Justia Drugs & Biotech Opinion SummariesArticles Posted in Contracts
The Traveler’s Property Casualty Company of America v. Actavis, Inc.
To seek redress for an opioid epidemic, characterized by the Court of Appeal as having placed a financial strain on state and local governments dealing with the epidemic’s health and safety consequences, two California counties sued (the California Action) various pharmaceutical manufacturers and distributors, including the appellants in this matter, Actavis, Inc., Actavis LLC, Actavis Pharma, Inc., Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., and Watson Pharma, Inc. (collectively, “Watson”). The California Action alleged Watson engaged in a “common, sophisticated, and highly deceptive marketing campaign” designed to expand the market and increase sales of opioid products by promoting them for treating long-term chronic, nonacute, and noncancer pain - a purpose for which Watson allegedly knew its opioid products were not suited. The City of Chicago brought a lawsuit in Illinois (the Chicago Action) making essentially the same allegations. The issue presented by this appeal was whether there was insurance coverage for Watson based on the allegations made in the California Action and the Chicago Action. Specifically, the issue was whether the Travelers Property Casualty Company of America (Travelers Insurance) and St. Paul Fire and Marine Insurance Company (St. Paul) owe Watson a duty to defend those lawsuits pursuant to commercial general liability (CGL) insurance policies issued to Watson. Travelers denied Watson’s demand for a defense and brought this lawsuit to obtain a declaration that Travelers had no duty to defend or indemnify. The trial court, following a bench trial based on stipulated facts, found that Travelers had no duty to defend because the injuries alleged were not the result of an accident within the meaning of the insurance policies and the claims alleged fell within a policy exclusion for the insured’s products and for warranties and representations made about those products. The California Court of Appeal concluded Travelers had no duty to defend Watson under the policies and affirmed. View "The Traveler's Property Casualty Company of America v. Actavis, Inc." on Justia Law
Stryker Corp. v. National Union Fire Insurance Co.
In the 1990s, Stryker purchased a Pfizer subsidiary that made orthopedic products, including the “Uni-knee” artificial joint. It was later discovered that those devices were sterilized using gamma rays, which caused polyethylene to degrade. If implanted past their five-year shelf-life, the knees could fail. Expired Uni-Knees were implanted in patients. Stryker, facing individual product-liability claims and potentially liable to Pfizer, sought defense and indemnification under a $15 million XL “commercial umbrella” policy, and a TIG “excess liability” policy that kicked in after the umbrella policy was fully “exhausted.” XL denied coverage, arguing that the Uni-Knee claims were “known or suspected” before the inception of the policy. Stryker filed lawsuits against the insurers, then unilaterally settled its individual product-liability claims for $7.6 million. Stryker was adjudicated liable to Pfizer for $17.7 million. About 10 years later, the Sixth Circuit held that XL was obliged to provide coverage. XL paid out the Pfizer judgment first, exhausting coverage limits. TIG declined to pay the remaining $7.6 million, arguing that Stryker failed to obtain “written consent” at the time the settlements were made. Stryker claimed that the policy was latently ambiguous because XL satisfied the Pfizer judgment first, Stryker was forced to present its settlements to TIG years after they were made. The district court granted Stryker summary judgment. The Sixth Circuit reversed, finding the contract unambiguous in requiring consent. View "Stryker Corp. v. National Union Fire Insurance Co." on Justia Law
Wis. Pharmacal Co., LLC v. Neb. Cultures of Cal., Inc.
The underlying coverage dispute arose from the supplying of a defective ingredient for incorporation into Wisconsin Pharmacal Company (Pharmacal) probiotic supplement tablets. Pharmacal brought this action against Jeneil Biotech, Inc. and Nebraska Cultures of California, Inc. (the Insureds) and the Netherlands Insurance Company and Evanston Insurance Company (the Insurers), alleging numerous tort and contract claims. The Insurers moved for summary judgment, arguing that their respective insurance policies did not cover any damages that arose out of the causes of action against the Insureds. The circuit court granted the Insurers’ motions for summary judgment, determining that the facts of this case did not trigger the Insurers’ duties to defend. The court of appeals reversed, concluding that the policies provided coverage. The Supreme Court reversed, holding that there was no “property damage” caused by an “occurrence” in this case, and even if there were, certain exclusions in both policies applied to negate coverage. View "Wis. Pharmacal Co., LLC v. Neb. Cultures of Cal., Inc." on Justia Law
Posted in: Contracts, Drugs & Biotech, Injury Law, Wisconsin Supreme Court
TriReme Med., LLC v. Angioscore, Inc.
AngioScore sells angioplasty balloon catheters (AngioSculpt), designed to open arterial blockages. Three AngioScore patents each list three inventors, but none lists Lotan as an inventor. TriReme is a competitor of AngioScore. Apparently concerned that AngioScore might charge TriReme with infringement, TriReme sought to acquire an interest in the AngioScore patents from Dr. Lotan, who performed consulting services for AngioScore. Lotan granted TriReme an exclusive license to “any and all legal and equitable rights” he held in the AngioScore patents. Lotan claimed that his inventive contribution arose from his work in connection with the development of the AngioSculpt catheters in 2003, which is reflected in the AngioScore patents. AngioScore’s defense was based on a 2003 consulting contract between AngioScore and Lotan. AngioScore asserts that it acquired rights to all inventive work completed by Lotan. TriReme brought suit for correction of inventorship, 35 U.S.C. 256. The district court dismissed, finding that TriReme lacked standing. The Federal Circuit reversed and remanded for consideration of whether Lotan’s continued work on AngioSculpt after the contract’s effective date came within the contract’s language. View "TriReme Med., LLC v. Angioscore, Inc." on Justia Law
Monsanto Co. v. E.I. du Pont de Nemours & Co.
Monsanto developed a genetic modification in soybean seeds (Roundup Ready® (RR)), known as the 40-3-2 event (RR trait), which enables soybean plants to tolerate application of glyphosate herbicide to kill weeds. Monsanto owns the patent for the RR trait and granted Pioneer a license to produce and sell seeds containing the traits. After Pioneer became a subsidiary of DuPont, Monsanto and Pioneer entered into an amended license, under which DuPont produced and sold RR trait seed. In 2006, DuPont announced that it had developed a glyphosate-tolerant trait, OGAT, expected to confer tolerance to both glyphosate and acetolactate synthase inhibitor herbicide. Testing indicated that OGAT alone did not provide sufficient glyphosate-tolerance for commercial use. DuPont then combined OGAT with the RR trait; the OGAT/RR stack provided increased yields in field trials. DuPont did not sell any OGAT/RR product, however, and discontinued development. Monsanto sued DuPont for breach of the license and patent infringement. The district court granted partial judgment to Monsanto, holding that the license was unambiguous and did not grant the right to stack non-RR technologies with the licensed” trait, but allowed DuPont to amend its answer to assert reformation counterclaims and defenses. The court ultimately told DuPont to “either voluntarily dismiss these reformation claims or produce … all documents … previously withheld.” DuPont continued litigating its reformation counterclaims and produced previously withheld internal e-mails that showed its awareness that it did not have the right to commercialize the OGAT/RR stack. The court found that DuPont’s position was not rooted in fact, that DuPont made misrepresentations and had perpetrated a fraud on the court, struck DuPont’s reformation defense and counterclaims, and awarded limited attorney fees to Monsanto. The Federal Circuit affirmed. View "Monsanto Co. v. E.I. du Pont de Nemours & Co." on Justia Law
Posted in: Agriculture Law, Contracts, Drugs & Biotech, Patents
Endo Pharm. Inc. v. Actavis, Inc.
Endo sells Opana® ER extended-release tablets containing a painkiller, oxymorphone. In earlier litigation, Endo sued Roxane and Actavis for patent infringement, 35 U.S.C. 271(e)(2)(A), based on their Abbreviated New Drug Applications to market generic versions of Opana® ER. The lawsuits settled; Endo granted defendants a license and a covenant not to sue. After making the agreements the 122 and 216 patents issued to Endo. They are continuations of the same parent application and directed to extended-release oxymorphone compositions and methods of treating pain using those compositions. Endo also acquired the unrelated 482 patent, concerning purified oxymorphone compositions and methods of making those compositions. The asserted patents are listed in the Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) entry for Opana® ER. Endo again sued for infringement and sought a preliminary injunction to prevent marketing or sales of generic oxymorphone formulations. The district court held that Endo was estopped from claiming that the activity of defendants, “which has gone on for a substantial period of time, is now suddenly barred because of these new patents.” The Federal Circuit vacated, finding that the defendants did not have an express or implied license to practice the patents at issue.View "Endo Pharm. Inc. v. Actavis, Inc." on Justia Law
Posted in: Civil Procedure, Contracts, Drugs & Biotech, Patents
MDS (Canada) Inc., et al. v. Rad Source Technologies, Inc.
This case involved disputes over licensing agreements for, inter alia, the RS 3400 blood irradiation device. At issue was whether the Federal Circuit has exclusive jurisdiction to hear an appeal of a breach of contract claim that would require the resolution of a claim of patent infringement for the complainant to succeed. The court concluded that it did not have appellate jurisdiction and resolved dispositive issues in favor of Rad Source, leaving a single dispositive issue for certification: When a licensee enters into a contract to transfer all of its interests in a license agreement for an entire term of a license agreement, save one day, but remains liable to the licensor under the license agreement, is the contract an assignment of the license agreement, or is the contract a sublicense?View "MDS (Canada) Inc., et al. v. Rad Source Technologies, Inc." on Justia Law
Posted in: Contracts, Drugs & Biotech, Intellectual Property, Patents
Mylan Inc. v. SmithKline Beecham Corp.
GSK holds patent and FDA rights to market and sell the pharmaceutical (paroxetine hydrochloride) controlled release tablets for treatment of depression, under the brand name Paxil. Under a 2007 settlement agreement, GSK granted Mylan certain rights to produce, market, and sell generic paroxetine. In 2010, GSK agreed, in an unrelated settlement, to begin supplying Apotex with GSK-produced generic paroxetine for marketing and sale. Mylan sued GSK and Apotex, claiming the 2010 agreement violated its licensing agreement, which did not permit GSK to provide its own form of generic paroxetine to another generic drug company to be marketed and sold in direct competition with Mylan. The district court found that the terms of the agreement were unambiguous and did not limit to whom GSK was permitted to market and sell its own version of generic paroxetine. The Third Circuit reversed the order of summary judgment on the breach-of-contract cause of action against GSK, but affirmed summary judgment on other claims. View "Mylan Inc. v. SmithKline Beecham Corp." on Justia Law
Posted in: Contracts, Drugs & Biotech
PharmAthene, Inc. v. SIGA Technologies, Inc.
On October 4th, SIGA moved for reargument to the remedy ordered in a September 22 Opinion. SIGA contended that the court misapplied the law and misunderstood material facts in awarding PharmAthene an equitable lien on a share of future profits derived from a biodefense pharmaceutical known as ST-246. The court held that it did not misapprehend the law of remedies by imposing an equitable remedy reasonably designed to compensate PharmAthene for its lost expectancy; SIGA had not shown that the September 22 Opinion was the product of either a misapplication of law or a misunderstanding of material fact; and the legal and equitable basis for the structure of the equitable payment stream was the court's authority to provide relief "as justice and good conscience may require" and to remedy in equity what otherwise would amount to unjust enrichment. Accordingly, the court denied SIGA's motion for reargument.View "PharmAthene, Inc. v. SIGA Technologies, Inc." on Justia Law
Posted in: Contracts, Drugs & Biotech, Health Care Law
PharmAthene, Inc. v. SIGA Technologies, Inc.
This action arose out of a dispute between two companies involved in the development of pharmaceuticals. Plaintiff was a biodefense company engaged in the development and commercialization of medical countermeasures against biological and chemical weapons and defendant was also a biodefense company that concentrated on the discovery and development of oral antiviral and antibacterial drugs to treat, prevent, and complement vaccines for high-threat biowarfare agents. The court rejected plaintiff's claim that defendant breached a binding license agreement, but found that defendant did breach its obligations to negotiate in good faith and that defendant was liable to plaintiff under the doctrine of promissory estoppel. The court rejected defendant's claim that plaintiff breached its obligation to negotiate in good faith. The court denied plaintiff's claims for specific performance of a license agreement with the terms set forth in the time sheet or, alternatively, for a lump sum award of its expectation damages. The court concluded, however, that plaintiff was entitled to share in any profits relied on from the sale of the drug in question, after an adjustment for the upfront payments it likely would have had to make had the parties negotiated in good faith a license agreement in accordance with the terms of the term sheet. In addition, plaintiff was entitled to recover from defendant a portion of the attorneys' fees and expenses plaintiff incurred in pursuing the action.View "PharmAthene, Inc. v. SIGA Technologies, Inc." on Justia Law