MEDIMMUNE, INC. v. GENENTECH, INC., et al.

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118 OCTOBER TERM, 2006
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 ma
tured into the “Cabilly II” patent. Respondent Genentech, Inc., sent
petitioner a letter stating that Synagis, a drug petitioner manufactured,
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 Sy
nagis did not infringe the patent’s claims, petitioner considered the let
ter a clear threat to enforce the patent, terminate the license agreement,
and bring a patent infringement action if petitioner did not pay. Be
cause such an action could have resulted in petitioner’s being ordered
to pay treble damages and attorney’s fees and enjoined from selling
Synagis, which accounts for more than 80 percent of its sales reve
nue, 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 be
cause, under Federal Circuit precedent, a patent licensee in good stand
ing 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 patent
invalidity claim is at issue, the record establishes that petitioner has
raised and preserved the contract claim that, because of patent inva
lidity, unenforceability, and noninfringement, no royalties are owing.
Pp. 123–125.
2. The Federal Circuit erred in affirming the dismissal of this action
for lack of subject-matter jurisdiction. The standards for determining
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 controversy, between
parties having adverse legal interests, of sufficient immediacy and real
ity 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

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threatened government action is concerned, 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 jurisdiction because the threat-eliminating be
havior 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 pay
ments did not render nonjusticiable a dispute over the patent’s validity.
Altvater v. Freeman, 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 dis
pute when they entered into their license agreement is mistaken. Their
appeal to the common-law rule that a party to a contract cannot both
challenge its validity and continue to reap its benefits is also unpersua
sive. Lastly, because it was raised for the first time here, this Court
does not decide respondents’ request to affirm the dismissal of the
declaratory-judgment claims on discretionary grounds. That question
and any merits-based arguments for denial of declaratory relief are left
for the lower courts on remand. Pp. 126–137.
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, post, p. 137.
John G. Kester argued the cause for petitioner. With him
on the briefs were Paul B. Gaffney, Janet C. Fisher, Aaron
P. Maurer, Harvey Kurzweil, Aldo Badini, and Henry J.
Ricardo.
Deanne E. Maynard argued the cause for the United
States as amicus curiae urging reversal. With her on the
brief were Solicitor General Clement, Assistant Attorney
General Keisler, Deputy Solicitor General Hungar, John
M. Whealan, and Joseph G. Piccolo.

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120 MEDIMMUNE, INC. v. GENENTECH, INC.
Opinion of the Court
Maureen E. Mahoney argued the cause for respondents.
With her on the brief for respondent Genentech, Inc., were
J. Scott Ballenger, Amanda P. Biles, Daniel M. Wall, Mark
A. Flagel, Roy E. Hofer, Meredith Martin Addy, John W.
Keker, and Mark A. Lemley. Paul M. Smith, William M.
Hohengarten, Ian Heath Gershengorn, Joseph M. Lipner,
Laura W. Brill, and Jason Linder filed a brief for respondent
City of Hope.*
Justice Scalia delivered the opinion of the Court.
We must decide whether Article III’s limitation of federal
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 li
*Briefs of amici curiae urging reversal were filed for the Generic Phar
maceutical Association by Theodore Case Whitehouse; for Medtronic, Inc.,
by Kenneth C. Bass III and Robert G. Sterne; for the Natural Resources
Defense Council, Inc., by Scott L. Nelson, Brian Wolfman, and Michael
E. Wall; and for Three Intellectual Property Professors by Jay Dratler,
Jr., and A. Samuel Oddi, both pro se.
Briefs of amici curiae urging affirmance were filed for the American
Bar Association by Michael S. Greco, Richard L. Rainey, and David H.
Remes; for the American Intellectual Property Law Association by Ed
ward R. Reines, Amber H. Rovner, and Melvin C. Garner; for the Boston
Patent Law Association by Erik Paul Belt; for a Group of Law Professors
by David Hricik, pro se; for the New York Intellectual Property Law
Association by David F. Ryan and Christopher A. Hughes; for the Phar
maceutical Research and Manufacturers of America by Marjorie E. Pow
ell; for Qualcomm Inc. et al. by E. Joshua Rosenkranz and Alan H. Blan
kenheimer; for the Trustees of Columbia University in the City of New
York et al. by Jerrold J. Ganzfried, John F. Stanton, Teresa M. Corbin,
Jennifer A. Sklenar, and Richard G. Taranto; for 3M et al. by Gary L.
Griswold, Steven W. Miller, Q. Todd Dickinson, and John A. Dragseth;
for John R. Allison et al. by Thomas F. Cotter, Mr. Allison, Christopher
A. Cotropia, Thomas G. Field, Jr., and Michael S. Mireles, all pro se; and
for Richard L. Donaldson et al. by Justin A. Nelson, Parker C. Folse III,
Brooke A. M. Taylor, and Richard A. Epstein.
Christine E. Lehman, James B. Monroe, and D. Brian Kacedon filed a
brief for the Licensing Executives Society (U. S. A. & Canada), Inc., as
amicus curiae.

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censee to terminate or be in breach of its license agreement
before it can seek a declaratory judgment that the underly
ing 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 fol
lowing 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 pre
vent 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, re
spondent City of Hope). The license covered an existing
patent relating to the production of “chimeric antibodies”
and a then-pending patent application relating to “the co
expression of immunoglobulin chains in recombinant host
cells.” Petitioner agreed to pay royalties on sales of “Li
censed Products,” and respondents granted petitioner the
right to make, use, and sell them. The agreement defined
“Licensed Products” as a specified antibody, “the manufac
ture, 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 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. The license agreement gave petitioner the right
to terminate upon six months’ written notice.
In December 2001, the “coexpression” application covered
by the 1997 license agreement matured into the “Cabilly II”
patent. Soon thereafter, respondent Genentech delivered
petitioner a letter expressing its belief that Synagis was cov
ered by the Cabilly II patent and its expectation that peti
tioner would pay royalties beginning March 1, 2002. Peti
tioner did not think royalties were owing, believing that the

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Cabilly II patent was invalid and unenforceable,1 and that its
claims were in any event not infringed by Synagis. Never
theless, 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 accounted for more than 80 percent of its revenue from
sales since 1999. Unwilling to risk such serious conse
quences, petitioner paid the demanded royalties “under pro
test 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’ mo
tion 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 controversy with regard to
validity, enforceability, or scope of the patent because the
license agreement “obliterate[s] any reasonable apprehen
sion” 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).
1 Hereinafter, invalidity and unenforceability will be referred to simply
as invalidity, with similar abbreviation of positive (validity and enforceabil
ity) and adjectival (valid and invalid, enforceable and unenforceable) forms.

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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 nonin
fringement, no royalties are owing under the license agree
ment.2 That probably makes no difference to the ultimate
issue of subject-matter jurisdiction, but it is well to be clear
about the nature of the case before us.
Respondents contend that petitioner “is not seeking an in
terpretation 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 infringes 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 JUDG-
MENT ON CONTRACTUAL RIGHTS AND OBLIGA-
TIONS,” and stated that petitioner “disputes its obligation
to make payments under the 1997 License Agreement be
cause [petitioner’s] sale of its Synagis� product does not in
fringe any valid claim of the [Cabilly II] Patent.” App. 136.
These contentions were repeated throughout the complaint.
2 The dissent contends that the question on which we granted certiorari
does not reach the contract claim. Post, at 140–141 (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.

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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 else
where the amended complaint states with unmistakable clar
ity that “the patent is . . . not infringed by [petitioner’s] Sy
nagis � product and that [petitioner] owes no payments under
license agreements with [respondents].” Id., at 104.4
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 con
tention 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. Studiengesellschaft Kohle, m. b. H. v. Shell Oil Co., 112
F. 3d 1561, 1568 (CA Fed. 1997) (“[A] licensee . . . cannot
3 In addition to agreeing with respondents that (despite the face of the
complaint) this case does not involve a contract claim, post, at 140–141, 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’ jurisdiction
over it. Nor is the alleged “lack of specificity in the complaint,” post, at
140, a jurisdictional matter.
4 The dissent observes that the District Court assumed that Synagis was
“ ‘covered by the patents at issue.’ ” Post, at 141 (quoting App. 349–350).
But the quoted statement is taken from the District Court’s separate opin
ion granting summary judgment on petitioner’s antitrust claims. For
purposes of that earlier ruling, whether Synagis infringed the patent was
irrelevant, and there was no harm in accepting respondents’ 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.

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invoke the protection of the Lear doctrine until it (i) actually
ceases payment of royalties, and (ii) provides notice to the
licensor 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 con
tract claim by failing to argue it below. Brief for Respond
ent 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 (CA Fed.), p. 38
(“Here, MedImmune is seeking to define its rights and obli
gations under its contract with Genentech—precisely the
type of action the Declaratory Judgment 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 pre
cluded jurisdiction over petitioner’s contract claims, and the
panel below had no authority to overrule Gen-Probe.5 Hav
ing determined 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 in
fringe 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 141. 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 license”);
id., at 12 (Summary of Argument: “[The purpose] of the Declaratory Judg
ment Act . . . was to allow contracting parties to resolve their disputes in
court without breach and without risking economic destruction and multi

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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 re
quirement. See Willing v. Chicago Auditorium Assn., 277
U. S. 274, 289 (1928); Liberty Warehouse Co. v. Grannis, 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., pub
lished posthumously) (“The award of execution is . . . an es
sential 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
plying 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 [the Declaratory
Judgment Act] is so that contracts can be resolved without breach”); id.,
at 57 (“The contract 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 141, quoting supra, at 124. 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.

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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 brightest
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 parties
having adverse legal interests”; and that it be “real and sub
stantial” and “admi[t] of specific relief through a decree of a
conclusive character, as distinguished from an opinion advis
ing what the law would be upon a hypothetical state of
facts.” Id., at 240–241. In Maryland Casualty Co. v. Pa
cific 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 circumstances, show that
there is a substantial controversy, between parties having
adverse legal interests, of sufficient immediacy and reality to
warrant the issuance of a declaratory judgment.” 7
7 The dissent asserts, post, at 137, that “the declaratory judgment proce
dure 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,” phras
ing 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
139, 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 Adjustment 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

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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 royalties 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 forthcoming. The factual
and legal dimensions of the dispute are well defined and, but
for petitioner’s continuing to make royalty payments, noth
ing about the dispute would render it unfit for judicial resolu
tion. Assuming (without deciding) that respondents here
could not claim an anticipatory breach and repudiate the li
cense, 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 petition
er’s sales. Petitioner’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
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.
8 The justiciability problem that arises, when the party seeking declara
tory 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 sufficient “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 Respondent Genentech 24; Brief for Re
spondent City of Hope 30–31.

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require a plaintiff to expose himself to liability before bring
ing 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 prosecution, but
nonetheless does not eliminate Article III jurisdiction. For
example, in Terrace v. Thompson, 263 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 genu
ine threat of enforcement, we did not require, as a prerequi
site 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. Thomp
son, 415 U. S. 452 (1974), we did not require the plaintiff to
proceed to distribute handbills and risk actual prosecution
before he could seek a declaratory judgment regarding the
constitutionality of a state statute prohibiting such distribu
tion. 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 imminent 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
behavior 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 aban
doning his rights or risking prosecution—is “a dilemma that
it was the very purpose of the Declaratory Judgment Act to
ameliorate.” Abbott Laboratories v. Gardner, 387 U. S. 136,
152 (1967).

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Supreme Court jurisprudence is more rare regarding ap
plication of the Declaratory Judgment Act to situations in
which the plaintiff ’s self-avoidance of imminent injury is co
erced by threatened enforcement action of a private party
rather than the government. Lower federal courts, how
ever (and state courts interpreting declaratory-judgment
acts requiring “actual controversy”), have long accepted ju
risdiction in such cases. See, e. g., Keener Oil & Gas Co. v.
Consolidated Gas Utils. Corp., 190 F. 2d 985, 989 (CA10
1951); American Machine & Metals, Inc. v. De Bothezat Im
peller Co., 166 F. 2d 535 (CA2 1948); Hess v. Country Club
Park, 213 Cal. 613, 614, 2 P. 2d 782, 783 (1931); 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, 28 U. S. C. App., p. 790.9
The only Supreme Court decision in point is, fortuitously,
close on its facts to the case before us. Altvater v. Freeman,
319 U. S. 359 (1943), held that a licensee’s failure to cease its
payment of royalties did not render nonjusticiable a dispute
over the validity of the patent. In that litigation, several
patentees had sued their licensees to enforce territorial re
strictions in the license. The licensees filed a counterclaim
for declaratory judgment that the underlying patents were
invalid, in the meantime paying “under protest” royalties re
quired by an injunction the patentees had obtained in an
earlier case. The patentees argued that “so long as [licens
ees] continue to pay royalties, there is only an academic, not
a real controversy, between the parties.” Id., at 364. We
9 The dissent claims the cited cases do not “rely on the coercion inherent
in making contractual payments.” Post, at 145, 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 conse
quences of failure to do so.

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rejected that argument and held that the declaratory
judgment claim presented 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 charac
ter.’ ” Ibid. (quoting Aetna, 300 U. S., at 240). The royal
ties “were being paid under protest and under the compul
sion 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
infringement 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 pay
ment 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 infringe
ment, 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 139, 143 (quoting 319 U. S., at 363). In
the passage from which the quotation was plucked, the Altvater 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 patent
valid although it dismissed the bill for failure to prove infringement. 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.” Alt
vater, 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 threat
ened. Indeed, it makes clear that in appropriate cases to hold a nonin
fringed patent valid is not to decide a hypothetical case.
Though the dissent acknowledges the central lesson of Altvater, post, at
144—that payment of royalties under “coercive” circumstances does not

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132 MEDIMMUNE, INC. v. GENENTECH, INC.
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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 dismissed.
Never mind that the injunction had been privately obtained
and was ultimately within the control of the patentees, who
could permit its modification. More fundamentally, and con
trary to the Federal Circuit’s conclusion, Altvater did not say
that the coercion dispositive 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 conse
quence of doing so would be to risk “actual [and] treble dam
ages in infringement suits” by the patentees. 319 U. S., at
365. It significantly did not mention the threat of prosecu
tion for contempt, or any other sort of governmental sanc
tion. 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 Alt
vater, supra, at 365.11
eliminate jurisdiction—it attempts to limit that rationale to the particular
facts of Altvater. But none of Altvater’s “unique facts,” post, at 144, sug
gests that a different test applies to the royalty payments here. Other
than a conclusory assertion that the payments here were “voluntarily
made,” post, at 146, 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 immi
nent 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

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Jurisdiction over the present case is not contradicted by
Willing v. Chicago Auditorium Assn., 277 U. S. 274. There
a ground lessee wanted to demolish an antiquated auditorium
and replace it with a modern commercial building. The les
see 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 plain
tiff 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 “infor
mal, friendly, private conversation,” id., at 286, a year before
the lawsuit was filed; and the lessee never even bothered to
approach the other colessors. The Court went on to remark
that “[w]hat the plaintiff seeks is simply a declaratory judg
ment,” and “[t]o grant that relief is beyond the power con
ferred upon the federal judiciary.” Id., at 289. Had Will
ing been decided after the enactment (and our upholding) of
the Declaratory Judgment Act, and had the legal disagree
has no more apprehension of imminent harm than a licensee who pays
royalties for fear of treble damages and an injunction 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 de
fendant could not have sued the declaratory-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 noninfringe
ment, eliminating any apprehension of suit, does not moot a declaratory
judgment counterclaim of patent invalidity.

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134 MEDIMMUNE, INC. v. GENENTECH, INC.
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ment between the parties been as lively as this one, we are
confident 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 con
tested 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 agreement.
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 covered patents. Permitting it
12 The dissent objects to our supposed “extension of Steffel [v. Thomp
son] . . . to apply to voluntarily accepted contractual obligations between
private parties.” Post, at 145. The criticism is misdirected in several
respects. The coercion principle upon which we rely today did not origi
nate with Steffel v. Thompson, 415 U. S. 452 (1974), see supra, at 128–129,
and we have no opportunity to extend it to private litigation, because Alt
vater v. Freeman, 319 U. S. 359 (1943), already did so, see supra, at 132.
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 chal
lenging threatened private enforcement action. Indeed, the latter is per
haps 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 146. It contends that Steffel would apply here only if respondents 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 145–146. Here, the dissent
argues, the license payments are “voluntarily made.” Post, at 146. 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 ignor
ing the consequences of the threatened action in this case can the dissent
claim that today’s opinion “contains no limiting principle whatsoever,”
post, at 146.

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to challenge the validity of the patent without terminating
or breaking the agreement alters the deal, allowing the li
censee 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 prod
uct does not infringe 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 roy
alties 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 challenge 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 re
pudiation 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 con
tract while continuing to reap its benefits. Rather, it is as
serting that the contract, properly interpreted, does not pre
vent it from challenging the patents, and does not require
the payment of royalties because the patents do not cover its
products and are invalid. Of course even if respondents
were correct that the licensing agreement or the common
law rule precludes this suit, the consequence would be that

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136 MEDIMMUNE, INC. v. GENENTECH, INC.
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respondents win this case on the merits—not that the very
genuine contract dispute disappears, so that Article III ju
risdiction is somehow defeated. In short, Article III ju
risdiction 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 de
clare the rights and other legal relations of any interested
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 decid
ing 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 consider
ation 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 compet
ing accusations 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
Court should, or must, decline to issue the requested declara
tory 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

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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 agree
ment 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 dis
missal 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.
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 question is yes. We
have consistently held that parties do not have standing to
obtain rulings on matters that remain hypothetical or conjec
tural. We have also held 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 contro
versy. 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 juris
diction over MedImmune’s claim. The Court reaches the
opposite result by extending the holding of Steffel v. Thomp
son, 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

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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). 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 “distinguished from
a difference or dispute of a hypothetical or abstract charac
ter; 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 substan
tial controversy . . . , as distinguished from an opinion advis
ing 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 contro
versy 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 proce
dural 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 judgment action
against an insured who claimed he had become disabled, had
formally presented his claims, and had refused to make any
more insurance payments. Id., at 242. In the course of de
ciding that it could entertain the insurer’s declaratory judg
ment action, the Court specifically noted that, had the in
sured filed his traditional cause of action first, “there would
have been no question that the controversy was of a justicia
ble nature . . . .” Id., at 243. Accordingly, the Act merely

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provided a different procedural tool that allowed the insur
ance company to bring an otherwise justiciable controversy
before a federal court.
We have also held that no controversy exists when a de
claratory judgment plaintiff attempts to obtain a premature
ruling on potential defenses that would typically be adjudi
cated in a later actual controversy. In Coffman v. Breeze
Corps., 323 U. S. 316 (1945), a patent owner brought a declar
atory judgment action against his licensees seeking to have
the Royalty Adjustment Act of 1942 declared unconstitu
tional and to enjoin his licensees from paying accrued royal
ties to the Government. This Court held that no case or
controversy existed because the validity of the Royalty Ad
justment Act would properly arise only as a defense in a suit
by the patent holder against the licensees to recover royal
ties. Id., at 323–324. Accordingly, 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 li
censing 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 in
validity 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 Cardinal Chemi
cal Co. v. Morton Int’l, Inc., 508 U. S. 83, 86 (1993), the af
firmative defense of patent invalidity was raised as a coun

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140 MEDIMMUNE, INC. v. GENENTECH, INC.
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terclaim to a patent infringement suit. Although we held
that a finding of noninfringement on appeal did not moot a
counterclaim alleging invalidity, id., at 102–103, we stated
that our holding was limited to the jurisdiction of an appel
late 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 charac
terization of this case as including a “contractual dispute.”
Ante, at 125. To substantiate this characterization, the
Court points to a three-paragraph count in MedImmune’s
complaint entitled “ ‘DECLARATORY JUDGMENT ON
CONTRACTUAL 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 123. 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), MedImmune is not bound by its con
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.” Advi
sory Committee’s Notes on Fed. Rule Civ. Proc. 57, 28 U. S. C. App.,
pp. 790–791.

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tractual obligations. As the Court admits, “the license re
quires [MedImmune] to pay royalties until a patent claim
has been held invalid by a competent body . . . .” Ante, at
124 (emphasis in original). Thus, even assuming the exist
ence 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, MedIm
mune’s “contract claim” simply repackages its patent invalid
ity 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 charac
terization. The Federal Circuit decided this case on the sole
ground that a licensee in good standing may not bring a de
claratory 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 cer
tiorari, which we accepted without alteration, 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 con
tract claim.” Ante, at 125. In reaching a contrary conclu
sion, the Court states that its identification of a contract
claim “probably makes no difference to the ultimate” out
come of this case. Ante, at 123. 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 judg

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142 MEDIMMUNE, INC. v. GENENTECH, INC.
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ment 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 li
censee in good standing that had made all necessary royalty
payments. Thus, by voluntarily entering into and abiding
by a license agreement with Genentech, MedImmune re
moved any threat of suit. See ante, at 128 (stating the
threat of suit was “remote, if not nonexistent”). MedIm
mune’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. Patent invalidity
is an affirmative defense to patent infringement, not a free
standing cause of action. See 35 U. S. C. §§ 282(2)–(3).
Therefore, here, the Declaratory Judgment Act must be
something more than an alternative procedure for bringing
an 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 liti
gation. MedImmune wants to know whether, if it decides
to breach its license agreement with Genentech, and if Gen
entech sues it for patent infringement, it will have a success
ful affirmative defense. Presumably, upon a favorable de
termination, MedImmune would then stop making royalty
payments, knowing in advance that the federal courts stand
behind its decision. Yet as demonstrated above, the Declar
atory Judgment Act does not allow federal courts to give
advisory rulings on the potential success of an affirmative
defense before a cause of action has even accrued. Calde
ron, 523 U. S., at 747 (dismissing a suit that “attempt[ed] to

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gain a litigation advantage by obtaining an advance ruling
on an affirmative defense”); see also Coffman, 323 U. S., at
324 (rejecting use of the Declaratory Judgment Act as a “me
dium 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 in
fringed 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 precedent
and expands the concept of coercion from Steffel, 415 U. S.
452, to reach voluntarily accepted contractual obligations be
tween private parties.
A
The Court inappropriately relies on Altvater, which is in
applicable to this case for three reasons. First, in Altvater,
the affirmative defense of patent invalidity arose in a declar
atory judgment motion filed as a counterclaim to a patent
infringement suit. See 319 U. S., at 360. Second, the opin
ion 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 termi
nated prior to the filing of the case. Id., at 365 (“Royalties

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144 MEDIMMUNE, INC. v. GENENTECH, INC.
Thomas, J., dissenting
were being demanded and royalties were being paid. But
they were being paid . . . under the compulsion of an injunc
tion decree”). Third, and related, though the one-time li
censee continued to pay royalties, it did so under the compul
sion 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 de
claratory judgment counterclaim moot because the “involun
tary 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., 508 U. S. 83, 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 juris
diction of an intermediate appellate court—not the juris
diction 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 liability. In doing so, we hypoth
esized a situation that paralleled the facts in Aetna Life Ins.:
The patentee had a cause of action against an alleged in
fringer and could have brought suit at any moment, and the
declaratory judgment procedure simply offered the alleged

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145 Cite as: 549 U. S. 118 (2007)
Thomas, J., dissenting
infringer a different method of bringing an otherwise justi
ciable 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 constitu
tional 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 obli
gations; indeed, no court has ever done so.3
The majority not only extends Steffel to cases that do not
involve governmental coercion, but also extends Steffel’s ra
tionale. If “coercion” were understood as the Court used
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 singu
larly inapposite here. Id., at 659–660. Lear did not involve the Declara
tory 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 130, 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 inher
ent in making contractual payments. See, e. g., Keener Oil & Gas Co. v.
Consolidated Gas Util. Corp., 190 F. 2d 985, 989 (CA10 1951).

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146 MEDIMMUNE, INC. v. GENENTECH, INC.
Thomas, J., dissenting
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, MedIm
mune would have had a choice, as did the declaratory plain
tiff in Steffel, either to cease the otherwise protected 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 prod
uct 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 ex
action preserves the right . . . to challenge the legality of
the claim.” Ante, at 131 (internal quotation marks omitted).
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 contractual obli
gations 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 li
censed 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 Jus
tice Stewart’s understanding that Steffel’s use would “be ex
ceedingly rare.” 415 U. S., at 476 (concurring opinion).
For the foregoing reasons, I respectfully dissent.