US Supreme Court reverses Medtronic ruling
The US Supreme Court has ruled that when licensees seek a declaratory judgement of non-infringement, the patentee bears the burden of proof to show infringement.
An earlier Federal Circuit ruling held that a licensee seeking such a declaration must prove non-infringement.
Medical device company Medtronic, the licensee in this case, was accused by Mirowski of using its patents, which cover implantable defibrillators, without paying royalties.
The companies had already been in a licensing agreement, but Mirowski said Medtronic was developing new technology that required it to pay more licensing fees.
In 2007 Medtronic asked a US district court to rule that it was not infringing Mirowski’s patents.
The US District Court for the District of Delaware said that Mirowski should prove infringement, adding that Medtronic did not infringe the patents.
Mirowski appealed to the US Court of Appeals for the Federal Circuit, which switched the burden of proof from the patentee to the licensee.
The appeals court said that while the patentee normally bears the burden of proof, because the party seeking declaratory judgement – Medtronic, in this case – is the only party “seeking the aid of the court,” that party must prove non-infringement.
But in a unanimous ruling on January 22, the Supreme Court reversed that position.
“When a licensee seeks a declaratory judgment against a patentee that its products do not infringe the licensed patent, the patentee bears the burden of persuasion on the issue of infringement,” wrote Justice Breyer on behalf of the court.
“This conclusion is strongly supported by three settled legal propositions,” he added.
The first, he said, citing case law, is that a patentee ordinarily bears the burden of proving infringement.
He added: “Practical considerations lead to the same conclusion. Shifting the burden based on the form of the action could create post-litigation uncertainty about a patent’s scope. It may also create unnecessary complexity by compelling a licensee to prove a negative.”
Finally, he continued, burden-shifting is difficult to reconcile with the declaratory judgement act’s purpose of “ameliorating the ‘dilemma’ posed by ‘putting’ one challenging a patent’s scope ‘to the choice between abandoning his rights or risking’ suit”.
Bill Baton, partner at Saul Ewing LLP, said the decision turned the state of the law back to the previous “status quo”.
“The Supreme Court disagreed [with the Federal Circuit], holding that suits like this one are an exception to the ‘ordinary default rule’, whereby declaratory judgment plaintiffs bear the burden of proving their claims.
“They are not, however, an exception to the longstanding rule that a patentee bears the burden of proving infringement. In short, even though Medtronic was the declaratory judgment plaintiff, defendant Mirowski, the patentee, bore the burden of proving to the court that Medtronic, its licensee, infringed Mirowski’s patents.
“The Supreme Court suggested that, to do otherwise, would have subjected Medtronic to prove a negative – i.e. that it was not an infringer,” he said.
The case now goes back to the Federal Circuit, which will re-assess it in light of the Supreme Court’s findings.
