The U.S. Supreme Court sided with MedImmune and reinstated the company's lawsuit challenging the validity of a key Genentechpatent.
In a decision closely watched by U.S. patent experts, the high court voted by a margin of 8-1 to reverse a federal appeals court. The suit was aimed at overturning a Genentech patent covering a method of producing antibody drugs.
The case was sent back to the appeals court for further proceedings.
The patent at issue in the case, known as the Cabilly patent, is licensed by MedImmune in connection with its biggest-selling product, a respiratory drug called Synagis.
The case also has broader implications for the U.S. patent system because it raises the question of 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.
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, 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 case has prompted concerns among brand name drug makers and other patent-reliant companies, who expressed concerns that a ruling in favor of MedImmune could harm the patent system and disrupt licensing deals.
Genentech is majority owned by Roche Holding.