Stephen G. Adrian | September 27, 2012
Medtronic v. Boston Scientific Corporation, Guidant Corporation and Mirowski Family Ventures
September 18, 2012
Panel: Lourie, Linn, Prost. Opinion by Linn.
This decision discusses who carries the burden of persuasion in the post-MedImmune world. This question arises as a consequence of the Supreme Court’s decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007). In MedImmune, the Supreme Court found declaratory judgment jurisdiction even though the declaratory judgment plaintiff-licensee continued to make royalty payments pursuant to a license. The Court reasoned that a licensee should not be forced to cease royalty payments and risk infringement liability before the licensee can challenge the extent of coverage of the license.
The district court entered judgment of non-infringement in favor of Medtronic and judgment of validity and enforceability in favor of Mirowski Family Ventures (MFV). MFV appeals the judgment of non-infringement and Medtronic cross appeals the district court’s claim construction. The CAFC vacates the district court ruling and remands.
In 1991, Medtronic entered into a sublicense agreement covering patent RE 38,119 (the RE’119) Patent with Eli Lilly & Co., Guidant’s predecessor-in-interest of the patents-in-suit. That agreement allowed Medtronic to challenge the RE’119 Patent’s validity, enforceability, and scope via a declaratory judgment action. In 2003, as required by the sublicense, Medtronic began paying royalties into escrow while challenging the validity of the RE’119 Patent. Ultimately the parties entered into a Litigation Tolling Agreement (“LTA”) that tolled litigation and obligated MFV to inform Medtronic of which Medtronic products MFV deemed were covered by the RE’119 Patent, or subsequent reissue patents claiming priority from the RE’119 Patent (here, RE 39,897), and subject to royalty payments. If Medtronic disagreed, the LTA gave Medtronic the right to retain its license and obligated Medtronic to seek a declaratory judgment of non-infringement in the United States District Court for the District of Delaware. In October and November of 2007, MFV identified several Medtronic products that MFV thought practiced its patents. Pursuant to the LTA, on December 17, 2007, Medtronic filed the complaint giving rise to this declaratory judgment action. Because Medtronic remained MFV’s licensee, MFV could not counterclaim for infringement of either patent. As sanctioned by MedImmune, the continued existence of a license precludes the very infringement counterclaim that normally would impose the burden of proving infringement on the patentee. Here, Medtronic is shielded from any liability for infringement by its license
Throughout the litigation, the parties disagreed over whether MFV, the patentee, bore the burden of proving infringement, or whether Medtronic, the declaratory judgment plaintiff, bore the burden of proving non-infringement. According to MFV, because Medtronic filed a complaint seeking a judgment that its products do not infringe MFV’s patents, Medtronic should have to prove that at least one limitation of each claim of MFV’s patents is not met by Medtronic’s products. Medtronic counters that, as the district court held, the burden of proving patent infringement always lies with the patentee; that burden never shifts to the accused infringer. Medtronic cites Under Sea Industries, 833 F.2d at 1557 (“The burden always is on the patentee to show infringement.”), Technology Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1327 (Fed. Cir. 2008) (burden never shifts to an accused infringer), and Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 1535 (Fed. Cir. 1991) (patentee must demonstrate every element of the claim), as support for its position. Medtronic’s expert report did provide reasons why it believed that its products did not infringe, while MFV’s expert report did not map the products in question with every limitation of the relevant claims.
Burden of Persuasion
In this case, the CAFC concludes that since Medtronic is the party seeking relief, Medtronic must bear the burden of proving it is entitled to such relief. A contrary result would allow licensees to use MedImmune’s shield as a sword—hauling licensors into court and forcing them to assert and prove what had already been resolved by license. Because the declaratory judgment plaintiff is the only party seeking the aid of the court in the circumstances presented here, that party must bear the burden of persuasion. Therefore, in the limited circumstance 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.
Medtronic contends that the district court based its refusal to find the patents invalid on an erroneous claim construction. Medtronic argues that the district court improperly restricted the asserted claims of the RE’119 patent to treating congestive heart failure based only on the specification’s disclosure of such treatment; nothing in the specification disclaims using the invention to treat other conditions. MFV argues that the patentee expressly defined his invention for use only in congestive heart failure.
The district court did nothing more than append the limitation “for the treatment of congestive heart failure,” onto the ends of the disputed claim terms. While the specification explains the use of the invention to treat congestive heart failure, it also discloses the invention’s value in treating other diseases. The district court erred by restricting the claimed invention to the treatment of congestive heart failure. The district court’s determination of no invalidity predicated on its improper claim construction is vacated.