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Edition: U.S. Article Comments (1) Follow Reuters Facebook Twitter RSS YouTube Read Trial session ends early as Casey Anthony takes ill 09 Jun 2011 Alabama sets nation's toughest immigration law 09 Jun 2011 Alleged Weiner nude photo released by radio hosts 09 Jun 2011 One dead, four others wounded in Brooklyn boardwalk shooting 09 Jun 2011 Nintendo president puzzled by investor reaction to Wii U 09 Jun 2011 Discussed 88 Alabama governor signs nation’s toughest immigration law 79 ”The world is getting warmer”: Romney 72 U.S. debt default unimaginable, creditors say Watched The next chapter for Hillary Clinton? 10:04am EDT Bodypainters apply their skill Mon, Jul 19 2010 Four-year-old takes art world by storm Mon, Jun 6 2011 small business Talent search favors tech giants Recruiters say the Web 2.0 hiring boom, which counters nationwide unemployment above 9 percent, shows no sign of abating. And startups are having to be very creative to lure potential hires away from Google and other tech giants. Full Article Silicon Valley recruiter: "Everyone's desperate" 5 reasons to join a startup after graduating Microsoft loses U.S. Supreme Court case on patent Tweet Share this Email Print Related News Microsoft loses US top court case on i4i patent Thu, Jun 9 2011 Healthcare battle unfolds in Atlanta court Wed, Jun 8 2011 Halliburton securities fraud lawsuit reinstated Mon, Jun 6 2011 Nokia on the ropes as analysts slash targets Wed, Jun 1 2011 Courts will not block Massey-Alpha deal Tue, May 31 2011 Analysis & Opinion Tech wrap: Myspace sale saga nears end How Microsoft lost 8-0 at the Supreme Court Related Topics Technology » Small Business » Regulatory News » i4i Chairman Loudon F. McLean Owen (L) and Chief Technology Officer and Founder Michel Vulpe pose for a portrait in Toronto, July 13, 2010. Credit: Reuters/Mark Blinch By James Vicini WASHINGTON | Fri Jun 10, 2011 12:06am EDT WASHINGTON (Reuters) - Microsoft Corp suffered a defeat on Thursday when the Supreme Court upheld a record $290 million jury verdict against the software giant for infringing a small Canadian company's patent. The justices unanimously agreed with a U.S. appeals court ruling that went against the world's largest software company in its legal battle with Toronto-based i4i. The high court refused to adopt Microsoft's lower standard to replace the long-standing requirement that a defendant in a patent infringement case prove by clear and convincing evidence that a plaintiff's patent is invalid. Redmond, Washington-based Microsoft had argued that a lower standard of proof involving a "preponderance of the evidence" would make some "bad" patents easier to invalidate while promoting innovation and competition. Justice Sonia Sotomayor, who wrote the opinion, said the court rejected Microsoft's contention that a defendant need only persuade a jury of a patent's invalidity by a preponderance of the evidence. When Congress has prescribed the governing standard of proof, its choice generally controls, she said. The Obama administration and i4i opposed Microsoft's position and said Congress had accepted the standard in effect for the past 28 years and the Supreme Court should uphold it. The legal battle began in 2007 when i4i sued Microsoft. A federal jury awarded $290 million to i4i after finding that Microsoft, in 2003 and 2007 versions of Word, its word processing application, had infringed i4i's patent relating to text manipulation software. A U.S. appeals court upheld the award, and the U.S. Patent and Trademark Office upheld the validity of the i4i patent. Microsoft continued to dispute those decisions, but removed the contested features from its current software. In appealing to the Supreme Court, Microsoft said it wanted a new trial. But the justices ruled against Microsoft. The case is not entirely over, however, since Microsoft also has a challenge to the patent pending at the patent office and may have to pay other potential licensing fees, said Michel Vulpe, i4i's founder and chief technology officer. "We're very pleased that the court did the right thing," and that the decision was unanimous, Vulpe told Reuters. SIGNIFICANT BUSINESS CASE Loudon Owen, i4i's chairman, said in a statement, "This is one of the most significant business cases the court has decided in decades." Microsoft has said it is the largest patent infringement verdict ever affirmed on appeal. It has also said it had set aside money for the verdict, so it was not material to its earnings. "While the outcome is not what we had hoped for, we will continue to advocate for changes to the law that will prevent abuse of the patent system and protect inventors who hold patents representing true innovation," Microsoft spokesman Kevin Kutz said in an email statement. Max Grant, a patent law attorney at Latham & Watkins, said that by upholding the status quo "the Supreme Court wisely left alone a complex area of the law that balances many competing interests." Microsoft's share price dipped when the decision was announced but quickly recovered and was little changed at $23.93 in afternoon trade. Sotomayor wrote that any decision to change the standard in patent infringement cases would have to come from Congress. She noted that the standard of clear and convincing evidence was almost 30 years old and had been left untouched during previous congressional patent system reforms. Google Inc, Yahoo Inc and trade groups such as the Computer & Communications Industry Association supported Microsoft, while Bayer AG, 3M Co and groups representing biotechnology companies and pharmaceutical manufacturers backed i4i. The case was decided by eight of the nine Supreme Court members. Chief Justice John Roberts, who owns Microsoft stock, recused himself from the case. The Supreme Court case is Microsoft Corp v. i4i Limited Partnership and Infrastructures for Information Inc, No. 10-290. (Additional reporting by Diane Bartz; Editing by Gerald E. McCormick, Ted Kerr and John Wallace) Technology Small Business Regulatory News Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language, all capital letters or appear to be spam, and we review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. Comments (1) TheDeuceman wrote: When you’er the bully of the school yard and have had most of what you got by taking from others, it is often hard to think that you can EVER be wrong. But MS counsel gave BAD advice to MS management-or maybe MS management did not want to hear it-that the way to fame and riches in the software bidniz is to appear in front of the Supreme Court with a plea to change the standard of the law as it pertains to a defendants obligation to show defect in a disputed patent by persuading the court to lower the standard for you. This standard has been in effect for over 30 years and is codified in law. MS’s position on this matter as a principal point of their defense just shows their continued arrogance for intellectual property rights, the law, and R&D partnerships. Darrow…for the Prosecution Jun 09, 2011 12:40am EDT -- Report as abuse See All Comments » Add Your Comment Social Stream (What's this?) © Copyright 2011 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Reader Feedback Mobile Newsletters RSS Podcasts Widgets Your View Analyst Research Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week FindLaw Super Lawyers Attorney Rating Service Reuters on Facebook Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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