On January 22, 2014, a unanimous Supreme Court held that a patent owner bears the burden of persuasion on the issue of patent infringement, reversing a decision of the Court of Appeals for the Federal Circuit. Medtronic, Inc. v. Mirowski Family Ventures, LLC, No. 12–1128.
Mirowski Family Ventures, LLC licensed several patents related to pacemakers to Eli Lilly & Co., which then sublicensed the patents to Medtronic, Inc. The dispute arose when Medtronic introduced several new products that Mirowski believed infringed claims in two of its pacemaker patents. Medtronic disagreed and brought a declaratory judgment action asserting that its products did not infringe Mirowski’s patents and that Mirowski’s patents were invalid. In accordance with the dispute resolution section of the license agreement, Medtronic escrowed the potential royalties owed under the license agreement.
The district court held that even though Mirowski was the defendant in the action, Mirowski, as the patent owner, bore the burden of proving infringement and the court concluded that Mirowski had not proved infringement. On appeal, the Federal Circuit disagreed, holding that in a declaratory judgment action where the patent owner is foreclosed from asserting an infringement counterclaim by the continued existence of a license, the accused infringer bears the burden of persuasion on the issue of patent infringement.
The Supreme Court reversed the Federal Circuit and held that the burden of proof should remain with the patentee for three reasons. First, the court acknowledged the general rule that the burden of proving infringement rests upon the patent owner. Second, the Supreme Court considered the operation of the Declaratory Judgment Act to be only procedural. In this context, a Declaratory Judgment action allows an accused infringer to sue for a declaration that a patent is invalid or not infringed as opposed to waiting for the patent owner to file suit for infringement. Third, in the Supreme Court’s view, the burden of proof is a substantive aspect of an infringement claim.
The Supreme Court’s holding that the patent owner bears the burden of persuasion on the issue of patent infringement will likely lead to more challenges to patents than would have occurred under the Federal Circuit’s holding. The Federal Circuit’s holding required the licensee to meet the more difficult burden of persuasion that it did not infringe the patent.
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