Medical device industry arch-rivals Medtronic (NYSE:MDT) and Boston Scientific (NYSE:BSX) are heading to the Supreme Court today to hash out a long-running patent infringement battle that has raised questions about the nature of infringement law.
Medtronic filed the appeal, which the Justices in May agreed to hear, to determine who bears the burden of proof in a dispute brought by an alleged infringer against the patent holder, a question that has been the focus of the lawsuit for the past couple of years.
Medtronic has argued that Boston Scientific and its Guidant subsidiary must prove that Medtronic’s technologies infringe on their exclusively licensed patents, rather than asking Medtronic to prove that it’s products are not in violation. Boston Scientific has argued that it does not bear that burden, since the company didn’t file the lawsuit to begin with.
Since Medtronic brought the initial lawsuit while still under a licensing agreement for the CRT patents in question, it created a unique situation that raises questions about who is actually the plaintiff and who is the defendant in this case.
The lawsuit has taken may turns since its inception in 2003, including a note of support from the U.S. Solicitor General in favor of Medtronic, ultimately landing in the Supreme Court after lower courts bounced back and forth on the issue.
Delaware District Court Judge Susan Robinson ruled in April 2011 that the burden rested on the patentee, in this case Mirowski Family Ventures, which owns a pair of patents issued to CRM pioneer Dr. Morton Mower, credited with inventing the technology that ultimately became known as a cardiac resynchronization therapy device. Mower’s CRT helps the hearts left and right ventricles beat simultaneously, increasing the heart’s efficiency, and MFV exclusively licenses both patents to Guidant Corp, which Boston Scientific acquired 2006 for an eyebrow-raising $26 billion.
Medtronic in 1991 entered into a sublicense agreement for the patents with Eli Lilly (NYSE:LLY), which owned Guidant at the time. The agreement gave Medtronic leverage to challenge 1 of the patents, which the medical device company began doing in 2003. Over the course of several years Medtronic, Eli Lilly and MFV battled over the validity of 1 of the CRT patents and whether or not Medtronic’s devices infringed on the technology and in 2007 MFV handed Medtronic a list of technologies that it deemed in violation.
The case finally closed on a question over who was responsible for providing the burden of evidence – the patentee, MFV, or the defendant, Medtronic. Delaware District Court Judge Susan Robinson ruled in April 2011 that the burden rested on the patentee, and that MFV had not proved its case.
MFV and Boston Scientific appealed that decision, arguing that Medtronic bore the burden of proof since it originally filed the lawsuit. Last fall a panel of Federal Circuit Judges agreed, concluding that the lower court had mistakenly but the burden of proof on MFV when Medtronic had "disturbed the status quo" with its lawsuit.