Patentee bears the burden of proving infringement in a declaratory judgment action even when a license agreement between the parties forecloses the patentee from asserting an infringement counterclaim

Supreme Court "hold[s] 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" and thus "reverse[s] the Federal Circuit's determination to the contrary."Slip op. at 1. The Fed. Cir. incorrectly shifted the burden to the plaintiff to prove noninfringement in declaratory judgment actions where an existing license prevents the patentee from asserting infringement.--more-->

Medtronic, Inc. v. Mirowski Family Ventures, LLC, 571 U.S. ___ (Jan. 22, 2014) (BREYER) (3 of 5 stars)

In addition to precedent placing the burden of proof on patentees, the Court also relied on practical considerations: (i)shifting the burden based on the form of the action creates post-litigation uncertainty about the scope of the patent; (ii) the burden shifting also allows for the re-litigation of infringement in a later suit brought by the patentee because that suit would not be precluded given the differing burden of persuasion; and (iii) shifting the burden in a declaratory judgment case is difficult to reconcile with the purpose of the Declaratory Judgment Act. The Supreme Court further rejected various arguments advanced in support of the Fed. Cir's ruling.

As part of the opinion, the Court ruled that the Fed. Cir. had jurisdiction because the "hypothetically threatened action" giving rise to the declaratory judgment is an action arising under the patent laws: "The relevant question concerns the nature of the threatened action in the absence of the declaratory judgment suit." Id. at 5.