Medtronic, Inc. v. Mirowski Family Ventures, LLC, 571 U.S. ____ (2014) (No. 12-1128).
A licensee brought a declaratory judgment action against a patentee, arguing that the licensee’s products did not infringe the patents and that the patents were invalid. The district court placed the burden of proving infringement on the patentee, even though the patentee was the defendant. The Federal Circuit reached the opposite conclusion, saddling the licensee-plaintiff with the burden of proving noninfringement. The Federal Circuit emphasized that the patentee was “‘foreclosed’ from asserting an ‘infringement counterclaim’ by the ‘continued existence of a license.’”
The Supreme Court reversed. Justice Breyer, writing for a unanimous Court, made clear that the Declaratory Judgment Act did not alter substantive aspects of a claim, such as the burden of proof or infringement, which remains with the patentee and is not shifted to the infringer. The Court emphasized that the “public” also has a “paramount interest in seeing that patent monopolies . . . are kept within their legitimate scope.” And as a practical matter, the Court found that it would create uncertainty to shift the burden to the accused infringer. The declaratory judgment plaintiff might fail to meet its burden and lose—but then the patentee might bring its own suit, fail to meet its burden, and lose also. Finally, because a declaratory judgment action is permitted “only in the presence of a genuine dispute, ‘of sufficient immediacy and reality,’ about the patent’s validity or its application,” there was no concern that a patentee will be forced into full-blown litigation against its will.
The Court made short work of the Federal Circuit’s attempt to limit its ruling to a specific license context. The Court found this limitation too broad, noting that it would cover many situations “when a patent licensee faces an ordinary but disputed claim of infringement.” Further, the fact the rule was limited could not make it legally justified.
A copy of the opinion can be found here