Almost a year ago, Microsoft was ordered to pay a massive $290 million in damages to Canadian company i4i over patents surrounding the use of XML in Word 2003 and 2007. After losing its appeal, the software-giant was forced to issue a new version of Word in the US that didn't include the features.
The case is far from over though. The Wall Street Journal is reporting that Microsoft has convinced the US Supreme Court to hear its appeal in a move that could have a far reaching consequences on the way in which technology patents are challenged.
Although on its surface the case will deal with whether or not Microsoft infringed i4i's patents, it will also concern the standard of proof that Federal judges use to determine patent validity. Currently, the courts require 'clear and convincing' evidence that the patent is invalid, but Microsoft - along with supporters Apple, Google, Intel, HP, Dell, General Motors and Wal-Mart - will argue that the lower 'preponderance of evidence' standard should be used where, as is the case here, the defendant presents new evidence not considered by the Patent and Trademark Office.
The uncertainty arises because US patent law doesn't spell out the standard of proof required to challenge a patent beyond the assumption that it's prima facie valid. This leaves it up to the courts to determine the standard that should be used based on past cases.
According to i4i's chairman, Loudon Owen, a ruling in Microsoft's favour would be a radical departure from existing US law that would have "immense" implications that mean "every patent in the US will be vulnerable".
Interestingly, the WSJ notes that Chief Justice John Roberts has elected not to participate, as he owns several hundred thousand dollars worth of shares in Microsoft.
A decision is expected to be handed down in July 2011.
