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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0232%3A26

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2007
- **Citation:** 549 U.S. 118

## Text

—_ ee ee

“Seco tee:
y | FILED
< ee

MAY 12 2006

IN THE
Supreme Court of the Anited States

4

MEDIMMUNE, INC.,

Petitioner,
Vv .

GENENTECH, INC. AND
CITY OF HOPE NATIONAL
MEDICAL CENTER,

Respondents.

4

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

4

*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

. wiry eh RLY 5
Aye ye Beep “ oh lies 1‘ j Ml ae

Piette vs
ra) ~

ere

~ vialad

ea

iy

i

|

Ve

£%- had Par i hited aes

TABLE OF CONTENTS

PAGE
CORFE GED WUC UTNE? gS eed we cas cede vaste i
PE a ATTN so ik Codaies cb ned tedive sae il
SE ae FP PUINOI a 5 io tire oss Vi i ewe ve eee iV
CONSENTS TO FILE AND INTEREST
Sr ee EI. NN Sadun na neice céeé cabus l
gs FO ere rer 2
SEE A 5 6 ah BS o BE ee eee Ren 5
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 . . . .

DIED hg vin kp 04 cdneawe $hbV 0 edu tue ko

**.

22

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

iV

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

vi

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

eee Se ee a BS cue nt bacunssceurs passim
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
Sd tk aE RP RRL ge Das eee 21
SRG. i TO SN-GE os 5s i ouoi cc vcevcensnss 20
SOE OK OED 5 £5 oo kcks bs veceeeas 20
i: I sis bs kicks cacencteecs 20
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

ix

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

3

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

4

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,

Ss

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.

6

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-

8

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

9

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).

10

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

12

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

13

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.

14

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

15

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,

16

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).

17

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).

19

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,

20

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.

22

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

23

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

24

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)

I
A)

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
27

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.

28

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.

29

A. Samuel Oddi

Giles Sutherland Rich Professor
in Iritellectual Property

514 West Fairlawn Boulevard

Akron, OH 44343-4594

330-972-6384

Jeffrey M. Samuels

David L. Brennan Pictessor of Law
and Director, Center of Intellectual
Property Law and Technology

2181 Jamieson Avenue #119

Alexandria, VA 22314-5752

330-972-7898

30

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0232%3A26. Public record. Not legal advice.