“Patentee Must Prove Infringement in Declaratory Judgment Action Brought by Licensee”

On January 22, 2014, the U.S. Supreme Court decided Medtronic, Inc. v. Mirowski Family Ventures, LLC, Docket No. 12-1128 (2014). The ruling is consistent with well settled law that a patentee ordinarily bears the burden of proving infringement, and establishes that the burden does not shift in the context of a MedImmune declaratory judgment case.

The question presented in Medtronic was "whether, in a declaratory judgment action brought by a licensee under MedImmune, the licensee has the burden to prove that its products do not infringe the patent, or whether . . . the patentee must prove infringement." In MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), the Court had ruled that a patent licensee could seek a declaratory judgment of non-infringement while continuing to pay royalties. The Federal Circuit decided in Medtronic Inc. v. Boston Scientific Corp., 695 F.3d 1266 (Fed. Cir. 2012) that for a MedImmune case, the licensee must bear the burden of proving non-infringement. In its decision, the Supreme Court reversed, holding that the patentee has the burden to prove that the licensee’s products infringe. In particular, the Court stated:

The Federal Circuit’s burden shifting rule does not deprive [the licensee] of the right to seek a declaratory judgment. But it does create a significant obstacle to use of that action. . . . As we have made clear . . ., we are unaware of any strong reason for creating that obstacle.

Another issue considered in the case was whether the Federal Circuit had subject matter jurisdiction. The Court rejected the argument that the case could have been a breach of contract case, depriving the Federal Circuit of its original jurisdiction. The license provided that if the licensee stopped paying royalties the licensor could terminate the agreement and bring a patent infringement action, and therefore the cause of action is created by federal patent law.

If you have questions relating to the Medtronic decision, please contact a Marshall Gerstein attorney.

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