Today, the Supreme Court issued a widely anticipated opinion in Microsoft v. i4i, 564 U. S. ____ (June 9, 2011), unanimously reaffirming the clear and convincing evidence standard for proving that a patent is invalid.

The result is—perhaps—not surprising. Under 35 U.S.C. § 282, a patent must be presumed valid, although the standard of proof that an accused infringer must reach to overcome that presumption is not specified in the statute. The Federal Circuit first held that the standard for proving invalidity is clear and convincing evidence in American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F. 2d 1350 (Fed. Cir. 1984), and it has never varied from that standard.

Microsoft had argued that the standard should be much lower, a mere preponderance of the evidence is sufficient to invalidate a patent. Alternatively, Microsoft argued that a preponderance standard should be used for evaluating materials that had not been considered by the PTO during prosecution of the patent. The government sided with i4i, arguing that the standard should not change, regardless of whether the PTO had considered the materials.

Microsoft had argued that the clear and convincing standard had not been generally adopted before the 1952 Act. Justice Sotomayor, writing for the Court (Chief Justice Roberts did not participate in the case), traced the clear and convincing standard back to Justice Cardozo’s opinion in Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U. S. 1 (1934), where he wrote that “there is a presumption of validity, a presumption not to be overthrown except by clear and cogent evidence.” That common law understanding, the Court held, was later written into § 282 when the Patent Act of 1952 became law. “Squint as we may, we fail to see the qualifications that Microsoft purports to identify in our cases.” Slip  op. at 10.

As the Court noted, the Federal Circuit has uniformly interpreted the presumption of validity required by § 282 for over 30 years. Moreover, Congress has actually amended § 282 several times since then, but has never seen the need to change the common law standard of proof required to overcome the presumption of validity by codifying a different standard in the statute. In short, if Microsoft wants a different standard, it will need to lobby Congress, not seek the Court’s intervention.

This leaves Microsoft on the hook for around $300 million in damages.

The Justices gave us two additional opinions. Justice Breyer, joined by Justices Scalia and Alito, concurred in the majority opinion, but wrote separately to emphasize that courts should be careful to separate factual and legal issues for the jury. Justice Breyer has long been concerned about invalid patents:

The problem arises from the fact that patents do not only encourage research by providing monetary incentives for invention. Sometimes their presence can discourage research by impeding the free exchange of information, for example by forcing researchers to avoid the use of potentially patented ideas, by leading them to conduct costly and time-consuming searches of existing or pending patents, by requiring complex licensing arrangements, and by raising the costs of using the patented information, sometimes prohibitively so.

Lab. Corp. of America Holdings v. Metabolite Labs., Inc., 548 U.S. 124, 127 (2006) (Breyer, J. dissenting from dismissal as improvidently granted). He obviously maintains that concern: “By preventing the ‘clear and convincing’ standard from roaming outside its fact-related reservation, courts can increase the likelihood that discoveries or inventions will not receive legal protection where none is due.” Slip op. at 25 (Breyer, J. concurring).

Justice Thomas concurred in the judgment, but he did not agree that the common law standard was codified in the Patent Act of 1952. In a subtle distinction, he would hold that RCA was governing precedent, but reaches the same result.

You can read the court’s full opinion here.