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MedImmune, Inc. v. Genentech, Inc.

Supreme Court of the United States

October 4, 2006, Argued ; January 9, 2007, Decided

No. 05-608

Opinion

 [1227]  [*120]  [**767]   Justice Scalia delivered the opinion of the Court.

LEdHN[1A][] [1A] We must decide whether Article III's limitation of federal courts' jurisdiction to "Cases" and "Controversies," reflected in the "actual controversy" requirement of the Declaratory Judgment Act, 28 U.S.C. § 2201(a), requires a patent licensee  [*121]  to terminate or be in breach of its license agreement before it can seek a declaratory judgment that the underlying patent is invalid, unenforceable, or not infringed.

LEdHN[2][] [2] Because the declaratory-judgment claims in this case were disposed of at the motion-to-dismiss stage, we take the following facts from the allegations in petitioner's amended complaint and the unopposed declarations that petitioner submitted in response to the motion to dismiss. Petitioner MedImmune, Inc., manufactures Synagis, a drug used to prevent respiratory tract disease in infants and young children. In 1997, petitioner entered into a patent license agreement with respondent Genentech, Inc. [**768]  (which acted on behalf of itself as patent [****6]  assignee and on behalf of the coassignee, respondent City of Hope). The license covered an existing patent relating to the production of "chimeric antibodies" and a then-pending patent application relating to "the coexpression of immunoglobulin chains in recombinant host cells." Petitioner agreed to pay royalties on sales of "Licensed Products," and respondents granted petitioner the right to make, use, and sell them. The agreement defined "Licensed Products" as a specified antibody, "the manufacture, use or sale of which . . . would, if not licensed under th[e] Agreement, infringe one or more claims of either or both of [the covered patents,] which have neither expired nor been held invalid by a court or other body of competent jurisdiction from which no appeal has been or may be taken." App. 399. The license agreement gave petitioner the right to terminate upon six months' written notice.

In December 2001, the "coexpression" application covered by the 1997 license agreement matured into the "Cabilly II" patent. Soon thereafter, respondent Genentech delivered petitioner a letter expressing its belief that Synagis was covered by the Cabilly II patent and its expectation that petitioner [****7]  would pay royalties beginning March 1, 2002. Petitioner did not think royalties were owing, believing that the  [*122]  Cabilly II patent was invalid and unenforceable,1 and that its claims were in any event not infringed by Synagis. Nevertheless, petitioner considered the letter to be a clear threat to enforce the Cabilly II patent, terminate the 1997 license agreement, and sue for patent infringement if petitioner did not make royalty payments as demanded. If respondents were to prevail in a patent infringement action, petitioner could be ordered to pay treble damages and attorney's fees, and could be enjoined  [***612] from selling Synagis, a product that has accounted for more than 80 percent of its revenue from sales since 1999. Unwilling to risk such serious consequences, petitioner paid the demanded royalties "under protest and with reservation of all of [its] rights." Id., at 426. This declaratory-judgment action followed.

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549 U.S. 118 *; 127 S. Ct. 764 **; 166 L. Ed. 2d 604 ***; 2007 U.S. LEXIS 1003 ****; 81 U.S.P.Q.2D (BNA) 1225; 75 U.S.L.W. 4034; 2007-1 Trade Cas. (CCH) P75,543; 20 Fla. L. Weekly Fed. S 27

MEDIMMUNE, INC., Petitioner v. GENENTECH, INC., et al.

Notice:  [****1] The LEXIS pagination of this document is subject to change pending release of the final published version.

Prior History: ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT.

MedImmune, Inc. v. Genentech, Inc., 427 F.3d 958, 2005 U.S. App. LEXIS 22370 (Fed. Cir., 2005)

Disposition: Reversed and remanded.

patent, declaratory judgment, infringed, invalid, royalties, licensee, license, license agreement, case or controversy, contract claim, injunction, contractual obligation, coercion, cases, patent infringement, royalty payment, counterclaim, affirmative defense, district court, federal court, pay royalties, declaratory-judgment, coercive, parties, declaratory judgment action, cause of action, challenging, actual controversy, hypothetical, patentees

Civil Procedure, Declaratory Judgments, Federal Declaratory Judgments, General Overview, Judgments, Constitutional Law, The Judiciary, Case or Controversy, Discretionary Jurisdiction, Patent Law, Jurisdiction & Review, Subject Matter Jurisdiction, Declaratory Judgments