A few observations:

1. This is a sleeper case (i4i v. Microsoft) that has drawn relatively little attention in the public's eye. In reality, the stakes associated with it are huge and the interest it has drawn from key players in the tech industry is commensurate with those stakes.

2. The reason it is not a particularly exciting case from a headline standpoint is that it deals with what appears to be a specialist technical issue of patent law, that is, what is the proper "standard of proof" to be applied when a patent is challenged as being invalid? Should it be a "clear and convincing" standard or a "preponderance of evidence" standard?

3. In fact, the practical effect of this case on patents will be far greater than that of, say, Bilski, which dealt with the question of what constitutes patentable subject matter. Bilski covered business method patents only. The i4i case affects basically every case pending in the courts in which the validity of a patent is being challenged.

4. Among those in the tech world, just about everybody who is anybody has weighed in with a "friend-of-the-court" (amicus) brief asking the Supreme Court to throw out the clear-and-convincing standard in favor of a preponderance standard. The parade includes Google, Apple, Facebook, Intuit, Yahoo, Intel, Dell, HP, and others. A group of 36 law professors specializing in IP have also asked that the standard be changed, as has EFF. A superbly informative summation of the amicus briefs seeking to undo the clear-and-convincing standard is found here: http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202472695453&.... A good discussion also appears here: http://www.patentlyo.com/patent/2010/09/challenging-the-clea....

5. By the way, the other side of the argument is well-articulated here: http://ipwatchdog.com/2011/03/13/supreme-court-patent-watch-....

6. So why is this so important and why do some companies (such as Apple) that frequently rely on patents to protect their competitive positions side with Microsoft in wanting to make it easier to find patents invalid? The simple answer: trolls. In essence, when a patent's validity is challenged and a jury is instructed to uphold it unless it finds "clear and convincing" evidence that it is not valid (owing to whatever ground, whether it be obviousness or existence of prior art or any other recognized ground for declaring a patent invalid), the challenge will almost certainly fail in the average case. The jury is basically told that the patent is presumed valid unless they can clearly find compelling evidence to invalidate. Since, in most cases, what is offered is conflicting evidence of varying types, jurors (typically not wanting to sort through a maze of technical evidence) will simply shrug their shoulders and say that the patent stands. If, on the other hand, the jurors are instructed that they are to determine the issue based on which way the preponderance of evidence tips, then they are to give no deference to the findings of the USPTO in upholding the patent but are to look at it fresh to decide whether the evidence shows that it is more likely than not that a patent is invalid. Thus, under current standards, trolls come into court heavily armed with law that says, in effect, uphold what the USPTO did unless you find a hellava reason not to. Microsoft, and the other tech companies, want this changed so that trolls have no built-in advantage when it comes to a litigated dispute over patent validity, i.e., they want a "level playing field" once the fight is on.

7. On the technical issue, patents laws are governed by statutes enacted by Congress but no existing statute requires that a clear-and-convincing standard be applied to this issue. The parties dispute the issue but Microsoft's position is that no such standard had been applied by federal courts (at least not with any consistency) before Congress created the Federal Circuit court to oversee patent disputes. Microsoft argues that the Federal Circuit has skewed patent litigation by arbitrarily making it more difficult to invalidate patents than Congress had intended. This was the same court, by the way, that had adopted the State Street test that led to a wild proliferation of business-method patents and that was struck down in Bilski. The Supreme Court is now being asked to bring a bit more sanity to the related area of standards for determining patent invalidity.

It is hard to say which way this one will go. The patent bar is in an uproar that issued patents might not be deemed presumptively valid when challenged but might be much more vulnerable to challenge going forward, and so too are the trolls. Pretty much everybody else favors reform, including most of the tech industry heavyweights. My own sense is that this one is going to tip toward Microsoft and that we will get some measure of reform here. This would be a significant and very practical step toward undercutting a good measure of the power currently held by the trolls.