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Supreme Court to Decide Standing Issue
On Feb. 21, 2006, the Supreme Court granted certiorari to review MedImmune, Inc. v. Genentech, 427 F.3d 958 (Fed. Cir. 2005). The question presented is: '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?' Whether the Court affirms or reverses the Federal Circuit, which answered in the affirmative, undoubtedly will affect the balance of power between patentees and their licensees and, perhaps, the willingness of licensors to grant licenses.
Background
The Declaratory Judgment Act (the 'Act') provides: 'In a case of actual controversy within its jurisdiction … any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.' 28 U.S.C. '2201(a). The limitation of the Act to 'case[s] of actual controversy' arises from Article III of the U.S. Constitution. Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239 (1937).
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