Case Name: Takeda Pharms. U.S.A., Inc. v. Mylan Pharms. Inc., No. 2020-1407, -1417 (Fed. Cir. July 31, 2020) (Circuit Judges Prost, Newman, and Hughes presiding; Opinion by Prost, C.J.; Dissent by Newman, J.) (Appeal from D. Del., Andrews, J.)
Drug Product and Patent(s)-in-Suit: Colcrys® (colchicine); U.S. Patents Nos. 7,601,758 (“the ’758 patent”), 7,619,004 (“the ’004 patent”), 7,820,681 (“the ’681 patent”), 7,906,519 (“the ’519 patent”), 7,915,269 (“the ’269 patent”), 7,935,731 (“the ’731 patent”), 7,964,647 (“the ’647 patent”), 7,964,648 (“the ’648 patent”), 7,981,938 (“the ’938 patent”), 8,093,296 (“the ’296 patent”), 8,093,297 (“the ’297 patent”), 8,093,298 (“the ’298 patent”), 8,097,655 (“the ’655 patent”), 8,415,395 (“the ’395 patent”), 8,415,396 (“the ’396 patent”), 8,440,721 (“the ’721 patent”), 8,440,722 (“the ’722 patent”)
Nature of the Case and Issue(s) Presented: In 2016, Takeda sued Mylan for patent infringement based on Mylan’s ANDA for colchicine. The parties settled that case via a 2017 license agreement. Under the license agreement, Mylan could sell its ANDA product on a specified date or in the event of a final court decision holding that all unexpired claims of the patents-in-suit were either: (i) not infringed, or (ii) any combination of not infringed and invalid or unenforceable.
At the time of the Mylan case, Takeda also sued Hikma based on its FDA filing to market colchicine. Hikma received approval to market Mitigare® under a § 505(b)(2) New Drug Application, which referenced Colcrys. Only three of the patents-in-suit remained at issue in the case. In December 2018, the district court granted summary judgment in favor of Hikma, finding non-infringement. Takeda did not appeal.
In October 2019, Mylan notified Takeda that it planned to “immediately start selling” its ANDA product, asserting that its right to do so under the license agreement had been triggered by the judgment of non-infringement in favor Hikma. On November 5, 2019, Takeda declined to indicate whether Takeda would pursue legal action against Mylan. Mylan launched on November 25, 2019, and Takeda sued Mylan on December 2, 2019, alleging breach of the license agreement and patent infringement. Takeda filed a motion for preliminary injunction to enjoin Mylan’s sale of colchicine. The district court denied Takeda’s motion, holding that Takeda failed to show it was likely to succeed on the merits or that it would suffer irreparable harm. Takeda appealed. The Federal Circuit affirmed.
Why Mylan Prevailed: The Federal Circuit first agreed with the district court that Takeda was unlikely to succeed on the merits. The 2017 license agreement did not require, as Takeda suggested, a final court decision for all claims that had been asserted in litigation. Instead, all that was required was a final court decision for all claims that were both asserted and adjudicated. Otherwise, Takeda could raise asserted claims and withdraw them and keep generic competition at bay. Takeda also conceded that the 2017 license agreement “does not expressly exclude a litigation that does not involve a generic Colcrys® product.” Therefore, the fact that the Hikma case concerned a § 505(b)(2) application as opposed to an ANDA did not change the analysis on the merits.
Moreover, the Federal Circuit noted that Takeda switched course at oral argument, suggesting that it had argued that the five patents voluntarily dismissed from the Hikma case were “adjudicated” according to the 2017 license agreement. This assertion was “clearly contradicted by the record, and its new interpretation of the License Agreement is waived.”
The Federal Circuit next addressed the district court’s finding that Takeda would not be irreparably harmed. Takeda relied principally on Section 1.10 of the license agreement, which stated that if Mylan were to breach, the parties stipulated that such breach “would cause Takeda irreparable harm.” But because the Federal Circuit concluded that it was unlikely Takeda could show that Mylan breached the agreement, the court found that Section 1.10 was not useful for establishing irreparable harm. First, without the stipulation of irreparable harm, Takeda made no credible assertion that it could not be compensated by monetary damages. Takeda’s bare assertion of irreparable harm was never sufficient to prove such harm or justify the extraordinary remedy of a preliminary injunction.
In her dissenting opinion, Judge Newman stated that the district court denied injunctive relief “despite the explicitly agreed provision for an immediate injunction on breach of the License Agreement.” Judge Newman dissented, finding “judicial refusal to enforce settlement terms violates fundamental principles of contract law and commerce, and negates the strong public policy favoring settlement of litigation on agreed terms.”
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