Tag Archives: declaratory judgment

Supreme Court Holds That Patentee Bears Burden of Persuasion on Infringement When Licensee Seeks a Declaratory Judgment

By: Joe Carnicella, intellectual property attorney with Picadio Sneath Miller & Norton, P.C.

We posted about this case in May 2013, and on January 22, 2014, the Supreme Court decided this matter.

First, the Supreme Court held that the Federal Circuit did not lack subject-matter jurisdiction.  Because federal courts determining declaratory judgment jurisdiction often look to the “character” of the declaratory judgment defendant’s “threatened action,” which in this case, the threatened hypothetical action would constitute the licensor terminating a license and bringing suit for infringement under federal patent laws, the declaratory judgment action would arise under federal patent laws.

Second, the Supreme Court held that when a licensee seeks a declaratory judgment against a patentee that its products do not infringe the licensed patent, the patentee bears the burden of persuasion on the issue of infringement.  The Supreme Court based this ruling on three settled legal propositions: (1) a patentee ordinarily bears the burden of proving infringement; (2) the operation of the Declaratory Judgment Act is only procedural leaving substantive rights unchanged; and (3) the burden of proof is a substantive aspect of a claim.

By way of background, the United States Supreme Court granted cert. to hear argument on whether, in a declaratory judgment action brought by a licensee, the licensee has the burden to prove that its products do not infringe the patent, or whether the patentee must prove infringement.  Medtronic Inc. (licensee) licensed a patent from Mirowski Family Ventures LLC (patentee / licensor) relating to a device used to stop imminent heart failure.  Medtronic subsequently created new products and then filed a declaratory judgment action claiming that its new products do not infringe the patent.  The Federal Circuit Court of Appeals held that Medtronic bears the burden of proving that its products do not infringe Mirowski’s patent.  Medtronic argued that the U.S. Supreme Court should overturn the Federal Circuit’s ruling, which Medtronic argued is inconsistent with the Supreme Court’s decision in MedImmune, Inc. v. Genetech, Inc., 549 U.S. 118 (2007).  In MedImmune, the Supreme Court ruled that a patent licensee that believes that its products do not infringe the patent 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.”  According to Medtronic, the Federal Circuit’s opinion undercut the MedImmune decision because it caused a licensee to take on the significant burden and cost of a presumption that its products infringe.  In turn, Mirowski argued that this case is distinguishable from MedImmune because the licensing agreement at issue specifically required Medtronic to file a declaratory judgment action if a dispute arose.  Mirowski submitted that the Federal Circuit correctly decided that, based specifically on the contract terms between the parties, Medtronic should bear the burden of proving that it should be let out of the contract for the new products.

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Supreme Court Announces It Will Hear Four New Intellectual Property Cases

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C. ()

SupremeCourtImage_1The Supreme Court announced on Friday that it will hear four additional intellectual property cases this term, which makes nine total intellectual property cases this term so far. Brief summaries of the issues presented are provided below, along with links to more information about each of these cases from our friends at SCOTUSblog.

New Cases

Limelight Networks, Inc. v. Akamai Technologies, Inc. (No. 12-786)

The issue in this case is whether a party may be liable for infringement under either 35 U.S.C. § 271(a) or § 271(b) where two or more entities join together to perform all of the steps of a process claim.

Nautilus, Inc. v. Biosig Instruments, Inc. (No. 13-369)

Two issues are raised in this case. Does the Federal Circuit’s acceptance of ambiguous patent claims with multiple reasonable interpretations—so long as the ambiguity is not “insoluble” by a court—defeat the statutory requirement of particular and distinct patent claiming? And, does the presumption of validity dilute the requirement of particular and distinct patent claiming?

POM Wonderful v. Coca-Cola (No. 12-761)

The issue in this case is whether the court of appeals erred in holding that a private party cannot bring a Lanham Act claim challenging a product label regulated under the Food, Drug, and Cosmetic Act.

ABC, Inc. v. Aereo, Inc. (No. 13-461)

The issue in this case is whether a company “publicly performs” a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet.

Previous Cases

Medtronic v. Boston Scientific Corp. (No. 12-1128)

The issue in this case is is whether, in 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.

This case was argued on November 5, 2013.

Lexmark International v. Static Control Components (No. 12-873)

The issue in this case is whether the appropriate analytic framework for determining a party’s standing to maintain an action for false advertising under the Lanham Act is (1) the factors set forth in Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters (“AGC”), 459 U.S. 519, 537-45 (1983), as adopted by the Third, Fifth, Eighth, and Eleventh Circuits; (2) the categorical test, permitting suits only by an actual competitor, employed by the Seventh, Ninth, and Tenth Circuits; or (3) a version of the more expansive “reasonable interest” test, either as applied by the Sixth Circuit in this case or as applied by the Second Circuit in prior cases.

This case was argued on December 3, 2013.

Highmark Inc. v. Allcare Management Systems (No. 12-1163)

The issue in this case is whether a district court’s exceptional-case finding under 35 U.S.C. § 285 (in a patent infringement lawsuit), based on its judgment that a suit is objectively baseless, is entitled to deference.

This case will be argued on February 26, 2014.

Octane Fitness v. Icon Health and Fitness (No. 12-1184)

The issue in this case is whether the Federal Circuit’s promulgation of a rigid and exclusive two-part test for determining whether a case is “exceptional” under 35 U.S.C. § 285 improperly appropriate a district court’s discretionary authority to award attorney fees to prevailing accused infringers in contravention of statutory intent and this Court’s precedent, thereby raising the standard for accused infringers (but not patentees) to recoup fees and encouraging patent plaintiffs to bring spurious patent cases to cause competitive harm or coerce unwarranted settlements from defendants?

This case will be argued on February 26, 2014.

Alice Corporation Pty. Ltd. v. CLS Bank International (No. 13-298)

The issue in this case is whether claims to computer-implemented inventions—including claims to systems and machine, processes, and items of manufacture—are directed to patent-eligible subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court.

This case will be argued on March 31, 2014.