The key litigated issue before the Federal Circuit in Medtronic Inc. v. Boston Scientific Corp. was which party bore the burden of proving patent infringement. Specifically, whether the declaratory judgment plaintiff, Medtronic Inc., bore the burden of proving noninfringement or whether the patentee, Mirowski Family Ventures, LLC (MFV), bore the burden of proving infringement when a license between the two parties prevented the licensor, MFV, from counterclaiming for patent infringement.

Medtronic, a leading medical device manufacturer, sublicensed two reissue patents from MFV, US Reissue Patent No. RE38,119 (the RE'199 Patent) and No. RE39,897 (the RE'897 Patent). The patents were for a medical device designed to help congestive heart failure patients. After Medtronic challenged the validity of the RE'199 Patent, the parties entered into a litigation tolling agreement (LTA). The LTA obligated MFV to identify Medtronic products that it claimed infringed the patents Medtronic licensed. If Medtronic disagreed, it was permitted under the LTA to retain its license and seek a declaratory judgment action. In 2007, Medtronic filed a complaint giving rise to a declaratory judgment action. However, because Medtronic remained a licensee, MFV was prevented from filing a counterclaim for patent infringement.

After a bench trial, the district court held that MFV, as the patentee, bore the burden to prove infringement, citing Federal Circuit precedent stating that the patentee always bears the burden to show infringement.

MFV appealed the district court's grant of declaratory judgment finding no infringement.

On appeal, the Federal Circuit reversed the district court and remanded in its September 18, 2012 opinion, holding that a patent licensee seeking a declaratory judgment of noninfringement bears the burden of proving noninfringement where the licensor is prevented from alleging a patent infringement counterclaim because of the license's existence.

The Federal Circuit explained that the case required it to determine the proper allocation of the burden of proof for patent infringement, in light of the Supreme Court's 2007 decision in MedImmune, Inc. v. Genentech, Inc. In MedImmune, the Court found that declaratory judgment jurisdiction existed even though the plaintiff licensee continued to make royalty payments to the licensor under a license. The Court reasoned that a licensee should not be forced to stop making royalty payments and risk infringement liability to challenge the extent of the license.

The Federal Circuit noted that in a customary declaratory judgment case, the declaratory judgment defendant (the patentee) must assert a counterclaim for infringement to avoid risking loss of the claim. However, in this case, the license precluded an infringement counterclaim. The court noted that the LTA required MFV to identify the products it believed were covered by the contract. After MFV identified those products, Medtronic was required to either pay royalties on them or sue for a declaratory judgment.

Under these circumstances, the court stated that Medtronic was the party requesting relief from the court, in particular to relieve it from its royalty obligation by declaring Medtronic's products to be noninfringing. Because Medtronic sought to disturb the status quo ante, it bore the burden of presenting evidence that it was entitled to the relief it requested. The court noted that a contrary result would permit licensees seeking to avoid royalties for certain products under licenses to drag licensors into court and demand that they prove that their patents were being infringed.

Medtronic Inc. v. Bos. Scientific Corp., 2011-13113, -1372 (Fed. Cir. Sept. 18, 2012).