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Editor-in-Chief,   Anatole Krattiger

Editorial Board

Concept Foundation


Fiocruz, Brazil

bioDevelopments-   Institute

MedImmune (Declaratory Judgment Jurisdiction) and Quanta (Patent Exhaustion of a Method) and Implications for Patent Licenses Advanced Video

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Presented by: Jeff Hawley, Of counsel Nixon Peabody LLP, Patent Law Professor, Pierce Law
Run Time: 1 hour 7 minutes
Presented at: 17th Annual Advanced Licensing Institute
Date: 8 January 2009


Jeff Hawley The recent Supreme Court’s decision MedImmune v. Genentech is discussed in relation to negotiating and drafting patent licenses. MedImmune accepted a license obliging payment of royalties for any drug covered by pending applications. The license provided that MedImmune was obliged to pay royalties until patent was held invalid but did not bar MedImmune from challenging patent’s validity. When the patent was issued, Genentech sent a letter demanding royalty payments but MedImmune replied stating patent was believed to be invalid and unenforceable though MedImmune paid royalties “under protest…”. MedImmune filed for a declaratory judgment action “on contractual rights and obligations,” alleging that its drug “did not infringe” and “did not infringe any valid claim”.

The second case, Quanta v. LG, deals with patent exhaustion of a method claim in a license. This case has significant ramifications for generic drug manufacturers. In other words, the doctrine of patent exhaustion applies to method patents or “[t]he authorized sale of an article that substantially embodies a patent exhausts the patent holder’s rights and prevents the patent holder from invoking patent law to control post sale use of the article.”