'Covenants Not to Sue' Provide Less Immunity in a Post-Medimmune World

This Note addresses the impact of the totality of circumstances test, as now adopted by the Federal Circuit, on covenants not to sue in the Declaratory Judgment (DJ) context. Under the old reasonable apprehension test, promises not to sue were given greater weight than under the new totality of the circumstances test. Part I of this Note addresses the new totality of the circumstances test under Medimmune and Sandisk. Part II of this Note compares the application of promises not to sue in pre-Medimmune and post-Medimmune decisions. Although the current case law does not indicate an extreme change from the pre-Medimmune decisions, the dicta in these cases indicates that a more extreme change may be forthcoming. Finally, Part III responds to a number of scholarly articles that have indicated disapproval of the Federal Circuit’s totality of the circumstances test by applying twofold analysis, taking into account exposed revenue and burdensome litigation costs, to four potential bargaining scenarios between hypothetical licensors and licensees.