Tuesday, November 30, 2010

Patent Trolls Beware! U.S. Supreme Court May Make It Harder for You to Win

Everyone in the tech industry is acutely aware of the massive amount of claims of patent infringement. It frequently seems that virtually no company is immune from such claims, given the relative ease of patent issuance and the breadth of coverage of many of those patents. As a result, patents are frequently used as business weapons. And, several companies exist that do virtually nothing other than collect pools of broadly granted patents and then send demand letters claiming infringement. Some refer to these kinds of companies as "patent trolls" -- and many believe that those companies do nothing more than "shake down" others with demands for substantial amounts of money.

Well, patent trolls beware -- the U.S. Supreme Court has agreed to hear Microsoft's appeal of a $290 million patent infringement verdict against it. Microsoft argues that the patent it purportedly infringed is invalid and, therefore, cannot be enforced. The price issue on which the U.S. Supreme Court will rule is whether Microsoft would need to demonstrate invalidity by "a preponderance of evidence" (i.e., essentially more than 50%) or, instead, by "clear and convincing evidence" (which is a much higher bar that must be crossed). Right now, the relevant standard is the higher "clear and convincing" standard.

Microsoft has interesting allies in this fight -- including arch-nemeses Apple and Google.

And, many in the tech industry will be on Microsoft's side on this one.