Takeda Chemical Industries, Ltd. v. Mylan Laboratories, Inc.

549 F.3d 1381, 89 U.S.P.Q. 2d (BNA) 1218, 2008 U.S. App. LEXIS 24743, 2008 WL 5120584
CourtCourt of Appeals for the Federal Circuit
DecidedDecember 8, 2008
Docket2007-1269, 2007-1270
StatusPublished
Cited by34 cases

This text of 549 F.3d 1381 (Takeda Chemical Industries, Ltd. v. Mylan Laboratories, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Takeda Chemical Industries, Ltd. v. Mylan Laboratories, Inc., 549 F.3d 1381, 89 U.S.P.Q. 2d (BNA) 1218, 2008 U.S. App. LEXIS 24743, 2008 WL 5120584 (Fed. Cir. 2008).

Opinions

Opinion for the court filed by LOURIE, Circuit Judge.

Opinion concurring in part and concurring in the result in part filed by BRYSON, Circuit Judge.

LOURIE, Circuit Judge.

Alphapharm Pty. Ltd. and Genpharm, Inc. (collectively, “Alphapharm”) and My-lan Laboratories, Inc., Mylan Pharmaceuticals, Inc., and UDL Laboratories, Inc. (collectively, “Mylan”) appeal from the final judgment of the United States District Court for the Southern District of New York. On September 20, 2006, the court granted a motion by plaintiff and patentee Takeda Chemical Industries, Ltd. and its affiliate Takeda Pharmaceuticals North America, Inc. (collectively, “Takeda”) to find the case relating to Hatch-Waxman challenges made by Alphapharm and My-lan in connection with Takeda’s U.S. Patent 4,687,777 (“the '777 patent”) to be exceptional and to award attorney fees. Takeda Chem. Indus., Ltd. v. Mylan Labs., Inc., 459 F.Supp.2d 227 (S.D.N.Y.2006) (“September Opinion”). On March 21, 2007, the court quantified the attorney fees, expenses, and expert fees, awarding Takeda $11,400,000 from Mylan and [1384]*1384$5,400,000 from Alphapharm, with interest. Takeda Chem. Indus., Ltd. v. Mylan Labs., Inc., Nos. 03-8253, 04-1966, 2007 WL 840368 (S.D.N.Y. Mar. 21, 2007) (“March Opinion”). Because we conclude that the district court did not clearly err in finding that this was an exceptional case because of the misconduct of Mylan and Alphapharm and did not abuse its discretion in awarding attorney fees, we affirm.

BACKGROUND

The '777 patent covers the anti-diabetic drug pioglitazone, for which Takeda has enjoyed commercial success under the name ACTOS®. Alphapharm and Mylan are two generic drug companies that sought approval to produce generic versions of pioglitazone under the Hatch-Waxman Act. That legislation provides the mechanism for a generic drug company to file an abbreviated new drug application (“ANDA”). An ANDA announces the intention of the filer to sell a bioequivalent form of a drug when approved by the FDA, and the filer makes a certification regarding existing patents covering the drug and its use. 21 U.S.C. § 355(j) (2006). Both Mylan and Alphapharm chose to make certifications pursuant to 21 U.S.C. § 355<j)(2)(A)(vii)(IV) (“Paragraph IV”), certifying that the '777 patent was invalid for obviousness. In response, Takeda sued Alphapharm and Mylan for infringement.

At trial, Alphapharm and Mylan each changed the focus of their invalidity arguments from those in their certification letters. Alphapharm pointed to a compound referred to as compound b, which Takeda disclosed in U.S. Patent 4,287,200 (“the '200 patent”) and in a 1982 scientific article 1 (“Sohda II”), as evidence that pioglita-zone was structurally obvious at the time the invention was made. Mylan advanced an inequitable conduct argument based on alleged misrepresentations by Takeda to the Patent and Trademark Office (“PTO”). On February 21, 2006, after an extensive bench trial, the district court held the invention of the '777 patent to be nonobvious and enforceable. Takeda Chem. Indus., Ltd. v. Mylan Labs., Inc., 417 F.Supp.2d 341 (S.D.N.Y.2006). The district court entered final judgment on March 13, 2006, and we affirmed the district court in two separate appeals. Takeda Chem. Indus., Ltd. v. Alphapharm Pty., Ltd., 492 F.3d 1350 (Fed.Cir.2007); Takeda Chem. Indus., Ltd. v. Ranbaxy Labs., Ltd., No. 06-1364, 2007 U.S.App. LEXIS 15883 (Fed.Cir. June 28, 2007).

Takeda then moved for an award of attorney fees against both Mylan and Al-phapharm on the theory that this was an exceptional case. When a patent has been infringed by the filing of an ANDA, 35 U.S.C. § 271(e)(4) provides for the grant of attorney fees under 35 U.S.C. § 285, which in turn allows the court to award reasonable attorney fees to a prevailing party in exceptional cases. Takeda contended that Mylan and Alphapharm each lacked a good faith basis for their Paragraph IV letters and engaged in misconduct throughout the litigation.

On September 20, 2006, the district court agreed with Takeda in an opinion that discussed the Paragraph IV letters and litigation conduct of Alphapharm and Mylan in the same thorough manner as the court’s previous decision regarding the validity of the '777 patent. Regarding Al-phapharm, the court held that the Paragraph IV certification letter was “so devoid [1385]*1385of merit and so completely fail[ed] to establish a prima facie case of invalidity that it must be described as ‘baseless.’ ” September Opinion, 459 F.Supp.2d at 235. The court discussed at length how Alphap-harm’s argument at trial focused on compound b as the lead compound for future research, whereas Alphapharm’s certification letter focused on two other compounds and contained scientific errors. The court also analyzed what it saw as Alphapharm’s litigation misconduct, which mainly consisted of a shifting theory of obviousness that did not explain why compound b would have been identified as the lead compound. As a result, the court found that this was “the exceptional case where an examination of the totality of the circumstances amply justifies, indeed compels, the award of attorneys’ fees.” Id. at 245.

Similarly, the court held that Mylan’s certification letter was filed in bad faith and with no reasonable basis to claim the '777 patent invalid. The court discussed how Mylan argued in its Paragraph IV letter that the invention of pioglitazone was obvious based on Takeda’s disclosure of a compound in the '200 patent and Sohda II (referred to as compound 16 and compound 14, respectively) only to abandon this theory entirely during the litigation. In addition, the court discussed Takeda’s numerous allegations of litigation misconduct committed by Mylan in its pursuit of an inequitable conduct claim, which principally addressed Takeda’s representations to the PTO regarding a different compound disclosed in the prior art, compound 3894. The court also found that the inequitable conduct claim was “always frivolous” and unsupported, as Mylan did not present any evidence that Takeda hid or misrepresented any information to the PTO. Id. at 249. The court concluded that the totality of the circumstances, including other instances of Mylan’s untimely conduct, justified the award of attorney fees against Mylan as well.

On March 21, 2007, the district court quantified the fees at $16,800,000, with Al-phapharm to pay $5,400,000 and Mylan, $11,400,000. In assessing the amount of the award, the court stated that the attorneys for Takeda did uniformly excellent work in a complex and contentious litigation. When allocating the attorney fees, the court accepted the division proposed by Takeda, with Mylan responsible for two-thirds of the total amount. The court also awarded Takeda its expert fees under its inherent power to impose sanctions, along with expenses and interest beginning on the date of the September Opinion.

Mylan and Alphapharm filed separate timely appeals from the district court’s judgment. The appeals were consolidated on December 17, 2007.

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549 F.3d 1381, 89 U.S.P.Q. 2d (BNA) 1218, 2008 U.S. App. LEXIS 24743, 2008 WL 5120584, Counsel Stack Legal Research, https://law.counselstack.com/opinion/takeda-chemical-industries-ltd-v-mylan-laboratories-inc-cafc-2008.