August 22, 2006

A pharmaceutical patent licensee in good standing cannot seek a declaration that the licensed patent is invalid or unenforceable, according to a Jenner & Block brief recently filed in the U.S. Supreme Court on behalf of a non-profit biomedical research and treatment institution.

The Firm’s client, California-based City of Hope, collaborated with Genentech, Inc. in the 1980s to develop techniques now used to produce life-saving therapeutic antibodies.  After years of litigation with a third party who claimed rights to the techniques, City of Hope and Genentech obtained a patent which they in turn licensed to MedImmune, Inc., a biotechnology company. 

Under the terms of that license, MedImmune pays royalties in exchange for immunity from being sued for infringement of the patent.  However, in 2003 MedImmune filed a lawsuit in California district court seeking to escape from its royalty obligations under the license by arguing that the underlying patent is invalid and unenforceable.  At the same time, MedImmune continues to pay royalties to Genentech and City of Hope to keep the license as a shield against an infringement suit and lock in the royalty rate if the attack on the patent fails.

According to the Firm’s brief, MedImmune’s lawsuit cannot proceed because the company’s continued maintenance of the license prevents a “ripe” or actionable controversy from arising. Under Article III of the Constitution, a federal court may only hear actual “cases and controversies,” which generally arise “only after one party has actually invaded the other’s legally protected interests” or such invasion is imminent, the brief explains.  Therefore, the lawsuit would be appropriate only if MedImmune breached or repudiated its license, which is “a contingency that may never occur, since MedImmune’s avowed aim is to maintain the license as a shield against the suit,” according to the Firm’s brief.

The Firm also argues that under a longstanding rule of equity, MedImmune may not keep the benefits of its license and at the same time attack the validity of the underlying patent in order to escape its license obligations.  “This kind of one-sided suit is inherently inequitable,” the brief explains, and the longstanding rule of equity should not be “abandoned now to allow MedImmune to bring a virtually unprecedented lawsuit.” 

The case is MedImmune, Inc. v. Genentech, Inc. and City of Hope, No. 05-608.  The High Court will hear oral arguments on October 4, 2006.

The Jenner & Block legal team representing City of Hope on this matter includes Partners Paul M. Smith, William M. Hohengarten and Ian Heath Gershengorn, and Associate Scott B. Wilkens.

Please click here to view all of the legal briefs and others documents in the case.

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