In legal proceedings, the burden of proof typically lies with the party who brings the action. However, in patent litigation the burden of proof normally lies with the patentee, who must prove infringement. In a particular type of declaratory judgement action, where a licensee seeks a declaration of non-infringement (known as a “MedImmune-type” declaratory judgment), this poses a difficult question: should a licensee have the burden to prove its products do not infringe the patent (in keeping with the doctrine that he who asserts must prove), or should the patentee prove infringement (in keeping with normal patent litigation)?
The US Supreme Court recently heard arguments in a case where these contradictory legal doctrines have been raised in a battle between medical device giants Medtronic Inc. and Boston Scientific Corp.
Medtronic Inc. was granted sub-licences under patents held by Mirowski Family Ventures and licensed to Boston Scientific Corp relating to a “cardiac resynchronisation therapy” (CRT) device. These devices are used to coordinate the contractions of the left and right chambers of the heart and are used in the treatment of symptoms associated with congestive heart failure. Boston Scientific Corp requested royalties from Medtronic for a number of Medtronic CRT devices which they claimed “infringed” the licensed patents. Medtronic did not, however, believe that their CRT devices fell within the scope of the licensed patents and felt that royalty payments were inappropriate.
In a previous case (MedImmune Inc. v. Genentech Inc.), it was ruled that a licensee who believes its licensor is demanding royalties for non-infringing products is not required to terminate the licence and risk an infringement action (thereby risking triple-damages in US litigation) but can instead bring an action for a declaratory judgment of non-infringement. In such a scenario, the defendant cannot bring a counter-claim for infringement, as the licence is still in place. This is contrary to a “normal” action for a declaratory judgement of non-infringement where the patentee can, and often will, bring a counter-claim of infringement.
In light of Boston Scientific’s assertions, Medtronic brought a MedImmune-type declaratory judgment action. So commenced an argument as to who has the burden of proof in such actions, the sole issue on appeal at the Supreme Court.
The decision at first instance (March 2011) fell in favour of Medtronic and non-infringement was found due to the failure of Boston Scientific to prove infringement. However, in September 2012, the Federal Circuit overruled this decision and stated that in a MedImmune-type declaratory judgement action, the plaintiff bears the burden of proving non-infringement, as it is the plaintiff who seeks to disturb thestatus quo ante. This decision is now under question at the Supreme Court.
Medtronic has argued that if the decision of the Federal Circuit is upheld, aMedImmune-type declaratory judgment action will come with a significant burden: that of proving that the involved products do not infringe the patents in question. The only way a licensee could ensure the burden remains with the patentee would be to breach the licence and risk an infringement action and its associated consequences. Boston Scientific, on the other hand, has asserted that as it cannot counter-claim for infringement and only Medtronic is seeking relief, the decision of the Federal Circuit should be upheld.
The decision of the Supreme Court, expected next summer, will hopefully clarify the effectiveness of MedImmune-type declaratory judgment actions for future litigants. The decision will not, however, be a case of simply resolving two conflicting principles of law; during the recent proceedings Justice Ginsberg highlighted that there are, in fact, “other rules on burden of proof… it’s not as though this is a firm rule with no exceptions”, so we shall have to wait and see.