Going Viral For The Sake Of Going Viral Not Such A Good Idea

Supreme Court Says That Licensing A Patent Doesn't Mean You Agree It's Valid

from the go-Supreme-Court-go dept

Tue, Jan 9th 2007 3:37pm — Mike Masnick

The Supreme Court has continued its ongoing effort to reshape patent law after the Federal Circuit Appeals Court had basically spent two decades twisting the state of patent law into the horrible mess it is today. The latest ruling is in the MedImmune/Genentech case looking at whether or not licensing a patent means you can't challenge its validity. Genentech (and plenty of other patent holders) claimed that once you licensed a patent, you were basically saying that you agreed to its validity, and could no longer challenge it. The lower court agreed. This is problematic in a lot of ways, especially with the rise in patent extortion lawsuits, where it's often cheaper to just license the patent rather than fight it. MedImmune licensed the patent early on, rather than waste money fighting it, but challenged it later on when the patent in question became much more important (and the license much more expensive). With an 8 to 1 decision, the Supreme Court sided with MedImmune, saying that licensing a patent shouldn't preclude challenging that patent's validity. Another small step in the right direction. Meanwhile, folks at MedImmune headquarters are having a good day. Not only did they win their Supreme Court case, but they received FDA approval for a new flu drug as well.

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8 Comments

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Anonymous Coward, 9 Jan 2007 @ 4:21pm

Wouldn't any good attorney write this into the licensing deal? IANAA, but....

"This licensing agreement does not imply or assume the validity of patent for the aforementioned technology nor does it preclude future actions regarding the validity of patent for the same."

Or vice versa...

And don't even think about using it. I've already filed the patent for the business process of establishing or not establishing future validity claims of patents by inserting specific language into the contract.
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Anonymous Coward, 9 Jan 2007 @ 4:54pm

So I guess now I can demand that the bully give me his wallet after I got bigger than him and beat him up after all these years of him taking my lunch money.
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Anonymous Coward, 9 Jan 2007 @ 4:54pm

Re:
Actually thats nothing like the scenario. its time to call it a day
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NewspeakIsUngood, 9 Jan 2007 @ 5:02pm

Which Judge
For anyone else who's interested, Justice Thomas provided the dissenting vote here:

http://www.miami.com/mld/miamiherald/business/national/16419025.htm
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Anonymous Coward, 9 Jan 2007 @ 5:38pm

This changes almost nothing. Now it will just become standard practice to have the licensee have to agree that a patent is valid in order to obtain a license.
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Joe Smith, 9 Jan 2007 @ 5:41pm

drafting
A properly drafted licence agreement should have dealt expressly with the question of whether or not the licencee had a right to challenge the patent and what would happen if someone else challenged the patent.

This case deals with the question of what the rights of the parties are in the absence of them expressly providing for these possibilities. As I recall from the transcript of the hearing the lawyer for Genetech gave a really stupid answer to an early question from one of the judges (the chief maybe) and the panel was on him like a pack of wolves.
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Anonymous Coward, 9 Jan 2007 @ 8:36pm

Re: drafting
If I recall, I believe there are some things you can't sign away in a contract.

For instance a contract is not valid that says you'll be a slave, or you'll kill yourself if you fail to meet a requirement.

Those stipulations are unenforceable, and can render a contract null and void. That is why most contracts have a statement saying basically, if any section is deemed unenforceable, the other sections still are.

So, I think what the Supreme Court was saying in effect was, even if you pay a license for a patent, you can't sign away your right to challenge the validity of the patent.
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astarre, 10 Jan 2007 @ 1:53pm

Anti-Patent Committee?
Not that I'm for further govt control/regulation, but why not set up a federal task force or office whose job is the review and challenge invalid/obvious patent claims? A small group of experts from a plethora of technical fields, not elected/appointed and therefore less likely to bow to "campaign contributions" and the like?

Just saying.
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