US Supreme Court Rules Patent Licensees May Continue License and Challenge Licensed Patents at Same Time

IP Client Alert: US Supreme Court Rules Patent Licensees May Continue License and Challenge Licensed Patents at Same Time

1/17/2007
By Hal Milton & Patrick Anderson The US Supreme Court, in Medimmune Inc. v. Genentech Inc., has held that a patent licensee can challenge the scope and validity of a patent in a declaratory judgment action without first breaching or terminating the license agreement. More specifically, the licensee may continue to make its royalty payments, shielding it from an infringement lawsuit, while it seeks a judgment that the licensed patent is either invalid or is not infringed by the licensee’s product. Prior to this holding, a licensee was required to commit “material breach?, e.g. by ceasing to pay royalties, in order to establish a case or controversy necessary to bring a declaratory judgment action. This was an obvious risk to the licensee because...
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