Assertion of Indirect Infringement Does Not Shift Burden of Proof On Patent Exhaustion Defense

In granting defendant's motion for summary judgment on a patent exhaustion defense, the court rejected defendant's argument that plaintiff bore the burden of proving a lack of exhaustion with respect indirect infringement claims. "[Defendant] argues that a different standard applies for a claim of indirect infringement, rather than direct infringement. According to [defendant], when an authorized purchaser uses the patented item, no act of direct infringement occurs because patent exhaustion has placed that item beyond the reach of the patent. A claim of patent infringement requires a direct infringer, and [plaintiff] has the burden of establishing an underlying act of direct infringement. Therefore, [defendant] argues that [plaintiff] has the burden of proof to show that an unlicensed direct infringer exists. . . . [Defendant's] point is well-taken and consistent with the law of indirect infringement, which requires more than just the possibility of the existence of a direct infringer. However, in suits alleging both direct and indirect infringement of the same patent, this view would lead to the anomalous result of requiring both the defendant to prove a defense and the plaintiff to overcome the defense regardless of whether it is proven. The Court therefore finds that the burden of proof for the affirmative defense of patent exhaustion lies with the party asserting the defense, regardless of whether the claim asserts direct or indirect infringement."

JVC Kenwood Corporation v. ArcSoft, Inc., et. al., 2-12-cv-03662 (CACD July 17, 2013, Order) (Pfaelzer, J.).