We will be discussing two patent cases in our weekly SoCal IP Institute meeting on Monday, October 24, 2011. Brief synopses are presented below.

Sanofi-Aventis et al. v. Apotex Inc., Case No. 2011-1048 (Fed Cir. Oct. 18, 2011) (attached). This is the third appeal in a long-running dispute between these two companies regarding the manufacture of a generic of the drug Plavix.  Apotex filed an Abbreviated New Drug Application with the FDA seeking to sell a generic form of Plavix prior to the expiration of U.S. Pat. No. 4, 847,265 owned by Sanofi-Aventis.  In this third appeal, Apotex challenges the award by the district court of prejudgment interest in addition to damages set by a preexisting agreement between the parties.  The agreement, entered into by the parties while Apotex’s application for approval was pending limited “actual damages for any past infringement by Apotex, up to the date on which Apotex is enjoined, will be 50% of Apotex’s net sales . . . .”  It also limited Sanofi’s ability to seek increased damages under 35 U.S.C. 248.  The district court found that this paragraph did not prohibit prejudgment interest which it awarded as $107,930, 857 in addition to $442,209,362 in actual damages as agreed by the parties.

The Federal Circuit reviewed the decision de novo and found that the 50% of Apotex’s net sales was intended to be the entire measure of damages because prejudgment interest is typically considered compensatory damages, one type of “actual damages.”  The court further found that to construe the term otherwise would run contrary to the purpose of the agreement, namely, a liquidated damages provision.

Apotex, for the first time at the damages phase of the underlying litigation, sought to draw a distinction between Apotex Corp. and Apotex, Inc. as to which of its entities undertook the infringing actions.  Neither the district court nor the Federal Circuit found that argument particularly appealing.  The district court’s decision to find them jointly and severally liable was affirmed.  Apotex also sought leave to amend their answer to include a patent misuse defense and a counterclaim for breach of contract at the district court.  Leave was denied.  The Federal Circuit agreed with the denial because the patent misuse defense was futile and because the counterclaim would substantially delay the resolution of the dispute.

Atlantic Research Marketing Sys., Inc. v. Troy et al., Case Nos. 2011-1002, -1003 (Fed. Cir. Oct. 6, 2011 (attached).  Atlantic Research appealed from the grant of summary judgment invalidating claims 31-36 of Atlantic Research’s U.S. Reissue Patent No. 39,465 for failing to meet the written description and best mode requirements. In particular, the specification did not disclose a sleeve for a firearm that attached to only the barrel nut as claimed.  The Federal Circuit found that the district court did not err in invalidating these claims on written description grounds.  Because the asserted claims of the patent were invalid, the Federal Circuit did not reach the best mode issue.

Troy cross-appealed from the district court’s denial of a motion for JMOL re misappropriation of a trade secret, a motion for a mistrial for failure to properly charge the jury and to address a jury taint issue related to external evidence being brought into deliberations and a motion for remittitur.  The Federal Circuit affirmed the denial of JMOL and reversed the jury’s verdict because the district court did not adequately investigate the jury taint issue.  The court failed to reach the remittitur issue because they vacated the jury verdict.

All are invited to join us in our discussion during the SoCal IP Institute meeting on Monday, October 24, 2011 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.