Supreme Court: Patent Owner Bears Burden of Proof in Noninfringement Declaratory Judgment Action By Licensee

When a patent owner sues another for infringement, the patent owner must prove infringement.  The Supreme Court ruled on January 22, 2014, in Medtronic, Inc. v. Mirowski Family Ventures, LLC, that this burden of proof still applies when a patent licensee sues the patent owner for a declaratory judgment that certain products do not infringe the patent and therefore do not fall under the license.

Medtronic had a license to certain defibrillator patents owned by Mirowski.  Years after the initial license agreement, Medtronic sought a declaratory judgment that its newer products did not infringe the patents (so Medtronic could avoid paying royalties).  After a bench trial, the Federal District Court in Delaware found Mirowski had not proved infringement, and Medtronic won.  But the Court of Appeals for the Federal Circuit reversed, holding that Medtronic, as the declaratory judgment plaintiff, bore the burden of proof.

The Supreme Court reversed and held, “the burden of persuasion is with the patentee, just as it would be had the patentee brought an infringement suit.”  The Court relied on three legal principles: (1) the burden of proving infringement is the patentee’s, (2) the operation of the Declaratory Judgment Act is only procedural, and (3) the burden of proof is a substantive aspect of a claim.  Practically, the Court found that burden shifting could create post-litigation uncertainty.  A declaratory judgment plaintiff could fail to prove noninfringement, and a patentee plaintiff could fail to prove infringement for the same patent and same allegedly infringing device, meaning the device neither infringes nor does not infringe.  A stable burden of proof reduces uncertainty for parties contemplating and engaged in patent litigation.