Patent Licensees Can Challenge A Patent’s Validity While Paying Royalties to the Licensor

The Supreme Court’s decision in MedImmune v. Genentech, 127 S.Ct. 765 (2007), permitted MedImmune to challenge Genetech’s drug patent before breaching its patent license with Genentech.

Historically, breach of a patent license restrained licensees from challenging patents on invalidity grounds since patent holders could retaliate against those who willfully breached a patent license with an injunction and seek money damages. The new standard in MedImmune removes that risk. However, this new threat to patent holders is offset by the expense of challenging a patent in court.