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The Supreme Court unanimously held that a patentee bears burden of proving infringement in a declaratory judgement action brought by a licensee. In Medtronic, Inc. V. Mirowski Family Ventures, LLC, Medtronic entered into a licensing agreement that permitted it to practice certain Mirowski patents in exchange for royalty payments. Medtronic brought a declaratory judgment action against Mirowski, arguing that certain products did not infringe the patents of the license agreement and that these patents were invalid. The district court and Federal Circuit reached the opposite conclusions on which party bears the burden of providing infringement. The district court placed the burden on the patentee and the Federal Circuit placed the burden on the licensee-plaintiff.

The Supreme Court reversed the Federal Circuit. The Court held that when a licensee seeks a declaratory judgment against a patentee it does not infringe the licensed patent, the patentee bears the burden of persuasion on the issue of infringement. However, in making its decision the court emphasized that a patentee ordinarily bears the burden of proving infringement. The Court found that the Declaratory Judgment Act did not alter this burden. The Court stated that the operation of the Declaratory Judgment Act is only procedural, which leaves substantive rights unchanged. As the burden of proof in an infringement action is a substantive aspect of a claim, the Declaratory Judgment Act does not shift the applicable burden.

The Court further noted that practical considerations lead to the same conclusion, i.e., shifting the burden based on the form of the action could create uncertainty about a patent’s scope and may create unnecessary complexity by compelling a licensee to prove a negative. The Court further stated that burden shifting is difficult to reconcile with the Declaratory Judgment Act’s purpose of “ameliorating the ‘dilemma’ posed by ‘putting’ one challenging a patent’s scope ‘to the choice between abandoning his rights or risking’ suit.” The Court felt that the Federal Circuit’s burden shifting rule creates the dilemma that the Declaratory Judgment Act sought to avoid.

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Todd A. Benni

It is critical in today's technology-driven, global marketplace to effectively procure and manage intellectual property. Our clients rely on us to provide prompt, thorough and efficient counsel on matters involving patents, copyrights, trademarks, trade dress, trade secrets, intellectual property procurement, and enforcement. We focus on management and enforcement for Fortune 500 companies, mid-cap companies and start-ups. Supported by the talents of our litigation and business law attorneys, our IP attorneys deliver a complete range of innovative and comprehensive solutions, as well as insightful industry expertise. Our in-depth approach enables us to meet the business goals of our diverse client base. In fact, the hallmark of our IP practice is to dovetail our clients’ intellectual property needs with their business plans and strategies, presenting a cohesive and thorough outcome.