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|  Infinite Monkey Theorem Blog | |
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| Is anything ever final? MedImmune v. Genentech |
Location: Blogs IMT Blog |
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| By PatentMonkey on 1/10/2007 11:11 AM |
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The US Supreme Court recently issued their decision in a patent related case - Medimmune, Inc. v. Genentech, Inc.
(2007).
The Supreme Court's decision overruled the Federal Circuit opening the door for MedImmune to challenge the validity of Genentech's patents related to the use of cell cultures to
manufacture human antibodies.
Once settled patent license agreements are now more open to patent validity challenges - proving yet again that very few things related to patents are ever final.
By way of background: MedImmune entered into a patent license agreement with Genentech for use of the Cabilly I Patent (US 6331415) and also received a license to the still pending patent application which later became the Cabilly II Patent (US 6331415).
The Cabilly I patent expired in March of 2006. However, during the term of the agreement, Genentech advised MedImmune that their product Synagis® was covered by Cabilly II which issued in 2001 and was not set to expire until 2018. MedImmune believes they do not infringe Cabilly II and questions the patent's validity. MedImmune sought a declaratory judgement that the Cabilly II patent was invalid. The Federal Circuit affirmed the lower court's decision which determined there was no "case of actual controvery" becuase MedImmune continued to comply fully with the license terms [pay royalties].
The Supreme Court overruled the Federal Circuit's decision opening the door for MedImmune to challenge the vailidty of Cabilly II.
The MedImmune decision presents several interesting issues. The MedImmune decision makes a strong statement that the end game is valid and enforceable patents which can stand up to challenges. However, the decision provides an avenue for challenging validity even after parties have reach an agreement eliminating any finality to patent disputes settled through a license agreement. However, in cases like MedImmune, where the Cabilly II application was still pending when the agreement was signed Licensees should have an ability to question validty or infringement.
Will ...
* Patent holders demand higher royalties as a means to imbed the costs of future challenges.
* Licensees employ a strategy whereby they are more willing to enter into agreements so as to not delay product sales only to use the profits from sales for validty challenges.
* More companies become "open innovators" taking licenses knowing they still have the ability to challenge a patent later.
At a minimum, this ruling will very likely bring forth even more court cases and patent system contention in an area [executed license agreements] that was widely assumed as settled business.
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