More 'pay and sue' expected

Last week's Supreme Court decision in MedImmune Inc. v. Genentech Inc. gave licensees power to challenge patents without putting themselves in jeopardy of infringement. But according to intellectual property attorneys, the ruling also is likely to make patent owners more reluctant to license technologies, and lead to higher fees for those that are granted as licensors seek compensation for the newly created risk of invalidity lawsuits.

The Supreme Court decision overturned a ruling by the U.S. Court of Appeals for the Federal Circuit (CAFC) - and the long-standing assumptions of most professionals involved with IP licensing - that paying royalties under a patent license precludes a company from challenging the validity of the patent.

The ruling thus strips away one reason for granting a license - to insulate

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