Takeda Pharms. U.S.A., Inc. v. Mylan Pharms., Inc.

Case Name: Takeda Pharms. U.S.A., Inc. v. Mylan Pharms., Inc., No. 19-2216-RGA, 2020 U.S. Dist. LEXIS 12753 (D. Del. Jan. 27, 2020) (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”), and 8,440,722 (“the ’722 patent”)

Nature of the Case and Issue(s) Presented: Takeda’s Colcrys treated and prevented gout flares and familial Mediterranean fever. In 2016, Mylan sought FDA approval to make and sell generic colchicine. Takeda sued, and the parties settled their lawsuit on Nov. 7, 2017. The parties signed a License Agreement, which allowed Mylan to sell a generic colchicine product. But the agreement also included a provision allowing Mylan to launch its product prior to the agreed-on entry date, for example in the event of a final court decision holding that all unexpired claims that were asserted and adjudicated against a third party were either (i) not infringed, or (ii) part of a combination of claims not infringed, invalid and/or unenforceable. According to Mylan, the latter exception was triggered by the court’s decision in another case, Takeda Pharm., U.S.A., Inc. v. West-Ward Pharm. Corp., No. 14-cv-1268-RGA. In the West-Ward case, Takeda asserted eight of its Colcrys patents, but voluntarily dismissed with prejudice five of them. The court granted summary judgment of non-infringement on the remaining three patents and there was no appeal.

On Oct. 28, 2019, Mylan notified Takeda that it planned to sell its generic product pursuant to the license agreement. In response, Takeda sued Mylan for patent infringement and breach of contract. Takeda filed a motion for preliminary injunction. Because Takeda has failed to show it was likely to succeed on the merits or that it would suffer irreparable harm, the court denied the motion.

Why Mylan Prevailed: The issue was whether the parties’ license agreement permitted Mylan to launch its generic colchicine product. The provision in question applied to a “Final Court Decision,” which was defined as “a final judgment from which no appeal … has been or can be taken.” In West-Ward, Takeda did not appeal, rendering the court’s decision a final judgment from which appeal was no longer possible.

Next, Mylan’s ability to launch early required that the patents were either not infringed or had claims the combination of which were not infringed, invalid and/or unenforceable. In West-Ward, the court granted summary judgment because a reasonable jury could not have found that the defendant had induced infringement of the three Colcrys patents at issue. Takeda argued that West-Ward did not trigger the license agreement because it related to only three patents. But the court did not adopt this reading of the license agreement. The license agreement applied to patent claims that were “asserted and adjudicated,” not to patent claims that were “asserted or adjudicated.” Of the three patents that were asserted and adjudicated in West-Ward, “all” of their unexpired claims were found not infringed. Therefore, the court reasoned that West-Ward triggered the license agreement, entitling Mylan to launch a generic version of Colcrys. Therefore, the court concluded the Takeda had not shown it was likely to succeed on the merits of its patent infringement or breach of contract claims.

Takeda also argued that the court’s reading of the license agreement conflicted with the intent of the parties. According to Takeda, the purpose of an earlier launch date was to ensure Mylan could enter the market if there were some change to the status quo that would allow the launch of other generic Colcrys products. Mitigare, the drug in dispute in West-Ward, was not a generic version of Colcrys, and therefore the parties did not envision that a judgment involving Mitigare could trigger an earlier launch by Mylan. Mitigare, like Colcrys, was a 0.6 mg colchicine product. While it was not a generic version of Colcrys, it did not follow that the license agreement, as understood by an objective, reasonable third party, required litigation over the possible introduction of generic Colcrys products. The relevant clause of the license agreement made no mention of generic Colcrys products, which was not true of other clauses. Therefore, the parties clearly knew how to condition provisions of the contract on the launch of generic Colcrys products, but they chose not to condition the relevant clause relied on by Mylan in such a way. Moreover, Takeda’s interpretation would have made it too easy for Takeda to avoid triggering an early launch by Mylan; it could assert all seventeen Colcrys patents against a third party, and then simply withdraw one patent (or one claim of one patent) early in litigation.

Finally, Takeda’s primary argument for irreparable harm depended on its showing that it was likely to succeed on the merits. Because Takeda had failed to show that it was likely to succeed on the merits, its irreparable harm argument also failed.