Feeds

Biotech firm fights to challenge 'bad patents'

Landmark case could upend US law

  • alert
  • submit to reddit

Boost IT visibility and business value

Businesses based on the licensing of patented technologies could be able to sue the owners of the patents while still using those patents if a biotech firm wins its landmark US case. The case could upend the basis of much US patent law.

Currently in the US, a company which licenses and uses a patented technology cannot sue its owner claiming that the invention should not be patented because the law says that a licence agreement means that the two companies cannot be in dispute.

One biotech firm, MedImmune, hopes to change that in a Supreme Court case that has the patent world transfixed. It is claiming that it should be allowed to challenge what it sees as "bad patents" held by Genentech.

Lower courts said that because MedImmune uses a piece of Genentech technology under patent licence, it cannot challenge the patent. The law treats the licence as the settlement of any dispute between the two companies.

The Federal District Court ruled that no case was possible because there is no "case of actual controversy" between the two companies. That decision is being appealed to the Supreme Court, which heard oral arguments last week.

MedImmune is arguing that cancelling its licence with Genentech would either open it up to a patent infringement law suit, but discontinuing the product based on the patent would cost them lost revenues of up to the $1 billion a year that its product earns the company.

While some argue that nobody is better positioned to assess whether or not a patent is valid than a licensee, there are worries that a precedent set by a MedImmune victory would create havoc. During the oral hearings one of the judges, Anthony Kennedy, said that a result in favour of MedImmune could "flood the courts" with cases.

Genentech is arguing that the courts cannot hear a case because they have no jurisdiction where there is not a breach of contract or an actual dispute between two companies. It claims that MedImmune is trying to use the case as a testing ground for how courts would rule if it did break its contract.

The US government is now involved in the case. The Solicitor General wrote a brief to the court which seemed to support MedImmune. "Some patents are invalid, and there is a strong federal policy in ridding the economy of such patents," wrote Paul Clement.

Clement said licencees are well placed to judge the value and nature of patents. Supporters of MedImmune's view hope that allowing licence holders to take cases would help to weed out weak patents. Supporters of Genentech's view, such as universities in the US, believe that building litigation expenses into licences in order to cover the costs of future cases would raise the cost of patent licences and of innovation.

A decision in the case is expected before next June.

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

The Essential Guide to IT Transformation

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.