549 U.S. 118 (2007)
MedImmune, Inc. manufactures Synagis, a drug used to prevent respiratory tract disease in infants and young children.1 In 1997, MedImmune entered into a patent license agreement with Genentech, Inc., which acted on behalf of itself and the coassignee City of Hope.2 The license covered an existing patent relating to the production of chimeric antibodies and a then-pending patent application relating to the coexpression of immunoglobulin chains in recombinant host cells.3 MedImmune agreed to pay royalties on sales of Licensed Products as defined in the agreement, which granted it the right to make, use, and sell them.4
In December 2001, the coexpression application covered by the 1997 license agreement matured into the Cabilly II patent.5 Soon thereafter, Genentech delivered MedImmune a letter expressing its belief that Synagis was covered by the Cabilly II patent and its expectation that MedImmune would pay royalties beginning March 1, 2002.6 MedImmune did not think royalties were owing, believing that the Cabilly II patent was invalid and unenforceable and that its claims were in any event not infringed by Synagis.7 Nevertheless, MedImmune considered the letter to be a clear threat to enforce the Cabilly II patent, terminate the 1997 license agreement, and sue for patent infringement if it did not make royalty payments as demanded.8 If respondents were to prevail in a patent infringement action, MedImmune could be ordered to pay treble damages and attorney’s fees, and could be enjoined from selling Synagis, a product that has accounted for more than 80 percent of its revenue from sales since 1999.9 Unwilling to risk such serious consequences, MedImmune paid the demanded royalties under protest and with reservation of all of its rights.10 This declaratory-judgment action followed.11
The District Court granted respondents’ motion to dismiss the declaratory-judgment claims for lack of subject-matter jurisdiction, relying on the decision of the United States Court of Appeals for the Federal Circuit in Gen-Probe Inc. v. Vysis, Inc., 359 F. 3d 1376 (2004).12 The Federal Circuit affirmed the District Court, also relying on Gen-Probe. 427 F. 3d 958 (2005).13 The Supreme Court granted certiorari. 546 U. S. 1169 (2006).14
Whether petitioner has raised and preserved a contract claim that no royalties are owing under the license agreement because of patent invalidity, unenforceability, and noninfringement?15
The record establishes that petitioner has raised and preserved the contract claim that, because of patent invalidity, unenforceability, and noninfringement, no royalties are owing.16
Yes. The very first count requested a declaratory judgment on contractual rights and obligations. It stated that petitioner disputes its obligation to make payments under the 1997 License Agreement because its sale of its Synagis product does not infringe any valid claim of the Cabilly II Patent. These contentions were repeated throughout the complaint.17 Petitioner raised the contract point before the Federal Circuit in its appellate brief. There it argued that it was seeking to define its rights and obligations under its contract with Genentech.
The Federal Circuit’s Gen-Probe precedent precluded jurisdiction over petitioner’s contract claims. The panel below had no authority to overrule Gen-Probe. The argument was thus preserved for review.18
Petitioner has raised and preserved the contract claim.19
Related opinions on this issue
Justice Thomas disagrees with the Court’s characterization of this case as including a contractual dispute.20 A fair reading of the amended complaint shows that MedImmune’s contract count simply posits that because the patent is invalid and unenforceable, MedImmune is not bound by its contractual obligations.21 MedImmune has not pursued a contract claim at any level of the litigation.22
The Federal Circuit decided this case on the sole ground that a licensee in good standing may not bring a declaratory judgment action to challenge the validity of the underlying patent without some threat or apprehension of a patent infringement suit.23
Whether a patent licensee must terminate or be in breach of its license agreement before it can seek a declaratory judgment that the underlying patent is invalid, unenforceable, or not infringed?24
The standards for determining whether a particular declaratory-judgment action satisfies the case-or-controversy requirement—i.e., whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant relief—are satisfied here even though petitioner did not refuse to make royalty payments under the license agreement.25
No. MedImmune manufactures Synagis, a drug used to prevent respiratory tract disease in infants and young children. In 1997, MedImmune entered into a patent license agreement with Genentech, Inc., which acted on behalf of itself and the coassignee City of Hope. The license covered an existing patent relating to the production of chimeric antibodies and a then-pending patent application relating to the coexpression of immunoglobulin chains in recombinant host cells. MedImmune agreed to pay royalties on sales of Licensed Products as defined in the agreement, which granted it the right to make, use, and sell them.
In December 2001, the coexpression application covered by the 1997 license agreement matured into the Cabilly II patent. Soon thereafter, Genentech delivered MedImmune a letter expressing its belief that Synagis was covered by the Cabilly II patent and its expectation that MedImmune would pay royalties beginning March 1, 2002. MedImmune did not think royalties were owing, believing that the Cabilly II patent was invalid and unenforceable and that its claims were in any event not infringed by Synagis. Nevertheless, MedImmune considered the letter to be a clear threat to enforce the Cabilly II patent, terminate the 1997 license agreement, and sue for patent infringement if it did not make royalty payments as demanded. If respondents were to prevail in a patent infringement action, MedImmune could be ordered to pay treble damages and attorney’s fees, and could be enjoined from selling Synagis, a product that has accounted for more than 80 percent of its revenue from sales since 1999.
Unwilling to risk such serious consequences, MedImmune paid the demanded royalties under protest and with reservation of all of its rights. This declaratory-judgment action followed. The District Court granted respondents’ motion to dismiss the declaratory-judgment claims for lack of subject-matter jurisdiction, relying on the decision of the United States Court of Appeals for the Federal Circuit in Gen-Probe Inc. v. Vysis, Inc., 359 F. 3d 1376 (2004). The Federal Circuit affirmed the District Court, also relying on Gen-Probe. 427 F. 3d 958 (2005). The Supreme Court granted certiorari. 546 U. S. 1169 (2006).
Applying the standard from Maryland Casualty Co. v. Pacific Coal & Oil Co., there is a substantial controversy between parties having adverse legal interests of sufficient immediacy and reality.26 The self-avoidance of imminent injury was coerced by the threatened enforcement action of a private party.27 The rule that a plaintiff must risk treble damages and the loss of 80 percent of its business before seeking a declaration of its actively contested legal rights finds no support in Article III.28
Related opinions on this issue
Justice Thomas argues that the case before us is not a justiciable case or controversy under Article III.31 When MedImmune filed this declaratory judgment action challenging the validity of the Cabilly II patent, it was under no threat of being sued by Genentech for patent infringement.32 This was so because MedImmune was a licensee in good standing that had made all necessary royalty payments.33
MedImmune's action seeks an advisory opinion about an affirmative defense it might use in some future litigation if it decides to breach the license agreement.34 The Declaratory Judgment Act does not allow federal courts to give advisory rulings on the potential success of an affirmative defense before a cause of action has even accrued.35