Articles Posted in U.S. 3rd Circuit Court of Appeals

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Jang, a doctor and inventor, sued BSC, the company to which Jang assigned his coronary stent patents, for breach of the patent assignment agreement, which required BSC to share profits from the patents with Jang, including any damages it recovers from third-party infringers. In 2010, BSC settled a claim against Cordis for infringement in combination with anther claim that Cordis had against BSC. BSC made a payment to Cordis, and the parties exchanged several patent licenses. BSC then denied that it had recovered any damages that it was obligated to share with Jang. The Third Circuit reversed judgment on the pleadings in favor of BSC. Two of Jang’s claims are sufficient to survive judgment on the pleadings: that BSC breached the contract because the cash offset qualifies as a “recovery of damages” and that BSC violated the implied covenant of good faith and fair dealing by structuring a settlement to thwart the agreed purpose of the patent assignment. View "Jang v. Boston Scientific SciMed Inc." on Justia Law

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Ethypharm, a French corporation, contracted with Reliant, an American company. Ethypharm would manufacture and provide its drug (Antara®); Reliant would obtain approval and market the drug. Reliant sought FDA approval under 21 U.S.C. 505(b)(2), using data from an approved, fenofibrate drug, TriCor®, developed by Fournier and distributed in the U.S. by Abbott. Antara received approval. Reliant began marketing and sought a declaration of non-infringement or unenforceability of Abbott’s patents. Abbott counterclaimed. In 2006, the companies settled: Abbott and Fournier would license the patents to Reliant and Reliant would pay royaltys. The agreement prohibited Reliant from assigning its rights to or partnering with specific companies. Reliant sold its rights to Oscient, which was not a prohibited purchaser. Losing market share to generic fenofibrate, Oscient discontinued promotion of Antara and filed for bankruptcy. Ethypharm sued Abbott, alleging antitrust and sham litigation under 15 U.S.C. 1, asserting that the settlement agreement was designed to ensure that Antara would be marketed by a company with “limited resources and a relatively small sales force,” so that it could not effectively compete with TriCor and that the royalty payment weakened Antara’s profitability. The district court granted Abbott summary judgment. The Third Circuit vacated, holding that Ethypharm lacked standing under the Sherman Act. View "Ethypharm SA France v. Abbott Labs" on Justia Law

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Schering held a patent on the controlled release coating applied to potassium chloride crystals for treatment of potassium deficiencies. Potential generic manufacturers filed an abbreviated application for approval (ANDA),Hatch-Waxman Act, 21 U.S.C. 301-399, asserting that the Schering patent was invalid or would not be infringed by their new generic drugs. Schering’s subsequent infringement suits were resolved through agreements in which it paid the generic manufacturers to drop patent challenges and refrain from producing a generic drug for a specified period. Congress amended Hatch-Waxman to require pharmaceutical companies who enter into such settlements to file for antitrust review. The FTC filed an antitrust action with respect to Schering’s settlements. Plaintiffs sued on behalf of a class of purchasers of the drug. The Third Circuit affirmed the district court’s certification of the class, but reversed its presumption that Schering’s patent was valid and gave Schering the right to exclude infringing products until the end of its term, including through reverse payment settlements. The court directed use of a “quick look rule of reason analysis” based on economic realities of the settlement rather than labels. The court must treat any payment from a patent holder to a patent challenger who agrees to delay entry into the market as prima facie evidence of unreasonable restraint of trade, rebuttable by showing that the payment was for a purpose other than delayed entry or offers some pro-competitive benefit. View "In Re: K-Dur Antitrust Litigation" on Justia Law