Amicus Curiae Brief — MedImmune, Inc. v. Genentech, Inc.

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MAY 12 2006

IN THE

Supreme Court of the Anited States

MEDIMMUNE, INC.,

Petitioner,

Vv .

GENENTECH, INC. AND

CITY OF HOPE NATIONAL

MEDICAL CENTER,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Federal Circuit

BRIEF OF THREE INTELLECTUAL

PROPERTY PROFESSORS AS AMICI CURIAE

IN SUPPORT OF THE PETITIONER

*Jay Dratler, Jr.

Goodyear Professor of Intellectual Property

University of Akron School of Law

873 Castle Boulevard

Akron, OH 44313-5774

330-972-7972

*Counsel of Record

for Amici Curiae

See Reverse Side for Additional Counset M ay 2006

A. Samuel Oddi

Giles Sutherland Rich Professor

in Intellectual Property

514 West Fairlawn Boulevard

Akron, OH 44343-4594

330-972-6384

Jeffrey M. Samuels

David L. Brennan Professor of Law

and Director, Center of Intellectual

Property Law and Technology

2181 Jamieson Avenue #119

Alexandria, VA 22314-5752

330-972-7898

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TABLE OF CONTENTS

PAGE

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CONSENTS TO FILE AND INTEREST

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1. The result and reasoning below contravene

consistent directives of this Court to respect the

importance of testing patents in court ............ 5

ll. The Federal Circuit’s “reasonable apprehension

of suit” test, formalistically applied by that court,

virtually nullifies the Declaratory Judgment Act

ee eer errr 8

Ill. Nothing in the Constitution's case or controversy

requirement mandates the Federal Circuit’s test... 12

IV. ‘There may be requests for declaratory judgments

in patent cases that are not cases or controversies

in a constitutional sense, but the case at bar is not

IN onsen 5. 0. Paievieewen ek nedviee sdnee 15

V. Patent law needs a new standard for declaratory

judgment, one consistent with the Declaratory

Judgment Act and the purpose of the Constitution’s

case or controversy requirement ...............

A. The Federal Circuit’s “reasonable apprehen-

sion of suit” test 1s bad economics as well as

Sa TR Ae a mee hE LaG ae ae So pret See

B. A proper standard for a declaratory-judgment

suit by a patent licensee would permit suit

whenever the licensee has a real, concrete

and non-pretextual reason for seeking release

from the license’s obligations and the

patentee would have a justiciable action for

infringement in the absence of the license . . . .

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TABLE OF AUTHORITIES

CASES PAGE

Aetna Life Insurance Co. v. Haworth,

es ST MUNSON oc vatseiecvdetentes 14, 22-23, 26

Arrowhead Industrial Water, Inc. v. Ecolochem, Inc..,

tw eek . Eo oe || er ee me De 7)

Blonder Tongue Laboratories, Inc.

v. University of Illinois Foundation,

et | Ree ee ee ere 5-7, 20-21, 26

BP Chemicals, Ltd. v. Union Carbide Corp.,

CPIG Fre Swe. CH: SSG bck eset isiet ies 8-9

Cardinal Chemical Co. v.

Morton International, Inc.,

FI ENE - 6.0bo td adi cksienndn eel Roe 5-7, 20

Christianson v. Colt Industries Operating Corp.,

UR GOOUOR...... c=. ooo. tae ee 20

Cygnus Therapeutic Systems v. ALZA Corp.,

OS OSG CESS Os. Ce. SIRE. no's 6 i0s 00k Cortana 10

Lastern R.R. Presidents Conference

v. Noerr Motor Freight, Inc.,

DOP UL. SEE Cee ss + be 6 hed e ie eee teeeeeeeee 25

eBay Inc. v. Mercl:xchange, L.L.C.,

126 S.Ct. 733, 74 U.S.L.W. 3321 (2005) ............. 11

Flast v. Cohen,

a kd él wco'eleles 13

Foster v. Hallco Manufacturing Co.,

BE a rr eer 12

Holmes Group, Inc. v. Vornado

Air Circulation Systems, Inc.,

ES Pe er a eee 20

International Medical Prosthetics Research

Associates, Inc. v. Gore Enterprise Holdings, Inc.,

Pe eS Ge BUD eo s-ccccectecetecccceces 9

Lang v. Pacific Marine and Supply Co.,

Peer ae Pe Os Cs BONO occ ccc cece cccevcess 16

Lear, Inc. v. Adkins,

ee 2, 5-7, 21

Lujan v. Defenders of Wildlife,

i Leos dnegeen saab eoncece 23, 25, 27

Markman v. Westview Instruments, Inc.,

er tk dwn eeee se 15

Maryland Casualty Co. v. Pacific Coal & Oil Co.,

Akal 2s Caled esses s a4 23

Massachusetts v. Mellon,

Sh a ile w Whe ee aaa 28

MedIimmune, Inc. v. Genentech, Inc.,

427 F.3d 958 (Fed. Cir. 2005),

cert. granted in instant CaS€ .... 2... 2. cece e cece. 9,28

MercExchange, LLC v. eBay, Inc.,

401 F.3d 1323 (Fed. Cir.), cert. granted,

SUED cin wind bk 650d eeeM ED ES Chere ees 11

Nobeipharma AB v. Implant Innovations, Inc.,

141 F.3d 1059 (Fed. Cir. 1998) (en banc in part) ...... 10

Precision Instrument Manufacturing Co. v.

Automotive Maintenance Machinery Co.,

ED 6 504 6eid ngednneesdeesrneeal 6

Professional Real Estate Investors, Inc.

v. Columbia Pictures Industries, Inc.,

SE diva Lota Sets GodWere Ga suae be 25

Richardson v. Suzuki Motor Co..,

ee ee, Ce cca ccewaceeecs 1}

Shell Oil Co. v. Amoco Corp.,

970 F.2d 885 (Fed. Cir. 1992) ..............-6: 8-9, 10

Sierra Club v. Morton,

Cr a des sod nee eee welwees abt 27

Spectronics Corp. v. 1B. Fuller Co.,

940 F.2d 631 (Fed. Cir.) cert. denied,

EE DORIS ns Oabsedabeeenepchecaben peer 9

Teva Pharmaceuticals USA, Inc. v. Pfizer Inc.,

395 F.3d 1324 (Fed. Cir. 2005) ..............05. 10, 12

Travelers Insurance Co. v. Davis,

ep | PET ee TT TORT err ore 1]

Valley Forge Christian College v. Americans

United for Separation of Church and State,

SP GUE ios 3 60 wenututewhatne coctiends 13

Vitronics Corp. v. Conceptronic, Inc.,

Se CO Gs CUED cic ccnvicycteccesawes 15

Walker Process Equipment, Inc. v.

Food Machinery & Chemical Corp.,

Se Sly CO A pi vo ecitectuvbevsceccudswene 28

Warner-Jenkinson Co. v. Hilton Davis Chemical Co.,

Fe Ge OE COED oon 006.00 6000 acess cee ttanesaee 20

CONSTITUTION, STATUTES AND BILLS

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TL ef IR ae oy ee ee 20

28 U.S.C. § 2201(a) (Declaratory

RS Oe ee wor re eee passim

Act of June 14, 1934, ch. 512,

48 Stat. 955 (original enactment) ................... 27

vil

Se AE cnehsosadiudaccacnphicecedsembass 15

I No os vss Sais cde e ees 15

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SRG. i TO SN-GE os 5s i ouoi cc vcevcensnss 20

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OTHER REFERENCES

Kenneth C, Davis, Administrative

i? EE ons ch db bands bes nS bhs KoCkeaneh 27

1 Jay Dratler, Jr., Intellectual Property Law:

Commercial, Creative, and Industrial Property

(Law Journal Press 1991 & Supps.) .............. 16-17

| Jay Dratler, Jr., Licensing of Intellectual Property

(Law Journal Press 1994 & Supps.)........... 17,21, 25

To Promote Innovation: the Proper Balance of

Competition and Patent Law and Policy, A Report

by the Federal Trade Commission (Oct. 2003) ..... 18-19

Adam B. Jaffe and Josh Lerner, /nnovation and Its

Discontents : How Our Broken Patent System is

Endangering Innovation and Progress, and What to

Do About It 34 (Princeton University Press 2004) ..... 18

vill

Jay Dratler, Jr., “Alice in Wonderland Meets

the U.S. Patent System,” 38 Akron L. Rev.

299, 308-319 (2005) ...... SEES LONE UR LER LES

Jay Dratler, Jr., “Does Lord Darcy Yet Live? The

Case Against Software and Business-Method

Patents,” 43 Santa Clara L. Rev. 823 (2003) ..........

Daniel A. Farber, “Uncertainty as a Basis for Standing,”

33 Hofstra L. Rev. 1123, 1125-1126 (2005) ..........

Cass Sunstein, “What's Standing After Lujan?

Of Citizen Suits, ‘Injuries,’ and Article III,”

91 Mich. L. Rev. 163, 185-186 (1992) ..............

John R. Thomas, “The Patenting of the Liberal

Professions, 40 B.C. L. Rev. 1139, 1163-1164

CONSENTS TO FILE AND

___ INTEREST OF THE AMICI CURIAE

Through their counsel of record, all parties to this

appeal have consented in writing to the filing of this brief.

Copies of the consents accompanied this brief,

The individuals Jay Dratler, Jr., Jeffrey M. Samuels,

and A. Samuel Oddi (collectively, “Amici”’) are all

attorneys and chaired professors of law. Two (Jay Dratler,

Jr. and A. Samuel Oddi) are admitted to practice before this

Court,

The interest of Amici in this case arises from lifetimes

of study, research and practice in the field of intellectual

property law. Jay Dratler, Jr. has thought and written about

declaratory judgments in patent cases for twelve years,

since his two-volume loose-leaf treatise on licensing was

first published in 1994. See | Jay Dratler, Jr., Licensing of

Intellectual Property § 2.0\[{1][a][iu] (Law Journal Press

1994 & Supps.) Jeffrey M. Samuels was Assistant

Commissioner of Patents and Trademarks from November

1987 to January 1993. A. Samuel Oddi served as patent

counsel for major corporations for over ten years and has

taught law for over 30 years. Although we are not

submitting the Brief on behalf of any organization, we all

work at the Intellectual Property and Technology Center at

the University of Akron School of Law, which is dedicated

to the advancement of law and policy in the field of

intellectual property.’

' The University of Akron has provided office services and will

reimburse out-of-pocket expenses related to this brief. This brief,

however, is not submitted on behalf of the University of Akron, which

has not reviewed and does not endorse its content.

From time to time cach of us acts as a paid attorney or

consultant. To our knowledge, however, no current or

likely future client of any of us has any pecuniary interest

in the outcome of this lawsuit. We thus occupy a unique

position of expertise and financial disinterest. Our interest

is in a patent system that is legally sound and economically

rational.

SUMMARY OF ARGUMENT

In a consistent line of cases extending over six decades,

this Court has emphasized the importance of tearing down

barriers to challenging patents’ validity, lest the public be

harmed by unjustified monopolies. Yet the Federal Circuit

has categorically refused to allow patent licensees in good

standing to challenge the validity or enforceability of the

patents they have licensed, although licensees are often the

ones best motivated to make such challenges. The Federal

Circuit has thus ignored this Court’s clear directives and

undermined this Court’s holding in Lear, Inc. v. Adkins.

The source of the problem is the Federal Circuit's

“reasonable apprehension of suit” test for declaratory-

judgment jurisdiction. That test grants “quiescent”

patentees—those who do not threaten suit or charge

infringement —-effective immunity from challenges to their

patents by way of declaratory judgment. They can notify

the industry of their patents, enter licensing negotiations,

grant licenses, or walk away from the table, all without

losing this “immunity” from suit. The Federal Circuit has

thus given patentees clear instructions for nullifying the

Declaratory Judgment Act in the field of patent law.

The Federal Circuit has held that the Constitution’s

requirement for a case or controversy dictates this result.

That is simply not so. The case or controversy requirement

is a limitation on constitutional government, based on the

separation of powers. It prevents the judiciary from

invading the domain of the legislative or executive branch

by deciding abstract or hypothetical questions not raised in

a real, conercte dispute between adverse parties. Instead,

the Federal Circuit appears to have interpreted it as a rule

of litigation fairness or procedural priority, under which a

quiescent patentee should not be sued first. ‘That

interpretation expands the case or controversy requirement

well beyond its rationale.

There may be patent cases in which actions for

declaratory judgments are not justiciable, but this case 1s

not one of them. Real issues of justiciability may arise if a

party concerned about potential liability for patent

infringement requests a declaratory judgment challenging

the patent before producing any product on which the

patent’s claims might be read. In that case a judgment on

the patent’s validity could be viewed as hypothetical or

advisory.

No such difficulty arises in this case. Here Appellant ts

producing a real product, and there is a real and concrete

dispute over whether royalties are due on it. No fact or

evidence necded to determine whether the patent is valid

and enforceable depends upon whether the license 1s in

force or has been breached or terminated. There is

theretore nothing hypothetical or abstract about this case.

Nor would adjudication provide a mere advisory

opinion. On the contrary, it would clarify alleged legal

rights that directly affect the economic interests of the

patentee, the licensee, the industry and the public. Because

this case involves medical products, its outcome may affect

the public health as well.

Patent law needs a new standard for the justiciability of

declaratory-judgment actions—one consistent with the

Declaratory Judgment Act and with the real purposes of

Article III’s case or controversy requirement. The Federal

Circuit’s test is not only inconsistent with this Court's

decisions and the Act. It is also economically harmful, for

it keeps courts from reviewing “bad” patents even as they

are on the rise.

At a minimum, a new standard should treat patentees

and their adversaries symmetrically. A licensee should be

able to request a declaratory judgment whenever a patentee

could sue for infringement if the license did not exist, as

long as there is a real, current dispute between the parties

that the court’s judgment can resolve.

Modern standing doctrine’s requirement for “injury in

fact” does not stand in the way. It does so only if

interpreted literally, as requiring invasion of a protected

interest. But in patent cases such an interpretation 1s

circular: even a confessed infringer does not invade the

patentee’s rights unless the patent is valid—a decision that

only the court can make. A literal interpretation of injury

in fact would climinate declaratory judgments from all of

patent law.

A patent’s validity or enforceability is almost always

uncertain. The uncertainty impacts both patentees and their

adversaries. It has direct and often cnormous economic

consequences and is the source of very real disputes.

Therefore, in patent cases, “injury in fact” exists whenever

doubt about a patent’s validity or enforceability is real

enough to engender non-pretextual disputes that a court can

resolve.

The uncertainty itself—not cither party—causes the

economic injury. The Declaratory Judgment Act provides

a means to resolve the uncertainty, and thereby to prevent

or redress the injury, when the alleged rightholder declines

to sue. Any justiciability doctrine that fails to recognize

these cconomic facts of life will not only nullify the

Declaratory Judgment Act in the field of patents; it will

also contravene decades of precedent. Surely nothing in

Article Ill, which seeks only to keeps courts from

performing legislative or executive functions, requires such

an extreme result.

ARGUMENT

1. The result and reasoning below’ contravene

consistent directives of this Court to respect the

importance of testing patents in court.

In a long line of cases stretching back at least six

decades, this Court has repeatedly ruled that testing patents

tor validity and enforceability has paramount importance in

the scheme of patent law. See Cardinal Chemical Co. v.

Morton International, Inc., 5O8 U.S. 83, 100-101 (1993)

(pointing out “the wasteful consequences of relitigating the

validity of a patent after it has once been held invalid in a

fair trial” and “the danger that the opportunity to relitigate

might, as a practical matter, grant monopoly privileges to

the holders of invalid patents’) (footnotes omitted);

Blonder Tongue Laboratories, Inc. v. University of Illinois

Foundation, 402 U.S. 313, 344 (1971); Lear, Inc. v. Adkins,

395 U.S. 653, 670-671 (1969); Precision Instrument

Manufacturing Co. v. Automotive Maintenance Machinery

Co., 324 U.S. 806, 816 (1945) (noting public’s “paramount

interest in seeing that patent monopolies spring from

backgrounds free from fraud or other inequitable conduct

and that such monopolies are kept within their legitimate

scope’ ).

The linchpin of these cases is this Court’s decision in

Blonder Tongue, 402 U.S. at 350, abandoning the doctrine

of mutuality of estoppel in patent cases. It ruled that a final

judgment of patent invalidity, if based on a full and fair

trial, estops the patentee from asserting the same patent

against anyone. See id., 402 U.S. at 328-329.

Under Blonder Tongue, a patent is dead once declared

invalid in a single lawsuit. It can no longer threaten

industry, curtail free competition, or harm the public. In

announcing this rule, this Court relied heavily on the great

expense and delay of patent litigation and the general

public’s strong economic interest in insuring that invalid

patents do not create unjustified economic monopolies. See

id., 402 U.S. at 334, 337 & n.31 (noting expense and

delay); 402 U.S. at 346 (noting competitive impact).

Twenty-two years later, in Cardinal Chemical, this

Court applied the same principles to curtail an odd

procedural practice that the Federal Circuit had developed.

That court had routinely vacated trial-court judgments of

patent invalidity after upholding findings that the patent

was not infringed. See Cardinal Chemical, supra, 508 U.S.

at 85, 89-90, 95.

Bare logic supported the procedure: if a patent 1s not

infringed, it docs not matter for that case whether or not it

is valid. But this Court repudiated the Federal Circuit's

formalistic logic. See id., 5O8 U.S. at 102. It reasoned that

the accused infringer had paid dearly in time and money for

the judgment of invalidity, and that both industry and the

public had a sirong interest in that judgment under Blonder-

Tongue. See id., 508 U.S. at 99 (noting interest of litigant);

508 U.S. at 100 (noting “importance to the public at large

of resolving questions of patent validity”); id., SO8 U.S. at

102 (both).

The case of Lear, Inc. v. Adkins 1s much closer to this

case. There this Court addressed whether a patent licensee

could challenge the validity of the licensed patent. The

specific issue was the continuing validity of the doctrine of

licensee estoppel, under which a licensee, by virtue of

taking a license, was deemed to have recognized the

validity of the licensed patent and to be estopped from

challenging it. See Lear, supra, 395 US. at 656.

Characterizing that principle as a matter of contract under

state law, this Court held it superseded by fundamental

patent principles. See id., 395 U.S. at 670-671. This Court

referred generally to the need to encourage legal challenges

to invalid patents and specifically to the benefits of

encouraging those with the greatest economic incentives to

make challenges to do so. “Licensees,” it said, “may often

be the only individuals with enough economic incentive to

challenge the patentability of an inventor's discovery. If

they are muzzled, the public may continually be required to

pay tribute to would-be monopolists without need or

justification.” /d., 395 ULS. at 670.

Together, these cases provide a_ consistent and

formidable body of precedent establishing three principles.

First, patent law protects our cconomy, future innovation

and the public from unjustified patent monopolies by

encouraging invalid or unenforceable patents to be

challenged and declared as such. Second, the law disfavors

any procedural mechanism that hinders or delays such

challenges or declarations. Third, patent law encourages

challenges to patents by “private attorneys general”

motivated by their own economic self-interest to protect the

public interest, and the class of private attorneys general

includes patent licensees.

The result and rationale below contravene these

principles. By precluding all patent licensees in good

standing from challenging the validity or enforceability of

their licensed patents, it eliminates a large and important

class of potential patent challenges. By requiring licensees

to repudiate, breach or terminate their license agreements

before mounting challenges by way of declaratory

judgment, it hinders and delays those challenges. It thus

discourages challenges to patents by those most highly

motivated to make them.

Il. The Federal Circuit’s “reasonable apprehension of

suit” test, formalistically applied by that court,

virtually nullifies the Declaratory Judgment Act in

the field of patent law.

The touchstone of the Federal Circuit’s analysis in this

case is its “reasonable apprehension of suit” test for federal

declaratory judgment jurisdiction. See, e.g., BP Chemicals,

Lid. v. Union Carbide Corp., 4 F.3d 975, 978 (Fed. Cir.

1993); Shell Oil Co. v. Amoco Corp., 970 F.2d 885, 887-

888 n.2 (Fed. Cir 1992); Spectronics Corp. v. 11.B. Fuller

Co., 940 F.2d 631, 634 (Fed. Cir.), cert. denied, 502 U.S.

1013 (1991).* No such jurisdiction exists in this case, that

court held, because the license agreement precluded any

reasonable apprehension that the patentee would sue. See

MedImmune, Inc. v. Genentech, Inc., 427 F.3d 958, 962-

965 (Fed. Cir. 2005).

This Court has never reviewed the Federal Circuit’s

“reasonable apprehension of suit” test. As the Federal

Circuit has repeatedly stressed, it is an objective test, which

depends upon the patentee’s actions. See, e.g. BP

Chemicals, 4 F.3d at 980; Arrowhead Industrial Water, Inc.

v. Ecolochem, Inc., 846 F.2d 731, 736 (Fed. Cir. 1988);

International Medical Prosthetics Research Associates,

Inc. v. Gore Enterprise Holdings, Inc., 787 F.2d 572, 575

(Fed. Cir. 1986).

The test allows a patentee to avoid a suit for declaratory

judgment if it is “quiescent,” Lc., if it makes no threat of

suit or charge of infringement. See Arrowhead Industrial

Water, 846 F.2d at 736 (if “defendant has done nothing but

obtain a patent, there can be no basis for the required

apprehension, a rule that protects quiescent patent Owners

against unwarranted litigation”) (citations omitted). But

this does not mean that the patentee must refrain from

’ ‘The test actually has two prongs: (1) the declaratory plaintiff s

reasonable apprehension of suit by the patentee and (2) the declaratory

plaintiff's engagement in or preparation for infringing activity. See BP

Chemicals, 4 F.3d at 978; Spectronics Corp., 940 F.2d at 634. The

second or “infringement” prong, however, ts not at issue in this appeal.

Respondent Genentech’s assertion that its licensed patent covered

Appellant's production and sale of the product Synagis® is tantamount

to an assertion that those activities would infnnge the patent in the

absence of a license

affecting an industry or the economy. The patentee can

circulate its patent to competitors and the industry. See

Spectronics, 940 F.2d at 632-633, 636-638 (patentee’s

letters to industry announcing addition of patent to its

“growing family of patents” and its patent strategy, without

referring to any competing products, did not create basis for

declaratory judgment action). The patentee can discuss

licensing. See Shell Oil, 970 F.2d at 889 (there was no

reasonable apprehension of suit where patentee responded

to plaintiff's initiatives and entered licensing negotiations,

during course of which it referred to plaintiffs catalyst as

“falling within” or “covered under” patent and said it

would enforce patent). The patentee can even refuse a

license and break off negotiations. See, e.g. Teva

Pharmaceuticals USA, Inc. v. Pfizer Inc., 395 F.3d 1324,

1327, 1329-1330 (Fed. Cir. 2005) (court had no declaratory

judgment jurisdiction although patentee had listed patent in

FDA’s “Orange Book” and had sued and later licensed

other generic maker, where it had refused to license

declaratory plaintiff on request or to sue it for

infringement); Cygnus Therapeutic Systems v. ALZA Corp.,

92 F.3d 1153, 1156-1157, 1159-1160 (Fed. Cir. 1996),

overruled on other ground, Nobelpharma AB vy. Implant

Innovations, Inc., 141 F.3d 1059, 1068 & n.S (Fed. Cir.

1998) (en banc on that other ground only) (there was no

reasonable apprehension of suit where patentee’s officers

(1) stated that declaratory plaintiff's continuing its rescarch

program “made no sense” due to existence of patent; (2)

reported that patent had survived reexamination; and (3)

insisted that patentee had “a very strong proprietary

position[,|” and where patentee refused to license

declaratory plaintiff; patentee had done nothing more than

exercise its right to exclude).

In practice, these results give patentees a_ practical

prescription for nullifying the Declaratory Judgment Act in

the ficld of patent law. All they have to do its stay

“quiescent” by refraining from threats of suit or charges of

infnngement. In the meantime, they can make an entire

industry aware of their patent, conclude — licensing

agreements, collect royalties, and scare off unlicensed

competition by the fear of patent litigation. Any unlicensed

competitor that invests in plant and production without a

license will msk a total loss of sunk investment if the

patentee sues for infringement after production begins,

wins the suit, and gets an injunction, which ts now a

standard remedy. '

A moment's thought reveals how this test frustrates the

Declaratory Judgment Act’s purpose. The Act allows courts

to “declare the mghts and other legal relations of any

interested party seeking such declaration[.]” 28 U.S.C. §

2201(a) (in part). It thus lets a plaintiff clarify uncertain

rights and legal relations when the other party to the dispute

declines to do so. See Travelers Insurance Co. v. Davis,

490 F.2d 536, 543 (3d Cir. 1974). Yet by requiring the

plaintiff to have a “reasonable apprehension of suit” based

upon the defendant’s objective manifestations, the Federal

* The question whether injunctive relief will remain a standard

remedy in a successful patent infringement suit ts now before this Court

in a separate case. See eBay Inc. v. Merckachange, LLC, 126 S.Ct.

733, 74 US TW. 3521 (2005) (granting certiorari to decide issue).

The law that this Court will review, however, ts now to that effect. See

Merckxchange, LLC v. eBay, Inc., 401 F.3d 1323, 1338 (Ped. Cir.

2005), cert. granted, supra (“Because the ‘right to exclude recognized

in a patent is but the essence of the concept of property,’ the gencral

rule is that a permanent injunction will issue once infringement and

validity have been adjudged”), quotine Richardson v Suzuki Motor

Co., 868 F.2d 1226, 1246-1247 (Fed. Cir. 1989).

Circuit allows the defendant to control the existence and

timing of litigation. That is precisely the result that the

Declaratory Judgment Act sought to avoid. Without clear

guidance and instructions from this Court, the Federal

Circuit will continue to allow patentces to nullify the

Declaratory Judgment Act in this manner.

Ill. Nothing in the Constitution’s case or controversy

requirement mandates the Federal Circuit's test.

Last year two judges of a three-judge panel decided that

the Constitution’s case or controversy requirement

mandates the “reasonable apprehension of suit” test. See

Teva Pharmaceuticals, 395 F.3d at 1335 (Fed. Cir. 2005).

There was a strong dissent. See id., 395 F.3d at 1339

(Chief Judge Mayer, dissenting). Yet this was not the first

time the Federal Circuit has flirted with constitutionalizing

its test. See Foster v. Hallco Manufacturing Co., 947 F.2d

469, 479 (Fed. Cir. 1991) (in patent context, “case or

controversy” requirement demands “sufficient acts by both

parties which support an actual charge of infringement or at

least a reasonable belief that a suit for infringement will be

brought”) (citation omitted).

To the extent one can read a rationale in the Federal

Circuit’s decisions, it appears to be a matter of fairness and

litigation prionty. The 7eva Pharmaceuticals panel seemed

to feel that it would be unfair and inappropriate for

“quiescent” patentees to suffer suit or to lose their choice of

the forum and timing for suit. See Teva Pharmaceuticals,

395 F.3d at 1334 (majority opinion) (patentee “need not”

sue declaratory plaintiff “immediately” because third

party’s 180-day exclusivity period under Hatch-Waxman

Act would prevent declaratory plaintiff from marketing

putatively infringing generic drug until six months after

relevant patent expired). A direct precedent for the Federal

Circuit’s decision in the case at bar suggested a similar

rationale:

| P Jermitting [the patent licensee] to pursue a lawsuit

without materially breaching its license agreement

yields undesirable results. [The licensor] voluntarily

rclinguished its statutory right to exclude by

vranting [the licensee] a nonexclusive license. In so

doing, {the licensor] chose to avoic litigation as an

avenue of enforcing its rights. Allowing this action

to proceed would effectively defeat those

contractual covenants and discourage patentees

from granting licenses. In other words, in this

situation, the licensor would bear all the risk, while

licensee would benefit from the license’s effective

cap on damages or royalties in the event its

challenge to the patent’s scope or validity fails.

Gen-Probe, Inc. v. Vysis, Inc., 359 F.3d 1376, 1382 (Fed.

Cir. 2004).

But the Constitution's case or controversy requirement

has nothing to do with litigation fairness, priority of suit, or

the choice of forum or timing of litigation. It is a matter of

constitutional governance and the separation of powers.

See, e.g., Flast v. Cohen, 392 U.S. 83, 96 (1968) (“Federal

judicial power 1s limited to those disputes which confine

federal courts to a role consistent with a system of

separated powers and which are traditionally thought to

be capable of resolution through the judicial process”);

Valley Forge Christian College v. Americans United for

Separation of Church and State, 454 U.S. 464, 473 1982).

‘The case or controversy requirement insures that courts will

decide nothing except against the background of specific

facts in a specific dispute among real and adverse parties.

See Aetna Life Insurance Co. v. Haworth, 300 U.S. 227,

240 (1937). In so doing, it keeps courts out of the

legislature’s and executive’s domains, where decisions can

be made based on general policy, speculation, and

prediction.

Therefore the touchstone of the case or controversy

requirement is the distinction between a_ dispositive

decision in a concrete case between adverse parties based

on real facts and an advisory opinion based on hypothetical

facts or speculation. See Aetna, 300 U.S. at 240-241. The

former is the function of the judiciary, the latter of

Congress and the executive branch.

On its face, a reasonable apprehension of suit has little

to do with this distinction. The Declaratory Judgment Act’s

animating principle is that real parties may have real,

present and concrete adverse interests in a determination of

rights or legal relations that a court can grant specifically

and conclusively in a dispositive opinion, but that one party

may wish to postpone or avoid for reasons of its own. If all

relevant facts are known and in evidence, the Act gives the

party desiring resolution the right to have it despite the

other party’s wish for delay. There is nothing necessarily

hypothetical, abstract, or “legislative” about such a

resolution, and nothing in one party’s attempts to avoid a

resolution—for example, by refraining from threats and

charges-—makes it so.

IV. There may be requests for declaratory judgments

in patent cases that are not cases or controversies

in a constitutional sense, but the case at bar is not

one of them.

Petitioner here asked the district court to declare that

the licensed patent is invalid or unenforceable. Both issues

are real, concrete and ripe for adjudication.

Under the Federal Circuit’s own precedent, a patent’s

validity is almost entirely a documentary issue. In order to

assess its validity, the court must first construe the patent’s

claims. See Markman v. Westview Instruments, Inc., 517

U.S. 370, 372 (1996) (courts, not juries, construe patent

claims). The Federal Circuit, however, has limited the

evidence to be used for this purpose to the public record,

including the patent and its prosecution history. See

Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582

(Fed. Cir. 1996). By statutory command, evidence of the

invention’s obviousness or lack of novelty —so-called

“prior art”-—-must have existed at the time the invention

was made or, at the latest, before the patent application was

filed. See 35 U.S.C. §§ 102, 103(a). Therefore the facts and

evidence necessary to decide a patent’s validity—the patent

itself, its prosecution history, prior art cited in the patent,

other prior art, and relevant technical references—are all

available when the patent issues. The purely legal question

of a patent's validity is therefore almost never hypothetical

or abstract.

What might make a request for a judgment of patent

invalidity hypothetical or abstract in the sense of Article III

is the position of the party asking for a judgment. If a

plaintiff seeks a declaratory judgment before ever

producing a product on which the patent claims might be

read, then no case or controversy may exist because the

plaintiff's interest is simply too abstract and hypothetical.

Cf. Lang v. Pacific Marine and Supply Co., 895 F.2d 761,

763, 764-765 (Fed. Cir. 1990) (affirming dismissal of claim

by patentee for declaratory judgment that ship would

infringe dominant patent where ship would not be finished

for nine months after complaint was filed).

But that is not this case. Here Appellant is currently

producing a product called Synagis® on which the patentee

claims royalties under the license. There is therefore a

product on which the patent’s claims can be read. All the

evidence needed to produce a final, concrete decision on

both validity and infringement exists now. The only thing

standing in the way of a trial, in the Federal Circuit’s view,

is the license agreement and therefore the absence of a

reasonable apprehension that the patentee will sue. But

nothing bearing on the patent’s validity or enforceability

turns on whether the license is in effect or has been

breached or terminated.

If the patentee had chosen to sue before granting a

license, the dispute would have presented a classic patent

infringement case—-as clear a case or controversy as exists

in patent law. Surely whether a case or controversy exists

under Article II] cannot turn solely on who sues first. If it

did, the Declaratory Judgment Act would be a dead letter in

all fields, not just patent law.

Like validity, the issue of enforceability is largely

documentary. Unenforceability for inequitable conduct- a

patent applicant’s culpable failure to disclose known and

material prior art to the patent cxaminer—depends on prior

art and acts of nondisclosure before the patent issues. See |

Jay Dratler, Jr., Intellectual Property Law: Commercial,

Creative, and Industrial Property § 2.08{2] (Law Journal

Press 1991 & Supps.). Another cause of unenforceability,

patent misuse, may turn on conduct occurring after the

patent issues, but that conduct must have occurred before

the case is filed. See 1 Jay Dratler, Jr., Licensing of

Intellectual Property §& 5.04 (Law Journal Press 1994 &

Supps.) (hereinafter, “Dratler Licensing”). Here again, the

existence of a case or controversy depends mostly on how

close to producing a putatively infringing product the

declaratory plaintiff was at the time of suit. The existence

vel non of a license agreement is irrelevant, except to the

extent that the license itself may be evidence of misuse.

V. Patent law needs a new standard for declaratory

judgment, one consistent with the Declaratory

Judgment Act and the purpose of the Constitution’s

case or controversy requirement.

A. The Federal Circuit’s “reasonable apprehension

of suit” test is bad economics as well as bad law.

The Federal Circuit’s test ignores this Court’s repeated

instructions to construe patent law so as to permit and

encourage legal challenges to possibly invalid patents by

private attorneys zeneral whose real and concrete economic

interests insure a case or controversy and a legitimate

reason for the challenge. See supra Part 1.

Today those instructions are more important then ever

before. Evidence is mounting that an increasing number of

“bad” patents are issuing on “inventions” that do not

quality for legal monopolies. Some commentators believe

the problem denves from poor incentives and lack of

resources within the Patent and Trademark Otfice (PTO).

See Adam B. Jalfe and Josh Lerner, Innovation and Its

Discontents: How Our Broken Patent System is

Endangering Innovation and Progress, and What to Do

About It 34 (Princeton University Press 2004) (“As a result

of legal and administrative changes made between 1982

and 1990, the PTO has become so overtaxed, and its

incentives have become so skewed toward granting patents,

that the tests for novelty and non-obviousness that are

supposed to insure that the patent monopoly is granted only

to true inventors have become largely non-operative”).

Some criticize the Federal Circuit’s failure to prescribe

reasonable limits on the scope of patentable subject matter.

See, e.g., Jay Dratler, Jr., “Alice in Wonderland Meets the

U.S. Patent System,” 38 Akron L. Rev. 299, 308-319

(2005) (hereinafter “Alice”); John R. Thomas, “The

Patenting of the Liberal Professions,” 40 B.C. L. Rev.

1139, 1163-1164 (1999).* Some see a failure of the PTO

and the courts to recognize the dividing line between

legitimate patents on inventions and prohibited monopolies

on businesses in our free-market economy. See “To

* Professor Thomas has suggested that the Federal Circuit's refusal

to restrain the expansion of patentable subject matter may ultimately

produce patents on the work product of lawyers and priests:

With business and medical techniques firmly

under wing, and patents on sports methods and

procedures of psychological analysis trickling out

of the Patent Office, patents appropriating almost

any sort of communicable practice seem easily

attainable. . . . Under increasingly permissive

Federal Circuit case law, techniques within such

far-flung disciplines as language, the fine arts and

theology also now appear to be within the realm

of patentability

40 BC_L. Rev. at 1163-1164.

1&8

Promote Innovation: the Proper Balance of Competition

and Patent Law and Policy, A Report by the Federal Trade

Commission,” Executive Summary at 5 (Oct. 2003) (“FTC

Innovation Report”) (“[M Jany participants in and observers

of the patent system expressed significant concerns that, in

some ways, the patent system is out of balance with

competition policy”). See also, Jay Dratler, Jr., “Does Lord

Darcy Yet Live? The Case Against Software and Business-

Method Patents,” 43 Santa Clara L. Rev. 823 (2003)

(arguing that Federal Circuit’s receptivity to patents on

computer programs and business methods shifts line

between competition and invention in place under Anglo-

American law since 1623 by granting monopolies on what

are essentially ideas for businesses devoid of technological

risk). Some see a failure to impose consistent and

discerning standards of nonobviousness. See FIC

innovation Report, Executive Summary at 10-11

(recommending that nonobviousness — standard — be

tightened); Alice, 38 Akron L. Rev. at 309-319 (arguing

that current standard of nonobviousness departs from the

spint of Thomas Jefferson’s original standard by

emphasizing cognitive difficulty over economic factors like

risk).

Yet whatever the reason, the chorus of discontent 1s

growing. For the first time in recent memory,

representatives of industry itself are beginning to question

whether some aspects of our patent system might impede,

rather than promote, technological innovation. Sce FTC

Innovation Report, Ch. 3 at 34-37 (discussing how patent

“thickets” impede innovation in the electronics industry

and noting 90,000 patents held by 10,000 parties relating to

microprocessors alone); id., Ch. 3 at 50-55 (similar

conclusions for software and Internet industries).

One reform bill now before Congress implicitly

recognizes that something is awry. See 2005 H.R. 2795

(Smith). It proposes a system of post-grant review of

issued patents, like those in many foreign countries, subject

to full judicial review. See id., § 9 (proposing new Chapter

32 of Title 35 for post-grant review). If adopted, that

system would supplement already existing options for ex

parte reexamination, see 35 U.S.C. ch. 30, §§ 301-307, and

inter partes reexamination, see 35 U.S.C. ch. 31, §§ 311-

318. The very existence of a proposal for yet a third means

of reviewing already-issued patents suggests the need for

some sort of substantive reform.

Given the Federal Circuit’s exclusive jurisdiction over

patent appeals, see 28 U.S.C. § 1295(a)(1), (4)(A), (4)(C),

plus the legal and technological complexity of patent cases,

this Court has understandably been reluctant to

micromanage the Federal Circuit’s substantive judgments

in the area of its special expertise. See Warner-Jenkinson

Co. v. Hilton Davis Chemical Co., 520 U.S. 17, 40 (1997).

But this Court has never shrunk from insuring that all

courts, including patent courts, observe proper procedure

and proper procedural standards. See, e.g., /iolmes Group,

Inc. v. Vornado Air Circulation Systems, Inc., 535 U.S.

826, 830, 833-834 (2005) (reinforcing well-pleaded

complaint rule for subject matter jurisdiction and vacating

Federal Circuit’s decision); Cardinal Chemical Co., 508

U.S. at 100-101 (repudiating Federal Circuit’s practice of

vacating holdings of patent invalidity after affirming

holdings of noninfringement); Christianson v. Colt

Industries Operating Corp., 486 U.S. 800, 811, 819 (1988)

(reinforcing “well-pleaded complaint” rule for subject-

matter jurisdiction and overturning Federal Circuit's

reluctant acceptance of junsdiction after jurisdictional

“ping-pong match” with Seventh Circuit); Blonder Tongue,

402 U.S. at 344 (abolishing doctrine of mutuality of

estoppel in patent cases, discussed in Part | supra); Lear,

395 U.S. at 670-671 (abolishing doctrine of licensee

estoppel in patent cases).

From an economic perspective, this case involves one

of the most important procedural issues that this Court may

ever resolve. Many patent licensees agree to take licenses

and to pay royalties not because they think the patents they

license are good ones, but because the cconomic risks of

being wrong are too great. See Dratler Licensing, §

2.02{ 1 }[a]fii], [iii][C], [iv]. If they forego a license, proceed

with a potentially infringing business, and wait to be sued

for infringement, they take two immense risks. First, they

risk damage liability for up to six years’ worth of

potentially infringing production. See 35 U.S.C. § 286.

Second, if they lose an infringement suit, they risk a shut-

down injunction’ that would devalue their entire sunk

investment in research, development, planning, plant,

production, distribution and marketing. See Dratler

Licensing, § 2.02[ 1 }[a}[it].

Licensees might have thought that Congress resolved

this dilemma when it adopted the Declaratory Judgment

Act. Yet the Federal Circuit’s “reasonable apprehension of

suit” test prevents them from bringing declaratory actions

to challenge licensed patents while the licenses are in force.

It thus throws them right back on the horns of their old

dilemma. See id., § 2.02[1 |[a][iv].

The dilemma gains importance today, when “bad”

patents are on the rise. The more uncertain patents there

are, the greater their uncertainty, and the greater the

S$ «

Sce note 3 supra.

economic importance of industries they cover, the greater

the risk of loss to a business that refuses to take a license.

As the incentive to sign a license increases, the chance that

anyone will challenge shaky patents decreases. ‘The law

thus encourages owners of shaky patents to transform their

very uncertainty- the “friction” in our legal system-—into

gold. Their gain, achieved without testing their patents in

court, comes at the expense of their compctitive rivals,

industry, innovation, and the public.

B. A proper standard for a declaratory-judgment

suit by a patent licensee would permit suit

whenever the licensee has a real, concrete and

non-pretextual reason for seeking release from

the license’s obligations and the patentee would

have a justiciable action for infringement in the

absence of the license.

The Declaratory Judgment Act is “only” procedural; it

does not, and cannot, expand the reach of judicial power

beyond the limits imposed by Article III. See Aetna, 300

U.S. at 240. Yet the Act seeks to exploit the full reach of

judicial power. See id., 300 U.S. at 239-240 (reference to

“actual controversy” in Act “manifestly has regard to the

constitutional provision and is operative only in respect to

controversies which are such in the constitutional sense’);

id., 300 U.S. at 240 (“The word ‘actual’ [in the Act] is one

of emphasis rather than of definition”).

A proper test for declaratory-judgment jurisdiction

therefore would recognize the Act’s intention to authorize

declaratory actions up to the constitutional limits. Indeed,

it would begin and end with those limits.

Under modern standing doctrine, the constitutional

limits involve four distinct analytical elements. The first 1s

the concreteness required of requests for declaratory

judgments, i.e., a real, concrete dispute, as distinguished

from an abstract or hypothetical case or request for an

advisory opinion. See Acina, 300 U.S. at 241 (dispute

“must be a real and substantial controversy admitting of

specific relief through a decree of a conclusive character, as

distinguished from an opinion advising what the law would

be upon a hypothetical state of facts”) (citation omitted).

See also, Maryland Casualty Co. v. Pacific Coal & Oil Co.,

312 U.S. 270, 273 (1941). The second element is the

“resolvability” required both for declaratory judgments, see

Aetna, 300 U.S. at 241, and for general constitutional

standing, see Lujan v. Defenders of Wildlife, 504 U.S. 555,

560 (1992). The dispute must be one that a court can

resolve finally by granting the requested judgment. The

third and fourth elements are injury in fact and causation

thereof, which the modern doctrine of constitutional

standing requires. There must be “an invasion of a legally

protected interest” and “a causal connection between the

injury and the conduct complained of... .” Lujan, 505

U.S. at 560 (citations omitted).

In the present context, “concreteness” exists whenever,

in the absence of the license, the patentee’s infringement

claim would be justiciable and the licensee has an

economic interest in the adjudication that is real, non-

pretextual and concrete. In that case the licensee’s

production or preparation for production provides

something on which to read the patent’s claims to assess

infringement, and the production or proximity to it prevents

the dispute from being hypothetical or the opinion

advisory. In addition, the licensee’s real economic interest

insures a real and concrete object of the litigation: to

release the licensee from an obligation or liability with

respect to an actual or forthcoming product that the patent

arguably covers.

The second constitutional limit is “resolvability.” A

declaratory judgment must be able to resolve the particular,

concrete dispute at issue in a way that discourages, if not

precludes, further htigation on the same point.

An example may be helpful. Suppose the license at

issue covers two patents, a basic patent and = an

improvement patent, and the licensee's production ts still in

the planning stage. The licensee thinks it can “invent

around” the improvement patent, and so requests a

declaratory judgment that the basic patent is invalid,

uneforceable, and not infringed. In the absence of a

co. ete product in current production, the case would not

be ripe for adjudication because the license and royalty

obligation might still cover the eventual product by virtue

of the improvement patent, even if the basic patent is

invalidated. The declaratory judgment would not fully

resolve the underlying economic issue: whether the

licensee must pay royalties.

Cases like the case at bar, involving substantial current

production, are distinguishable. Here there ts no question

that litigation would determine whether royalties are due

with respect to substantial ongoing production of a current

product on which the licensed patent’s claims can be read.

In that respect this case is indistinguishable from an

infringement suit by the patentee in the absence of the

license, which would also be justiciable.

The last two requirements—-for injury in fact and its

causation—are the most problematic in this context. If

injury in fact is defined as “invasion of a legally protected

interest” (Lujan, 50S U.S. at 560) and is taken literally, a

strict requirement for it would wipe out most declaratory

judgments in patent law, even under the Federal Circuit's

test. A “quiescent” patentee who merely owns a patent

certainly does nothing to invade a declaratory plaintiff's

rights. But neither does a patentee who brings or threatens

suit. As long as it acts in good faith or its claim ts not

baseless, every patentee has a constitutional right” to sue

and to threaten, immunized from antitrust liability under an

entire mini-jurisprudence known as the Noerr-Pennington

dectrine. See Professional Real Estate Investors, Inc. v.

Columbia Pictures Industries, Inc., 508 U.S. 49, 60 (1993)

(relaxing Noerr-/’ennington immunity for a single action

only when it 1s (i) “objectively baseless” and (11) brought in

subjective bad faith); Dratler Licensing, § 2.04[1]

(discussing doctrine, its history, and exception).

Since a patentee has every right to threaten and bring

suit, its doing so does not invade any protected interest of a

licensee or any putative infringer. Therefore, the notion of

invading a protected interest as a_ condition for

constitutional standing is far too weak a beam to support

declaratory judgments in patent cases.

The gist of the matter is that patent nghts are almost

always uncertain. Without recognizing that fundamental

reality, the doctrine of injury in fact is circular even in

pedestrian infringement suits.

* “the Noerr-Pennington doctrine ts ultimately based on the First-

Amendment nght to petition the government for redress of grievances.

See Eastern R_R Presidents Conference v. Noerr Motor Freight, Inc ,

365 US. 127, 137, 129 (1961)

An invalid patent cannot be infringed. See Blonder

Tongue, 402 U.S. at 344, 350. Therefore, whether an

infringement defendant’s allegedly infringing activities

cause injury in fact depends upon whether the patent 1s

valid, which only the litigation itself can resolve. The same

circularity exists for declaratory-judgment actions, and

therefore there is no reason to distinguish between them

insofar as injury in fact or justiciability is concerned.

Only one escape from this conceptual conundrum is

evident: recognizing that uncertainty in a patent’s validity

or enforceability can itself be a cause of injury in fact. Cf.

Daniel A. Farber, “Uncertainty as a Basis for Standing,” 33

Hofstra L. Rev. 1123, 1125-1126 (2005). The ubiquitous

uncertainty of patents is indeed a cause of real injury: it

motivates licenses to pay real money to avoid horrendous

real risks.

Any standing doctrine that refuses to recognize

uncertainty as a cause of injury in fact in patent cases must

confront the doctrine of stare decisis. ‘This Court's very

first decision under the Declaratory Judgment Act involved

acts that would be difficult, if not impossible, to

characterize as “invasion of a legally protected interest.”

See Aetna, 300 U.S. at 237-238, 242 (detendant’s formal

written claim under insurance policy, asserting that he had

become totally disabled and therefore that policy provisions

waiving payment of premiums on disability had come into

play, supported jurisdiction over insurer’s request for

declaratory judgment that policies had lapsed for

nonpayment). The vast majority of cases in which the

Federal Circuit has recognized jurisdiction also involved no

such invasion.’ Yet the modern doctrine of standing, with

its requirement for “injury in fact,” developed more than

two decades after the Declaratory Judgment Act’s adoption.

See Act of June 14, 1934, ch. 512, 48 Stat. 955; Cass

Sunstein, “What’s Standing After Lujan? Of Citizen Suits,

‘Injuries, and Article III,” 91 Mich. L. Rev. 163, 185-186

(1992) (reporting that first appearance of “injury in fact”

criterion came in 1958, in treatise on administrative law),

citing Kenneth C. Davis, Administrative Law Treatise §

22.02, at 211-13 (1958). Proponents of a stricter standing

requirement for declaratory judgments based on “injury in

fact” therefore must explain how their views avoid

canceling an act of Congress and multiple decisions made

decades previously.

Both infringernent and declaratory-judgment actions in

patent cases amply satisfy the real concerns underlying

modern standing doctrine. Where they involve current or

forthcoming products and nonpretextual cconomic

obligations among, partics in privity, they are worlds away

from the environmental and social-policy cases in which

plaintiffs challenge generally applicable law based on some

diffuse “injury” to the environment, good government, or

the like. Cf, e.g., Lujan, 504 U.S. at 562, 578 (challenge to

change in regulation requiring consultation with affected

states only for actions affecting endangered-species

designations in the United States and on the high seas, but

not in foreign countries, failed for lack of showing of injury

and redressability); Sierra Club v. Morton, 405 U.S. 727,

729-730, 740-741 (1972) (club that challenged Forest

’ Most of the Federal Circuit's decisions supporting jurisdiction in

patent cases rely on the patentce’s charge of infringement or threat of

suit constitutionally protected activity. See Dratler Licensing, §

2.O2f 1 fajin|[ BI

Service’s lease of public lands to developers of ski resort

but did not allege individualized injury to its members

lacked standing to sue); Massachusetts v. Mellon, 262

U.S. 447, 480, 488-489 (1923) (Court lacks jurisdiction

to review allegedly unconstitutional taxation and

appropriation at behest of individual taxpayers or State on

their behalf).

Just like a patent infringement case, a_ licensee's

declaratory-judgment suit involves a specific and concrete

injury (economic loss due to legal uncertainty) to a specific

and concrete party (the licensee and declaratory plaintiff),

which a declaratory judgment can fully resolve. And just

as in a patent infringement suit, a case or controversy exists

in an action for declaratory judgment if there is a real or

forthcoming product on which to read the patent’s claims

and a concrete economic interest, such as payment or

nonpayment of royalties, that depends on the patent's

validity or enforceability or the scope of its claims.*

* In this particular case there are additional reasons why a case or

controversy existed. In addition to suing for a declaratory judgment

that the licensed patent was invalid or unenforceable, Appellant

claimed that Respondents had violated the antitrust laws. See

MedImmune, 427 F.3d at 965-969 (finding these claims also non-

justiciable or waived and declining to transfer them to Ninth Circuit).

These claims included assertions that: (1) Kespondents had colluded

with a third party in the patent-interference settlement that presaged

issuance of the licensed patent to extend the patent’s duration beyond

what it would have been absent the settlement and (2) the patent's

issuance had resulted from fraud for which Respondents were

responsible. See id., 427 F.3d at 965, 967-968. Since the viability of

the antitrust claim depended on whether the patent had been procured

by fraud and was therefore unenforceable, see Walker Process

Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172,

175-177 (1965), these collateral claims were substantively intertwined

with the request for a declaratory judgment of patent unenforceability.

CONCLUSION

Amici respectfully request that this Court reverse the

judgment below, reject the Federal Circuit’s “reasonable

apprehension of suit” test as inconsistent with the

Declaratory Judginent Act and not required by Article Il,

and announce a new test for the justiciability of

declaratory-judgment claims in patent cases along the lines

suggested herein.

Respectfully Submitted,

Jay Dratler, Jr.*

Goodyear Professor of Intellectual Property

University of Akron School of Law

873 Castle Boulevard

Akron, OH 44313-5774

330)-972-7972

*Counsel of Record

(Counsel continuc on page 30)

(Continued from previous page):

The fact that these claims also were real and concrete and able to

be resolved lends weight to the justiciability of the case as a whole.

See MedIlmmune, 427 F.3d at 970-971 (opinion dissenting in part,

arguing that antitrust claims should be transferred to Ninth Circunt,

rather than dismissed). But the justictability of a request for a

declaratory judgment does not depend upon the presence of related

claims. It is enough that the claim for a declaratory-judgment itself is

real and concrete and that its resolution will have real, concrete and

immediate consequences here resolution of the obligation to pay

royalties on a product then in current production.