The MedImmune US Supreme Court decision and European implications

Every once in a while this blog pays attention to patent cases outside Europe, if there is an impact for Europe and European patent pratise.

Surely this is the case for the decision by the US Supreme in MedImmune, Inc. v. Genentech, Inc., No. 05-608, U.S. (2007) (Scalia, J.). The issues at stake is whether a patent can be challenged by a licensee even after taking a license under that same license. The question is whether certain US law provisions require a patent licensee to terminate or be in breach of its licenseagreement before it can seek a declaratory judgment that the underlying patent is invalid, unenforceable, or not infringed.

Many jurisdictions in Europe, among which Germany, take the view that if and someone takes a license under a patent he cannot have it both ways: buying peace and freedom from suit under the patent he takes a license under and at the same time challenge the validity. In Europe, a clause in a license agreement outright forbidding the licensee to challenge the validity is a no-go under current competition law. However, challenging the patent by the licensee, even after taking a license, gives the licensor the right to terminate the license. By allowing this termination practise by German courts, the practical result is that no licensee who has "bought patent peace" will be able to effectively challenge the patent after taking the license. To me this seems much like the situation under the "old" US law, as developped by the Court of Appeal for the Federal Circuit ("CAFC"), the Federal appeals court for patents in the US. It also gives rise to the question how effective the anti competion porvision is that a no-challenge clause is illegal under EU competition law if practically the licensor can achieve this result by simply terminating the license agreement after the licensee has taken up the gauntlets against the licensor.

Interesting is Prof Hal Wegner's comments and summary on this recent decision, as can be seen in his post, as can be found on this blog under "US Patent Law Updates by Hal Wegner" (on the right side of this blog under "IP Presentations").

See also:
Lynn E. Eccleston, "MedImmune: The Practical Implications"