Over the past year, the patent law landscape has changed significantly. In fact, three recent U.S. Supreme Court cases underscore the shift in the patent law environment and how it now favors patent challengers.

The outcome from KSR v. Teleflex (4/07) is likely to lead to more challenges to patent validity on grounds of obviousness, and a higher proportion of those challenges will likely succeed. In Medimmune v. Genentech (1/07), future revenue streams from existing patent licensing agreements are put at increased risk, as it allows licensees in good standing to challenge the validity of licensed patents. The case of eBay v. MercExchange (5/06) reduces the threat of an injunction as a remedy for infringement, particularly where the patent owner merely collects royalties as opposed to practicing its own patents. As a result, eBay may meaningfully diminish the negotiating leverage of patent owners that do not practice their patents.

Yet, changes in the patent law landscape are not just a matter of shifting outcomes in litigated cases. Rather, these changes will carry over to the negotiating table. In many cases, this may result in reduced "bids" by potential licensees and possibly wider "bid/ask" spreads between potential licensees and patent owners. While the impact of these changes will take some time to fully discern, we are already seeing impacts in company-specific situations.