In Medtronic, Inc. v. Mirowski Family Ventures, LLC, No. 12-1128 (Jan. 22, 2014), the U.S. Supreme Court held that a patentee cannot defeat a declaratory judgment action of non-infringement unless it establishes that all limitations of the claims are present in the products at issue because the patentee continues to bear the burden of persuasion on patent infringement.
The declaratory defendant, Mirowski Family Ventures LLC, owns two reissue patents (RE38,119 and RE39,897) which cover a type of cardiac pacemaker. The declaratory plaintiff Medtronic is a sublicensee of the patents. The license required Mirowski to identify infringing Medtronic products introduced into the market. If Medtronic disagreed, it could file a declaratory judgment action, but Mirowski was prohibited from counterclaiming for infringement. Medtronic filed a declaratory judgment action with respect to the two reissue patents, and continued to pay royalties on the alleged infringing products into an escrow account.
At trial, Medtronic argued that specific limitations of the patent claims did not cover the new products, and Mirowski rebutted only those arguments. The district court ruled in favor of Medtronic because Mirowski failed to show that every limitation of the claims were met by the products at issue, holding that the burden always falls on the patentee to show infringement.
The Federal Circuit reversed the district court on appeal, determining that, “in the post-MedImmune world,” the burden to show infringements shifts when the license agreement did not allow the patentee to counterclaim infringement. Medtronic, Inc. v. Mirowski Family Ventures, LLC, 695 F.3d 1266, 104 U.S.P.Q.2d 1323 (Fed. Cir. 2012).
The Supreme Court reversed the Federal Circuit, noting long held precedent that “the burden of proving infringement generally rests upon the patentee” and that the operation of the Declaratory Judgment Act is only procedural while the burden of proof is a substantive aspect of a claim. “Taken together these three legal propositions indicate that, in a licensee's declaratory judgment action, the burden of proving infringement should remain with the patentee.” The Supreme Court further noted that even though the Federal Circuit's burden-shifting rule would only apply in “limited circumstances” where the contract prevented the licensor from filing an infringement counterclaim, “the fact that a rule's scope is limited cannot, by itself, show that the rule is legally justified.”