By Kimberly Atkins
The Daily Record Newswire
WASHINGTON, DC — In a case that could have a significant impact on patent litigation, it appears the burden of proof is staying exactly where it is.
U.S. Supreme Court justices seem disinclined to shift the burden of proof onto patent licensees to prove noninfringement in declaratory judgment actions. That’s according to developments during oral arguments Nov. 5 in Medtronic Inc. v. Boston Scientific Corp., when several justices indicated their desire to require patent-holders to prove infringement.
The case stems from a licensing agreement between Minneapolis-based Medtronic Inc. and Guidant Corp., an Indianapolis subsidiary of Massachusetts-based Boston Scientific.
The agreement allowed Medtronic the use of certain implantable cardiac devices whose patents were owned by Mirowski Family Ventures of Maryland.
Medtronic was allowed to license the patented devices and Mirowski was required to give notice if the company thought any of Medtronic’s own devices used technology patented in the products that it licensed.
The agreement also provided that Medtronic could seek a declaratory judgment challenging an infringement claim without breaking the licensing agreement, so long as it continued to pay royalties.
However, Mirowski subsequently claimed that Medtronic was infringing its patents, and Medtronic filed an action against Mirowski challenging the validity of the patents covered by the license. The parties disagreed over who bore the burden of proof.
A district court ruled that the patent holder, Mirowski, had the burden of proving infringement, but a panel of the U.S. Circuit Court of Appeals reversed that decision, holding that Medtronic had to prove non-infringement.
The Supreme Court granted Medtronic’s petition for certiorari to decide where the proof burden lies.
Seth Waxman, a partner in the Washington office of WilmerHale representing Medtronic, argued that the burden in declaratory judgment actions should be no different than in
traditional infringement claims.
“The Declaratory Judgment Act is procedural only and doesn’t change substantive rights,” Waxman said.
Justice Samuel Alito Jr. wondered if the decision would have much of an impact, since the issue involves the burden of persuasion and not the burden of production. But Waxman called the difference “surpassingly important” in many cases.
“Where the burden of persuasion rests is very often outcome-determinative,” he said. “And that’s certainly true in patent cases.”
Curtis Gannon, assistant to the U.S. solicitor general, argued as amicus in support of Medtronic that “the best way to think of a declaratory judgment action like this is that it’s the mirror image of the underlying coercive hypothetical action that could have been brought against Medtronic” by the patent holder.
And because the issues are the same, Gannon added, the burden of proof should be as well.
“The issues that were going to be resolved in the declaratory judgment action … were going to involve questions of patent validity, patent enforceability, scope of coverage [and] patent infringement,” he said. “Which is exactly what we have here.”
While neither Waxman nor Gannon faced aggressive questioning, Arthur Neustadt, the senior partner in the Alexandria, Va., office of Oblon, Spivak, McClelland, Maier & Neustadt who argued on behalf of Mirowski, was peppered with questions by the justices.
When Neustadt asserted that “one of the most fundamental tenets of our jurisprudence [is] that if a party files a complaint and seeks relief, it has the responsibility to prove that it is entitled to that relief,” Justice Antonin Scalia disagreed.
“You could say that about any declaratory judgment action,” the justice said. “If we follow what you said, that then shifts the burden in every declaratory judgment action. And it clearly doesn’t.”
A decision is expected later this term.
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