January 22, 2014 United States Supreme Court opinion

Medtronic, Inc. v Mirowski Family Ventures, LLC

Medtronic sued Ventures for a declaratory judgment that certain products did not infringe Ventures’ patents. The district court placed the burden of proving infringement on Ventures and entered judgment for Medtronic. The Federal Circuit reversed holding that the burden in these circumstances lies with the plaintiff to prove non infringement. The Court unanimously reversed. It first held that eh Federal Circuit had jurisdiction because Ventures could have sued for infringement of its patents under the licensing agreement in some circumstances. Thus, the declaratory judgment arose from a patent law dispute and appeal was properly to the Federal Circuit. As to the burden of proof, the Court held that the patent holder normally has the burden and declaratory judgment actions by licensees are no different given the declaratory judgment action is purely procedural. The Court noted that this result is consistent with the declaratory judgment scheme as it prevents payment of disputed royalties to be improperly incentivized and it prevents infringement issues from being litigated to inclusive judgments that are not preclusive. The Court rejected arguments to the contrary noting that this case is an exception to the normal plaintiff bears the burden rule, the Federal Circuit rule would impact a significant number of infringement declaratory judgment claims, this result will not create new litigation as there must be a genuine dispute about the scope of a patent and patent holders must not be allowed to extract royalties outside the proper scope of the patent monopoly.

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