The U.S. Supreme Court held today that you can pay patent royalties and sue the patent holder in federal court to establish that you don’t have to pay royalties.

The dispute involves MedImmune, Inc., and Genentech, Inc.  The companies entered into a patent licensing agreement in 1997.  Genentech later sent a letter accusing MedImmune of infringing a Genentech patent and demanded royalties per their agreement.  MedImmune paid under protest but also brought a declaratory judgment action challenging the validity and enforceability of the Genentech patent and denying infringement.  The district court dismissed for lack of a "case or controversy", and the Federal Circuit affirmed.

The Supreme Court reversed in an 8-1 decision.  MedImmune, Inc. v. Genentech, Inc., No. 05-608 (U.S. Jan 9, 2007).  See the opinion here.

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