Meddimmune, Microsoft, and KSR: The United States Supreme Court in 2007 Tips the Balance in Favor of Innovation in Patent Cases, and Thrice Reverses the Federal Circuit

INTRODUCTION "The Congress shall have Power ... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." (1) Pursuant to this power, Congress enacted the first patent act in 1790. (2) The Patent Act of 1952 now allows an inventor to obtain a patent for "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." (3) A U.S. patent grants the inventor the exclusive right to make, use, or sell the patented item, (4) grants remedies for infringement including an injunction, (5) damages which may be trebled, (6) and attorneys' fees. (7) Thus, a patent grants a valuable property right to the inventor, because during the patent term of twenty years from the filing date of the patent application, (8) no one else may make, use or sell the patented invention. (9) The Court of Appeals for the Federal Circuit has exclusive jurisdiction over patent appeals. (10) In the last few terms, the U.S. Supreme Court has heard several patent-related cases, yet has not affirmed any of these. In 2005, for example, the Supreme Court unanimously held in Merck KGaA v. Integra Life Sciences I, Ltd., (11) that under a Patent Act exemption from infringement, (12) the use of patented compounds in preclinical studies is protected in certain situations, vacating the judgment of the Federal Circuit. (13) In 2006, the Supreme Court held unanimously in eBay Inc. v. Merc Exchange, LLC (14) that the traditional four-factor test used by courts of equity when awarding injunctive relief also applies to disputes under the Patent Act, vacating and remanding the decision of the Court of Appeals for the Federal Circuit. (15) Also in 2006, in a case that started as a patent case, (16) the Supreme Court again unanimously held in Illinois Tool Works, Inc. v. Independent Ink, Inc. that in a patent tying case the patent does not necessarily confer market power on the patentee. (17) Although the Supreme Court's decision was concerning antitrust law, the Court vacated and remanded the judgment of the U.S. Court of Appeals for the Federal Circuit. (18) Also in 2006, the Supreme Court dismissed a patent case, Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc. (19) The Court in its 2006 term decided three patent cases and reversed the Court of Appeals for the Federal Circuit in each. This article will examine these three patent cases decided by the U.S. Supreme Court in 2007. First, the Court in January 2007 in MedImmune, Inc. v. Genentech, Inc. decided a patent licensee does not have to breach a license agreement before seeking declaratory judgment that the underlying patent is invalid, unenforceable, or not infringed. (20) The Federal Circuit's judgment was reversed. (21) On April 30, 2007, the Supreme Court decided both Microsoft Corp. v. AT&T Corp. (22) and KSR International Co. v. Teleflex Inc. (23) In the former, Microsoft was held not to have supplied a component of an invention from the United States that had the possibility of infringing under the Patent Act. (24) In the latter, which "could be one of the most significant business cases of the last decade," (25) the Court unanimously held that the Federal Circuit improperly applied a narrow and rigid approach to the requirement of non-obviousness under the Patent Act, and an expansive and flexible test must be used. (26) This Article will examine these three patent cases from the Court and their implications. These three decisions will shape the face of patent law for years to come. The balance has been tipped by the Court away from the pro-patent perspective of the Court of Appeals for the Federal Circuit, and towards a pro-innovation approach which is necessary in the fast-paced, high-technology global business environment. I. MEDIMMUNE V. GENENTECH Genentech is the assignee and owner, with the City of Hope, of U. …