Medimmune: New Rules for Patent Licenses?

Medimmune's Synagis' drug accounted for 80% of its sales revenue. Genentech claimed that a patent license to Medimmune under Genentech's Cabilly II patent entitled it to royalties on those sales. Medimmune considered the patent invalid, but did not want to repudiate the license and risk an injunction, treble damages, and attorneys' fees and so paid royalties on sales of the SYNAGIS drug 'under protest.' Was there an 'actual controversy' between Medimmune and Genen- tech to provide jurisdictional basis for a declaratory judgment action or the issues of patent infringement and validity? 'No,' held the Federal Circuit, on the basis of
its earlier Gen-Probe decision, because the license protected Medimmune from the reasonable apprehension of a lawsuit. Medimmune, Inc. v. Genentech, Inc., 427 F.3d 958, 964, 965 (Fed. Cir. 2005). The Supreme Court, however, reversed, holding that Medimmune did not have to 'bet the farm' by repudiating the license in order to provide the jurisdictional basis for a federal declaratory judgment action. Medimmune, Inc. v. Genentech, Inc., 127 S. Ct. 764 (2007).