Question: 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. The answer to that question 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 advance 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. I respectfully dissent. Article III of the Constitution limits the judicial power to the adjudication of "Cases" or "Controversies." In the constitutional sense, a "Controversy" is distinguished from a difference or dispute of a hypothetical or abstract character; from one that is academic or moot. The controversy must be definite and concrete, touching the legal relations of parties having adverse legal interests.

It must be a real and substantial controversy, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts. The facts before us present no case or controversy under Article III. MedImmune's actions in entering into and continuing to comply with the license agreement deprived Genentech of any cause of action against MedImmune. Additionally, MedImmune had no cause of action against Genentech. 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. MedImmune has therefore asked the courts to render an opinion advising what the law would be upon a hypothetical state of facts. A federal court cannot, consistent with Article III, provide MedImmune with such an opinion. To hold a patent valid if it is not infringed is to decide a hypothetical case. Of course, MedImmune presents exactly that case. [Thus] I would hold that this case presents no actual case or controversy.

QUESTIONS FOR ANALYSIS

1 LAW. What was the majority's decision on the principal question before the Court in this case? What were the reasons for this decision?

2 LAW. How did the dissent interpret the issue before the Court? What were the reasons for this interpretation?

3 ETHICS. Suppose that either or both of the parties in this case had asserted their respective positions only to increase their profits. Would this have been unethical? Explain.

4 ECONOMIC D IMENSIONS. This case resolved what seems to be a technical question in a dispute between a pharmaceutical maker and a biotechnology firm. What is the practical importance of the ruling?

5 IMPLICATIONS FOR THE BUSINESSPERSON. What does the outcome of this case suggest to the smaller start-up company that relies on a license to obtain patented technology?