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How Much Does the "Clear and Convincing" Standard Matter? Study Suggests "Not Much"

By Peter Zura

In the case of Microsoft v. i4i, some of Microsoft?s amici contended that the clear and convincing evidentiary standard has a ?compelling effect on jurors? and that it is ?tremendously difficult to persuade a jury to go against the decision of the Patent Office.?

Etan S. Chatlynne, Stephen Kenny and Lucas Watkins decided to test this assertion by looking at validity challenges from two data sets: cases from 1966-1982 (the "Graham v. Deere-to-CAFC" period) and cases from 2008-2010 (the "KSR" period).  More importantly, before 1982, rebutting a patent?s presumption of validity generally required clear and convincing evidence.  However, the standard would shift to a preponderance of the evidence if a validity challenger introduced ?unconsidered evidence? (i.e. prior art not before the PTO during examination).  Since 1982, rebutting a patent?s presumption of validity has required clear and convincing evidence in all instances.

The authors analyzed the validity challenges from the first data set (1966-1982) to determine whether: 1) the court instructed the jury to apply one of the evidentiary standards; 2) the court discussed unconsidered evidence that a jury could have considered in evaluating invalidity; and 3) the jury determined that the validity challenger satisfied its evidentiary burden for at least one claim.  Unconsidered evidence raised the inference that the jury applied a clear and convincing evidentiary standard, while a finding that there was unconsidered evidence raised the inference that the jury applied a preponderance of the evidence standard.

For the second data set (2008-2010), the authors analyzed the challenges to determine whether: 1) the challenger introduced unconsidered evidence; and 2) the jury determined that the validity challenger satisfied its evidentiary burden for at least one claim. For this data set, evidence was deemed unconsidered if it was: 1) discussed in the Federal Circuit opinion, the district court opinion, or a party?s brief; and 2) not listed on the front of the asserted patent.

What did they find?

Challengers that introduced unconsidered evidence:

• 1966-1982 - 32% of patents challenged on unconsidered evidence were invalidated on a "preponderance of the evidence" (8 out of 25 times).
• 2008-2010 - 34% of patents challenged on unconsidered evidence were invalidated on a "clear and convincing" standard (13 out of 38 times)

Challengers that did not introduce unconsidered evidence:

• 1966-1982 - 13% of patents challenged were invalidated under "clear and convincing" standard (6 out of 45 times). 
• 2008-2010 - 0% of patents challenged were invalidated under "clear and convincing" standard (0 out of 5 times)

Note the authors:

[I]rrespective of the evidentiary standard, such challengers [using unconsidered evidence] in both periods established the factual bases of invalidity approximately one third of the time.  This indicates that the clear and convincing evidentiary standard may not be as significant a driver in invalidity outcomes as some have suggested.

The study concludes

The comparison herein of data from periods separated by more than twenty-five years surely implicates additional factors such as changes in applicable practice, procedure, search technology and much of the surrounding body of legal rules, including the change made by the Supreme Court to the legal standard for obviousness in KSR.  These factors could impact this investigation in ways the authors could neither determine nor account for.

Nevertheless, subject to the validity of the assumptions employed, this investigation suggests that a challenger?s likelihood of establishing the factual bases of invalidity are driven more by the likely greater impact of unconsidered evidence than by a shift to a preponderance of the evidence standard. Whether this means that the clear and convincing evidentiary standard has a ?compelling effect on jurors? and that it is ?tremendously difficult to persuade a jury to go against the decision of the Patent Office,? the authors cannot say. The data, however, suggest that a shift to a preponderance of the evidence standard will not significantly affect a validity challenger?s ability to establish the factual bases of invalidity to a jury.

Read/download a copy of the study here (link)

Full post as published by Two-Seventy-One Patent Blog on April 19, 2011 (boomark / email).