UPDATE 2-US high court reinstates MedImmune patent suit

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By Peter Kaplan

WASHINGTON, Jan 9 (Reuters) - The U.S. Supreme Court sided with MedImmune Inc. MEDI.O on Tuesday and reinstated the company's lawsuit challenging the validity of a key Genentech Inc. DNA.N patent.

In a decision that could shift the balance of power away from patent holders and toward licensees, the high court voted by a margin of 8-1 to reverse the Court of Appeals for the Federal Circuit that had dismissed the case.

The case was sent back to the appeals court for further proceedings.

MedImmune issued a statement praising the decision and saying it would "vigorously" pursue the legal challenge of Genentech's patent.

A representative of Genentech , majority owned by Roche Holding AG (ROG.VX), was not immediately available for comment.

The lawsuit is aimed at overturning a Genentech patent covering a method of producing antibody drugs. That patent, known as the Cabilly patent, is licensed by MedImmune in connection with its biggest-selling product, a respiratory drug called Synagis.

The underlying question in the case centers on whether companies should be allowed to sue to invalidate a patent while they continue to license it.

Such lawsuits have been blocked in the past by the Court of Appeals for the Federal Circuit, a U.S. court that specializes in hearing patent cases.

MedImmune agreed to pay for a license on the Genentech patent, but it did so "under protest," saying it did not think the patent was valid or that it covered MedImmune's product.

The federal circuit appeals court has held that companies cannot sue to invalidate a patent they are licensing because they have "no reasonable apprehension" of being sued for infringement.

But Justice Antonin Scalia, writing the majority opinion, disagreed with the circuit court, saying licensing a patent should not preclude a challenge to that patent.

"Promising to pay royalties on patents that have not been held invalid does not amount to a promise not to seek a holding of their invalidity," Scalia wrote.

The lone dissent from the ruling came from Justice Clarence Thomas.

The ruling was one of several in recent months in which the Supreme Court has taken a critical look at federal circuit opinions that favored patent owners.