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January 10, 2007

In the past two days the Court issued two decisions of interest to the business community.

MedImmune, Inc. v. Genentech, Inc., No. 05-608. The Court, in an 8-1 opinion by Justice Scalia, ruled that a patent licensee who continues to pay royalties has Article III standing to seek a declaratory judgment that the licensed patent is invalid. The Court observed that Article III does not require that law-abiding parties expose themselves to prosecution in order to challenge contemplated government action. Likewise, the Court held, the patent licensee's declaratory-judgment action is justiciable because the licensee's formal compliance with the contract is coerced and does not signal the absence of a concrete dispute between the parties. This result expands the options available to licensees paying royalties on what they believe to be invalid patents, allowing them to contest validity without subjecting themselves to penalty for breaches of contract.

Norfolk Southern Railway Co. v. Sorrell, No. 05-746. The Court, in a 8-0 opinion by Chief Justice Roberts  (with Justice Ginsberg concurring in the judgment), determined that Missouri's "unique" practice of applying different causation standards to railroad negligence and employee contributory negligence in Federal Employers' Liability Act (FELA) actions is impermissible under FELA. The Court found no textual basis in FELA for applying different standards. The Court noted that, in the absence of express statutory derogation of the common law in FELA, the common law rule-of applying a uniform causation standard-constituted "strong evidence" against a contrary approach. The Court buttressed its statutory reading by observing the practical difficulties of applying different causation standards and emphasized that while FELA was enacted to benefit railroad employees, that remedial purpose could not "compensate for the lack of a statutory basis." Because the Court declined to clarify what uniform causation standard should be employed in FELA actions, litigation over that uncertainty-possibly culminating in a future Supreme Court decision-will continue.

If you have any questions about these decisions, please contact appellate@mayerbrown.com

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