A declaratory judgment is a binding judgment from a court defining the legal relationship between parties and their rights in a matter before the court. When there is uncertainty as to the legal obligations or rights between two parties, a declaratory judgment offers an immediate means to resolve this uncertainty.
Should patent licensees be required to violate the terms of a patent licensing agreement, and therefore risk a willful patent infringement suit by the patent owner, in order to challenge the validity of the patent in a court of law?
A declaratory judgment suit is one in which the plaintiff’s requested relief from the court is a statement of the parties’ rights. In a declaratory judgment action, an “actual controversy” must exist between the parties in order for a court to declare the rights and legal relations of the interested parties. MedImmune v. Genentech asks the Supreme Court to consider what defines an “actual controversy” as applied to suits challenging the validity of patents. Specifically, the Court will decide whether it is necessary for a patent licensee to breach the terms of a patent in order to bring suit against the patent owner. The Court’s decision in this case has the potential to shift the balance of power between patent holders and licensees.
Does Article III’s grant of jurisdiction of "all Cases . . . arising under . . . the Laws of the United States," implemented in the "actual controversy" requirement of the Declaratory Judgment Act, 28 U.S.C. § 2201(a), require a patent licensee to refuse to pay royalties and commit material breach of the license agreement before suing to declare the patent invalid, unenforceable or not infringed?
MedImmune licensed a patent owned by Genentech called Cabilly I (United States Patent No. 4,816,567), which involved technology relating to the use of cell cultures to manufacture human antibodies.
