Academic journal article Research-Technology Management

Supreme Court Says You Can License and Sue

Academic journal article Research-Technology Management

Supreme Court Says You Can License and Sue

Article excerpt

The U.S. Supreme Court has overturned precedent in a Jan. 9, 2007 ruling in the case of Medimmune vs. Genentech. The Court's ruling says that a licensee can sue to invalidate a licensed patent (and thus potentially eliminate or reduce the need to pay royalties). Prior to this ruling, the courts have generally held that, if you agreed to take a license, there was no controversy and therefore you had no standing to sue. If threatened with a patent, even a weak one, there has been a lot of pressure to license. This is because awareness of a patent and not licensing creates a vulnerability to triple damages.

I see four implications for technology management:

1. If you are paying royalties on a patent(s) you now believe to be invalid, you can sue to get a declaratory judgement invalidating the patent. You may also be able to enhance your chances by choosing a favorable court jurisdiction (venue) for the suit. All district courts are not equal in their precedents and attitudes toward patents and there may be a psychological edge in trying the case in your home location.

2. A suit allows a better forum for presenting invalidity arguments than the alternative of asking the patent office to reexamine the patent. …

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