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AbbVie Inc. v. Medimmune Ltd.

United States Court of Appeals, Federal Circuit

February 5, 2018

ABBVIE INC., ABBVIE BIOTECHNOLOGY, LTD., Plaintiffs-Appellants
v.
MEDIMMUNE LIMITED, Defendant-Appellee

         Appeal from the United States District Court for the Eastern District of Virginia in No. 2:16-cv-00322-AWA-DEM, Judge Arenda L. Wright Allen.

          Jeffrey I. Weinberger, Munger, Tolles & Olson LLP, Los Angeles, CA, argued for plaintiffs-appellants. Also represented by Heather E. Takahashi; Ginger Anders, Washington, DC; David Penn Frazier, Michael A. Morin, Latham & Watkins LLP, Washington, DC.

          David I. Berl, Williams & Connolly LLP, Washington, DC, argued for defendant-appellee. Also represented by Thomas S. Fletcher, Shaun Patrick Mahaffy.

          Before Prost, Chief Judge, Dyk, and Chen, Circuit Judges.

          DYK, CIRCUIT JUDGE.

         AbbVie, Inc., and AbbVie Biotechnology Ltd. ("AbbVie") filed suit in the Eastern District of Virginia against MedImmune Limited ("MedImmune"), seeking a declaratory judgment that U.S. Patent No. 6, 248, 516 ("the '516 patent") is invalid. The district court determined that it lacked jurisdiction under the Declaratory Judgment Act, 28 U.S.C. §§ 2201-02, and alternatively that it would not exercise jurisdiction if it existed, and it granted MedImmune's motion to dismiss. We affirm.

         Background

         This declaratory-judgment action concerns a development and licensing agreement entered into by predecessors to AbbVie and MedImmune in 1995. The agreement stemmed from a research collaboration between those predecessors that resulted in the antibody adalimumab, the active ingredient in the well-known pharmaceutical drug Humira. The contract is governed by British law.[1] The 1995 agreement licensed AbbVie to practice the '516 patent among others, although the parties agree that AbbVie does not presently practice it. The agreement also required AbbVie to pay royalties on the sales of certain antibodies "until the last to expire of [certain] Patents or the expiry of fifteen years from the date of First Commercial Sale of a Product by [AbbVie's predecessor] . . . (whichever is later)." J.A. 62. The last of those patents to expire is the '516 patent, with an expiration date of June 19, 2018. The first commercial sale occurred in January 2003. Accordingly, AbbVie's obligation to pay royalties to MedImmune either ceased in January 2018 (if the period is measured from the first commercial sale) or will cease in June 2018 (if measured from the expiration date of the '516 patent).

         Seeking to hasten the end of its royalty obligations, AbbVie brought this declaratory-judgment action in June 2016 seeking a declaration that the '516 patent is invalid. AbbVie argued that a declaration of the '516 patent's invalidity would constitute its expiration for purposes of the 1995 agreement (making the royalty obligations expire in January 2018). However, AbbVie did not seek a declaration as to the contract's interpretation.

         MedImmune argued that the district court lacked declaratory-judgment jurisdiction or, if it had jurisdiction, should decline to exercise it. On the merits, MedImmune rejected AbbVie's interpretation of the contract, contending that the royalty obligations are pegged to the patent's expiration date without regard to the patent's validity.[2]

         The district court dismissed the complaint on two alternate grounds. First, the court observed that AbbVie does not practice the '516 patent and therefore is not at risk of an infringement suit. The district court held that AbbVie "could not be subject to a patent [infringement] action, and therefore lack[s] standing to bring this action." J.A. 6.

         Second, assuming AbbVie had standing, the district court noted that the interpretation of the 1995 agreement was governed by British contract law and would implicate the rights of the British government, which jointly owns the patent through one of its research councils. Deciding the invalidity question, the district court observed, would not resolve the parties' ultimate dispute and would raise these additional concerns about foreign law and sovereign immunity. The district court concluded, therefore, that it would not exercise its declaratory-judgment jurisdiction as a matter of discretion. The district court dismissed the case.

         AbbVie timely appealed, and we have jurisdiction under 28 ...


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