Endo Pharmaceuticals Inc. v. Actavis, Inc. and Actavis South Atlantic, LLC

Docket No. 2013-1658

NEWMAN, DYK (dissent in part), MOORE
March 31, 2014

Brief Summary: DC denial of preliminary injunction vacated as Appellees had no express or implied license as the disputed patents were not continuations of the license patents.

Summary: Endo appealed DC denial of its motions for a preliminary injunction to prevent Roxane Laboratories (Roxane) and Actavis from selling their oxymorphone-containing painkillers (generic products competing with Endo’s Opana® ER product). A prior litigation between Endo and Roxane resulted in a settlement and license agreement (Roxane Agreement) that provided Roxane a license and a covenant not to sue for the “Opana® ER patents” (US 5,662,933; 5,958,456; and 7,276,250) and “any [U.S.] patent applications that claim priority to the Opana® ER Patents, including any continuation…[and] patent applications that claim priority to Opana® ER”. The Roxane Agreement also included a “No Implied Rights” provision explaining that Roxane was not granted “any license or right ‘whether by implication, estoppel or otherwise, other than as expressly granted herein.’” A separate similar settlement and license agreement between Endo and Actavis (Actavis Agreement) included one additional patent (not relevant here), a license, a convenant not to sue and a “No Implied Rights” provision. The later-issued patents disputed here are US 8,309,122; 8,329,216; and 7,851,482. The DC denied the preliminary injunction on “theories of express license and implied license by reason of estoppel” (Roxane and Actavis arguing that “Endo attempted to deprive them ‘of the benefit of [the] earlier bargain”.) Although the ‘122 and ‘216 patents and one of the Opana® ER patents (‘250 patent) claim priority to an identical provisional application, the FC panel determined these were not continuations of any Opana® ER patents and therefore not covered by the agreements (regarding Roxane’s arguments: “This is flatly wrong, and it is difficult to believe that this argument was made given what is required for an application to be a continuation.”) As such, there was no express license. The FC also found no implied license, rejecting the argument that “Endo’s later-obtained patents ‘eviscerated’ the benefit of the licenses” and “estoppel must override” the “No Implied Rights” provision. It contrasted the TransCore (FC 2009) (cited by Appellees (patentee legally estopped from bringing second infringement action even though the earlier settlement agreement stated it “shall not apply to any other patents”)) situation from this one, explaining that that case involved a second patent of broader scope than the licensed patents (“[t]he same inventive subject matter”) (“You get what you bargained for. And we will not use the implied license doctrine to insert ourselves into that bargain and rewrite the contract…Endo is not estopped from asserting the patents at issue…because none of the asserted patents in a continuation of any of the licensed patents…rather than grant a license to an ‘idea’, [the licenses are] limited to specific patents and patent applications.”) Thus, the DC decision was vacated and remanded. Judge Dyk argued that Actavis should have an implied license because, in part, “a patent claiming priority to a provisional application must cover the same subject matter as the provisional application”.

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