permanently enjoined Micro-
soft from selling any Word products that can open
.xml, .docx, or .docm files containing custom XML—
which is to say, all versions of Word that were avail-
able at the time of judgment. Id. at 3-4; see also
App., infra, 175a.
3. On appeal, Microsoft argued that the district
court’s jury instructions were erroneous because they
applied the clear-and-convincing-evidence standard
even to invalidity arguments based on prior-art evi-
dence that was not before the PTO. Microsoft C.A.
Br. 45-46.
The Federal Circuit “conclude[d] that the jury in-
structions were correct in light of this court’s prece-
dent, which requires the challenger to prove invalid-
ity by clear and convincing evidence.” App., infra,
23a (citing Zenith Elecs. Corp. v. PDI Commc’n Sys.,
Inc., 522 F.3d 1348, 1363-64 (Fed. Cir. 2008)). The
court explained that its decisions “make clear that
the Supreme Court’s decision in KSR International
Co. v. Teleflex Inc. did not change the burden of prov-
ing invalidity by clear and convincing evidence.”
Ibid. (citation omitted) (citing Lucent Techs., Inc. v.
Gateway, Inc., 580 F.3d 1301, 1311-16 (Fed. Cir.
2009), and Tech. Licensing Corp. v. Videotek, Inc.,
545 F.3d 1316, 1327 (Fed. Cir. 2008)). Thus, “based
 12

on [Federal Circuit] precedent,” the court could not

“discern any error in the jury instructions.” Ibid.2
REASONS FOR GRANTING THE PETITION
In KSR International Co. v. Teleflex, Inc., this
Court found it “appropriate to note” that the ration-
ale for the presumption of patent validity—on which
the Federal Circuit bases its deferential clear-and-
convincing-evidence standard—“seems much dimin-
ished” when an invalidity defense rests on evidence
that the PTO never considered. 550 U.S. 398, 426
(2007). Yet despite having numerous opportunities
to revisit its entrenched rule that “[t]he burden of
proof is not reduced when prior art . . . was not con-
sidered by the PTO,” Uniroyal, Inc. v. Rudkin-Wiley
Corp., 837 F.2d 1044, 1050 (Fed. Cir. 1988), the Fed-
eral Circuit has instead declined to accept KSR’s in-
vitation to reconsider this standard, see App., infra,
23a (finding no error “based on our [i.e., Federal Cir-
cuit] precedent”); see also, e.g., Order Denying Re-
hearing En Banc, Lucent Techs., Inc. v. Gateway,
Inc., No. 2008-1485 (Fed. Cir. Nov. 23, 2009); Order
Denying Rehearing En Banc, z4 Techs., Inc. v. Mi-
crosoft Corp., No. 2006-1638 (Fed. Cir. Jan. 30,
2008). If the Federal Circuit’s failure to accept this
Court’s broad hint in KSR were not enough to war-
rant certiorari, the decision below also conflicts with

2 The citations in this paragraph refer to the Federal Cir-

cuit’s amended opinion. In response to a petition for panel re-
hearing, the court withdrew and replaced its original opinion
“for the limited purpose of revising portions of the discussion of
willfulness.” App., infra, 192a. The Federal Circuit’s discus-
sion of the clear-and-convincing-evidence standard is identical
in both the original and amended opinions. Compare id. at 80a
with id. at 23a.
 13

pre-1982 decisions of all twelve regional courts of ap-

peals.
The question presented is undeniably important.
Studies undertaken by the Federal Trade Commis-
sion and leading scholars confirm that, by greatly
diminishing the ability of patent litigants to cull the
“patent thicket” of invalid patents, the standard of
proof applied by the Federal Circuit stifles, rather
than promotes, the progress of the useful arts. KSR,
550 U.S. at 427. The categorical rule applied by the
courts below has been the law of the Federal Circuit
since 1984 and thus is ripe—indeed, overdue—for
this Court’s review. This case, which comes to the
Court on final judgment from the largest patent in-
fringement verdict ever affirmed on appeal, presents
an ideal vehicle for that review. The petition should
be granted.
I. THE FEDERAL CIRCUIT’S DECISION BELOW
DISREGARDS THIS COURT’S DECISION IN
KSR AND CONFLICTS WITH DECISIONS OF
ALL TWELVE REGIONAL CIRCUITS.
A. THE DECISION BELOW CONFLICTS WITH
THE UNAMBIGUOUS TEACHING OF KSR.
In KSR, this Court held (unanimously) that
claim 4 of respondent Teleflex’s patent (the Engelgau
patent) recited subject matter that was “obvious,”
and thus not patentable, in light of an earlier patent
(the Asano patent) that Teleflex had never presented
to the PTO during the prosecution of the Engelgau
patent. See 550 U.S. at 426.
Because claim 4 of the Engelgau patent was ob-
vious as a matter of law, this Court did not need to
reach the question “whether the failure to disclose
Asano during [Teleflex’s] prosecution of Engelgau
 14

voids the presumption of validity given to issued pat-

ents.” 550 U.S. at 426. “[N]everthless,” this Court
“th[ought] it appropriate to note that the rationale
underlying the presumption—that the PTO, in its
expertise, has approved the claim—seems much di-
minished” when a defense of invalidity rests on evi-
dence that was never considered by the PTO during
the prosecution of an asserted patent. Ibid.
The Federal Circuit’s longstanding rule that a
challenger must prove its invalidity defense by clear
and convincing evidence even “when prior art is pre-
sented to the court which was not considered by the
PTO,” Uniroyal, 837 F.2d at 1050—which is to say,
whether or not the PTO was aware of the prior-art
evidence when it issued the patent—cannot sensibly
be reconciled with this Court’s statement that the
“rationale underlying the presumption . . . seems
much diminished” when a defense of invalidity is
based on evidence that the PTO never considered,
KSR, 550 U.S. at 426. Nor can the Federal Circuit’s
rule be reconciled with the many other cases in
which this Court has resolved questions of patent va-
lidity without applying—or even mentioning—a
clear-and-convincing-evidence standard of proof.
See, e.g., Leggett v. Standard Oil Co., 149 U.S. 287,
297 (1893) (invalidating patent based on evidence
that the claimed process of lining oil barrels with
glue had been used previously by other manufactur-
ers); see also Grogan v. Garner, 498 U.S. 279, 286
(1991) (noting that where the statute at issue “does
not prescribe the standard of proof,” “[t]his silence is
inconsistent with the view that Congress intended to
require a special, heightened standard of proof”).
The Court should grant certiorari so that it may
now hold expressly what it has held impliedly in so
many of its past patent-law precedents, and what the
 15

Court strongly indicated in KSR: When a defense of

invalidity under Section 282 rests on prior-art evi-
dence that was not considered by the PTO before the
patent issued, the statutory presumption of validity
cannot rightly be interpreted as requiring alleged in-
fringers to establish invalidity by “clear and convinc-
ing” evidence.
B. THE DECISION BELOW CONFLICTS WITH
THE UNANIMOUS PRE-1982 DECISIONS
OF THE REGIONAL COURTS OF APPEALS.
The Federal Circuit’s rule that a challenger must
prove invalidity by clear and convincing evidence
even when the relevant prior-art evidence was not
presented to or considered by the PTO conflicts di-
rectly with the pre-1982 decisions of all twelve re-
gional circuits. While the Federal Circuit now (post-
1982) has exclusive jurisdiction over most patent ap-
peals, regional circuits continue to have jurisdiction
over cases in which patent claims and issues are
raised only in a defendant’s counterclaim. See
Holmes Group, Inc. v. Vornado Air Circulation Sys.,
Inc., 535 U.S. 826 (2002). Regional circuit decisions
on matters of patent law “provide an antidote to the
risk that the specialized court may develop an insti-
tutional bias,” and are useful, to the extent the Fed-
eral Circuit departs from them, in identifying patent
cases that “merit this Court’s attention.” Id. at 839
(Stevens, J., concurring). Against the backdrop of
the Federal Circuit’s indifference to this Court’s
teaching in KSR, the Federal Circuit’s break from
the uniform view of the regional circuits presents a
compelling case for this Court’s review.
As in KSR, each of the regional courts of appeals
to have addressed the question presented has re-
jected application of a heightened evidentiary stan-
 16

dard for invalidity claims based on prior art that was

not before the PTO. These cases correctly recognize
that, when the PTO has not considered the prior-art
evidence on which an invalidity defense rests, there
is no factual determination with respect to pat-
entability that warrants deference in the form of a
clear-and-convincing-evidence standard.
The Fifth Circuit, for example, emphasized that,
“[w]here the validity of a patent is challenged for
failure to consider prior art, the bases for the pre-
sumption of validity, the acknowledged experience
and expertise of the Patent Office personnel and the
recognition that patent approval is a species of ad-
ministrative determination supported by evidence,
no longer exist.” Baumstimler v. Rankin, 677 F.2d
1061, 1066 (5th Cir. 1982) (citation omitted).
“[T]hus,” the court held, “the challenger of the valid-
ity of the patent need no longer bear the heavy bur-
den of establishing invalidity either ‘beyond a rea-
sonable doubt’ or ‘by clear and convincing evidence.’”
Ibid. Accordingly, the Fifth Circuit concluded that
the jury charge, which instructed that the defendant
needed to prove invalidity “‘by clear and convincing
evidence,’” was “erroneous,” and remanded the case
for a new trial. Id. at 1068-69.
In Manufacturing Research Corp. v. Graybar
Electric Co., the Eleventh Circuit reached a similar
conclusion, holding that the district court, presented
with prior-art evidence that had not been considered
by the examiner, “erred in instructing the jury to ap-
ply a clear and convincing evidence standard to the
defense of invalidity,” and remanded for a new trial.
679 F.2d 1355, 1364 (11th Cir. 1982). “[W]hen perti-
nent prior art was not considered by the Patent Of-
fice,” the court explained, “the burden upon the chal-
lenging party is lessened, so that he need only intro-
 17

duce a preponderance of the evidence to invalidate a

patent.” Id. at 1360-61; see also id. at 1364 (“Gray-
bar is only obligated to show invalidity by a prepon-
derance of the evidence”).
Presented with the converse situation—a patent
holder arguing that the district court erred in in-
structing the jury that it could find invalidity by a
preponderance of the evidence—the First Circuit af-
firmed the preponderance instruction. See Futorian
Mfg. Corp. v. Dual Mfg. & Eng’g, Inc., 528 F.2d 941,
943 (1st Cir. 1976). The First Circuit explained that,
“to the extent patent office attention has not been di-
rected to relevant instances of prior art the presump-
tion of validity arising from the issuance of a patent
is eroded.” Ibid. “The presumption of validity hav-
ing been [thus] weakened, it follows that while [the]
burden still remain[s] on the challenger, it would, as
a practical matter, be less than the burden embodied
in the ‘clear and convincing’ standard.” Ibid.
The other nine regional circuits are substantially
in accord, holding that when the evidence of invalid-
ity adduced by the challenger has not been consid-
ered by the PTO, the statutory presumption of valid-
ity is “weakened,” U.S. Expansion Bolt Co. v. Jordan
Indus., Inc., 488 F.2d 566, 569 (3d Cir. 1973); Pre-
formed Line Prods. Co. v. Fanner Mfg. Co., 328 F.2d
265, 271 (6th Cir. 1964), “substantially weakened,”
Cont’l Can Co. v. Old Dominion Box Co., 393 F.2d
321, 326 n.8 (2d Cir. 1968), “weakened or destroyed,”
Marston v. J.C. Penney Co., 353 F.2d 976, 982 (4th
Cir. 1965), “weakened, if not completely destroyed,”
Ralston Purina Co. v. Gen. Foods Corp., 442 F.2d
389, 390 (8th Cir. 1971), “largely dissipated,” Jaybee
Mfg. Corp. v. Ajax Hardware Mfg. Corp., 287 F.2d
228, 229 (9th Cir. 1961), or diminished to the point
that it “does not apply,” Turzillo v. P. & Z. Mergen-
 18

time, 532 F.2d 1393, 1399 (D.C. Cir. 1976), “does not
exist,” Henry Mfg. Co. v. Comm. Filters Corp., 489
F.2d 1008, 1013 (7th Cir. 1972), or simply “vanishes,”
Plastic Container Corp. v. Cont’l Plastics of Okla.,
Inc., 708 F.2d 1554, 1558 (10th Cir. 1983).3
Though all twelve regional circuits had held that,
when the PTO has issued a patent without consider-
ing prior-art evidence pertinent to patentability, the
presumption of patent validity is (at a minimum)
“weakened,” and accordingly incapable of supporting
a heightened standard of proof, the Federal Circuit
nonetheless adheres to a rule that a challenger must
carry a clear-and-convincing-evidence standard in all
cases, repeatedly declining invitations to reconsider
the issue en banc. That deliberate departure from
the uniform pre-1982 practice of the regional circuits
warrants this Court’s review.

3 Panels of several courts of appeals also held that “a prepon-

derance of evidence is sufficient to establish invalidity” in the
“usual” patent case where an invalidity defense rests on docu-
mentary or physical evidence. Dickstein v. Seventy Corp., 522
F.2d 1294, 1297 (6th Cir. 1975); see also Rains v. Niaqua, Inc.,
406 F.2d 275, 278 (2d Cir. 1969) (noting that “in the usual case
a preponderance of the evidence determines the issue”). Al-
though this rule was not followed by every circuit, see Campbell
v. Spectrum Automation Co., 513 F.2d 932, 937 (6th Cir. 1975)
(collecting cases), it is strongly supported by the text of Section
282, which does not require any particular standard of proof:
Section 282’s “silence is inconsistent with the view that Con-
gress intended to require a special, heightened standard of
proof,” Grogan, 498 U.S. at 286.
 19

II. THE SELECTION OF AN APPROPRIATE

STANDARD OF PROOF FOR INVALIDITY IS
ESSENTIAL TO AVOID DISTORTING THE
PATENT SYSTEM.
It is beyond serious dispute that invalid patents
“stifle, rather than promote, the progress of useful
arts.” KSR, 550 U.S. at 427. Invalid patents confer
market power “without consumer benefit,” encourage
litigation, raise “transaction costs,” and create uncer-
tainty that “may deter investment in innovation
and/or distort its direction.” Nat’l Research Council,
A Patent System for the 21st Century 95 (2004),
available at http://www.nap.edu/html/patentsystem/
0309089107.pdf.
The PTO, however, faces unprecedented chal-
lenges in attempting to ensure that only valid pat-
ents are granted. The recent surge of patent applica-
tions—last year, the PTO received almost twice as
many patent applications (485,500) as it did just ten
years ago (278,268), and three times as many as 20
years ago (163,306), see USPTO Performance and
Accountability Report 113 tbl. 2 (2009)—has over-
whelmed the resources of the PTO’s examiners. See
Doug Lichtman & Mark A. Lemley, Rethinking Pat-
ent Law’s Presumption of Validity, 60 Stan. L. Rev.
45, 46, 54 (2007). A patent examiner is able to
spend, on average, just 18 hours on each application.
See Mark A. Lemley & Bhaven N. Sampat, Examiner
Characteristics and the Patent Grant Rate 5-6 (Stan-
ford Law & Econ. Olin Working Paper No. 369,
2009), available at http://www-siepr.stanford.edu/pro
grams/SST_Seminars/Examiner_Characteristics.pdf;
see also, e.g., Mark A. Lemley & Carl Shapiro, Prob-
abilistic Patents, 19 J. Econ. Persp. 75, 79 (2005)
(same).
 20

Compounding the strain on agency resources im-

posed by the volume of patent applications is the dif-
ficulty of obtaining reliable information about the
claimed technology. As Professors Lichtman and
Lemley observed, “[p]atent applications are evalu-
ated early in the life of a claimed technology, and
thus at the time of patent review there is typically no
publicly available information” from which an exam-
iner could readily determine novelty or nonobvious-
ness. Lichtman & Lemley, supra, at 46. “Worse,
patent examiners cannot solicit credible outsider
opinions” because patent evaluation is at least in
part a confidential conversation between an appli-
cant and the examiner. Ibid. Indeed, federal law re-
quires the PTO to “establish appropriate procedures
to ensure that no protest or other form of pre-
issuance opposition to the grant of a patent . . . may
be initiated after publication of the application with-
out the express written consent of the applicant.” 35
U.S.C. § 122(c); see also FTC Report, supra, ch. 5, at
28 (detailing “the failings of ex parte examination,”
including “limited examiner time, the limited nature
of [the] applicants’ disclosure obligations, limited ac-
cess to potentially vital prior art and third-party ex-
pertise”).
When coupled with significant information asym-
metries, the examiners’ limited time predictably and
inevitably results in an increasingly large number of
mistakes, some of them glaring. See, e.g., Sara
Schaefer Munoz, Patent No. 6,004,596: Peanut Butter
and Jelly Sandwich, Wall St. J., Apr. 5, 2005, at B1;
see also Bilski v. Kappos, 130 S. Ct. 3218, 3259
(2010) (Breyer, J., concurring in the judgment) (not-
ing “the granting of patents that ‘ranged from the
somewhat ridiculous to the truly absurd’” (quoting In
re Bilski, 545 F.3d 943, 1004 (Fed. Cir. 2008) (Mayer,
 21

J., dissenting))). Particularly in an era when the

PTO’s gatekeepers are stretched too thin, patent liti-
gation is an important tool for “weeding out . . . those
patents that should not have been granted.” FTC
Report, supra, ch. 5, at 28; see also Lear, Inc. v. Ad-
kins, 395 U.S. 653, 670 (1969) (because the PTO’s
non-adversarial process is error-prone, without liti-
gation over patent validity “the public m[ight] con-
tinually be required to pay tribute to would-be mo-
nopolists without need or justification”).
In patent litigation, no less than in other arenas,
the standard of proof is often outcome-determinative.
See In re Winship, 397 U.S. 358, 367-68 (1970). In-
deed, when the Federal Circuit strengthened the
presumption of validity by adopting the clear-and-
convincing-evidence standard in the early 1980s, the
rate at which patents were held valid increased sig-
nificantly. Lichtman & Lemley, supra, at 69.4 The
standard of proof that courts apply to invalidity de-
fenses thus directly affects whether patent litigants
can cull invalid patents from the modern patent
thicket and, less directly, whether our patent system
is calibrated to promote progress in the useful arts,
or to stifle it.
After undertaking a comprehensive review of the
Nation’s patent system, the FTC concluded that the
clear-and-convincing-evidence standard of proof im-
posed by the Federal Circuit on patent challengers
4 See also, e.g., Matthew D. Henry & John L. Turner, The
Court of Appeals for the Federal Circuit’s Impact on Patent Liti-
gation, 35 J. Legal Stud. 85 (2006); Glynn S. Lunney, Patent
Law, the Federal Circuit, and the Supreme Court: A Quiet Revo-
lution, 11 Sup. Ct. Econ. Rev. 1, 1-2 (2004); John R. Allison &
Mark A. Lemley, Empirical Evidence on the Validity of Liti-
gated Patents, 26 AIPLA Q.J. 185, 205-06 (1998).
 22

tended to hinder, rather than promote, progress. By

“distort[ing] the litigation process,” the clear-and-
convincing-evidence standard creates “serious poten-
tial for judicially confirming unnecessary, potentially
competition-threatening rights to exclude.” FTC Re-
port, supra, ch. 5, at 28.5
If it is true that the Federal Circuit’s clear-and-
convincing-evidence standard jeopardizes the ability
of patent litigants to clear the field of competition-
threatening invalid patents, as the FTC has con-
cluded, then the risk is particularly acute in cases in
which the pertinent evidence of invalidity was not
considered by the patent examiner. It is in those
cases—cases where the PTO was not afforded the
opportunity “to do its job,” Am. Hoist & Derrick Co. v.
Sowa & Sons, Inc., 725 F.2d 1350, 1359 (Fed. Cir.
1984)—that the risk of examiner error is at its ze-
nith, and, as recognized in KSR, the justification for
the presumption of validity at its nadir.

5 Similarly, the clear-and-convincing-evidence standard has

been subject to persistent criticism in academic commentary.
See, e.g., Lichtman & Lemley, supra, at 61 (“The illogic of the
clear and convincing evidence presumption, the fact that it de-
parts from the prior rule in many other circuits, and the Su-
preme Court’s skepticism might make this issue ripe for Su-
preme Court review should the Federal Circuit fail to act.”);
Alan Devlin, Revisiting the Presumption of Patent Validity, 37
Sw. U. L. Rev. 323, 338 (2008) (“Either the Federal Circuit or
Supreme Court should hold that one seeking to invalidate a
patent face no more than a burden of proof on the balance of
probabilities.”); B.D. Daniel, Heightened Standards of Proof in
Patent Infringement Litigation: A Critique, 36 AIPLA Q.J. 369,
412 (Fall 2008) (“The proper standard of proof for resolving all
questions of invalidity . . . should be preponderance of the evi-
dence.”).
 23

For this reason, the Federal Circuit’s clear-and-

convincing-evidence standard fails even on its own
terms. That heightened evidentiary standard sup-
posedly rests on the “basic proposition that a gov-
ernment agency such as the then Patent Office was
presumed to do its job.” Am. Hoist & Derrick Co.,
725 F.2d at 1359. But whatever the implications of
this “basic proposition” as a matter of administrative
law, the PTO cannot remotely be “presumed to do its
job” when the relevant evidence was never before it.
See Stuart M. Benjamin & Arti K. Rai, Who’s Afraid
of the APA? What the Patent System Can Learn from
Administrative Law, 95 Geo. L.J. 269, 319 (2007)
(arguing that the clear-and-convincing-evidence
standard is unwarranted because, “[u]nder boiler-
plate administrative law, a court cannot defer to
agency factfinding if the agency has not even passed
on the factual question—the agency has not consid-
ered the factual question, so there is nothing for the
court to defer to”). The Federal Circuit’s application
of the clear-and-convincing-evidence standard even
when the supposed rationale for that standard does
not apply is thus symptomatic of the same inflexible
adherence to judge-made rules that this Court ex-
pressly disapproved in KSR. 550 U.S. at 419 (“Help-
ful insights . . . need not become rigid and mandatory
formulas . . . .”). As in KSR, this Court’s review is
warranted.
III. THE STANDARD-OF-PROOF ISSUE IS
CLEANLY PRESENTED AND RIPE FOR
REVIEW BY THIS COURT.
A decade ago, the Federal Circuit considered it
already “well established that persons defending
against a charge of infringement on the ground of
patent invalidity by virtue of prior invention or prior
 24

knowledge must establish this defense by clear and

convincing evidence.” Environ Prods., Inc. v. Furon
Co., 215 F.3d 1261, 1265 (Fed. Cir. 2000). And, the
uniform view of all twelve regional circuits notwith-
standing, it was equally well-established that, as the
decision below illustrates, a challenger’s burden “is
not reduced when prior art is presented to the court
which was not considered by the PTO.” Uniroyal,
837 F.2d at 1050.
This issue will not benefit from further percola-
tion in the circuits. The twelve regional circuits hear
patent cases only in extremely rare circumstances,
and in any event remain bound by their pre-1982 de-
cisions holding that the statutory presumption of va-
lidity and the standard of proof that allegedly flows
from it are, at least, “weakened” when validity is
challenged based on evidence of invalidity not con-
sidered by the PTO. E.g., Futorian Mfg. Corp., 528
F.2d at 943. And the Federal Circuit has exhibited
an unwillingness to revisit its interpretation of Sec-
tion 282 en banc, even when confronted directly by
this Court’s unanimous statement that the rationale
for according patents a presumption of validity
“seems much diminished” when the pertinent evi-
dence of invalidity had not been presented to the ex-
aminer. KSR, 550 U.S. at 426; see also, e.g., Order
Denying Rehearing En Banc, Lucent Techs., Inc. v.
Gateway, Inc., No. 2008-1485 (Fed. Cir. Nov. 23,
2009); Order Denying Rehearing En Banc, z4 Techs.,
Inc. v. Microsoft Corp., No. 2006-1638 (Fed. Cir. Jan.
30, 2008). The question presented is ripe for this
Court’s review.
This case, which comes to the Court on final
judgment from the largest patent infringement ver-
dict ever affirmed on appeal, presents an optimal ve-
hicle for that review. Microsoft proposed an instruc-
 25

tion that its “burden of proof with regard to its de-

fense of invalidity based on prior art that the exam-
iner did not review during the prosecution of the pat-
ent-in-suit is by preponderance of the evidence,”
D.E. 301-2, at 7 n.8, and objected to the district
court’s clear-and-convincing-evidence instruction
both during the instruction conference, C.A. J.A.
2264, and in its motion for a new trial, D.E. 359, at
21. Moreover, the court of appeals expressly reaf-
firmed its clear-and-convincing-evidence standard in
response to Microsoft’s arguments on appeal. App.,
infra, 23a.
This case thus clearly and cleanly presents the
question whether the Federal Circuit’s clear-and-
convincing-evidence standard for challenges to pat-
ent validity is appropriate, even when the challenge
is based on prior-art evidence not considered by the
examiner. That issue is outcome-determinative in
this litigation. As the Federal Circuit recognized,
“[b]ecause the S4 source code was destroyed after the
project with SEMI was completed,” “the dispute
turned largely on the credibility of S4’s creators . . . ,
who are also the named inventors on the ’449 pat-
ent.” App., infra, 20a. As i4i repeatedly emphasized
at trial, Microsoft faced a steep hurdle in seeking to
establish invalidity by clear and convincing evidence
in light of this disputed testimony. See id. at 22a
(“Although the absence of the source code is not Mi-
crosoft’s fault, the burden was still on Microsoft to
show by clear and convincing evidence that S4 em-
bodied all of the claim limitations.”); see also supra at
9. If the question presented is resolved in Microsoft’s
favor, Microsoft—like the defendants in Baumstim-
ler, 677 F.2d at 1069, Manufacturing Research, 679
F.2d at 1364, and several other cases decided in the
 26

regional circuits before 1982—will be entitled to a

new trial.
CONCLUSION
The petition for a writ of certiorari should be
granted.
Respectfully submitted.
MATTHEW D. POWERS THEODORE B. OLSON
WEIL, GOTSHAL & THOMAS G. HUNGAR
MANGES LLP Counsel of Record
201 Redwood Shores Parkway MATTHEW D. MCGILL
Redwood Shores, CA 94065 SCOTT P. MARTIN
(650) 802-3000 GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, N.W.
T. ANDREW CULBERT Washington, D.C. 20036
ISABELLA FU (202) 955-8500
MICROSOFT CORPORATION thungar@gibsondunn.com
One Microsoft Way
Redmond, WA 98052
(425) 706-6921

KEVIN KUDLAC
AMBER H. ROVNER
WEIL, GOTSHAL &
MANGES LLP
700 Louisiana, Suite 1600
Houston, TX 77002
(713) 546-5000

August 27, 2010