Medtronic, Inc. v. Mirowski Family Ventures, LLC.
134 S. Ct. 843
SCOTUS
2014

Background

  • Medtronic (licensee) and Mirowski (patentee) had a license under which Medtronic paid royalties and could challenge infringement by filing a declaratory judgment action while depositing disputed royalties into escrow.
  • Mirowski accused several new Medtronic products of infringing its patents; Medtronic filed a declaratory judgment seeking noninfringement and invalidity and placed royalties in escrow.
  • The District Court found Mirowski (as patentee/defendant) bore the burden to prove infringement and ruled for Medtronic.
  • The Federal Circuit reversed, holding that when a patentee is a declaratory-judgment defendant and barred from counterclaiming by a license, the licensee-plaintiff must prove noninfringement (i.e., burden shifts to licensee).
  • The Supreme Court granted certiorari to decide whether the burden of persuasion shifts in such licensee-initiated declaratory judgment actions and whether the Federal Circuit had jurisdiction.

Issues

Issue Plaintiff's Argument (Medtronic) Defendant's Argument (Mirowski) Held
Whether the federal courts have subject-matter jurisdiction over the declaratory judgment action The DJ action arises under patent law because Medtronic faces a real threat: if it stops paying royalties Mirowski could terminate the license and sue for patent infringement. The threatened action would be a contract/damages dispute, not a federal patent action, so federal jurisdiction is lacking. Jurisdiction exists: the threatened coercive suit (termination + infringement suit) would arise under federal patent law, so the DJ action "arises under" patent law.
Whether the patentee (as DJ defendant) or the licensee (DJ plaintiff) bears the burden of persuasion on infringement Medtronic: burden should remain on patentee because burden allocation is substantive and DJ Act is procedural; shifting would undermine the DJ Act’s purpose and create uncertainty. Mirowski/Federal Circuit: where a license prevents the patentee from counterclaiming, the burden should shift to the licensee who seeks a declaration of noninfringement. Held for Medtronic: the patentee retains the burden to prove infringement in a licensee’s DJ suit; burden does not shift.
Whether settled rules (Schaffer and related principles) compel burden-shifting in DJ context Medtronic: Schaffer’s default rule does not control here; Schaffer was not a DJ case and permits exceptions; burden allocation is substantive and preserved. Mirowski: relied on Schaffer’s language about plaintiffs bearing the burden and argued procedural posture should determine burden. Court: Schaffer does not support burden-shifting; DJ suits like this are an exception and preserve the ordinary substantive burden on the patentee.
Practical consequences of burden assignment (policy) Medtronic: keeping burden on patentee prevents post-litigation uncertainty, avoids forcing licensees to disprove every theory, and preserves the DJ Act’s amelioration of the ‘‘abandon-or-risk’’ dilemma. Mirowski: shifting burden protects patent owners and prevents licensees from forcing full-scale infringement litigation. Court: public and patent-system interests do not justify changing ordinary burden; preserving patentee’s burden better serves certainty and purposes of DJ relief.

Key Cases Cited

  • Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667 (procedural limits of Declaratory Judgment Act)
  • Public Serv. Comm’n of Utah v. Wycoff Co., 344 U.S. 237 (character of threatened action in DJ jurisdiction analysis)
  • Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1 (assessing whether threatened coercive action presents a federal question)
  • Christianson v. Colt Industries Operating Corp., 486 U.S. 800 (federal patent law creates the cause of action for infringement)
  • Aetna Life Ins. Co. v. Haworth, 300 U.S. 227 (Declaratory Judgment Act is procedural)
  • Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (procedural nature of DJ Act leaves substantive rights unchanged)
  • MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (licensee’s ability to bring DJ action when threatened with suit despite continuing royalty payments)
  • Schaffer v. Weast, 546 U.S. 49 (ordinary default rule on plaintiffs’ burden; not dispositive in DJ context)
  • Raleigh v. Illinois Dept. of Revenue, 530 U.S. 15 (burden of proof as substantive law)
  • Imhaeuser v. Buerk, 101 U.S. 647 (patentee ordinarily bears burden to prove infringement)
  • Agawam Co. v. Jordan, 78 U.S. 583 (affirming patentee’s burden on infringement)
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