December 17, 2020 Practice Points

Burden Shifting in Process Patent Cases

When defendants don’t comply with discovery, a rarely invoked exception to the burden of proof on infringement can be a potent weapon.

By Lisa Phillips and Matthew Benner

One of the first rules of patent litigation is that the patentee has the burden of proving infringement. Except that’s not always true. For over three decades, 35 U.S.C. § 295 has allowed a process patentee to reverse the burden—an exception the Federal Circuit has characterized as a “potent weapon to use against a non-cooperative defendant.” Nutrinova Nutrition Specialties & Food Ingredients GmbH v. Int’l Trade Comm’n, 224 F.3d 1356, 1360 (Fed. Cir. 2000).

But this potent weapon is rarely wielded. One reason is because section 295’s requirements aren’t easily established. First, the district court must find a “substantial likelihood” that an accused product was made by a patented process. 35 U.S.C. § 295(1). Second, the court must find that the patentee “made a reasonable effort to determine the process actually used” to make the product “and was unable to [do] so.” 35 U.S.C. § 295(2). If the patentee establishes both conditions, the burden shifts to the alleged infringer to disprove infringement. 35 U.S.C. § 295; Nutrinova, 224 F.3d at 1359.

Because only a handful of cases have applied section 295, litigants have turned to the legislative history to help understand the statute’s requirements. See, e.g., Aventis Pharm., Inc. v. Barr Labs., Inc., 411 F. Supp. 2d 490, 510 (D.N.J. 2006). Fortunately, Congress provided some helpful guidance. For instance, the Senate Committee on the Judiciary explained that a patentee must establish “substantial likelihood” using the available evidence, such as chemical traces, physical marks, or sale prices that rule out more expensive production methods. S. REP. 100-83. And to show a “reasonable effort,” a patentee must use the available discovery procedures, including seeking information from manufacturers outside of the United States. See id. (indicating section 295 “would be inapplicable” if a defendant used the patented process in the United States, where “the discovery provisions of the Federal Rules” and “the equitable powers of Federal courts should be sufficient”); accord H. REP. 100-60 at 16.

Additionally, although Federal Circuit guidance on whether to shift the burden under particular circumstances is limited, a few district court decisions include detailed discussions. For example, several cases illustrate that expert testimony to establish the “substantial likelihood” prong may not be speculative, but it needn’t be uncontradicted either. Compare Aventis, 411 F. Supp. 2d at 511 (finding insufficient expert’s opinion that supplier’s use of patented process was “possible”) with Syngenta Crop Protection, LLC v. Willowood, LLC, No. 1:15-cv-274, 2017 WL 1133378, at *8 (M.D.N.C. Mar. 24, 2017) (finding “substantial likelihood” based on expert opinion that relied on laboratory testing, admissions, and commercial reasonableness, despite supplier’s sworn denials), rev’d in part on other grounds, 944 F.3d 1344 (Fed. Cir. 2019). And for the “reasonable effort” requirement, other cases show that courts evaluate whether the patentee “followed all of the avenues of discovery,” including “written discovery requests, facility inspections, first-hand observation of the process, independent testing of process samples, the use of experts, and depositions of [the defendant’s] officials.” LG Display Co., Ltd. v. AU Optronics Corp., 709 F. Supp. 2d 311, 336 (D. Del. 2010) (quoting, with alteration in original, Kemin Foods, L.C. v. Pigmentos Vegetales Del Centro S.A. de C.V., No. 4:02-cv-40327, Docket Item 201-2 at 32 (S.D. Iowa Aug. 27, 2004)).

Of course, despite the available guidance, the case law on section 295 is likely to leave many questions and circumstances unaddressed for a long time to come. So the statute’s potent but rarely invoked burden-shifting mechanism—which courts have cited in only 47 Westlaw-reported decisions after 32 years on the books—may be fertile ground for new and creative arguments.

Lisa Phillips and Matt Benner are with Fisch Sigler LLP in Washington, D.C.

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