U.S. Supreme Court Facilitates Ability To Challenge Patent Validity

On January 9, 2007, the U.S. Supreme Court reversed the Federal Circuit’s ruling requiring a patent licensee to terminate or be in breach of its license in order to seek a declaratory judgment that the licensed patent is invalid, unenforceable, or not infringed by the licensee. MedImmune, Inc. v. Genentech, Inc. et al., 05-608, slip. op. (January 9, 2007). Justice Antonin Scalia delivered the 8-1 majority opinion in this case, and Justice Clarence Thomas rendered the sole dissenting opinion. The broadened ability of a licensee to benefit from a patent’s exclusivity and simultaneously challenge its validity is expected to disfavor patent owners in licensing negotiations. Furthermore, this decision opens the door wider for recipients of "mere offers to license" to request a declaratory judgment of invalidity. Moreover, the pharmaceutical industry may well feel the immediate impact of this decision by permitting more patent challenges by generic drug companies.