Chalk One Up for the Little Guys

Justice Scalia, in his infinite wisdom, has sided with the little guys his opinion in MedImmune v. Genentech.

For those of you out there who do not want to read the opinion, here is a quick summary: 

The case was originally dismissed because MedImmune continued to pay royalties under its licensing agreement for Genentech's patent when it brought an action to declare the patent invalid.  The lower court's reasoning was that there was no case or controversy  because MedImmune had not violated it licensing agreement.

The Supreme Court reversed finding that a licensee need not open itself up to litigation (and more importantly treble damages and attorney's fees) before asserting that a patent is invalid.  The Court essentially found that coercion to pay royalties through the threat of litigation was enough of a case or controversy for an action for declaratory judgment.

What does this all mean?  Well, the Court has made it easier to bring a suit against a patent holder.  Licensees will not have to open themselves up to possibly large damages awards when they feel that their licenses are unenforceable because the underlying patent is invalid.  Now small business owners do not have to bet the farm when they feel that a patent is not valid.

Only time will tell if this decision results in more suits challenging the validity of patents.