Does the burden of proving patent infringement in a declaratory judgment action fall upon the licensee or licensor?
In a traditional patent infringement suit, the patent owner has the burden of proving infringement. In MedImmune, Inc. v. Genentech, Inc., the Supreme Court held that a patent licensee could bring a declaratory judgment action against a licensor without violating the agreement. Here, Petitioner Medtronic entered a license agreement with Respondent Mirowski Family Ventures (“MFV”) that allowed Medtronic to challenge the validity, enforceability, and scope of a medical device patent in a declaratory judgment action. The Supreme Court will decide who—the patent owner or the licensee—has the burden of proving infringement in such an action. Medtronic argues that the traditional burden of proof (i.e., burden on the owner) should apply in the declaratory judgment context, as this would promote fairness and consistency in judgments, further the public interest in determining the scope of a patent, and avoid reaching issues of substantive law in declaratory judgment actions. MFV argues that the burden of proving noninfringement should be on the licensee because it is the party seeking relief and because this would incentivize patent owners to enter into license agreements. The Court’s ruling in this case will reshape the incentives for entering into and litigating license agreements, and thereby impact the litigation practices in declaratory judgment actions involving patent licenses.
In MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 137 (2007), this Court ruled that a patent licensee that believes that its products do not infringe the patent and accordingly are not subject to royalty payments is "not required ... to break or terminate its ... license agreement before seeking a declaratory judgment in federal court that the underlying patent is ... not infringed."
The question presented is 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.
- Crouch, Supreme Court to Hear Another Case Involving Licensees in Good Standing Who Challenge Patent Rights, Patently-O, May 20, 2013.