Intellectual Property Law: Counseling, Licensing, Litigation & Procurement

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Medtronic v. Mirowski Family Ventures

Banner & Witcoff offers the following content as a resource to help clients understand and prepare for the potential impact of this case:

Background

On Jan. 22, 2014, the U.S. Supreme Court unanimously reversed the Federal Circuit in Medtronic v. Mirowski Family Ventures. The high court held that the burden of proving infringement remains on the patent owner, even when a licensee seeks a declaratory judgment of noninfringement. The decision, authored by Justice Stephen Breyer, substantially benefits patent licensees, who, upon showing declaratory standing, may now force the licensor to prove that a licensed patent covers the licensee’s products, and do so at a time and forum of the licensee’s choosing.

As a general rule, the patentee always carries the burden of proving infringement; but at the case below, the Federal Circuit carved out an exception in the limited circumstances where a licensee files declaratory judgment against its licensor. In those cases, the three-judge panel held, the licensee must prove noninfringement, rather than the patentee proving infringement.

The Supreme Court quickly rejected the Federal Circuit’s burden shift, first taking a statutory approach and pointing out that the Declaratory Judgment Act has only procedural, not substantive, impact. The burden of proof is a substantive matter, and a burden shift a substantive change, and thus, the burden shift was legal error.

The Court also rejected the Federal Circuit on policy grounds, opining that the new exception would cause post-litigation uncertainty about the scope of the litigated patent. If the declaratory judgment had a different burden than its corresponding coercive action, the Court explained, the declaratory judgment action would have no claim preclusive effect over the later action. Instead, the parties would be forced to relitigate the entire infringement allegation, and the declaratory judgment action would fail to achieve its intended purpose of providing an “immediate and definitive determination of the legal rights of the parties.”

The respondents expressed concerns that, without the Federal Circuit’s exception, licensees could easily “force the patentee into full-blown patent infringement litigation . . .at [their] sole discretion.” The Court countered that those circumstances are strictly limited to situations where the licensee can show a genuine dispute of “sufficient immediacy and reality” about the patent’s validity or its application. Overall, the Court concluded, the “general public interest considerations are, at most, in balance . . . and do not favor a change in the ordinary rule imposing the burden of proving infringement upon the patentee.”

Important Dates

 

  • Jan. 22, 2014 – U.S. Supreme Court hands down decision
  • Nov. 5, 2013 – U.S. Supreme Court hears oral argument
  • Aug. 2, 2013 – U.S. Solicitor General files brief
  • May 20, 2013 – U.S. Supreme Court grants Medtronic’s petition for a writ of certiorari
  • March 14, 2013 – Medtronic files petition for a writ of ceriorari
  • Sept. 18, 2012 – Federal Circuit issues panel decision

Court Documents

Media

Banner & Witcoff attorneys are available to answer questions and discuss this case. Media inquiries should be directed to Amanda Robert (312) 463-5465 or arobert@staging.banner.flywheelsites.com.

Intellectual Property Law: Counseling, Licensing, Litigation & Procurement