AbbVie, Inc. v. MedImmune Limited
Decided: February 5, 2018
Under an agreement governed by British law, drugmaker AbbVie had an obligation to pay MedImmune royalties until the expiration of US patent 6,248,516—even though AbbVie does not practice this patent.
In an effort to end its royalty obligations, AbbVie filed a declaratory judgment action alleging invalidity of the ‘516 patent; but this action did not also seek a declaration as to whether a ruling of invalidity would end AbbVie’s royalty obligations under the agreement.
The District Court dismissed the case, ruling that (1) AbbVie lacks standing to bring a declaratory judgment action because it does not practice the ‘516 patent; and (2) deciding
the validity issue would not resolve the parties’ ultimate dispute, because AbbVie’s payment obligation depends on an interpretation of the contract, which was not at issue in this case.
On appeal, the US Court of Appeals for the Federal Circuit said that the district court was
wrong to focus its standing analysis on whether AbbVie practices the ‘516 patent, because
the underlying dispute is purely contractual. But the panel agreed with the lower court that AbbVie’s failure to seek an interpretation of the underlying agreement was fatal to its case;
they explained that Supreme Court precedent prohibits the use of a DJ action to “obtain piecemeal adjudication of issues that would not fully and conclusively resolve the underlying controversy.” And in this case, even if US courts were to find the ‘516 patent invalid, it is unclear whether the contract—when construed under British law—would then terminate AbbVie’s payment obligations.
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