Supreme Court hears Medtronic case

On November 5, the US Supreme Court  heard oral arguments in the Medtronic Inc v Boston Scientific Corporation case to determine whether the patent holder or licensee bears the burden of proof in matters where declaratory judgment of non-infringement has been sought.

Mirowski Family Ventures owns two patents that cover implantable defibrillators, which it licensed exclusively to Boston Scientific.

In 2007, Medtronic filed for declaratory judgment for non-infringement after Mirowski claimed it was developing products that use the patents without paying royalties.

The US District Court for the District of Delaware decided that Mirowski should bear the burden of proof, and found Medtronic did not infringe the patents, a decision Mirowski  successfully appealed against at the US Appeals Court for the Federal Circuit.

Normally, the patent owner must provide proof of infringement, regardless of whether declaratory judgment has been requested. In this case the Federal Circuit found that because the declaratory judgment plaintiff is the only party “seeking the aid of the court,” it must bear the burden of proving it does not infringe, a decision Medtronic wished to reverse.

In the Supreme Court case, Seth Waxman, a partner from Wilmer Cutler Pickering Hale and Dorr LLP in Washington, DC, argued on behalf of Medtronic that the Federal Circuit applied a different rule in error.

“Until this case, it was settled that the burden does not shift if the issue arises in a declaratory action seeking a judgment of non-infringement. The Federal Circuit imposed a different rule in suits brought under MedImmune where the party seeking a declaration of non-infringement is a licensee. That was [an] error,” he said.

In the  MedImmune Inc v Genentech Inc case, decided in 2007, the Supreme Court found that a patent licensee may file a declaratory judgment action to challenge a patent’s validity without stopping royalty payments.

“Allocation of the burden of proof inheres in the governing substantive law while the Declaratory Judgment Act is procedural only and does not change substantive rights,” Waxman added.

Mirowski’s lawyer Arthur Neustadt, senior partner at Oblon, Spivak, McClelland, Maier & Neustadt LLP, said that the Federal Circuit got it right in its decision: “The Federal Circuit took the well-settled law on burden of proof and it applied it to two stipulated facts and reached a conclusion that it had to reach. It was controlled by it.”

He added: “Medtronic is a licensee. It cannot be an infringer. So everything that you say about infringement involves a completely different situation.”

He referred to the “normal default rule”, where the burden of proof falls to the party that filed the complaint.

The court is expected to hand down its decision before the end of June 2014.