close

For more than four decades, Fenwick & West LLP has helped some of the world’s most recognized companies become, and remain, market leaders. From emerging enterprises to large public corporations, our clients are leaders in the technology, life sciences and cleantech sectors and are fundamentally changing the world through rapid innovation.  MORE >

Fenwick & West was founded in 1972 in the heart of Silicon Valley—before “Silicon Valley” existed—by four visionary lawyers who left a top-tier New York law firm to pursue their shared belief that technology would revolutionize the business world and to pioneer the legal work for those technological innovations. In order to be most effective, they decided they needed to move to a location close to primary research and technology development. These four attorneys opened their first office in downtown Palo Alto, and Fenwick became one of the first technology law firms in the world.  MORE >

From our founding in 1972, Fenwick has been committed to promoting diversity and inclusion both within our firm and throughout the legal profession. For almost four decades, the firm has actively promoted an open and inclusive work environment and committed significant resources towards improving our diversity efforts at every level.  MORE >

At Fenwick, we are proud of our commitment to the community and to our culture of making a difference in the lives of individuals and organizations in the communities where we live and work. We recognize that providing legal services is not only an essential part of our professional responsibility, but also an excellent opportunity for our attorneys to gain valuable practical experience, learn new areas of the law and contribute to the community.  MORE >

Year after year, Fenwick & West is honored for excellence in the legal profession. Many of our attorneys are recognized as leaders in their respective fields, and our Corporate, Tax, Litigation and Intellectual Property Practice Groups consistently receive top national and international rankings, including:

  • Named Technology Group of the Year by Law360
  • Ranked #1 in the Americas for number of technology deals in 2015 by Mergermarket
  • Nearly 20 percent of Fenwick partners are ranked by Chambers
  • Consistently ranked among the top 10 law firms in the U.S. for diversity
  • Recognized as having top mentoring and pro bono programs by Euromoney

MORE >

We take sustainability very seriously at Fenwick. Like many of our clients, we are adopting policies that reduce consumption and waste, and improve efficiency. By using technologies developed by a number of our cleantech clients, we are at the forefront of implementing sustainable policies and practices that minimize environmental impact. In fact, Fenwick has earned recognition in several areas as one of the top US law firms for implementing sustainable business practices.  MORE >

At Fenwick, we have a passion for excellence and innovation that mirrors our client base. Our firm is making revolutionary changes to the practice of law through substantial investments in proprietary technology tools and processes—allowing us to deliver best-in-class legal services more effectively.   MORE >

Mountain View Office
Silicon Valley Center
801 California Street
Mountain View, CA 94041
650.988.8500

San Francisco Office
555 California Street
13th Floor
San Francisco, CA 94104
415.875.2300

Seattle Office
1191 Second Avenue
10th Floor
Seattle, WA 98101
206.389.4510

New York Office
1211 Avenue of the Americas
32nd Floor
New York, NY 10036
212.921.2001

Shanghai Office
Unit 908, 9/F, Kerry Parkside Office
No. 1155 Fang Dian Road
Pudong New Area, Shanghai 201204
P.R. China
+86 21 8017 1200


Litigation Alert: Supreme Court Knocks Down Federal Circuit Rule and Allows Licensees to Challenge a Licensed Patent

Yesterday, the Supreme Court ruled in MedImmune v. Genentech that a patent licensee does not need to breach its license agreement before seeking a declaratory judgment in federal court that the underlying patent is invalid, unenforceable, or not infringed. This 8-1 decision reversed the Federal Circuit and established a new rule. This rule reduces patentees' leverage over existing licensees who have not admitted the validity, enforceability or infringement of the licensed patents, or otherwise waived their right to bring such challenges. It also emphasizes the importance of such terms in future licensing agreements.

In this case, Genentech asserted that a respiratory drug product from MedImmune infringed on its patent. MedImmune ultimately agreed to take a license from Genentech, although it denied liability. Moreover, MedImmune continued to pay royalties pursuant to its license agreement despite later filing a declaratory judgment action arguing that Genentech was not entitled to royalties because the asserted patent was invalid, unenforceable, or not infringed. Genentech moved to dismiss the lawsuit for lack of subject matter jurisdiction.

The issue decided by the Supreme Court was whether there was an "actual controversy" in light of the fact that MedImmune was a licensee in good standing with Genentech. Constitutionally, federal courts only have jurisdiction where there is an actual controversy, and cannot issue advisory opinions. In prior cases with similar facts, the Federal Circuit had found no controversy existed because a licensee in good standing cannot have any reasonable apprehension of being sued for infringement by the patentee. See, e.g., Gen-Probe, Inc. v. Vysis, Inc., 359 F. 3d 1376, 1381 (2004).

The Supreme Court overturned these cases. Justice Scalia, who has authored several of the Court's major decisions on justiciability, wrote for the majority. He emphasized that the actual controversy is the contractual dispute regarding MedImmune's obligations under the licensing agreement. MedImmune argued that it owed no royalties under the license agreement unless the underlying patent was valid and covered MedImmune's drug. While MedImmune had contractually agreed to pay the royalties regardless of the patent's validity, the Court stated that agreeing to pay a royalty "until a patent claim has been held invalid by a competent body" does not prevent a licensee from questioning the patent's validity. The Court also found that MedImmune's amended complaint sufficiently disputed that the patent covered the respiratory drug. Therefore, even though Genentech could not sue MedImmune for infringement while the license was in place, there was a sufficient controversy over whether MedImmune had to pay royalties.

The Court further decided that MedImmune did not first need to breach the license (which would give rise to a Genentech claim for damages or injunctive relief) before seeking declaratory relief about the parties' rights and duties under the license. In Altwater v. Freeman, 319 U.S. 359 (1943), the Court allowed patent licensees who had paid royalties "under protest," to seek a declaratory judgment about the patent's validity. Signing a license agreement under protest creates a controversy "where payment of a claim is demanded as of right and where payment is made, but where the involuntary or coercive nature of the exaction preserves the right to recover the sums paid or to challenge the legality of the claim." The Federal Circuit had distinguished Altwater as only applicable where the "involuntary or coercive nature" arises from an injunction or governmental compulsion. The Supreme Court, however, stated that Altwater's facts did not require such a narrow rule. "The rule that a plaintiff must destroy a large building, bet the farm, or (as here) risk treble damages and the loss of 80 percent of its business, before seeking a declaration of its actively contested legal rights finds no support" in the Constitution's jurisdictional requirements for federal courts.

The opinion is at http://www.supremecourtus.gov/opinions/06pdf/05-608.pdf.


For further information, please contact:

Charlene M. Morrow, Litigation Partner
cmorrow@fenwick.com, 650.335.7155

Heather H. Mewes, Litigation Partner
hmewes@fenwick.com, 415.875.2302

Liwen A. Mah, Litigation Associate
lmah@fenwick.com, 415.875.2336

This update is intended by Fenwick & West LLP to summarize recent developments in the law. It is not intended, and should not be regarded, as legal advice. Readers who have particular questions about these issues should seek advice of counsel.

© 2007 Fenwick & West LLP. All Rights Reserved.