“Reverse” Patent Declaratory Judgment Actions: A Proposed Solution for Medtronic

The United States Supreme Court is scheduled to hear arguments in Medtronic, Inc. v. Boston Scientific Corp. – the first patent case of the term – on November 5, 2013. The issue in Medtronic is whether the burden of proof in patent declaratory judgment actions should be on the patent owner to prove infringement or on the accused infringer to prove non-infringement. Ordinarily, the patent owner bears the burden of proving infringement and the declaratory posture of a suit does not shift that burden. In Medtronic, however, the Federal Circuit created an exception for “MedImmune-type” suits, meaning declaratory judgment actions where the plaintiff is a licensee in good standing. In those cases, the Federal Circuit reasoned, the burden should lie with the accused infringer because the patent owner is precluded from counterclaiming for infringement. This essay advances two arguments. First, the Federal Circuit and the parties claim that this exception is limited to MedImmune-type suits, but Medtronic\u27s reasoning sweeps more broadly. There are other types of declaratory judgment actions where the patent owner cannot assert an infringement counterclaim, for instance because the declaratory judgment plaintiff has not yet infringed, and under Medtronic the burden would shift in those cases too. Second, the Federal Circuit wrongly concluded that the patent owner in Medtronic could not file a counterclaim. While it’s true that the license precluded an infringement counterclaim, the Federal Circuit’s own precedent makes clear that the patent owner could have filed a “reverse” declaratory judgment action seeking a declaration of future infringement. Thus, the Federal Circuit’s rationalization for this exception was unjustified, and Medtronic should be reversed