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To Pay or Not to Pay: Supreme Court to Consider Whether Patent Licensee in Good Standing May Challenge Patent Validity

By Paul A. Ragusa and Samantha M. French
May 31, 2006

Should a patent licensee who fully complies with the terms of its license be precluded from bringing a declaratory judgment action against the patent owner in order to challenge the validity of the patent? On Feb. 21, 2006, the Supreme Court granted certiorari in MedImmune, Inc. v. Genentech, Inc., 126 S. Ct. 1329 (2006), to consider this precise question.

Background

A patent license is an arrangement where an owner agrees to forego at least a portion of its exclusionary rights in exchange for remuneration from the licensee. Importantly, the license is oftentimes regarded as a covenant not to sue, precluding the patentee from suing for infringement and simultaneously precluding the licensee from suing for invalidity of the patent.

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