I strive to use this blog to talk about topics of professional interest to me. When I can’t find local topics, I look to broader issues with mostly settled statements of fact like Supreme Court decisions. From time to time the Court hears patent cases, and in two of them they issued unanimous decisions about them. Recently in Medtronic v. Mirkowski the Supreme Court unanimously reversed the CAFC decision on the burden of proving infringement, so I have an opportunity to talk about why there was a conflict in the first place.
The appeals court ruled in favor of the defendant because it wanted to preserve the terms of the licensing agreement. Medtronic had obtained a license for Mirkowski’s patent, but Medtronic then filed for declaratory judgment asserting that they were not infringing the patent. Normally when filing a declaratory judgment for noninfringement, the defendant can counter that the plaintiff infringes, but the license Mirkowski gave Medtronic prevented it. Therefore, the court reasoned that the plaintiff had the burden of proving noninfringement because, as in other areas of case law, the party filing suit has the burden of proof.
The Supreme Court rejected this logic because the rules of patent infringement supersede declaratory judgment precedent. The parties had agreed through contractual arrangement that any damages paid due to infringement would be deposited in an escrow account, and Medtronic would need to notify Mirkowski if it wanted to challenge any claims of patent infringement. The Court noted that the rules of patent cases established that the patent owner has the burden of proving that the defendant infringes the patents. If the alleged infringer has the burden of proving noninfringement in a declaratory judgment, that could lead a situation where, after the alleged infringer loses in the declaratory judgment for lack of evidence, the patent owner sues for infringement and loses due to lack of evidence. Thus shifting the burdens of proving infringement based on the initial party filing makes it harder for everyone to understand what the patent covers. The CAFC tried to limit their rule’s application to this case’s scenario, but the Supreme Court thought that logic was not sufficient to legitimate the appeals court holding. Mirkowski is not precluded from the counterclaims because the declaratory judgment case still requires a genuine dispute about the patent. The public interest in limiting the extent of patent monopolies outweighs the patent owner’s interest in stopping infringement.
While the CAFC tried to value the contractual arrangement and the declaratory judgment procedure, the Supreme Court unanimously reversed the decision because it was inconsistent with settled laws about patent infringement. Later this year the Court will decide more patent cases, one about the rules of joint infringement and one about the definiteness of patent claims. I will be watching the cases and trying to explain them as best as I can, and I will continue to look into cases related to developments in Silicon Valley.