Supreme Court: Patentee Maintains Burden Of Proving Infringement In Actions Brought By Licensee

On January 22, 2014, in a unanimous 9-0 decision, the U.S. Supreme Court in Medtronic, Inc. v. Mirowski Family Ventures, LLC, No. 12-1128 (Breyer, J.), held that "when a licensee seeks a declaratory judgment against a patentee to establish that there is no infringement, the burden of proving infringement remains with the patentee." (Slip Op. at 1.) In so holding, the Supreme Court reversed the Federal Circuit which held that where the patentee is a declaratory judgment defendant that is foreclosed from asserting an infringement counterclaim based on the continued existence of a license, the licensee/plaintiff bore the burden of persuasion on non-infringement.

Medtronic introduced seven new medical devices that it believed to be outside the scope of the license agreement. Id. Mirowski disagreed and provided notice to Medtronic that it believed the new medical devices infringed various claims of two of its patents. Id. Medtronic, in turn, brought a declaratory judgment action in the District of Delaware seeking a judgment that the new devices were either non-infringing or that the two asserted patents were invalid. Id.

After a bench trial, the district court found for Medtronic on the basis that Mirowski had not successfully proven infringement. Medtronic, Inc. v. Boston Scientific Corp., 777 F. Supp. 2d 750, 766 (D. Del. 2011). The district court found that Mirowski, as the party asserting infringement, bore the ultimate burden of proof on infringement. Id.

On appeal, the Federal Circuit acknowledged that the patentee ordinarily bears the burden of proving infringement and that where a licensee seeks a declaratory judgment of non-infringement, a counterclaiming patentee/defendant bears the burden of proving infringement. 695 F.3d 1266, 1272 (Fed. Cir. 2012). However, the Federal Circuit decided that a different rule applies when the patentee, like Mirowski, is foreclosed from asserting an infringement counterclaim by the continued existence of a license. Accordingly, the Federal Circuit found that Medtronic had the burden to demonstrate that its seven new medical devices did not infringe Mirowski's patents. Id.

In reversing the Federal Circuit decision, the Supreme Court relied on three legal propositions: (1) the burden of proving infringement ordinarily rests on the patentee; (2) the operation of the Declaratory Judgment Act is only procedural and does not impact substantive rights; and (3) the burden of proof is a substantive aspect of a...