Access practice tools, as well as industry leading news, customizable alerts, dockets, and primary content, including a comprehensive collection of case law, dockets, and regulations. Leverage...
By Tony Dutra
The U.S. Supreme Court will hear next term a case on the burden of proof in a declaratory judgment action brought by a licensee of technology covered by the license (Medtronic Inc. v. Boston Scientific Corp. ( U.S., No. 12-1128, review granted 5/20/13).
The case appeals a Sept. 18 decision by the U.S. Court of Appeals for the Federal Circuit that interpreted the Supreme Court's ruling in MedImmune Inc. v. Genentech Inc., 549 U.S. 118, 81 USPQ2d 1225 (2007) (06 PTD, 1/10/07).
The court held that “in the post-MedImmune world,” the licensee seeking a declaratory judgment bears the burden of persuasion. 695 F.3d 1266, 104 U.S.P.Q.2d 1323 (Fed. Cir. 2012) (181 PTD, 9/19/12).
whether, in such a declaratory judgment action brought by a licensee under MedImmune, the licensee has the burden to prove that its products do not infringe the patent, or whether (as is the case in all other patent litigation, including other declaratory judgment actions), the patentee must prove infringement.
Two petitions were filed in the same case and were discussed by the court in its May 16 conference. However, the court made no announcement as to the second petition, which asked questions on claim construction deference and standards that would affect a broader section of the patent community. Mirowski Family Ventures L.L.C. v. Medtronic Inc., No. 12-1116 (U.S., review sought March 14, 2013).
Morton Mower and Mieczyslaw Mirowski developed the first implantable cardioverter defibrillators during the period between 1969 and 1980. Two reissue patents (RE38,119 and RE39,897) are assigned to Mirowski Family Ventures L.L.C. (MFV), which in turn exclusively licensed the patents to Guidant Corp., which is owned by Boston Scientific Corp. The patents--the '897 patent is a continuation of the '119 patent--cover what has become known as a cardiac resynchronization therapy device.
Medtronic is a sublicensee of the '119 patent. In 2003, it began paying royalties into an escrow account and initiated a validity challenge against the patent. The license called for MFV to identify infringing Medtronic products and then for Medtronic to file a declaratory judgment action, which it did in 2007 in the U.S. District Court for the District of Delaware. Because Medtronic was a licensee authorized to use the patented technology, MFV was prohibited from counterclaiming for infringement.
The district court ruled in favor of Medtronic, concluding that the burden always falls on the patentee to show infringement.
MedImmune provided licensees with a shield from the economic consequences of challenging their licensors' patents while enabling those licensees to file declaratory judgment suits to clarify the rights and obligations of the parties under their license agreements. This case requires us to determine the proper allocation of the burden of persuasion in the post-MedImmune world, under circumstances in which a declaratory judgment plaintiff licensee seeks a judicial decree absolving it of its responsibilities under its license while at the same time the declaratory judgment defendant is foreclosed from counterclaiming for infringement by the continued existence of that license.
The court concluded that the burden of persuasion must fall on the party seeking relief. In this case, that party was clearly Medtronic, “asking the court to disturb the status quo ante and to relieve it from a royalty obligation it believes it does not bear,” the court said. “A contrary result would allow licensees to use MedImmune's shield as a sword--haling licensors into court and forcing them to assert and prove what had already been resolved by license.”
“Therefore, this court holds that in the limited circumstance when an infringement counterclaim by a patentee is foreclosed by the continued existence of a license, a licensee seeking a declaratory judgment of noninfringement and of no consequent liability under the license bears the burden of persuasion.”
Martin R. Lueck of Robins Kaplan Miller & Ciresi, Minneapolis, represents Medtronic. Arthur I. Neustadt of Oblon, Spivak, McClelland, Maier & Neustadt, Alexandria, Va., represents MFV.
By Tony Dutra
Federal Circuit's opinion is available at http://pub.bna.com/ptcj/11131312Sep18.pdf.
Cert petition is available at http://pub.bna.com/ptcj/121128pet.pdf.
MFV response is at http://pub.bna.com/ptcj/121128resp.pdf.
Medtronic reply is at http://pub.bna.com/ptcj/121128reply.pdf.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)