*1 GENENTECH, INC., MEDIMMUNE, INC. et al. January 2006 Decided 05-608. Argued No. October *2 Scalia, Roberts, Court, J., opinion J., delivered which C. Kennedy, Breyer, Stevens, Souter, Ginsburg, Alito, JJ., and and joined. Thomas, J., post, p. dissenting filed opinion,
John G. Kester With him argued the cause for petitioner. Gaffney, Fisher, were Paul B. Janet C. Aaron briefs Harvey Henry P. Badini, Maurer, Kurzweil, Aldo J. Ricardo. Maynard
Deanne E. cause for the United argued curiae amicus her on States as reversal. With urging Attorney Clement, brief were Solicitor General Assistant Hungar, Deputy Keisler, General General John Solicitor Joseph Whealan, M. Piccolo. G. Mahoney E.
Maureen the cause for argued respondents. were Genentech, Inc., With her respondent on the brief for Ballenger, Biles, Wall, Daniel M. Mark P. J. Scott Amanda Addy, Flagel, Roy Martin John W. A. Meredith Hofer, E. Lemley. Smith, M. M. Paul William Keker, A. and Mark Gershengorn, Lipner, Joseph Hohengarten, M. Heath Ian Linder Brill, Laura W and Jason filed a brief for respondent City Hope.* delivered Court. opinion
Justice & alia Ill’s of federal We Article limitation must decide whether “Controversies,” reflected courts’ jurisdiction “Cases” Declaratory the “actual controversy” requirement li- 2201(a), § Act, requires Judgment S. C. *3 Phar- *Briefs of amici curiae filed Generic urging reversal were for the Whitehouse; Medtronic, Inc., Theodore Case by for maceutical Association Sterne; III and by Kenneth C. Bass Robert G. for Natural Resources Nelson, Wolfman, Brian and Michael Inc., by L. Council, Scott Defense Dratler, Wall; Jay E. Property by and for Three Intellectual Professors Jr., Oddi, pro se. A Samuel and both curiae urging were for the American amici Briefs of affirmance filed Greco, L. H. Rainey, Michael and David S. Richard by Bar Association Remes; Ed- by Property Law for the American Intellectual Association Garner; Reines, Rovner, H. C. ward R. Amber and Melvin for the Boston Belt; Erik Paul by Professors Group Patent Law Association for a of Law se; Hricik, pro by David Property Law for the New York Intellectual Ryan Christopher Hughes; F. Association David by A for the Phar- and Marjorie E. Pow- by maceutical Research and Manufacturers of America ell; Alan H. Blan- E. Joshua Rosenkranz and Qualcomm by et al. for Inc. kenheimer; University City of New for the Trustees of Columbia in the Corbin, Stanton, Ganzfried, J. M. Jerrold John F. Teresa by York et al. Taranto; Sklenar, by Gary L. Richard G. and for 3M al. A et Jennifer Q. Dickinson, Miller, Dragseth; Griswold, Steven IV and John A Todd Allison, Cotter, Christopher Mr. Thomas F. by for John Allison et al. R. se; Míreles, Field, Jr., pro and Cotropia, Thomas G. and Michael A all III, Nelson, C. Folse Justin A. Parker by Donaldson et al. Richard L. Epstein. Taylor, and A Brooke A M. Richard Lehman, Monroe, D. Kacedon filed E. James B. and Brian Christine (U. Canada), Inc., as Society A. Licensing S. & brief for the Executives amicus curiae. agreement
censee to or be in terminate breach its license declaratory judgment underly- before it seek a can that the ing patent infringed. is invalid, or not unenforceable,
I declaratory-judgment Because the claims in were disposed stage, of at take motion-to-dismiss we the fol- lowing petitioner’s allegations from facts amended complaint unopposed petitioner and declarations that response submitted to the motion dismiss. Petitioner Synagis, drug pre- Medlmmune, Inc., manufactures used to respiratory young vent tract disease infants and children. petitioner agreement In 1997, into a entered license (which respondent Genentech, Inc. acted behalf of assignee coassignee, itself as and on behalf of the re- spondent City Hope). existing covered license patent relating production to the of “chimeric antibodies” then-pending patent relating application to “the co- expression immunoglobulin in recombinant chains host agreed pay royalties cells.” Petitioner on sales of “Li- granted petitioner respondents Products,” censed right make, agreement use, sell them. defined specified antibody, “Licensed Products” as a “the manufac- ture, would, use of which . if or sale . . not licensed under th[e] Agreement, infringe one or more claims either or expired patents,] [the both of covered which have neither body competent nor been held invalid a court or other *4 jurisdiction may appeal be from which no been or taken.” has App. agreement petitioner right gave 399. The license upon to six terminate months’ written notice. “coexpression” application
In covered December by “Cabilly agreement II” 1997license matured into the patent. respondent Genentech delivered thereafter, Soon petitioner Synagis expressing was cov- a letter its belief by expectation peti- Cabilly patent ered II and its royalties pay beginning tioner March 2002. Peti- would believing owing, royalties tioner did think not were unenforceable,1 and and that its invalid II Cabilly patent Never- infringed Synagis. claims were event any to be clear threat the letter theless, considered petitioner terminate the 1997 license II patent, to enforce the Cabilly if did petitioner and for patent infringement sue agreement, If demanded. respondents as make royalty payments action, petitioner infringement in a patent were to prevail fees, and attorney’s treble damages could be ordered to pay Synagis, product and from enjoined selling could be of its revenue from than 80 percent accounted for more has such serious conse- risk sales since 1999. Unwilling “under pro- the demanded quences, paid petitioner Id., at 426. rights.” test of all [its] and with reservation This action followed. declaratory-judgment in detail discussed relief
Petitioner
sought
also
and
damages
in Part II below. Petitioner
requested
and state claims not
federal
with
other
respect
injunction
mo-
The District Court granted respondents’
relevant here.
claims for lack of
tion
dismiss the declaratory-judgment
on the decision
subject-matter
jurisdiction,
relying
Circuit
Federal
United
States
Appeals
(2004).
Inc.,
Inc.
F. 3d
Gen-
Vysis,
Gen-Probe
cannot
standing
in good
Probe had held that a
licensee
regard
with
III
establish
Article
because
validity, enforceability,
scope
reasonable
apprehen-
license
“obliterate[s]
agreement
Id., at
infringement.
will
sued for
sion” that the licensee
Court,
District
also
affirmed the
1381. The Federal Circuit
(2005).
granted
We
II At the outset, we concerning address disagreement nature dispute at issue here —whether it involves only or rather claim patent invalidity claim of freestanding that, both because of because of nonin- patent invalidity fringement, no are under the license agree- owing ment.2 That makes no difference the ultimate probably issue of clear but is well to subject-matter jurisdiction, about nature of before us. in- contend that “is
Respondents not petitioner seeking terpretation of its Brief contractual present obligations.” for Respondent 37; Genentech see Brief for also Respondent (1) City claim Hope They 48-49. two reasons: because there is no the Cabilly dispute Synagis infringes II (2) patent, making royalties because thereby payable; while there is a over the contract dispute patent validity, calls for royalties on an whether or infringing product is valid. Brief for Respondent See underlying Genentech 7, first comport 37. The does not point simply with the The amended allegations petitioner’s complaint. a “DECLARATORY JUDG- first very count requested MENT ON CONTRACTUAL AND OBLIGA- RIGHTS TIONS,” and its “disputes stated that petitioner obligation to make be- Agreement under the 1997 License payments cause in- [petitioner’s] sale does not product Synagis® Patent.” fringe any II] valid claim of [Cabilly App.
These contentions repeated throughout complaint. were granted question The dissent which we certiorari contends that Post, Thomas, (opinion does not reach claim. at 140-141 the contract J.). “license question specifically We think refers otherwise. infringed.” Pet. agreement” “not and to contention (i). owing royalties are meaning for Cert. unmistakable under contract. *6 3 infringe phrase not “does
Id., 104,105,108,147 at And the added) thought (emphasis be to be cannot valid claim” validity, patent’s since else- challenge no more than a to the clar- complaint with unmistakable where the states amended Sy- ity infringed by [petitioner’s] patent that “the is . .. payments nagis® under product [petitioner] owes no and that agreements [respondents].” Id., 104.4 at license with petitioner assuredly did contend point, As to the second royalties pay obligation to it the license that had no under patent. con- is that 104,136,147. at Nor Id., on an invalid requires petitioner to True, tention the license frivolous. by royalties pay invalid been held claim has until a competent Cabilly body, But the has not. the II 673 Adkins, at Lear, license issue in Inc. paid similarly “royalties provided be until are to that ” rejected 'patent... invalid,’ we held such time as the is comply argument with repudiating the licensee must royalties pay vindicated claim is its contract and until its nonrepudiating express opinion no on court. We whether during similarly obligation licensee is relieved of its contract challenge patent’s is, on the a successful —that applicability estoppel of licensee under these circumstances. Studiengesellschaft Co., Oil Kohle, m. b. H. Shell Cf. (CA 1997) (“[A] . .. cannot F. 3d Fed. licensee 3In face of the agreeing (despite addition to the respondents 140-141, post, complaint) claim, at the this case involve a does contract That, however, goes evidently dissent thinks contract claim is weak. claim, jurisdiction merits not to existence the courts’ complaint,” post, alleged specificity it. Nor is the “lack of over jurisdictional 140, a matter. Synagis was that the dissent observes District Court assumed ” “ 349-350). Post, App. (quoting patents ‘covered issue.’ opin separate is Court’s quoted statement taken from the District But the claims. For antitrust petitioner’s on summary granting ion patent was ruling, Synagis infringed of that earlier whether purposes contention accepting respondents’ irrelevant, no harm in and there was however, petitioner’s contract about point. nothing, tells us This respect to it. holding with jurisdictional later District Court’s claim or the (i) protection actually invoke Lear until it doctrine (ii) payment royalties, provides ceases notice ceasing payment licensor that the reason invalid”). because it has deemed relevant claims petitioner alleged All we need determine whether has dispute. contractual It has done so.
Respondents argue petitioner further waived its con- by failing argue Respond- claim tract Brief for below. Arg. ent Tr. of 10-11; Genentech Oral 30-31. The record petitioner point reveals, however, that raised contract Plantiff-Appellant before Federal Circuit. See Brief for (CA Fed.), p. Medlmmune, Inc., in 04-1300, Nos. 04-1384 (“Here, seeking rights Medlmmune is to define its and obli- *7 gations precisely under its with contract Genentech — type Declaratory Judgment contemplates”). of action the Act petitioner argument pages That its a limited contract to few appellate suggest merely waiver; its brief does a it argument reflects counsel’s sound assessment that the would precedent pre- be The futile. Federal Circuit’s Gen-Probe jurisdiction petitioner’s cluded over claims, contract and the panel authority below had no Hav- overrule Gen-Probe.5 ing preserved petitioner determined that has raised jurisdictional question. claim,6 contract to the we turn 5Respondents obviously They Court: agree. said in District “The are, motion, purposes facts of case for of this the facts in identical Gen-Probe. Gen-Probe, . . seeking . Like Medlmmune an action filed (a) declaratory judgment nothing agreement that: owes its license under infringe any do Synagis® allegedly Genentech because its sales (b) . invalid; [Cabilly [Cabilly patent valid patent; II] claim is II] (c) (d) unenforceable; [Cabilly Synagis® not in II] does (CA [Cabilly 04-1300, Fed.), patent.” in 04-1384 fringe App. Nos. II] (record omitted). p. A2829 citations 6 dissent claim in petitioner allege The asserts did not contract Post, opening demonstrably its brief or This is at oral at 141. argument. (the g., See, e. Cabilly II false. was “not Brief Petitioner license”); infringed Synagis®, under the so that were not due id., (Summary Argument: purpose] Declaratory Judg at 12 “[The contracting parties disputes their ment Act... was to resolve allow risking court without breach and destruction and multi- without economic
III
Act
Declaratory Judgment
provides that,
a case
“[i]n
of actual
its jurisdiction
within
. . .
controversy
court
any
of the United
. . .
declare
may
States
and other
rights
relations of
legal
interested
such decla-
party seeking
ration, whether or not further
relief is or could be sought.”
2201(a).
§
U. C.
There
a time when
S.
this Court
harbored doubts about
compatibility
declaratory-
judgment actions with Article Ill’s
re-
case-or-controversy
Willing Chicago
Assn.,
Auditorium
quirement.
See
v.
Liberty
Grannis,
Warehouse Co. v.
U.
289 (1928);
States,
see also Gordon v. United
(1927);
U. S. 70
117 U. S.
(1864) (the
697, 702
Appx.
last opinion of
C.
Taney,
J., pub-
(“The
lished
award
posthumously)
of execution
... an es-
sential
part
a court
every judgment passed by
exercising
judicial
We
power”).
doubts,
those
dispelled
however,
Nashville, &
Wallace,
C. St. L. R.
Co.
S. 249 (1933),
(in a case
holding
involving
declaratory
rendered
court)
in state
that an
action for
appropriate
can relief
Article
under
III.
federal Declaratory
Act was
into
Judgment
signed
law the
Aetna
year, and we
following
upheld
constitutionality
Haworth,
Ins. Co. (1937).
Aetna and the draw the brightest cases do not following of lines between those actions that declaratory-judgment satisfy the and those that case-or-controversy requirement do not. Our the dispute decisions have be required concrete, “definite and relations of parties the touching legal having adverse it be “real and sub legal interests”; and that stantial” and of a specific through relief decree “admi[t] conclusive character, as from advis distinguished opinion what law ing state would be upon hypothetical Id., facts.” Pa v. Maryland Casualty Co. 240-241. In Coal & Oil Co., 270, 273 (1941), we summarized cific as follows: in each case is whether “Basically, question the facts alleged, circumstances, under all the show that there is a substantial controversy, parties between having adverse interests, and legal immediacy reality sufficient warrant issuance declaratory judgment.”7 asserts, The 137, proce dissent post, declaratory judgment that “the dure cannot be used rulings to obtain matters that would advanced be controversy.” addressed in preceding a future As case of actual our shows, simply discussion point not so. If the is that a is dissent’s defense declaratory-judgment be cannot raised means action where is controversy” “premature,” phras there no “actual or where it would ing that argument question: begs as the whether this dissent has done actual, controversy. ripe 316, post, Breeze Corps., cited U. S. 323-324 Coffman (which 139, support why parties does not view none of the dissent’s it). There, cited paying his enjoin owner licensee from sued royalties accrued Royalty Adjustment to the Government Act under sought constitutionality of the Act. attack the request injunction nonjusticiable held the for because right owner asserted no to recover Act there was even raise as a indication that no licensee would for defense to the dissent cites royalties. suit other point, Ashmus, (1998), simply holds that a Calderon U. S. *9 dispute would been
There is no have that these standards refusing step petitioner to satisfied if final had taken the agreement. royalty payments make the 1997 license under licensing Respondents royalties right under the claim a agreement. owing royalties are that no Petitioner asserts infringed; Cabilly invalid not because the II and (without contradiction) by respondents alleges and a threat forthcoming. enjoin factual sales are not if legal dispute but and, and are well defined of the dimensions petitioner’s royalty payments, continuing for noth to make judicial ing dispute resolu about the it unfit for would render (without deciding) respondents Assuming here tion. repudiate anticipatory li could not claim breach royalty payments cense, the makes what continuation remote, if would at least otherwise be an imminent threat payments long made, not there nonexistent. As are those enjoin petition respondents is no risk that will seek to words, er’s eliminate acts, sales. Petitioner’s own other question before us is the imminent of harm. The threat dispute longer be a case or whether no this causes meaning within Article III. begin analysis recognition that, where Our must government concerned, we do not threatened action litigant piecemeal may declaratory-judgment obtain not use a action to conclusively finally resolve adjudication would of defenses is, controversy. course, here. underlying That arises, seeking justiciability party declara- problem when the tory occurring, complained-of injury from preventing relief is himself (whether standing is threatened with plaintiff can be in terms of described challenged “‘fairly action injury in ... “imminent” fact trace[able] Lujan Wildlife, defendant,’” Defenders of (whether “hardship (1992)), ripeness sufficient terms of there is is enforcement parties withholding consideration” until there court [in] (1967)). Gardner, 136, 149 As action, Abbott Laboratories U. S. to the same respondents acknowledge, standing ripeness boil down 24; Brief for Re- Respondent question in Genentech Brief this case. City spondent Hope 30-31.
require
plaintiff
expose
to
himself to liability
bring-
before
ing suit to
the basis for the
challenge
threat —for example,
the
of a law
constitutionality
threatened
to be enforced.
(or inaction)
own action
plaintiff’s
failing
in
to violate
the law eliminates the immanent
threat of
but
prosecution,
nonetheless does
Article
For
not eliminate
III jurisdiction.
in Terrace v.
Thompson,
example,
S. 197
farm,
State threatened
his
plaintiff
forfeiture
fines, and
if he entered into a
with an alien in
penalties
lease
violation of the State’s anti-alien land
Given
law.
this genu-
ine threat of
enforcement, we did not
prerequi-
require,
site to
in
testing
the law
suit for injunction,
plaintiff
farm,
bet
so
speak, by taking
Id.,
violative
action.
Village
also,
at 216. See
e.g.,
Co.,
Euclid v. Ambler
Ex
(1926);
Supreme jurisprudence Act to situations plication Judgment Declaratory of imminent is co- which the injury plaintiff’s self-avoidance private party action of erced threatened enforcement federal courts, Lower how- rather than the government. (and declaratory-judgment ever state courts interpreting have controversy”), long ju- acts accepted requiring “actual g., & Keener Oil Gas Co. e. See, risdiction in such cases. Corp., (CA10 Consolidated Gas Utils. 190 F. 2d Metals, Inc. De Im- Bothezat American & Machine 1951); *11 Country peller (CA2 1948); Hess v. Club Co., 166 F. 535 2d Washington- Park, 782, (1931); 783 213 P. Cal. 2 2d 613, 614, Moore, Theater Detroit Co. v. 673, 675, 229 N. W. 249 Mich. on Committee’s Note 618, Advisory see also (1930); 618-619 790.9 p. Rule C. App., Fed. Civ. 28 U. S. Proc.. is, in fortuitously, only
The Court decision Supreme point Freeman, Altvater its close on facts to the case before us. failure to cease (1943), 319 S. 359 held that a licensee’s U. a nonjusticiable dispute of did not render payment royalties In over the the that several of patent. litigation, their to enforce territorial re- had sued licensees patentees filed a strictions in the license. The licensees counterclaim were patents that underlying judgment invalid, in re- the meantime “under paying royalties protest” had in an obtained quired by injunction patentees earlier case. The that “so as long patentees argued [licens- academic, is not only continue there pay royalties, ees] Id., at a between the We real controversy, parties.” on “rely cited the coercion inherent dissent claims the cases do The Post, true; they making 145, n. 3. That payments.” in at is contractual (to it) puts the coercion inherent put the as relied matter dissent other claimed contractual obligations. dissent fails complying in with payment magically obligation different. explain why a contractual course, view, is not obviously the relevant coercion our It is not. In obligation, but conse rather compliance contractual claimed quences of failure to do so.
rejected argument held that the declaratory- claim case or presented justiciable controversy: “The fact being were did not make this paid ‘difference or of a or abstract charac- dispute hypothetical Ibid, Aetna, 300 U. 240). ter.’” at (quoting S., royal- ties “were under and under the being paid protest compul- “[ujnless sion of an decree,” injunction injunction modified, decree were other only course was [of action] it, and to defy risk not actual but treble damages only infringement S., suits.” 365. We concluded that “the requirements of ease are met [a] where payment of claim is demanded and where right pay- ment made, but where the or coercive involuntary nature of the exaction preserves to recover the sums right paid Ibid.10 or to claim.” challenge legality incorrectly required The dissent asserts that Altvater infringe actual (and ment, quoting wildly twice, for emphasis) out of context Altvater’s “ statement infringed ‘[t]o hold a valid if it is is to decide Post, 363). (quoting ease.’” hypothetical S., In the passage the Altvater quotation from plucked, which was Fittings Corp. distinguishing Electrical Court’s earlier decision Co., Thomas & Betts U. S. 241 which involved an affirmative finding invalidity light defense of become moot had *12 no infringement. the quotation: Here is full Electrical Fittings] adjudged patent
“The District of a [in a claim although valid infringement. it the prove dismissed bill for failure to We held finding disposition that the of of immaterial the the was winning party might cause and that the obtain appeal to a reformation of infringed the To if it to decide decree. hold a is not valid hypothetical present quite But in the case is case. the situation different. Though We only have here not bill but the answer a counterclaim. answer, non-infringement disposes of of the it does decision bill not validity.” Alt- dispose question of the counterclaim which raises the of (footnote omitted). vater, supra, at quotation quoted by the clear, snippet As the full the dissent has makes merely nothing do be actual or threat- infringement to with whether must Indeed, appropriate to hold a nonin- ened. it clear cases makes that hypothetical case. not fringed valid is decide Altvater, post, of at Though acknowledges the dissent the central lesson does payment circumstances 144—that of under “coercive” decision distinguished Federal Circuit’s Gen-Probe involved the of compulsion Altvater the it that ground an be so readily dismissed. But cannot injunction. Altvater been Never had obtained that the privately mind injunction of control who patentees, was ultimately within fundamentally, and could More con- permit its modification. conclusion, did not trary say to the Altvater Federal Circuit’s that governmental, coercion dispositive but The opinion suggested just acknowledged opposite. of payments had stopping licensees the option defiance of conse- explained but injunction, treble dam- quence of so risk “actual doing would be to [and] S.,U. at ages in infringement patentees. suits” prosecu- It did mention threat significantly tion for sort sanc- other contempt, governmental tion. it which Moreover, cited treatise said approvingly serious business or “actual or threatened injury can be as other as coercive employment” by private party forms of restitution actions common coercion supporting livelihood, his law; and business man’s imperil “[t]o his as coer- quite enterprises, [was] solvency, ordinarily cive” F. his as, for Wood- example, “detaining property.” cited in ward, § Alt- Quasi Law of Contracts vater, at 365.11 supra, jurisdiction particular to the eliminate limit attempts to that rationale —it post,
facts Altvater. “unique facts,” sug- But none of Altvater’s gests applies royalty that a here. payments different test to the Other “voluntarily conclusory payments than a were assertion that here post, made,” explains threat of why the dissent never treble does percent petitioner’s of 80 not fall damages and the loss business within Altvater’s coercion rationale. case, distinguished “injunction” Altvater
11 Even if could be apprehension would still contradict Federal Circuit's “reasonable immi form, apprehension suit” the “reasonable (or, test in its evolved 1324,1333 Inc., USA, F. Pfizer, nent Inc. 3d Pharm. Teva test, suit” *13 (2005)). of an injunction pays compulsion who under A licensee over Jurisdiction the ease is not present contradicted Chicago Willing v. Assn., Auditorium S. 274. There a ground lessee auditorium wanted demolish antiquated and awith modern replace commercial les- building. see believed it had the to do this without the lessors’ right consent, but was the ball first unwilling drop wrecking and its test belief later. was no declaratory- Because there judgment act at the time state under federal or applicable law, the lessee filed an action remove “cloud” on lease. This Court held that an III had Article not arisen because the wronged plain- defendant “[n]o ha[d] Id., tiff 288, to do It ha[d] threatened so.” was true that one colessors had with the lessee’s disagreed of the lease, that in an “infor- interpretation happened but id., mal, friendly, conversation,” 286, before private year filed; lawsuit was never and lessee even bothered the other approach colessors. The Court went on to remark “[wjhat plaintiff declaratory seeks simply judg- ment,” con- grant power relief beyond “[t]o Id., 289. Had Will- ferred upon federal judiciary.” ing (and been decided after enactment our upholding) the Declaratory Judgment Act, and had the legal disagree- has more apprehension pays no harm than a licensee who imminent royalties for damages injunction fear treble fatal his business. The reasonable-apprehension-of-suit our test also conflicts with decisions Co., in Maryland Casualty &Coal Oil 270, Co. Pacific 312 U. S.
(1941), jurisdiction where though collision-victim de- obtained even plaintiff-insurer could have declaratory-judgment fendant sued Aetna insured; obtaining against without first judgment Life Haworth, Ins. Co. (1937), jurisdiction obtained 300 U. S. where though very even sought declaratory relief reason insurer the insured no file suit. It is also in given had indication that he would Int’l, Inc., Co. Cardinal Chemical v. Morton tension with noninfringe- which appellate judgment held affirmance of a ment, suit, eliminating not moot apprehension does invalidity. of patent counterclaim *14 we one, between been as this are
ment
parties
lively
a
would
The rule
confident
different
result
have obtained.
farm,
that a
a
bet the
large
must
plaintiff
destroy
building,
(as here)
or
and
of
the loss
damages
risk treble
of
percent
actively
its
con-
business before
declaration of its
seeking
finds no
in
III.12
tested
Article
legal rights
support
this
settled
parties
effect
assert
Respondents
when
into the
agreement.
entered
1997 license
dispute
they
it
contend,
When
licensee enters such an agreement,
they
it
an insurance
from
essentially
immunizing
purchases
policy,
suits for
so
as it
infringement
pay
continues to
long
does not
the covered
challenge
Permitting
patents.
objects
Thomp
supposed
[v.
dissent
to our
of
“extension
Steffel
son]|
voluntarily
...
apply
accepted
obligations
to
to
between
contractual
Post,
private parties.”
in several
at 145. The
is misdirected
criticism
respects.
today
origi
did not
principle upon
rely
which we
coercion
128-129,
Thompson,
(1974),
supra,
nate with
censee continue while enjoying immunity bringing suit, the elimination of which was part patentee’s quid if pro quo. valid, Of course even it were argument would have no force with claim regard petitioner’s their agreement does not call royalties because prod- *15 uct not does But even as to infringe patent.
invalidity claim, the begin seems to us mistaken. To point with, it is not clear where the against prohibition challenging of the be It can be validity patents to found. hardly from the implied mere on royalties promise pay patents “which have neither nor been held invalid a court expired body other jurisdiction from which no competent appeal has been or taken,” roy- may App. Promising pay alties on that have not not been held invalid does patents to a amount promise invalidity. to seek their holding Respondents to the that a appeal common-law rule party to a contract cannot at one and same time its challenge reap and continue to benefits, Commodity citing Credit 2d 512 Co., 504, Bros. & 243 F. Corp. Rosenberg (CA9 1957), F. Stoddard, & Co. v. Kingman 740, (CA7 1898). Lear, contend, did not that rule they suspend agreements, since licensing plaintiff case had re- the contract. if Lear’s already repudiated Even pudiation of the doctrine of so limited licensee estoppel (a on which, point earlier, as we have said we do not opine), it is hard to see how the common-law rule has application any here. Petitioner is not the con- repudiating impugning Rather, tract while it as- its benefits. continuing reap contract, does not serting properly interpreted, pre- it vent from does challenging patents, require cover its do not payment because the patents even if products respondents and are Of course invalid. or the common- were correct the licensing agreement law rule would be that suit, this precludes consequence very-
respondents the merits —not that win this on case genuine ju- disappears, dispute Article III so that contract ju- In Article III short, risdiction is somehow defeated. “insurance-policy” nothing risdiction do has contention.
Lastly, respondents urge of the to affirm the dismissal us discretionary grounds. declaratory-judgment on claims “may Declaratory Judgment provides court de Act rights legal interested clare the relations and other 2201(a) added), § party,” (emphasis not that it 28 U. S. C. long must do so. been “to confer This text understood has unique courts discretion decid federal and substantial ing rights litigants.” whether Wilton v. declare the (1995); Co., also Cardinal Seven Falls see U. S. Int'l, Inc., 83, 95, Chemical Co. Morton 508 U. S. n. (1993); America, Brillhart v. Excess Ins. Co. 316 S. (1942). 494-496 consistent with the We “more have found however, statute,” “to district with discretion vest courts bearing instance, the first facts on the usefulness of because declaratory judgment remedy, the fitness *16 peculiarly grasp.” resolution, Wilton, for are within their supra, gave at 289. The no consider District Court here discretionary despite ation dismissal, to its “serious since, misgivings” rule, about the it considered Federal Circuit’s by App. to itself bound for dismiss Gen-Probe. to Pet. Cert. Discretionary 31a. dismissal was to the Federal irrelevant Respondents for the Circuit same reason. have raised the exchanging compet Court, issue for the first time before this ing inequitable petitioner. accusations of See, conduct with Respondent Reply g., 42-44; e. Brief for Genentech Brief for 17, circumstances, n. Under Petitioner these imprudent us to would be for decide District whether requested or should, declara must, decline issue the policy equitable, tory prudential, We leave the relief. discretionary arguments favor for the in of such dismissal Similarly on available remand. lower courts’ consideration for consideration on remand are merits-based arguments for denial of declaratory relief.
[*] [*] [*] We hold that was not insofar as Article petitioner required, III is to break or concerned, terminate its 1997 license agree- ment before seeking federal declaratory court judgment that is invalid, underlying unenforceable, infringed. The Court of Appeals erred the dis- affirming missal of this for action lack of jurisdiction. subject-matter judgment reversed, Court of Appeals the cause is remanded for consistent with this proceedings opinion.
It is so ordered. Thomas, Justice dissenting.
We certiorari in this granted to determine whether licensee in good breach standing must license prior challenging underlying patent pursuant to the §2201. C. Declaratory 28 U. S. Judgment Act, (2006). S. 1169 The answer We question yes. have held that do not have consistently parties standing obtain matters rulings on that remain hypothetical conjec- tural. We have also held that the judgment declaratory pro- cedure cannot used to rulings obtain advanced matters would be addressed future case actual contro- versy. Medlmmune has sought
precisely I therefore affirm the and would purpose, Court of no Article III juris- there is Appeals’ holding diction over Medlmmune’s claim. The Court reaches opposite extending Thomp- result holding Steffel son, S. 452 contractual private obligations. *17 I dissent. respectfully
I Article III limits the judicial power Constitution § to the We or 2. adjudication “Cases” “Controversies.” 138 “to Act extends Declaratory Judgment held
have such in the constitutional sense.” which are controversies Haworth, (1937). Ins. 227, Aetna Co. v. In 300 U. S. Life actions, Court's declaratory judgment the context of assessing framework for uniform cases have provided exists. In the controversy case or an III whether Article from sense, a “Controversy” “distinguished constitutional charac- of a or abstract or hypothetical a difference dispute Ibid, United (citing or moot.” from one that is academic ter; Co., (1920)). Alaska S. S. “The States U. S. concrete, the legal touching must be controversy definite interests.” adverse having relations of parties legal a real and substan- must be S., at 240-241. Finally, “[i]t U. advis- an opinion from ..., distinguished controversy tial state what upon hypothetical the law would ing Id., facts.” at 241. not) (and could Act did Declaratory Judgment or controversy” definition
alter the of “case constitutional or contro- case Article Ill's command that an actual relax courts adjudicate question. exist before federal versy may Maryland Casualty Co., Oil & Co. Coal See Pacific (1941). has held that Thus, 272-273 this Court U. is proce- Act “the operation Declaratory Judgment Ins., Aetna In other S., 240. only.” dural Life words, the Act different merely procedure provides federal court. an actual before bringing controversy Ins., where in Aetna The Court applied principle Life action insurance a declaratory judgment company brought disabled, had he insured who claimed had become against to make any his refused formally claims, and had presented Id., course of de- In the more insurance payments. declaratory judg- the insurer’s it could ciding entertain in- that, had the noted action, specifically ment the Court “there would first, his traditional cause of action filed sured of a justicia- been that the have no question Id., at 243. merely Act Accordingly, nature . . . .” ble *18 a different provided procedural the insur- tool that allowed an ance to company bring otherwise justiciable controversy before a federal court.
We have also held that no
when
controversy exists
a de-
a
claratory judgment plaintiff
obtain
attempts to
premature
on
ruling
defenses
potential
that would
be
typically
adjudi-
cated in a later actual
Breeze
v.
In
controversy.
Coffman
(1945),
Corps.,
action determine of a defense State validity in a future might raise habeas proceeding). li
These in the principles apply force patent equal Freeman, Altvater In context. 319 U. S. censing Court, 365-366 held unremarkably, quite standing “licensee” had a declaratory judgment bring counterclaim in patent affirmative defense asserting to a suit. But not response patent infringement Altvater to be stated that mistaken, expressly is to hold if it decide infringed “[t]o valid is not patent Id., Chemi Cardinal hypothetical too, at 363. case.” So Int'l, cal (1993), the Inc., v. Morton af Co. as a raised coun- firmative was invalidity defense suit. we held Although terclaim to infringement a did not moot a that a appeal noninfringement finding id., 102-103, we stated invalidity, counterclaim alleging of an jurisdiction appel- that our limited holding course, the trial court, of late court that “[i]n and reiterated *19 has the of a burden declaratory judgment party a seeking controversy,” case or of actual existence the establishing id., at 95.
II isus the case before background, the Against foregoing under Article III. not a justiciable case A with the charac- matter, As a I Court’s threshold disagree dispute.” a “contractual terization of this case as including Ante, at characterization, the substantiate 125. To in a count Medlmmune’s three-paragraph Court points ON “‘DECLARATORY JUDGMENT entitled complaint AND RIGHTS OBLIGATIONS’” CONTRACTUAL and to that “‘its allegations Synagis® product broad Medlmmune’s ” Patent.’ does not valid claim of the any [Cabilly II] infringe Ante, Nowhere in its did Medlmmune complaint infringe state of its not Synagis® product why d[o] “sale[s] 136.1 Patent.” any [Cabilly App. II] valid claim of in it is hardly Given the specificity the lack complaint, supposed Court never what the explains that the surprising of A actually contract about. fair dispute reading far) (and a of thus amended review the litigation complaint Medlmmune’s “contract count” simply posits shows that (as is invalid and alleged unenforceable because the patent its con- III), by Medlmmune is not bound counts II and identify anywhere addition, the fact Medlmmune did In suggests that there of contract was at issue provision which record Advi before or after breach.” to “be construed provision no contractual App., S. C. Civ. Proc. sory on Fed. Rule Committee’s Notes pp. 790-791.
tractual As the admits, “the license re- obligations. Court until a quires to pay claim [Medlmmune] . .” Ante, has been held a by invalid . . competent body Thus, even exist- (emphasis original). assuming ence of a cognizable claim, contract that claim validity hinges entirely upon validity, determination the patent’s such, of any contractual As independent Medlm- question. mune’s “contract claim” simply invalid- repackages ity claim. reason, for this
Probably Medlmmune has not pursued level contract claim at District litigation. stated was the product subject license, issue,” was “covered Synagis, patents App. 349-350, and Medlmmune has never that charac- challenged The Federal terization. this case on sole Circuit decided ground that licensee in good bring de- standing may action to claratory challenge without
underlying patent some threat or apprehension *20 (2005). suit. infringement See 427 F. 3d Medlmmune in for question presented its cer- petition tiorari, which we alteration, says accepted without nothing about a contract claim. Neither does Medlmmune’s opening brief a contractual oral allege dispute. Even at argument, it amicus, Medlmmune, was not but alleged an there was a at contract Tr. of issue in this case. dispute Oral Arg. 21-22.
In did Medlmmune short, con- preserv[e] “rais[e] Ante, tract 125. claim.” at In conclu- contrary reaching sion, of states a contract its identification claim no ultimate” makes to the out- “probably difference Ante, come of This well be very this case. may true, if of the only because Court’s broad scope holding.
B controversy before The facts us under no case present judg- Article When this declaratory III. Medlmmune filed Cabilly patent, challenging the of the II ment action by being it under no sued for threat of Genentech was a li- infringement. so was This was because Medlmmune necessary royalty good standing that had all made censee abiding voluntarily entering by payments. into and Thus, re- agreement Genentech, with Medlmmune a license (stating any ante, See threat suit. moved nonexistent”). if Medlm- “remote, of suit threat comply entering continuing to into and actions mune’s agreement deprived cause with license Genentech Additionally, against Medlmmune action Medlmmune. invalidity against had no cause action Genentech. Patent patent infringement, free- an not a defense affirmative §§282(2)-(3). standing cause of action. See 35 U. S. C. Judgment Declaratory be must Therefore, here, Act bringing something procedure more alternative for than an federal otherwise actual case before (“[T]he Ins., S., But see Aetna court. Life Declaratory operation procedural Judgment Act is only”). neither nor had a cause Medlmmune
Because Genentech prayer can action, Medlmmune’s relief only advisory opinion reasonably seeking understood might liti- about in some future an affirmative defense use gation. if it decides whether, Medlmmune wants know Gen- agreement if Genentech, breach license patent infringement, it for a success- entech sues it will have Presumably, upon de- ful a favorable affirmative defense. royalty stop making termination, would then Medlmmune knowing payments, stand that the federal courts advance *21 the Declar- as above, behind its decision. Yet demonstrated give atory Judgment not allow courts Act federal does potential advisory rulings affirmative success of an Calde- action has even accrued. before of defense cause “attempted] (dismissing a suit ron, S., at U. 747 523 ruling litigation advantage by obtaining advance gain Coffman, on an also defense”); S., affirmative see U. a “me- Declaratory Judgment use Act as (rejecting
dium for which securing advisory opinion arisen”). has not therefore Medlmmune has asked the courts render “an the law what would be opinion advising supra, Ins., Aetna upon state of hypothetical facts.” Life Wycoff Co., Public Serv. Comm’n Utah 241; see also (1952) (“The S. 237, not be disagreement must nebulous or contingent but must have taken on fixed and ”). final . . shape cannot, . A federal court consistent with III, provide Article Medlmmune with such an opinion.
Finally, has in the Court stated plainly context a counterclaim action challenging of a if hold a valid in- patent, patent “[t]o Altvater, fringed is to decide a case.” hypothetical at 363. S.,U. course, presents Of Medlmmune exactly that case. Based on a clear our I precedent, would reading hold that this ease no actual case or presents controversy.
Ill To reach misreads our result, today’s precedent from Steffel, and expands the coercion 415 U. S. concept 452, to reach contractual be- voluntarily accepted obligations private tween parties.
A Altvater, The Court in- relies on which is inappropriately Altvater, First, applicable this case for three reasons. the affirmative arose defense in a declar- invalidity motion filed as a counterclaim to a atory judgment S., infringement Second, See opin- suit. ion in Altvater on the that no license understanding proceeds existed. Both the District Court and the Court of Appeals had had that the license been termi- held already underlying Id., at 365 prior (“Royalties nated of the case. filing *22 being paid. being But were were demanded and compulsion injunc- they an being paid of under the were ... decree”). though the li- Third, one-time related, tion compul- royalties, pay under the so it did censee continued to prior a injunction case. been entered sion of that had an unique simply the facts of under held that Ibid. Altvater considering Appeals the de- erred that case, claratory the “involun- judgment counterclaim moot because right tary preserve[d] the or exaction nature coercive legality paid challenge the recover sums claim.” Ibid. similarly inapt 83, is Co.,
Cardinal Chemical Altvater, as in defendant raised case, In that here. patent invalidity in a counterclaim to affirmative defense specifically infringement S., a 86. We suit. 508U. appeal noninfringement finding not moot held did that a alleging invalidity. But Id., at 102-103. a counterclaim we stressed: juris- concernís]
“[T]he us, therefore[,] issue before juris- appellate court —not diction of intermediate an court, a trial In trial diction of... court.... seeking declaratory party a has the course, a establishing of an actual burden existence controversy.” Id., at party hypothetical showed
We on to offer went patent litigation judgment “[i]n ... could seek a infringement patentee action.” even if has not filed hypothetical holder However, Ibid. involved infringement against competitor threatened an suit licensee) allegedly infringing that continued to sell the aCnot doing liability. hypoth- product growing so, we In and faced paralleled in Aetna Ins.: the facts esized situation Life alleged against an in- patentee of action had a cause any moment, brought fringer suit at have and could alleged simply procedure offered declaratory judgment infringer bringing justi- a different method of otherwise ciable case or into court.2
B The Court’s more serious error is its extension Steffel, of supra, apply voluntarily accepted to obliga- to contractual parties. private tions between court has No taken ever such a broad view of Steffel.
In Steffel, the Court held that in certain limited circum- party’s anticipatory qualified stances, a action cause of as a expressly case under Article Based III. governmental power, the coercive of nature found Court necessary petitioner expose “it is that not that first himself prosecution challenge to actual arrest or to be entitled statute that he of claims deters the exercise his constitu- added). rights.” (emphasis tional Id., Limited, as it governmental power, particularly power is, to of arrest prosecution, says nothing about in the coercion Steffel private obligations. context It contractual is therefore surprising today, applied not that, until has Court never theory private and its of coercion to contractual obli- Steffel gations; indeed, no court has so.3 ever done majority only extends to cases do not that Steffel governmental involve coercion, but also extends ra- Steffel’s If tionale. “coercion” were used understood 2Additionally, Lear, Adkins, Inc. do has little ease. with this propriety It and extent common-law addressed in Lear making had estoppel, doctrine licensee and the licensee ceased payments singu agreement under the that makes the license fact —a Id., larly inapposite 659-660. Lear did Declara here. involve the tory brought Judgment as a Act the case was breach-of-contract because action for pay royalties. failure to ante, ISO, Admitting “rare,” that the Court cites such decisions are may cases contractual predating that hold that a court construe Steffel provisions prior rely on the inher Those cases do not coercion breach. g., Keener Co. making e. Oil & Gas See, ent in payments. contractual (CA10 1951). Consolidated Gas Corp., Util. 190 F. 2d Steffel, term in if had only would apply Genentech Medlmmune with a threatened suit infringement the absence a license At that point, Medlm- agreement. choice, mune would have had as did declaratory plain- activity tiff in either the otherwise Steffel, to cease protected face to continue (here, activity selling Synagis) faced no such a lawsuit. But Medlmmune threat of Medlmmune could continue Here, prod- choice. selling had risk uct without threat of suit because it eliminated agreement. into license By holding suit by entering choice to enter avoid voluntary agreement coerced, some other coerced choice is itself the Court goes far beyond Steffel. nature of ex- “coercive majority explains
action right legality ... preserves challenge *24 omitted). (internal Ante, marks the claim.” at 131 quotation coercive nature of what “exaction”? The answer has there be the because made license voluntarily payments no threat of suit here. that contractual obli- holding By bring are coercive allow gations sufficiently party action, has majority every given and a around licensee cause of action free pass li- Article Ill’s requirements for challenging censed But patents. opinion applies today’s reasoning just Indeed, suits. today's opinion patent validity contains no aside whatsoever, Jus- limiting casting principle ex- tice Stewart’s would “be use understanding Steffel’s rare.” S., at 476 ceedingly (concurring opinion). For the I dissent. reasons, foregoing respectfully