Supreme Court Ruling Allows Patent Challenge

The Supreme Court has issued a ruling making it less risky for companies to challenge the validity of patents held by other companies. By an 8 to 1 vote, the high court ruled that biotech firm MedImmune could resume its challenge of a patent even though it was abiding by a licensing agreement with Genentech, the patent's holder. The Jan. 9 decision reverses a previous ruling by the U.S. Court of Appeals for the Federal Circuit—the court that hears all patent appeals—requiring companies to breach licensing agreements before they can sue to have the patent declared invalid. This change means that companies do not have to risk being sued by the patent holder for infringement of licensing agreements in order to have the courts assess a patent. Although the ruling will help smaller companies that can't afford to challenge patents held by larger companies because of the potential of an infringement suit, some legal experts worry that this ruling will destabilize existing patent agreements. The case between MedImmune and Genentech now goes back to lower courts to decide whether the questioned patent should be upheld or thrown out.