Supreme Court Overturns CAFC Yet Again; Explains Basic Patent Law To The 'Patent' Court

from the this-is-becoming-a-pandemic dept

Over the last few years, the Supreme Court has taken a renewed interest in patent law. After years of ignoring the issue, and leaving it in the hands of the appeals court for the federal circuit (CAFC -- which was established, in part, to hear all patent appeals), the Supreme Court has taken to regularly smacking down the CAFC, and telling it that it doesn't understand basic patent law. It's now happened again. The court has reversed yet another CAFC decision, this time concerning who has the burden of proving infringement. This was as case involved Medtronic filing for a declaratory judgment that it did not infringe on someone else's patent (Medtronic, it should be noted, has a history of being quite a patent bully itself at times). A district court had noted that the patent holder, in this case the Mirowski Family Ventures, has the burden of proof on showing infringement. CAFC said that since Medtronic brought the declaratory judgment suit that it was actually Medtronic's burden to prove that it did not infringe. The Supreme Court has reversed in an easy unanimous decision.
Simple legal logic, resting upon settled case law, strongly supports our conclusion. It is well established that the burden of proving infringement generally rests upon the patentee....
The ruling notes that a declaratory judgment filing is just a procedural issue, which doesn't change the basic substantive rights. Thus, it should be viewed as if it were the patent holder bringing the claim, leaving the burden on them. The court also points out that it would be kind of ridiculous to put the burden first on the party filing for declaratory judgment that it doesn't infringe if there's no proof that there's infringement in the first place. It would leave the plaintiff trying to prove a negative in the dark...
A patent holder is in a better position than an alleged infringer to know, and to be able to point out, just where, how, and why a product (or process) infringes a claim of that patent. Until he does so, however, the alleged infringer may have to work in the dark, seeking, in his declaratory judgment complaint, to negate every conceivable infringement theory.
Perhaps most interesting is, at the very end of the decision, Justice Breyer clearly notes that the purpose of the patent system is to benefit the public interest -- and that requires a "well-functioning" patent system, rather than a broken down patent system. As it notes, "patent monopolies" need to be "kept within their legitimate scope."

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    Koby (profile), 23 Jan 2014 @ 6:35am


    Here, however, there was a twist. A licensee was the party that filed for a Declaratory Judgment, placing the licensor in a difficult situation since it apparently was not permitted to file a counterclaim alleging infringement since the license remained in effect (but the licensor was receiving no royalties since the licensee decided to pay them into an escrow account). In the panel's view this created a situation where an exception to the general rule seemed both appropriate and fair. It is not that they did not know the law (they did), but an exception was believed to be the better approach (much like Judge Leon in his recent NSA decision).

    The licensor also put the licensee in a difficult situation by approaching them and claiming they infringed on their patents, so get a license or else. The licensee had a choice: either pay for the license or else risk a lawsuit. This was actually not such a difficult position for the licensor because their contract allowed the licensee to put the money into a escrow account and challenge the action in court. So the licensee was just following the contract! So who wins? The established case law STILL stands, that the patent holder has the burden of proof that there is infringement.

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