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In 2007, the Supreme Court ruled in MedImmune, Inc. v. Genentech, Inc. that a patent licensee may file a declaratory judgment action seeking judgment of noninfringement, invalidity or unenforceability of the licensed patent without first terminating the license. The high court reasoned that a licensee should not be required to terminate the license or cease paying royalties under it in order to contest the patent because that could give rise to infringement liability. After MedImmune, the question remained as to the proper allocation of the burden of persuasion in a declaratory judgment case that a patent licensee brings against its licensor in which the issue is whether the licensee’s products are covered by the license and, consequently, royalty bearing.

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