Supreme Court to hear Medtronic case

The US Supreme Court has agreed to hear a patent infringement case between medical device manufacturers Medtronic and Boston Scientific.

The case concerns two patents owned by Mirowski Family Ventures, which relate to implantable defibrillators.

Medtronic is seeking a reversal of the Federal Circuit’s finding that it bears the burden of proving it was not infringing Mirowski’s patents, which are now licensed exclusively to Boston Scientific.

In 1991 Medtronic entered into a sublicense agreement with Eli Lilly, Mirowski’s licensor at the time. Medtronic agreed to pay the company royalties for any products it develops that use the patents.

The terms of the agreement allow Medtronic to challenge the patents while they are still under license.

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

The District Court for the District of Delaware, placing the burden of proof on Mirowski, found Medtronic was not infringing the patents.

Mirowski then successfully appealed against the decision at the Federal Circuit, which threw the case out on grounds that the burden of proof was improperly placed.

“Because the district court relied on a legally incorrect allocation of the burden of proof to find noninfringement in the limited circumstances of this case and incorrectly construed the claim terms in question, this court vacates and remands,” the judgment said.

Vernon Winters, partner at Sidley Austin in San Francisco, said that the case was unusual, and that the Federal Circuit heavily relied on the premise that the parties’ license had resolved the question of infringement on reaching its decision.

“Based on that premise, the court reasoned that because the declaratory judgment plaintiff/licensee was party seeking the court’s aid—that is, the declaratory judgment plaintiff/licensee was seeking to disturb the status quo—it should bear the burden of proof,” he said.

“The court recognised that normally the patentee bears the burden of proving infringement, but distinguished that normal rule because in the context of a license, as a technical matter infringement is not (at least in the court’s view) at issue; instead, the licensee’s obligations to pay royalties under the license are at issue.”

He said that if the Supreme Court finds that the patentee bears the burden of proving infringement, which is normally the case, it may encourage more existing patent licensees to challenge licensed patents, which may have “significant practical effect”:

“If a licensee bears the burden of proof, it has to show non-infringement of all of the claims in the licensed patents—which, depending on the scope of the license, can run into the hundreds or even thousands of claims.  If, by contrast, the patentee/licensor bears the burden of proof, as a practical matter the number of claims at issue is winnowed during the litigation, often at the district court’s insistence.”

A spokesperson for Medtronic said: “We are pleased the court agreed to hear our appeal.”

Boston Scientific did not respond to a request for comment.

The case is expected to be argued after the court’s next term starts in October.

For more life sciences stories, please visit  www.lifesciencesipreview.com