The Supreme Court recently handed down its decision in MedImmune, Inc. v. Genetech, Inc. The issue that the Court faced in this case was whether the “actual controversy” requirement of the Declaratory Judgment Act requires a patent licensee to commit material breach of the license agreement before filing an action for declaratory judgment, an action that is filed to obtain a declaration that a patent is invalid, unenforceable, or not infringed. The Court’s decision also raises questions to the strictness of the standard for granting patents.
Patents that are too readily granted hinder innovation, hurt efficient licensing, and impede competition. In addition, the granting of dubious patents sometimes forces companies using the patented technology to enter into financial settlements, like in the Blackberry case from last year. The number of patent applications per year over the last twenty years has tripled, a testament to expanding technology and more inventions. The Court is set to make a stance on the standard of patentability so technology and innovation can remain increasing but at the same time prevent against the harms of too easily-granted patents.
The Court in MedImmune held that a licensee in good standing is still able to file a declaratory judgment action. This decision comes on the heels of an increased number of patent cases that the Supreme Court has decided and are currently docketed. The MedImmune decision hints that the Court is willing to influence a change on the standard for granting patents, making them harder to obtain. The Court is slated to hand down its decision in KSR v. Teleflex, which examines the validity of the “motivation-suggestion-teaching” test of obviousness. This test states that to render an invention obvious, the prior art must suggest an advantage to be derived from combining its teachings. If the Court finds that the test conflicts with the Court’s nonobviousness precedent, Graham v. John Deere, then the patentability standard is raised.