(Slip Opinion) OCTOBER TERM, 2006 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
MEDIMMUNE, INC. v. GENENTECH, INC., ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE FEDERAL CIRCUIT
No. 05–608. Argued October 4, 2006—Decided January 9, 2007
After the parties entered into a patent license agreement covering, inter
alia, respondents’ then-pending patent application, the application
matured into the “Cabilly II” patent. Respondent Genentech, Inc.,
sent petitioner a letter stating that Synagis, a drug petitioner manu
factured, was covered by the Cabilly II patent and that petitioner
owed royalties under the agreement. Although petitioner believed no
royalties were due because the patent was invalid and unenforceable
and because Synagis did not infringe the patent’s claims, petitioner
considered the letter a clear threat to enforce the patent, terminate
the license agreement, and bring a patent infringement action if peti
tioner did not pay. Because such an action could have resulted in pe
titioner’s being ordered to pay treble damages and attorney’s fees and
enjoined from selling Synagis, which accounts for more than 80 per
cent of its sales revenue, petitioner paid the royalties under protest
and filed this action for declaratory and other relief. The District
Court dismissed the declaratory-judgment claims for lack of subject-
matter jurisdiction because, under Federal Circuit precedent, a pat
ent licensee in good standing cannot establish an Article III case or
controversy with regard to the patent’s validity, enforceability, or
scope. The Federal Circuit affirmed.
Held:
1. Contrary to respondents’ assertion that only a freestanding pat
ent-invalidity claim is at issue, the record establishes that petitioner
has raised and preserved the contract claim that, because of patent
invalidity, unenforceability, and noninfringement, no royalties are
owing. Pp. 3–6.
2. The Federal Circuit erred in affirming the dismissal of this ac
tion for lack of subject-matter jurisdiction. The standards for deter
2 MEDIMMUNE, INC. v. GENENTECH, INC.
Syllabus
mining 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 contro
versy, between parties having adverse legal interests, of sufficient
immediacy and reality to warrant” relief, Maryland Casualty Co. v.
Pacific Coal & Oil Co., 312 U. S. 270, 273—are satisfied here even
though petitioner did not refuse to make royalty payments under the
license agreement. Where threatened government action is con
cerned, a plaintiff is not required to expose himself to liability before
bringing suit to challenge the basis for the threat. His own action (or
inaction) in failing to violate the law eliminates the imminent threat
of prosecution, but nonetheless does not eliminate Article III jurisdic
tion because the threat-eliminating behavior was effectively coerced.
Similarly, where the plaintiff’s self-avoidance of imminent injury is
coerced by the threatened enforcement action of a private party
rather than the government, lower federal and state courts have long
accepted jurisdiction. In its only decision in point, this Court held
that a licensee’s failure to cease its royalty payments did not render
nonjusticiable a dispute over the patent’s validity. Altvater v. Free
man, 319 U. S. 359, 364. Though Altvater involved an injunction, it
acknowledged that the licensees had the option of stopping payments
in defiance of the injunction, but that the consequence of doing so
would be to risk “actual [and] treble damages in infringement suits”
by the patentees, a consequence also threatened in this case. Id., at
365. Respondents’ assertion that the parties in effect settled this
dispute when they entered into their license agreement is mistaken.
Their appeal to the common-law rule that a party to a contract can
not both challenge its validity and continue to reap its benefits is also
unpersuasive. Lastly, because it was raised for the first time here,
this Court does not decide respondents’ request to affirm the dis
missal of the declaratory-judgment claims on discretionary grounds.
That question and any merits-based arguments for denial of declara
tory relief are left for the lower courts on remand. Pp. 7–18.
427 F. 3d 958, reversed and remanded.
SCALIA, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and STEVENS, KENNEDY, SOUTER, GINSBURG, BREYER, and ALITO,
JJ., joined. THOMAS, J., filed a dissenting opinion.
Cite as: 549 U. S. ____ (2007) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash
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SUPREME COURT OF THE UNITED STATES
_________________
No. 05–608
_________________
MEDIMMUNE, INC., PETITIONER v. GENENTECH,
INC., ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT
[January 9, 2007]
JUSTICE SCALIA delivered the opinion of the Court.
We must decide whether Article III’s limitation of fed
eral courts’ jurisdiction to “Cases” and “Controversies,”
reflected in the “actual controversy” requirement of the
Declaratory Judgment Act, 28 U. S. C. §2201(a), requires a
patent licensee to 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.
I
Because the declaratory-judgment claims in this case
were disposed of at the motion-to-dismiss stage, we take
the following facts from the allegations in petitioner’s
amended complaint and the unopposed declarations that
petitioner submitted in response to the motion to dismiss.
Petitioner MedImmune, Inc., manufactures Synagis, a
drug used to prevent respiratory tract disease in infants
and young children. In 1997, petitioner entered into a
patent license agreement with respondent Genentech, Inc.
(which acted on behalf of itself as patent assignee and on
behalf of the coassignee, respondent City of Hope). The
2 MEDIMMUNE, INC. v. GENENTECH, INC.
Opinion of the Court
license covered an existing patent relating to the produc
tion of “chimeric antibodies” and a then-pending patent
application relating to “the coexpression of immunoglobu
lin chains in recombinant host cells.” Petitioner agreed to
pay royalties on sales of “Licensed Products,” and respon
dents granted petitioner the right to make, use, and sell
them. The agreement defined “Licensed Products” as a
specified antibody, “the manufacture, use or sale of which
. . . would, if not licensed under th[e] Agreement, infringe
one or more claims of either or both of [the covered pat
ents,] which have neither expired nor been held invalid by
a court or other body of competent jurisdiction from which
no appeal has been or may be taken.” App. 399. The
license agreement gave petitioner the right to terminate
upon six months’ written notice.
In December 2001, the “coexpression” application cov
ered by the 1997 license agreement matured into the
“Cabilly II” patent. Soon thereafter, respondent Genen
tech delivered petitioner a letter expressing its belief that
Synagis was covered by the Cabilly II patent and its ex
pectation that petitioner would pay royalties beginning
March 1, 2002. Petitioner did not think royalties were
owing, believing that the Cabilly II patent was invalid and
unenforceable,1 and that its claims were in any event not
infringed by Synagis. Nevertheless, petitioner 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 petitioner did not make royalty
payments as demanded. If respondents were to prevail in
a patent infringement action, petitioner could be ordered
to pay treble damages and attorney’s fees, and could be
enjoined from selling Synagis, a product that has ac
——————
1 Hereinafter,
invalidity and unenforceability will be referred to sim
ply as invalidity, with similar abbreviation of positive (validity and
enforceability) and adjectival (valid and invalid, enforceable and
unenforceable) forms.
Cite as: 549 U. S. ____ (2007) 3
Opinion of the Court
counted for more than 80 percent of its revenue from sales
since 1999. Unwilling to risk such serious consequences,
petitioner paid the demanded royalties “under protest and
with reservation of all of [its] rights.” Id., at 426. This
declaratory-judgment action followed.
Petitioner sought the declaratory relief discussed in
detail in Part II below. Petitioner also requested damages
and an injunction with respect to other federal and state
claims not relevant here. 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). Gen-Probe had held that a patent licensee in
good standing cannot establish an Article III case or con
troversy with regard to validity, enforceability, or scope of
the patent because the license agreement “obliterate[s]
any reasonable apprehension” that the licensee will be
sued for infringement. Id., at 1381. The Federal Circuit
affirmed the District Court, also relying on Gen-Probe.
427 F. 3d 958 (2005). We granted certiorari. 546 U. S.
1169 (2006).
II
At the outset, we address a disagreement concerning the
nature of the dispute at issue here—whether it involves
only a freestanding claim of patent invalidity or rather a
claim that, both because of patent invalidity and because
of noninfringement, no royalties are owing under the
license agreement.2 That probably makes no difference to
the ultimate issue of subject-matter jurisdiction, but it is
——————
2 The dissent contends that the question on which we granted certio
rari does not reach the contract claim. Post, at 5 (opinion of THOMAS,
J.). We think otherwise. The question specifically refers to the “license
agreement” and to the contention that the patent is “not infringed.”
Pet. for Cert. (i). The unmistakable meaning is that royalties are not
owing under the contract.
4 MEDIMMUNE, INC. v. GENENTECH, INC.
Opinion of the Court
well to be clear about the nature of the case before us.
Respondents contend that petitioner “is not seeking an
interpretation of its present contractual obligations.”
Brief for Respondent Genentech 37; see also Brief for
Respondent City of Hope 48–49. They claim this for two
reasons: (1) because there is no dispute that Synagis in
fringes the Cabilly II patent, thereby making royalties
payable; and (2) because while there is a dispute over patent
validity, the contract calls for royalties on an infringing
product whether or not the underlying patent is valid. See
Brief for Respondent Genentech 7, 37. The first point
simply does not comport with the allegations of petitioner’s
amended complaint. The very first count requested a
“DECLARATORY JUDGMENT ON CONTRACTUAL
RIGHTS AND OBLIGATIONS,” and stated that peti
tioner “disputes its obligation to make payments under the
1997 License Agreement because [petitioner’s] sale of its
Synagis® product does not infringe any valid claim of the
[Cabilly II] Patent.” App. 136. These contentions were
repeated throughout the complaint. Id., at 104, 105, 108,
147.3 And the phrase “does not infringe any valid claim”
(emphasis added) cannot be thought to be no more than a
challenge to the patent’s validity, since elsewhere the
amended complaint states with unmistakable clarity that
“the patent is . . . not infringed by [petitioner’s] Synagis
product and that [petitioner] owes no payments under
license agreements with [respondents].” Id., at 104.4
——————
3 In addition to agreeing with respondents that (despite the face of the
complaint) this case does not involve a contract claim, post, at 4–5, the
dissent evidently thinks the contract claim is weak. That, however,
goes to the merits of the claim, not to its existence or the courts’ juris
diction over it. Nor is the alleged “lack of specificity in the complaint,”
post, at 4, a jurisdictional matter.
4 The dissent observes that the District Court assumed that Synagis
was “ ‘covered by the patents at issue.’ ” Post, at 5 (quoting App. 349–
350). But the quoted statement is taken from the District Court’s
separate opinion granting summary judgment on petitioner’s antitrust
Cite as: 549 U. S. ____ (2007) 5
Opinion of the Court
As to the second point, petitioner assuredly did contend
that it had no obligation under the license to pay royalties
on an invalid patent. Id., at 104, 136, 147. Nor is that
contention frivolous. True, the license requires petitioner
to pay royalties until a patent claim has been held invalid
by a competent body, and the Cabilly II patent has not.
But the license at issue in Lear, Inc. v. Adkins, 395 U. S.
653, 673 (1969), similarly provided that “royalties are to
be paid until such time as the ‘patent . . . is held invalid,’ ”
and we rejected the argument that a repudiating licensee
must comply with its contract and pay royalties until its
claim is vindicated in court. We express no opinion on
whether a nonrepudiating licensee is similarly relieved of
its contract obligation during a successful challenge to a
patent’s validity—that is, on the applicability of licensee
estoppel under these circumstances. Cf. Studiengesell
schaft Kohle, M. B. H. v. Shell Oil Co., 112 F. 3d 1561,
1568 (CA Fed. 1997) (“[A] licensee . . . cannot invoke the
protection of the Lear doctrine until it (i) actually ceases
payment of royalties, and (ii) provides notice to the licen
sor that the reason for ceasing payment of royalties is
because it has deemed the relevant claims to be invalid”).
All we need determine is whether petitioner has alleged a
contractual dispute. It has done so.
Respondents further argue that petitioner waived its
contract claim by failing to argue it below. Brief for Re
spondent Genentech 10–11; Tr. of Oral Arg. 30–31. The
record reveals, however, that petitioner raised the contract
point before the Federal Circuit. See Brief for Plantiff-
Appellant MedImmune, Inc. in Nos. 04–1300, 04–1384
——————
claims. For purposes of that earlier ruling, whether Synagis infringed
the patent was irrelevant, and there was no harm in accepting respon
dents’ contention on the point. This tells us nothing, however, about
petitioner’s contract claim or the District Court’s later jurisdictional
holding with respect to it.
6 MEDIMMUNE, INC. v. GENENTECH, INC.
Opinion of the Court
(CA Fed.), p. 38 (“Here, MedImmune is seeking to define
its rights and obligations under its contract with Genen
tech—precisely the type of action the Declaratory Judg
ment Act contemplates”). That petitioner limited its
contract argument to a few pages of its appellate brief
does not suggest a waiver; it merely reflects counsel’s
sound assessment that the argument would be futile. The
Federal Circuit’s Gen-Probe precedent precluded jurisdic
tion over petitioner’s contract claims, and the panel below
had no authority to overrule Gen-Probe.5 Having deter
mined that petitioner has raised and preserved a contract
claim,6 we turn to the jurisdictional question.
——————
5 Respondents obviously agree. They said in the District Court: “The
facts of this case are, for purposes of this motion, identical to the facts
in Gen-Probe. . . . Like Gen-Probe, MedImmune filed an action seeking
a declaratory judgment that: (a) it owes nothing under its license
agreement with Genentech because its sales of Synagis® allegedly do
not infringe any valid claim of the [Cabilly II] patent; (b) the [Cabilly II]
patent is invalid; (c) the [Cabilly II] patent is unenforceable; and (d)
Synagis® does not infringe the [Cabilly II] patent.” App. in Nos. 04–
1300, 04–1384 (CA Fed.), p. A2829 (record citations omitted).
6 The dissent asserts that petitioner did not allege a contract claim in
its opening brief or at oral argument. Post, at 5. This is demonstrably
false. See, e.g., Brief for Petitioner 8 (the Cabilly II patent was “not
infringed by Synagis®, so that royalties were not due under the li
cense”); id., at 12 (Summary of Argument: “[The purpose] of the De
claratory Judgment Act . . . was to allow contracting parties to resolve
their disputes in court without breach and without risking economic
destruction and multiplying damages. . . . The holding [below] . . .
would . . . disrupt the law of licenses and contracts throughout the
economy, essentially undoing the achievement of the reformers of
1934”); Tr. of Oral Arg. 15 (“We’re saying this is a contract dispute”);
id., at 16 (“[T]he purpose of this [the Declaratory Judgment Act] is so
that contracts can be resolved without breach”); id., at 57 (“The con
tract claim is clear in the record. It’s at page 136 of the joint appendix.
I don’t think more needs to be said about it”).
The dissent also asserts that the validity of the contract claim
“hinges entirely upon a determination of the patent’s validity,” since
“ ‘the license requires [MedImmune] to pay royalties until a patent
claim has been held invalid by a competent body,’ ” post, at 5, quoting
Cite as: 549 U. S. ____ (2007)
7
Opinion of the Court
III
The Declaratory Judgment Act provides that, “[i]n a case
of actual controversy within its jurisdiction . . . any court of
the United States . . . may declare the rights and other
legal relations of any interested party seeking such decla
ration, whether or not further relief is or could be sought.”
28 U. S. C. §2201(a). There was a time when this Court
harbored doubts about the compatibility of declaratory-
judgment actions with Article III’s case-or-controversy
requirement. See Willing v. Chicago Auditorium Assn.,
277 U. S. 274, 289 (1928); Liberty Warehouse Co. v. Gran
nis, 273 U. S. 70 (1927); see also Gordon v. United States,
117 U. S. Appx. 697, 702 (1864) (the last opinion of Taney,
C. J., published posthumously) (“The award of execution is
. . . an essential part of every judgment passed by a court
exercising judicial power”). We dispelled those doubts,
however, in Nashville, C. & St. L. R. Co. v. Wallace, 288
U. S. 249 (1933), holding (in a case involving a declaratory
judgment rendered in state court) that an appropriate
action for declaratory relief can be a case or controversy
under Article III. The federal Declaratory Judgment Act
was signed into law the following year, and we upheld its
constitutionality in Aetna Life Ins. Co. v. Haworth, 300
U. S. 227 (1937). Our opinion explained that the phrase
“case of actual controversy” in the Act refers to the type of
“Cases” and “Controversies” that are justiciable under
Article III. Id., at 240.
Aetna and the cases following it do not draw the bright
est of lines between those declaratory-judgment actions
that satisfy the case-or-controversy requirement and those
that do not. Our decisions have required that the dispute
be “definite and concrete, touching the legal relations of
——————
infra, at 5. This would be true only if the license required royalties on
all products under the sun, and not just those that practice the patent.
Of course it does not.
8 MEDIMMUNE, INC. v. GENENTECH, INC.
Opinion of the Court
parties having adverse legal interests”; and that it be “real
and substantial” and “admi[t] of specific relief through a
decree of a conclusive character, as distinguished from an
opinion advising what the law would be upon a hypotheti
cal state of facts.” Id., at 240–241. In Maryland Casualty
Co. v. Pacific Coal & Oil Co., 312 U. S. 270, 273 (1941), we
summarized as follows: “Basically, the question in each
case is whether the facts alleged, under all the circum
stances, show that there is a substantial controversy,
between parties having adverse legal interests, of suffi
cient immediacy and reality to warrant the issuance of a
declaratory judgment.”7
There is no dispute that these standards would have
been satisfied if petitioner had taken the final step of
refusing to make royalty payments under the 1997 license
agreement. Respondents claim a right to royalties under
the licensing agreement. Petitioner asserts that no royal
——————
7 The dissent asserts, post, at 1, that “the declaratory judgment pro
cedure cannot be used to obtain advanced rulings on matters that
would be addressed in a future case of actual controversy.” As our
preceding discussion shows, that is not so. If the dissent’s point is
simply that a defense cannot be raised by means of a declaratory-
judgment action where there is no “actual controversy” or where it
would be “premature,” phrasing that argument as the dissent has done
begs the question: whether this is an actual, ripe controversy.
Coffman v. Breeze Corps., 323 U. S. 316, 323–324 (1945), cited post,
at 3, does not support the dissent’s view (which is why none of the
parties cited it). There, a patent owner sued to enjoin his licensee from
paying accrued royalties to the Government under the Royalty Adjust
ment Act of 1942, and sought to attack the constitutionality of the Act.
The Court held the request for declaratory judgment and injunction
nonjusticiable because the patent owner asserted no right to recover
the royalties and there was no indication that the licensee would even
raise the Act as a defense to suit for the royalties. The other case the
dissent cites for the point, Calderon v. Ashmus, 523 U. S. 740, 749
(1998), simply holds that a litigant may not use a declaratory-judgment
action to obtain piecemeal adjudication of defenses that would not
finally and conclusively resolve the underlying controversy. That is, of
course, not the case here.
Cite as: 549 U. S. ____ (2007) 9
Opinion of the Court
ties are owing because the Cabilly II patent is invalid and
not infringed; and alleges (without contradiction) a threat
by respondents to enjoin sales if royalties are not forth
coming. The factual and legal dimensions of the dispute
are well defined and, but for petitioner’s continuing to
make royalty payments, nothing about the dispute would
render it unfit for judicial resolution. Assuming (without
deciding) that respondents here could not claim an antici
patory breach and repudiate the license, the continuation
of royalty payments makes what would otherwise be an
imminent threat at least remote, if not nonexistent. As
long as those payments are made, there is no risk that
respondents will seek to enjoin petitioner’s sales. Peti
tioner’s own acts, in other words, eliminate the imminent
threat of harm.8 The question before us is whether this
causes the dispute no longer to be a case or controversy
within the meaning of Article III.
Our analysis must begin with the recognition that,
where threatened action by government is concerned, we
do not require a plaintiff to expose himself to liability
before bringing suit to challenge the basis for the threat—
for example, the constitutionality of a law threatened to be
enforced. The plaintiff’s own action (or inaction) in failing
to violate the law eliminates the imminent threat of prose
cution, but nonetheless does not eliminate Article III
jurisdiction. For example, in Terrace v. Thompson, 263
——————
8 The justiciability problem that arises, when the party seeking de
claratory relief is himself preventing the complained-of injury from
occurring, can be described in terms of standing (whether plaintiff is
threatened with “imminent” injury in fact “ ‘fairly . . . trace[able] to the
challenged action of the defendant,’ ” Lujan v. Defenders of Wildlife, 504
U. S. 555, 560 (1992)), or in terms of ripeness (whether there is suffi
cient “hardship to the parties [in] withholding court consideration”
until there is enforcement action, Abbott Laboratories v. Gardner, 387
U. S. 136, 149 (1967)). As respondents acknowledge, standing and
ripeness boil down to the same question in this case. Brief for Respon
dent Genentech 24; Brief for Respondent City of Hope 30–31.
10 MEDIMMUNE, INC. v. GENENTECH, INC.
Opinion of the Court
U. S. 197 (1923), the State threatened the plaintiff with
forfeiture of his farm, fines, and penalties if he entered
into a lease with an alien in violation of the State’s anti
alien land law. Given this genuine threat of enforcement,
we did not require, as a prerequisite to testing the validity
of the law in a suit for injunction, that the plaintiff bet the
farm, so to speak, by taking the violative action. Id., at
216. See also, e.g., Village of Euclid v. Ambler Realty Co.,
272 U. S. 365 (1926); Ex parte Young, 209 U. S. 123 (1908).
Likewise, in Steffel v. Thompson, 415 U. S. 452 (1974), we
did not require the plaintiff to proceed to distribute hand
bills and risk actual prosecution before he could seek a
declaratory judgment regarding the constitutionality of a
state statute prohibiting such distribution. Id., at 458–
460. As then-Justice Rehnquist put it in his concurrence,
“the declaratory judgment procedure is an alternative to
pursuit of the arguably illegal activity.” Id., at 480. In
each of these cases, the plaintiff had eliminated the immi
nent threat of harm by simply not doing what he claimed
the right to do (enter into a lease, or distribute handbills
at the shopping center). That did not preclude subject-
matter jurisdiction because the threat-eliminating behav
ior was effectively coerced. See Terrace, supra, at 215–
216; Steffel, supra, at 459. The dilemma posed by that
coercion—putting the challenger to the choice between
abandoning his rights or risking prosecution—is “a di
lemma that it was the very purpose of the Declaratory
Judgment Act to ameliorate.” Abbott Laboratories v.
Gardner, 387 U. S. 136, 152 (1967).
Supreme Court jurisprudence is more rare regarding
application of the Declaratory Judgment Act to situations
in which the plaintiff’s self-avoidance of imminent injury
is coerced by threatened enforcement action of a private
party rather than the government. Lower federal courts,
however (and state courts interpreting declaratory judg
ment Acts requiring “actual controversy”), have long ac
Cite as: 549 U. S. ____ (2007) 11
Opinion of the Court
cepted jurisdiction in such cases. See, e.g., Keener Oil &
Gas Co. v. Consolidated Gas Utilities Corp., 190 F. 2d 985,
989 (CA10 1951); American Machine & Metals, Inc. v. De
Bothezat Impeller Co., 166 F. 2d 535 (CA2 1948); Hess v.
Country Club Park, 213 Cal. 613, 614, 2 P. 2d 782, 783
(1931) (in bank); Washington-Detroit Theater Co. v. Moore,
249 Mich. 673, 675, 229 N. W. 618, 618–619 (1930); see
also Advisory Committee’s Note on Fed. Rule Civ. Proc.
57.9
The only Supreme Court decision in point is, fortui
tously, close on its facts to the case before us. Altvater v.
Freeman, 319 U. S. 359 (1943), held that a licensee’s fail
ure to cease its payment of royalties did not render non-
justiciable a dispute over the validity of the patent. In
that litigation, several patentees had sued their licensees
to enforce territorial restrictions in the license. The licen
sees filed a counterclaim for declaratory judgment that the
underlying patents were invalid, in the meantime paying
“under protest” royalties required by an injunction the
patentees had obtained in an earlier case. The patentees
argued that “so long as [licensees] continue to pay royal
ties, there is only an academic, not a real controversy,
between the parties.” Id., at 364. We rejected that argu
ment and held that the declaratory-judgment claim pre
sented a justiciable case or controversy: “The fact that
royalties were being paid did not make this a ‘difference or
dispute of a hypothetical or abstract character.’ ” Ibid.
——————
9 The dissent claims the cited cases do not “rely on the coercion inher
ent in making contractual payments.” Post, at 9, n. 3. That is true;
they relied on (to put the matter as the dissent puts it) the coercion
inherent in complying with other claimed contractual obligations. The
dissent fails to explain why a contractual obligation of payment is
magically different. It obviously is not. In our view, of course, the
relevant coercion is not compliance with the claimed contractual
obligation, but rather the consequences of failure to do so.
12 MEDIMMUNE, INC. v. GENENTECH, INC.
Opinion of the Court
(quoting Aetna, 300 U. S., at 240). The royalties “were
being paid under protest and under the compulsion of an
injunction decree,” and “[u]nless the injunction decree were
modified, the only other course [of action] was to defy it,
and to risk not only actual but treble damages in in
fringement suits.” 319 U. S., at 365. We concluded that
“the requirements of [a] case or controversy are met where
payment of a claim is demanded as of right and where
payment is made, but where the involuntary or coercive
nature of the exaction preserves the right to recover the
sums paid or to challenge the legality of the claim.” Ibid.10
——————
10 The dissent incorrectly asserts that Altvater required actual in
fringement, quoting wildly out of context (and twice, for emphasis)
Altvater’s statement that “ ‘[t]o hold a patent valid if it is not infringed
is to decide a hypothetical case.’ ” Post, at 3, 7 (quoting 319 U. S., at
363). In the passage from which the quotation was plucked, the Alt
vater Court was distinguishing the Court’s earlier decision in Electrical
Fittings Corp. v. Thomas & Betts Co., 307 U. S. 241 (1939), which
involved an affirmative defense of patent invalidity that had become
moot in light of a finding of no infringement. Here is the full quotation:
“The District Court [in Electrical Fittings] adjudged a claim of a pat
ent valid although it dismissed the bill for failure to prove infringe
ment. We held that the finding of validity was immaterial to the
disposition of the cause and that the winning party might appeal to
obtain a reformation of the decree. To hold a patent valid if it is not
infringed is to decide a hypothetical case. But the situation in the
present case is quite different. We have here not only bill and answer
but a counterclaim. Though the decision of non-infringement disposes
of the bill and answer, it does not dispose of the counterclaim which
raises the question of validity.” Altvater, supra, at 363 (footnote
omitted).
As the full quotation makes clear, the snippet quoted by the dissent has
nothing to do with whether infringement must be actual or merely
threatened. Indeed, it makes clear that in appropriate cases to hold a
noninfringed patent valid is not to decide a hypothetical case.
Though the dissent acknowledges the central lesson of Altvater, post,
at 8—that payment of royalties under “coercive” circumstances does not
eliminate jurisdiction—it attempts to limit that rationale to the par
ticular facts of Altvater. But none of Altvater’s “unique facts,” post, at 8,
Cite as: 549 U. S. ____ (2007) 13
Opinion of the Court
The Federal Circuit’s Gen-Probe decision distinguished
Altvater on the ground that it involved the compulsion of
an injunction. But Altvater cannot be so readily dis
missed. Never mind that the injunction had been pri
vately obtained and was ultimately within the control of
the patentees, who could permit its modification. More
fundamentally, and contrary to the Federal Circuit’s
conclusion, Altvater did not say that the coercion disposi
tive of the case was governmental, but suggested just the
opposite. The opinion acknowledged that the licensees
had the option of stopping payments in defiance of the
injunction, but explained that the consequence of doing so
would be to risk “actual [and] treble damages in infringe
ment suits” by the patentees. 319 U. S., at 365. It signifi
cantly did not mention the threat of prosecution for con
tempt, or any other sort of governmental sanction.
Moreover, it cited approvingly a treatise which said that
an “actual or threatened serious injury to business or
employment” by a private party can be as coercive as other
forms of coercion supporting restitution actions at common
law; and that “[t]o imperil a man’s livelihood, his business
enterprises, or his solvency, [was] ordinarily quite as coer
cive” as, for example, “detaining his property.” F. Wood
ward, The Law of Quasi Contracts §218 (1913), cited in
Altvater, supra, at 365.11
——————
suggests that a different test applies to the royalty payments here.
Other than a conclusory assertion that the payments here were “volun
tarily made,” post, at 10, the dissent never explains why the threat of
treble damages and the loss of 80 percent of petitioner’s business does
not fall within Altvater’s coercion rationale.
11 Even if Altvater could be distinguished as an “injunction” case, it
would still contradict the Federal Circuit’s “reasonable apprehension of
suit” test (or, in its evolved form, the “reasonable apprehension of
imminent suit” test, Teva Pharm. USA, Inc. v. Pfizer, Inc., 395 F. 3d
1324, 1333 (2005)). A licensee who pays royalties under compulsion of
an injunction has no more apprehension of imminent harm than a
licensee who pays royalties for fear of treble damages and an injunction
14 MEDIMMUNE, INC. v. GENENTECH, INC.
Opinion of the Court
Jurisdiction over the present case is not contradicted by
Willing v. Chicago Auditorium Association, 277 U. S. 274.
There a ground lessee wanted to demolish an antiquated
auditorium and replace it with a modern commercial
building. The lessee believed it had the right to do this
without the lessors’ consent, but was unwilling to drop the
wrecking ball first and test its belief later. Because there
was no declaratory judgment act at the time under federal
or applicable state law, the lessee filed an action to remove
a “cloud” on its lease. This Court held that an Article III
case or controversy had not arisen because “[n]o defendant
ha[d] wronged the plaintiff or ha[d] threatened to do so.”
Id., at 288, 290. It was true that one of the colessors had
disagreed with the lessee’s interpretation of the lease, but
that happened in an “informal, friendly, private conversa
tion,” id., at 286, a year before the lawsuit was filed; and
the lessee never even bothered to approach the other co
lessors. The Court went on to remark that “[w]hat the
plaintiff seeks is simply a declaratory judgment,” and “[t]o
grant that relief is beyond the power conferred upon the
federal judiciary.” Id., at 289. Had Willing been decided
after the enactment (and our upholding) of the Declara
tory Judgment Act, and had the legal disagreement be
tween the parties been as lively as this one, we are confi
——————
fatal to his business. The reasonable-apprehension-of-suit test also
conflicts with our decisions in Maryland Casualty Co. v. Pacific Coal &
Oil Co., 312 U. S. 270, 273 (1941), where jurisdiction obtained even
though the collision-victim defendant could not have sued the declara
tory-judgment plaintiff-insurer without first obtaining a judgment
against the insured; and Aetna Life Ins. Co. v. Haworth, 300 U. S. 227,
239 (1937), where jurisdiction obtained even though the very reason the
insurer sought declaratory relief was that the insured had given no
indication that he would file suit. It is also in tension with Cardinal
Chemical Co. v. Morton Int’l, Inc., 508 U. S. 83, 98 (1993), which held
that appellate affirmance of a judgment of noninfringement, eliminat
ing any apprehension of suit, does not moot a declaratory judgment
counterclaim of patent invalidity.
Cite as: 549 U. S. ____ (2007) 15
Opinion of the Court
dent a different result would have obtained. The rule that
a plaintiff must destroy a large building, bet the farm, or
(as here) 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.12
Respondents assert that the parties in effect settled this
dispute when they entered into the 1997 license agree
ment. When a licensee enters such an agreement, they
contend, it essentially purchases an insurance policy,
immunizing it from suits for infringement so long as it
continues to pay royalties and does not challenge the
——————
12 The dissent objects to our supposed “extension of Steffel [v. Thomp
son] . . . to apply to voluntarily accepted contractual obligations be
tween private parties.” Post, at 9. The criticism is misdirected in
several respects. The coercion principle upon which we rely today did
not originate with Steffel v. Thompson, 415 U. S. 452 (1974), see supra,
at 9–10, and we have no opportunity to extend it to private litigation,
because Altvater v. Freeman, 319 U. S. 359 (1943) already did so, see
supra, at 12. Moreover, even if today’s decision could be described as
an “extension of Steffel” to private litigation, the dissent identifies no
principled reason why that extension is not appropriate. Article III
does not favor litigants challenging threatened government enforcement
action over litigants challenging threatened private enforcement action.
Indeed, the latter is perhaps the easier category of cases, for it presents
none of the difficult issues of federalism and comity with which we
wrestled in Steffel. See 415 U. S., at 460–475.
The dissent accuses the Court of misapplying Steffel’s rationale.
Post, at 10. It contends that Steffel would apply here only if respon
dents had threatened petitioner with a patent infringement suit in the
absence of a license agreement, because only then would petitioner be
put to the choice of selling its product or facing suit. Post, at 10. Here,
the dissent argues, the license payments are “voluntarily made.” Ibid.
If one uses the word “voluntarily” so loosely, it could be applied with
equal justification (or lack thereof) to the Steffel plaintiff’s “voluntary”
refusal to distribute handbills. We find the threat of treble damages
and loss of 80 percent of petitioner’s business every bit as coercive as
the modest penalties for misdemeanor trespass threatened in Steffel.
Only by ignoring the consequences of the threatened action in this case
can the dissent claim that today’s opinion “contains no limiting princi
ple whatsoever,” post, at 10.
16 MEDIMMUNE, INC. v. GENENTECH, INC.
Opinion of the Court
covered patents. Permitting it to challenge the validity of
the patent without terminating or breaking the agreement
alters the deal, allowing the licensee to continue enjoying
its immunity while bringing a suit, the elimination of
which was part of the patentee’s quid pro quo. Of course
even if it were valid, this argument would have no force
with regard to petitioner’s claim that the agreement does
not call for royalties because their product does not in
fringe the patent. But even as to the patent invalidity
claim, the point seems to us mistaken. To begin with, it is
not clear where the prohibition against challenging the
validity of the patents is to be found. It can hardly be
implied from the mere promise to pay royalties on patents
“which have neither expired nor been held invalid by a
court or other body of competent jurisdiction from which
no appeal has been or may be taken,” App. 399. Promising
to pay royalties on patents that have not been held invalid
does not amount to a promise not to seek a holding of their
invalidity.
Respondents appeal to the common-law rule that a
party to a contract cannot at one and the same time chal
lenge its validity and continue to reap its benefits, citing
Commodity Credit Corp. v. Rosenberg Bros. & Co., 243
F. 2d 504, 512 (CA9 1957), and Kingman & Co. v.
Stoddard, 85 F. 740, 745 (CA7 1898). Lear, they contend,
did not suspend that rule for patent licensing agreements,
since the plaintiff in that case had already repudiated the
contract. Even if Lear’s repudiation of the doctrine of
licensee estoppel was so limited (a point on which, as we
have said earlier, we do not opine), it is hard to see how
the common-law rule has any application here. Petitioner
is not repudiating or impugning the contract while con
tinuing to reap its benefits. Rather, it is asserting that the
contract, properly interpreted, does not prevent it from
challenging the patents, and does not require the payment
of royalties because the patents do not cover its products
Cite as: 549 U. S. ____ (2007) 17
Opinion of the Court
and are invalid. Of course even if respondents were cor
rect that the licensing agreement or the common-law rule
precludes this suit, the consequence would be that respon
dents win this case on the merits—not that the very genu
ine contract dispute disappears, so that Article III juris
diction is somehow defeated. In short, Article III
jurisdiction has nothing to do with this “insurance-policy”
contention.
Lastly, respondents urge us to affirm the dismissal of
the declaratory-judgment claims on discretionary grounds.
The Declaratory Judgment Act provides that a court “may
declare the rights and other legal relations of any inter
ested party,” 28 U. S. C. §2201(a) (emphasis added), not
that it must do so. This text has long been understood “to
confer on federal courts unique and substantial discretion
in deciding whether to declare the rights of litigants.”
Wilton v. Seven Falls Co., 515 U. S. 277, 286 (1995); see
also Cardinal Chemical Co. v. Morton Int’l, Inc., 508 U. S.
83, 95, n. 17 (1993); Brillhart v. Excess Ins. Co. of America,
316 U. S. 491, 494–496 (1942). We have found it “more
consistent with the statute,” however, “to vest district
courts with discretion in the first instance, because facts
bearing on the usefulness of the declaratory judgment
remedy, and the fitness of the case for resolution, are
peculiarly within their grasp.” Wilton, supra, at 289. The
District Court here gave no consideration to discretionary
dismissal, since, despite its “serious misgivings” about the
Federal Circuit’s rule, it considered itself bound to dismiss
by Gen-Probe. App. to Pet. for Cert. 31a. Discretionary
dismissal was irrelevant to the Federal Circuit for the
same reason. Respondents have raised the issue for the
first time before this Court, exchanging competing accusa
tions of inequitable conduct with petitioner. See, e.g.,
Brief for Respondent Genentech 42–44; Reply Brief for
Petitioner 17, and n. 15. Under these circumstances, it
would be imprudent for us to decide whether the District
18 MEDIMMUNE, INC. v. GENENTECH, INC.
Opinion of the Court
Court should, or must, decline to issue the requested
declaratory relief. We leave the equitable, prudential, and
policy arguments in favor of such a discretionary dismissal
for the lower courts’ consideration on remand. Similarly
available for consideration on remand are any merits-
based arguments for denial of declaratory relief.
* * *
We hold that petitioner was not required, insofar as
Article III is concerned, to break or terminate its 1997
license agreement before seeking a declaratory judgment
in federal court that the underlying patent is invalid,
unenforceable, or not infringed. The Court of Appeals
erred in affirming the dismissal of this action for lack of
subject-matter jurisdiction.
The judgment of the Court of Appeals is reversed, and
the cause is remanded for proceedings consistent with this
opinion.
It is so ordered.
Cite as: 549 U. S. ____ (2007) 1
THOMAS, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 05–608
_________________
MEDIMMUNE, INC., PETITIONER v. GENENTECH,
INC., ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT
[January 9, 2007]
JUSTICE THOMAS, dissenting.
We granted certiorari in this case to determine whether
a patent licensee in good standing must breach its license
prior to challenging the validity of the underlying patent
pursuant to the Declaratory Judgment Act, 28 U. S. C.
§2201. 546 U. S. 1169 (2006). The answer to that ques
tion is yes. We have consistently held that parties do not
have standing to obtain rulings on matters that remain
hypothetical or conjectural. We have also held that the
declaratory judgment procedure cannot be used to obtain
advanced rulings on matters that would be addressed in a
future case of actual controversy. MedImmune has sought
a declaratory judgment for precisely that purpose, and I
would therefore affirm the Court of Appeals’ holding that
there is no Article III jurisdiction over MedImmune’s
claim. The Court reaches the opposite result by extending
the holding of Steffel v. Thompson, 415 U. S. 452 (1974), to
private contractual obligations. I respectfully dissent.
I
Article III of the Constitution limits the judicial power
to the adjudication of “Cases” or “Controversies.” §2. We
have held that the Declaratory Judgment Act extends “to
controversies which are such in the constitutional sense.”
Aetna Life Ins. Co. v. Haworth, 300 U. S. 227, 240 (1937).
2 MEDIMMUNE, INC. v. GENENTECH, INC.
THOMAS, J., dissenting
In the context of declaratory judgment actions, this
Court’s cases have provided a uniform framework for
assessing whether an Article III case or controversy exists.
In the constitutional sense, a “Controversy” is “distin
guished from a difference or dispute of a hypothetical or
abstract character; from one that is academic or moot.”
Ibid. (citing United States v. Alaska S. S. Co., 253 U. S.
113, 116 (1920)). “The controversy must be definite and
concrete, touching the legal relations of parties having
adverse legal interests.” 300 U. S., at 240–241. Finally,
“[i]t must be a real and substantial controversy . . . , as
distinguished from an opinion advising what the law
would be upon a hypothetical state of facts.” Id., at 241.
The Declaratory Judgment Act did not (and could not)
alter the constitutional definition of “case or controversy”
or relax Article III’s command that an actual case or con
troversy exist before federal courts may adjudicate a
question. See Maryland Casualty Co. v. Pacific Coal & Oil
Co., 312 U. S. 270, 272–273 (1941). Thus, this Court has
held that “the operation of the Declaratory Judgment Act
is procedural only.” Aetna Life Ins., 300 U. S., at 240. In
other words, the Act merely provides a different procedure
for bringing an actual case or controversy before a federal
court. The Court applied that principle in Aetna Life Ins.,
where an insurance company brought a declaratory judg
ment action against an insured who claimed he had be
come disabled, had formally presented his claims, and had
refused to make any more insurance payments. Id., at
242. In the course of deciding that it could entertain the
insurer’s declaratory judgment action, the Court specifi
cally noted that, had the insured filed his traditional cause
of action first, “there would have been no question that the
controversy was of a justiciable nature . . . .” Id., at 243.
Accordingly, the Act merely provided a different proce
dural tool that allowed the insurance company to bring an
otherwise justiciable controversy before a federal court.
Cite as: 549 U. S. ____ (2007) 3
THOMAS, J., dissenting
We have also held that no controversy exists when a
declaratory judgment plaintiff attempts to obtain a pre
mature ruling on potential defenses that would typically
be adjudicated in a later actual controversy. In Coffman v.
Breeze Corps., 323 U. S. 316 (1945), a patent owner
brought a declaratory judgment action against his licen
sees seeking to have the Royalty Adjustment Act of 1942
declared unconstitutional and to enjoin his licensees from
paying accrued royalties to the Government. This Court
held that no case or controversy existed because the valid
ity of the Royalty Adjustment Act would properly arise
only as a defense in a suit by the patentholder against the
licensees to recover royalties. Id., at 323–324. Accord
ingly, the complaint at issue was “but a request for an
advisory opinion as to the validity of a defense to a suit for
recovery of the royalties.” Id., at 324. And the Court
noted that “[t]he declaratory judgment procedure . . . may
not be made the medium for securing an advisory opinion
in a controversy which has not arisen.” Ibid.; see also
Calderon v. Ashmus, 523 U. S. 740, 747 (1998) (holding
that a prisoner may not use a declaratory judgment action
to determine the validity of a defense that a State might
raise in a future habeas proceeding).
These principles apply with equal force in the patent
licensing context. In Altvater v. Freeman, 319 U. S. 359,
365–366 (1943), the Court, quite unremarkably, held that
a “licensee” had standing to bring a declaratory judgment
counterclaim asserting the affirmative defense of patent
invalidity in response to a patent infringement suit. But
not to be mistaken, the Altvater Court expressly stated
that “[t]o hold a patent valid if it is not infringed is to
decide a hypothetical case.” Id., at 363. So too, in Cardi
nal Chemical Co. v. Morton Int’l, Inc., 508 U. S. 83, 86
(1993), the affirmative defense of patent invalidity was
raised as a counterclaim to a patent infringement suit.
Although we held that a finding of noninfringement on
4 MEDIMMUNE, INC. v. GENENTECH, INC.
THOMAS, J., dissenting
appeal did not moot a counterclaim alleging invalidity, id.,
at 102–103, we stated that our holding was limited to the
jurisdiction of an appellate court and reiterated that “[i]n
the trial court, of course, a party seeking a declaratory
judgment has the burden of establishing the existence of
an actual case or controversy,” id., at 95.
II
Against the foregoing background, the case before us is
not a justiciable case or controversy under Article III.
A
As a threshold matter, I disagree with the Court’s char
acterization of this case as including a “contractual dis
pute.” Ante, at 5. To substantiate this characterization,
the Court points to a three-paragraph count in MedIm
mune’s complaint entitled “ ‘DECLARATORY JUDGMENT
ON CONTACTUAL RIGHTS AND OBLIGATIONS’ ” and
to MedImmune’s broad allegations that “ ‘its Synagis®
product does not infringe any valid claim of the [Cabilly II]
Patent.’ ” Ante, at 4. Nowhere in its complaint did
MedImmune state why “sale[s] of its Synagis® product
d[o] not infringe any valid claim of the [Cabilly II] Patent.”
App. 136.1 Given the lack of specificity in the complaint, it
is hardly surprising that the Court never explains what
the supposed contract dispute is actually about. A fair
reading of the amended complaint (and a review of the
litigation thus far) shows that MedImmune’s “contract
count” simply posits that because the patent is invalid and
unenforceable (as alleged in counts II and III), MedIm
mune is not bound by its contractual obligations. As the
——————
1 In addition, the fact that MedImmune did not identify anywhere in
the record which provision of the contract was at issue suggests that
there is no contractual provision to “be construed before or after
breach.” Advisory Committee’s Notes on Fed. Rule Civ. Proc. 57, 28
U. S. C. App., pp. 790–791.
Cite as: 549 U. S. ____ (2007) 5
THOMAS, J., dissenting
Court admits, “the license requires [MedImmune] to pay
royalties until a patent claim has been held invalid by a
competent body . . . .” Ante, at 5 (emphasis in original).
Thus, even assuming the existence of a cognizable contract
claim, the validity of that claim hinges entirely upon a
determination of the patent’s validity, independent of any
contractual question. As such, MedImmune’s “contract
claim” simply repackages its patent invalidity claim.
Probably for this reason, MedImmune has not pursued a
contract claim at any level of the litigation. The District
Court stated that the product that was the subject of the
license, Synagis, was “covered by the patents at issue,”
App. 349–350, and MedImmune has never challenged that
characterization. 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. See 427 F. 3d
958, 965 (2005). The question MedImmune presented in
its petition for certiorari, which we accepted without al
teration, says nothing about a contract claim. Neither
does MedImmune’s opening brief allege a contractual
dispute. Even at oral argument, it was not MedImmune,
but an amicus, that alleged there was a contract dispute
at issue in this case. Tr. of Oral Arg. 21–22.
In short, MedImmune did not “rais[e] and preserv[e] a
contract claim.” Ante, at 6. In reaching a contrary conclu
sion, the Court states that its identification of a contract
claim “probably makes no difference to the ultimate”
outcome of this case. Ante, at 3. This may very well be
true, if only because of the broad scope of the Court’s
holding.
B
The facts before us present no case or controversy under
Article III. When MedImmune filed this declaratory
6 MEDIMMUNE, INC. v. GENENTECH, INC.
THOMAS, J., dissenting
judgment action challenging the validity of the Cabilly II
patent, it was under no threat of being sued by Genentech
for patent infringement. This was so because MedImmune
was a licensee in good standing that had made all neces
sary royalty payments. Thus, by voluntarily entering into
and abiding by a license agreement with Genentech,
MedImmune removed any threat of suit. See ante, at 9
(stating the threat of suit was “remote, if not nonexis
tent”). MedImmune’s actions in entering into and continu
ing to comply with the license agreement deprived Genen
tech of any cause of action against MedImmune.
Additionally, MedImmune had no cause of action against
Genentech. Patent invalidity is an affirmative defense to
patent infringement, not a freestanding cause of action.
See 35 U. S. C. §§282(2)–(3). Therefore, here, the Declara
tory Judgment Act must be something more than an al
ternative procedure for bringing on otherwise actual case
or controversy before a federal court. But see Aetna Life
Ins., 300 U. S., at 240 (“[T]he operation of the Declaratory
Judgment Act is procedural only”).
Because neither Genentech nor MedImmune had a
cause of action, MedImmune’s prayer for declaratory relief
can be reasonably understood only as seeking an advisory
opinion about an affirmative defense it might use in some
future litigation. MedImmune wants to know whether, if
it decides to breach its license agreement with Genentech,
and if Genentech sues it for patent infringement, it will
have a successful affirmative defense. Presumably, upon a
favorable determination, MedImmune would then stop
making royalty payments, knowing in advance that the
federal courts stand behind its decision. Yet as demon
strated above, the Declaratory Judgment Act does not
allow federal courts to give advisory rulings on the poten
tial success of an affirmative defense before a cause of
action has even accrued. Calderon, 523 U. S., at 747
(dismissing a suit that “attempt[ed] to gain a litigation
Cite as: 549 U. S. ____ (2007) 7
THOMAS, J., dissenting
advantage by obtaining an advance ruling on an affirma
tive defense”); see also Coffman, 323 U. S., at 324 (reject
ing use of the Declaratory Judgment Act as a “medium for
securing an advisory opinion in a controversy which has
not arisen”). MedImmune has therefore asked the courts
to render “an opinion advising what the law would be
upon a hypothetical state of facts.” Aetna Life Ins., supra,
at 241; see also Public Serv. Comm’n of Utah v. Wycoff Co.,
344 U. S. 237, 244 (1952) (“The disagreement must not be
nebulous or contingent but must have taken on fixed and
final shape . . .”). A federal court cannot, consistent with
Article III, provide MedImmune with such an opinion.
Finally, as this Court has plainly stated in the context of
a counterclaim declaratory judgment action challenging
the validity of a patent, “[t]o hold a patent valid if it is not
infringed is to decide a hypothetical case.” Altvater, 319
U. S., at 363. Of course, MedImmune presents exactly that
case. Based on a clear reading of our precedent, I would
hold that this case presents no actual case or controversy.
III
To reach today’s result, the Court misreads our prece
dent and expands the concept of coercion from Steffel, 415
U. S. 452, to reach voluntarily accepted contractual obliga
tions between private parties.
A
The Court inappropriately relies on Altvater, which is
inapplicable to this case for three reasons. First, in Alt
vater, the affirmative defense of patent invalidity arose in
a declaratory judgment motion filed as a counterclaim to a
patent infringement suit. See 319 U. S., at 360. Second,
the opinion in Altvater proceeds on the understanding that
no license existed. Both the District Court and the Court
of Appeals had already held that the underlying license
had been terminated prior to the filing of the case. Id., at
8 MEDIMMUNE, INC. v. GENENTECH, INC.
THOMAS, J., dissenting
365 (“Royalties were being demanded and royalties were
being paid. But they were being paid . . . under the com
pulsion of an injunction decree”). Third, and related,
though the one-time licensee continued to pay royalties, it
did so under the compulsion of an injunction that had been
entered in a prior case. Ibid. Altvater simply held that
under the unique facts of that case, the Court of Appeals
erred in considering the declaratory judgment counter
claim moot because the “involuntary or coercive nature of
the exaction preserve[d] the right to recover the sums paid
or to challenge the legality of the claim.” Ibid.
Cardinal Chemical Co. v. Morton Int’l, Inc., 508 U. S. 83
(1993), is similarly inapt here. In that case, as in Altvater,
the defendant raised the affirmative defense of patent
invalidity in a counterclaim to a patent infringement suit.
508 U. S., at 86. We specifically held that a finding of
noninfringement on appeal did not moot a counterclaim
alleging invalidity. Id., at 102–103. But we stressed:
“[T]he issue before us, therefore[,] concern[s] the ju
risdiction of an intermediate appellate court—not the
jurisdiction of a trial . . . court . . . . In the trial court,
of course, a party seeking a declaratory judgment has
the burden of establishing the existence of an actual
case or controversy.” Id., at 95.
We went on to offer a hypothetical that showed a party
could seek a declaratory judgment “[i]n patent litigation
. . . even if the patentee has not filed an infringement
action.” Ibid. However, that hypothetical involved a
patent-holder that threatened an infringement suit
against a competitor (not a licensee) that continued to sell
the allegedly infringing product and faced growing liabil
ity. In doing so, we hypothesized a situation that paral
leled the facts in Aetna Life Ins.: The patentee had a cause
of action against an alleged infringer and could have
brought suit at any moment, and the declaratory judg
Cite as: 549 U. S. ____ (2007) 9
THOMAS, J., dissenting
ment procedure simply offered the alleged infringer a
different method of bringing an otherwise justiciable case
or controversy into court.2
B
The Court’s more serious error is its extension of Steffel,
supra, to apply to voluntarily accepted contractual obliga
tions between private parties. No court has ever taken
such a broad view of Steffel.
In Steffel, the Court held that in certain limited circum
stances, a party’s anticipatory cause of action qualified as
a case or controversy under Article III. Based expressly
on the coercive nature of governmental power, the Court
found that “it is not necessary that petitioner first expose
himself to actual arrest or prosecution to be entitled to
challenge a statute that he claims deters the exercise of his
constitutional rights.” Id., at 459 (emphasis added).
Limited, as it is, to governmental power, particularly the
power of arrest and prosecution, Steffel says nothing about
coercion in the context of private contractual obligations.
It is therefore not surprising that, until today, this Court
has never applied Steffel and its theory of coercion to
private contractual obligations; indeed, no court has ever
done so.3
The majority not only extends Steffel to cases that do
——————
2 Additionally, Lear, Inc. v. Adkins, 395 U. S. 653 (1969), has little to do
with this case. It addressed the propriety and extent of the common-law
doctrine of licensee estoppel, and the licensee in Lear had ceased making
payments under the license agreement—a fact that makes the case
singularly inapposite here. Id., at 659–660. Lear did not involve the
Declaratory Judgment Act because the case was brought as a breach-of
contract action for failure to pay royalties.
3 Admitting that such decisions are “rare,” ante, at 9, the Court cites
cases predating Steffel that hold that a court may construe contractual
provisions prior to breach. Those cases do not rely on the coercion
inherent in making contractual payments. See, e.g., Keener Oil & Gas
Co. v. Consolidated Gas Util. Corp., 190 F. 2d 985, 989 (CA10 1951).
10 MEDIMMUNE, INC. v. GENENTECH, INC.
THOMAS, J., dissenting
not involve governmental coercion, but also extends Stef
fel’s rationale. If “coercion” were understood as the Court
used that term in Steffel, it would apply only if Genentech
had threatened MedImmune with a patent infringement
suit in the absence of a license agreement. At that point,
MedImmune would have had a choice, as did the declara
tory plaintiff in Steffel, either to cease the otherwise pro
tected activity (here, selling Synagis) or to continue in that
activity and face the threat of a lawsuit. But MedImmune
faced no such choice. Here, MedImmune could continue
selling its product without threat of suit because it had
eliminated any risk of suit by entering into a license
agreement. By holding that the voluntary choice to enter
an agreement to avoid some other coerced choice is itself
coerced, the Court goes far beyond Steffel.
The majority explains that the “coercive nature of the
exaction preserves the right . . . to challenge the legality of
the claim.” Ante, at 12 (internal quotation marks omit
ted). The coercive nature of what “exaction”? The answer
has to be the voluntarily made license payments because
there was no threat of suit here. By holding that contrac
tual obligations are sufficiently coercive to allow a party to
bring a declaratory judgment action, the majority has
given every patent licensee a cause of action and a free
pass around Article III’s requirements for challenging the
validity of licensed patents. But the reasoning of today’s
opinion applies not just to patent validity suits. Indeed,
today’s opinion contains no limiting principle whatsoever,
casting aside Justice Stewart’s understanding that Stef
fel’s use would “be exceedingly rare.” 415 U. S., at 476
(concurring opinion).
For the foregoing reasons, I respectfully dissent.