This is serious! As noted in a previous blog (see The Value Of A Date-Picker) Microsoft has succeeded in overturning a judgment, won by Lucent, in the amount of $358M. The issue of damages will now be retried. Thus, Microsoft’s victory is only partial, as a new damage award will still likely be measured in the hundreds of millions of dollars.
Rather than meekly awaiting this diminished fate, Microsoft has gone on the offensive. It has petitioned the CAFC for a rehearing en banc of the Lucent case. The question it wishes the court to address is the standard of proof required to establish the invalidity of a patent based upon prior art not considered by the Patent Examiner during prosecution of the patent.
Not surprisingly, Microsoft argues that the presently accepted standard, of “clear and convincing” evidence, should not apply when the patent is attacked on the basis of previously unconsidered prior art. In support of its position, Microsoft cites the Supreme Court’s KSR decision, “the rationale underlying the presumption [of validity] – that the PTO, in its expertise, has approved the claim – seems much diminished” where the attack is based on prior art it had not considered.
The importance of this issue can hardly be overstated. If the court were to adopt such a position, the validity of virtually all issued patents would be greatly weakened. We are waiting to see how this turns out.