Medtronic, Inc. v. Mirowski Family Ventures, LLC

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Medtronic, Inc. v. Mirowski Family Ventures, LLC
Seal of the United States Supreme Court.svg
Argued November 5, 2013
Decided January 22, 2014
Full case nameMedtronic, Inc. v. Mirowski Family Ventures, LLC
Docket no. 12-1128
Citations571 U.S. 191 ( more )
134 S. Ct. 843; 187 L. Ed. 2d 703; 2014 U.S. LEXIS 788; 82 U.S.L.W. 4067; 109 U.S.P.Q.2d 1341
Argument Oral argument
Opinion announcement Opinion announcement
Case history
PriorMedtronic, Inc. v. Boston Scientific Corp., 777 F. Supp. 2d 750 (D. Del. 2011); vacated and remanded, 695 F.3d 1266 (Fed. Cir. 2012); cert.granted, 569 U.S. 993(2013).
SubsequentOn remand, Medtronic Inc. v. Boston Scientific Corp., 558 F. App'x 998 (Fed. Cir. 2014); cert. denied, 135 S. Ct. 364 (2014).
Holding
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.
Court membership
Chief Justice
John Roberts
Associate Justices
Antonin Scalia  · Anthony Kennedy
Clarence Thomas  · Ruth Bader Ginsburg
Stephen Breyer  · Samuel Alito
Sonia Sotomayor  · Elena Kagan
Case opinion
MajorityBreyer, joined by unanimous
Laws applied
28 U.S.C.   § 1338 (district court jurisdiction over patents), 28 U.S.C.   § 2201 (power to issue declaratory judgment)

Medtronic, Inc. v. Mirowski Family Ventures, LLC, 571 U.S. 191 (2014), is a case of the Supreme Court of the United States that deals with civil procedure, and specifically with the question of the burden of proof required in pursuing declaratory judgments.

Contents

Background

In 1991, Medtronic and Mirowski entered into an agreement permitting Medtronic to practice certain Mirowski patents in exchange for royalty payments. In 2007, the parties found themselves in the midst of an "infringement" dispute, and Mirowski gave Medtronic notice that it believed seven new Medtronic products violated various claims contained in two of its patents, [lower-alpha 1] which dealt with cardiac resynchronization therapy, [4] a pacemaker that is used to treat congestive heart failure. [5] Medtronic thought that its products did not infringe Mirowski's patents, either because the products fell outside the scope of the patent claims or because the patents were invalid.

Medtronic brought an action for declaratory judgment in the United States District Court for the District of Delaware, seeking a declaration that its products did not infringe Mirowski's patents and that the patents were invalid.

The courts below

The District Court recognized that Mirowski was the defendant in the action, but it held that Mirowski, "[a]s the part[y] asserting infringement," bore the burden of proving infringement. [6] After a bench trial, the court found that Mirowski had not proved infringement, either directly or under the doctrine of equivalents, and it therefore lost.

On appeal, the United States Court of Appeals for the Federal Circuit held that "when an infringement counterclaim by a patentee is foreclosed by the continued existence of a license, a licensee seeking a declaratory judgment of noninfringement and of no consequent liability under the license bears the burden of persuasion." [7] Therefore, Medtronic, as plaintiff, bore the burden of proof, and the District Court ruling was vacated and remanded.

Because of the importance of burdens of proof in patent litigation, the Supreme Court granted certiorari to hear the appeal.

At the Supreme Court

In a unanimous ruling, the Court reversed the Federal Circuit ruling. Justice Breyer held that, when a licensee seeks a declaratory judgment against a patentee to establish that there is no infringement, the burden of proving infringement remains with the patentee. He stated that "Simple legal logic, resting upon settled case law, strongly supports our conclusion." [8] The case law in question has held that:

  1. Following the traditional rule that the plaintiff has the burden of proof, the "burden of proving infringement generally rests upon the patent[-holder]" seeking to enforce the patent. [9]
  2. "The operation of the Declaratory Judgment Act [10] [is] only procedural," [11] leaving "substantive rights unchanged." [12]
  3. "The burden of proof is a substantive aspect of a claim." [13]

Breyer also noted that "practical considerations lead to the same conclusion":

To shift the burden depending upon the form of the action could create postlitigation uncertainty about the scope of the patent. Suppose the evidence is inconclusive, and an alleged infringer loses his declaratory judgment action because he failed to prove noninfringement. The alleged infringer, or others, might continue to engage in the same allegedly infringing behavior, leaving it to the patentee to bring an infringement action. If the burden shifts, the patentee might lose that action because, the evidence being inconclusive, he failed to prove infringement. So, both sides might lose as to infringement, leaving the infringement question undecided, creating uncertainty among the parties and others who seek to know just what products and processes they are free to use. [8]

Since the Declaratory Judgment Act does not "extend" the "jurisdiction" of the federal courts, [14] the action is properly characterized as one "arising under an Act of Congress relating to patents." [15] [16] It could therefore be raised in place of an infringement suit:

The relevant question concerns the nature of the threatened action in the absence of the declaratory judgment suit. Medtronic believes — and seeks to establish in this declaratory judgment suit — that it does not owe royalties because its products are noninfringing. If Medtronic were to act on that belief (by not paying royalties and not bringing a declaratory judgment action), Mirowski could terminate the license and bring an ordinary federal patent law action for infringement.... Consequently this declaratory judgment action, which avoids that threatened action, also "arises under" federal patent law.... [16]

Impact

Medtronic is a consequence of the Court's previous ruling in MedImmune, Inc. v. Genentech, Inc. , which cleared the way for declaratory judgments to be sought in patent cases. The question as to who bears the burden of proof in such proceedings was the matter at issue in the present case. [17] One commentator welcomed it, saying, "the straightforward, undiverted analysis of the burden of proof question would be perfect for the section of a civil procedure text on declaratory judgments." [18]

Other commentators pointed out that the case was a reminder that patentees should take great care when corresponding with its licensees, as the former must bear the burden of proving their assertions in any subsequent litigation. [19]

Notes

  1. United States Reissued Patent Nos. RE 38,119 [1] and RE 39,897, [2] both reissues of U.S. Patent No. 4,928,688 [3]

Related Research Articles

A declaratory judgment, also called a declaration, is the legal determination of a court that resolves legal uncertainty for the litigants. It is a form of legally binding preventive by which a party involved in an actual or possible legal matter can ask a court to conclusively rule on and affirm the rights, duties, or obligations of one or more parties in a civil dispute. The declaratory judgment is generally considered a statutory remedy and not an equitable remedy in the United States, and is thus not subject to equitable requirements, though there are analogies that can be found in the remedies granted by courts of equity. A declaratory judgment does not by itself order any action by a party, or imply damages or an injunction, although it may be accompanied by one or more other remedies.

<i>Chamberlain Group, Inc. v. Skylink Technologies, Inc.</i> American legal case concerning the DMCA

The Chamberlain Group, Inc. v. Skylink Technologies, Inc., 381 F.3d 1178 is a legal case heard by the United States Court of Appeals for the Federal Circuit concerning the anti-trafficking provision of the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 1201(a)(2), in the context of two competing universal garage door opener companies. It discusses the statutory structure and legislative history of the DMCA to help clarify the intent of the anti-circumvention provisions and decide who holds the burden of proof. It expresses that the statute creates a cause of action for liability and does not create a property right, and holds that as Chamberlain had alleged that Skylink was in violation of the anti-trafficking provision, it had the burden to prove and failed to show that access was unauthorized and its rights were infringed under the Copyright Act. As Chamberlain incorrectly argued that Skylink had the burden of proof and failed to prove their claim, the court upheld summary judgment in favor of Skylink.

In United States patent law, patent misuse is a patent holder's use of a patent to restrain trade beyond enforcing the exclusive rights that a lawfully obtained patent provides. If a court finds that a patent holder committed patent misuse, the court may rule that the patent holder has lost the right to enforce the patent. Patent misuse that restrains economic competition substantially can also violate United States antitrust law.

The exhaustion doctrine, also referred to as the first sale doctrine, is a U.S. common law patent doctrine that limits the extent to which patent holders can control an individual article of a patented product after a so-called authorized sale. Under the doctrine, once an authorized sale of a patented article occurs, the patent holder's exclusive rights to control the use and sale of that article are said to be "exhausted," and the purchaser is free to use or resell that article without further restraint from patent law. However, under the repair and reconstruction doctrine, the patent owner retains the right to exclude purchasers of the articles from making the patented invention anew, unless it is specifically authorized by the patentee to do so.

In United States patent law, inequitable conduct is a breach of the applicant's duty of candor and good faith during patent prosecution or similar proceedings by misrepresenting or omitting material information with the specific intent to deceive the United States Patent and Trademark Office. A claim of inequitable conduct is a defense to allegations of patent infringement. Even in an instance when a valid patent suffers infringement, a court ruling on an allegation of infringement may exercise its power of equitable discretion not to enforce the patent if the patentee has engaged in inequitable conduct.

<i>Mallinckrodt, Inc. v. Medipart, Inc.</i>

Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, is a decision of the United States Court of Appeals for the Federal Circuit, in which the court appeared to overrule or drastically limit many years of U.S. Supreme Court precedent affirming the patent exhaustion doctrine, for example in Bauer & Cie. v. O'Donnell.

Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008), is a case decided by the United States Supreme Court in which the Court reaffirmed the validity of the patent exhaustion doctrine. The decision made uncertain the continuing precedential value of a line of decisions in the Federal Circuit that had sought to limit Supreme Court exhaustion doctrine decisions to their facts and to require a so-called "rule of reason" analysis of all post-sale restrictions other than tie-ins and price fixes. In the course of restating the patent exhaustion doctrine, the Court held that it is triggered by, among other things, an authorized sale of a component when the only reasonable and intended use of the component is to engage the patent and the component substantially embodies the patented invention by embodying its essential features. The Court also overturned, in passing, that the exhaustion doctrine was limited to product claims and did not apply to method claims.

United States v. General Electric Co., 272 U.S. 476 (1926), is a decision of the United States Supreme Court holding that a patentee who has granted a single license to a competitor to manufacture the patented product may lawfully fix the price at which the licensee may sell the product.

A post-sale restraint, also termed a post-sale restriction, as those terms are used in United States patent law and antitrust law, is a limitation that operates after a sale of goods to a purchaser has occurred and purports to restrain, restrict, or limit the scope of the buyer's freedom to utilize, resell, or otherwise dispose of or take action regarding the sold goods. Such restraints have also been termed "equitable servitudes on chattels".

TiVo Inc. v. EchoStar Corp. is a case stretching from 2004 to 2011, which took place in the United States District Court for the Eastern District of Texas and the United States Court of Appeals for the Federal Circuit. TiVo Inc. sued EchoStar Corp. claiming patent infringement of a DVR technology. The issues addressed during litigation included patent infringement, wording of injunctions, infringing product redesign, contempt of court orders, and contempt sanctions. Ultimately, the court held that EchoStar Corp. had indeed infringed TiVo Inc's patent and was in contempt of court for noncompliance of an injunction. The parties reached a settlement wherein EchoStar Corp. paid TiVo Inc. a licensing fee. Further, the court replaced the established contempt test with a single step test. The simplified test makes it more difficult for patent holders to prove contempt as a result of repeat infringement.

Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488 (1942), is a patent misuse decision of the United States Supreme Court. It was the first case in which the Court expressly labeled as "misuse" the Motion Picture Patent/Carbice tie-in defense to a charge of patent infringement and created the present blanket remedy in infringement cases of unenforceability of the misused patent. The decision re-emphasized that misuse can be found without finding an antitrust violation.

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Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172 (1965), was a 1965 decision of the United States Supreme Court that held, for the first time, that enforcement of a fraudulently procured patent violated the antitrust laws and provided a basis for a claim of treble damages if it caused a substantial anticompetitive effect.

Princo Corp. v. ITC, 616 F.3d 1318 was a 2010 decision of the United States Court of Appeals for the Federal Circuit, that sought to narrow the defense of patent misuse to claims for patent infringement. Princo held that a party asserting the defense of patent misuse, absent a case of so-called per se misuse, must prove both "leveraging" of the patent being enforced against it and a substantial anticompetitive effect outside the legitimate scope of that patent right. In so ruling, the court emphasized that the misuse alleged must involve the patent in suit, not another patent.

Akamai Technologies, Inc. v. Limelight Networks, Inc., 797 F.3d 1020, is a 2015 en banc decision of the United States Court of Appeals for the Federal Circuit, on remand from a 2014 decision of the U.S. Supreme Court reversing a previous Federal Circuit decision in the case. This is the most recent in a string of decisions in the case that concern the proper legal standard for determining patent infringement liability when multiple actors are involved in carrying out the claimed infringement of a method patent and no single accused infringer has performed all of the steps. In the 2015 remand decision, the Federal Circuit expanded the scope of vicarious liability in such cases, holding that one actor could be held liable for the acts of another actor "when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance." In addition, the court held that where multiple "actors form a joint enterprise, all can be charged with the acts of the other[s], rendering each liable for the steps performed by the other[s] as if each is a single actor."

Impression Products, Inc. v. Lexmark International, Inc., 581 U.S. ___ (2017), is a decision of the Supreme Court of the United States on the exhaustion doctrine in patent law in which the Court held that after the sale of a patented item, the patent holder cannot sue for patent infringement relating to further use of that item, even when in violation of a contract with a customer or imported from outside the United States. The case concerned a patent infringement lawsuit brought by Lexmark against Impression Products, Inc., which bought used ink cartridges, refilled them, replaced a microchip on the cartridge to circumvent a digital rights management scheme, and then resold them. Lexmark argued that as they own several patents related to the ink cartridges, Impression Products was violating their patent rights. The U.S. Supreme Court, reversing a 2016 decision of the Federal Circuit, held that the exhaustion doctrine prevented Lexmark's patent infringement lawsuit, although Lexmark could enforce restrictions on use or resale of its contracts with direct purchasers under regular contract law. Besides printer and ink manufacturers, the decision of the case could affect the markets of high tech consumer goods and prescription drugs.

<i>National Lockwasher Co. v. George K. Garrett Co.</i>

National Lockwasher Co. v. George K. Garrett Co., 137 F.2d 255, is one of the earliest or the earliest federal court decision to hold that it is patent misuse for a patentee to require licensees not to use a competitive technology. Such provisions are known as "tie-outs."

The reverse doctrine of equivalents is a legal doctrine of United States patent law, according to which a device that appears to literally infringe a patent claim, by including elements or limitations that correspond to each element or limitation of the patent claim, nonetheless does not infringe the patent, because the accused device operates on a different principle. That is, "it performs the same or a similar function in a substantially different way." It has been said that "the purpose of the 'reverse' doctrine is to prevent unwarranted extension of the claims beyond a fair scope of the patentee's invention."

Blonder-Tongue Labs., Inc. v. University of Ill. Foundation, 402 U.S. 313 (1971), is a decision of the United States Supreme Court holding that a final judgment in an infringement suit against a first defendant that a patent is invalid bars the patentee from relitigating the same patent against other defendants. In so ruling, the Supreme Court overruled its 1936 decision in Triplett v. Lowell, which had required mutuality of estoppel to bar such preclusion, and held that the better view was to prevent relitigating if the plaintiff had had a full and fair opportunity to litigate the issue in question.

References

  1. "US RE38,119" (PDF). May 20, 2003.
  2. "US RE39,897" (PDF). October 23, 2007.
  3. USpatent 4928688,Mower, Morton M.,"Method and apparatus for treating hemodynamic disfunction",issued May 29, 1990
  4. "What Is a Cardiac Resynchronization Therapy Device?". Medtronic.
  5. "U.S. Supreme Court tosses out Medtronic pacemaker patent loss". Reuters. January 22, 2014.
  6. Medtronic, Inc. v. Boston Scientific Corp., 777F. Supp. 2d750 , 766(D. Del.2011).
  7. Medtronic, Inc. v. Boston Scientific Corp., 695F.3d1266 , 1274(Fed. Cir.2012).
  8. 1 2 S.Ct., III-A
  9. Imhaeuser v. Buerk, 101 U.S. 647 (1880).
  10. 28 U.S.C.   § 2201.
  11. Aetna Life Ins. Co. v. Haworth, 300 U.S. 227 (1937).
  12. Beacon Theatres, Inc. v. Westover , 359 U.S. 500 (1959).
  13. Raleigh v. Illinois Dept. of Revenue, 530 U.S. 15 (2000).
  14. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667 (1950).
  15. 28 U.S.C.   § 1338.
  16. 1 2 S.Ct., II
  17. Ronald Mann (November 8, 2013). "Argument analysis: Justices worry that Federal Circuit has thumb on the scale for patent-holders". SCOTUSblog.
  18. Ronald Mann (January 23, 2014). "Opinion analysis: Justices unimpressed with Federal Circuit's mastery of federal procedure curriculum". SCOTUSblog.
  19. "Supreme Court Delivers a Jolt to Patentees in Medtronic". Bracewell & Giuliani LLP. January 23, 2014.