Federal Circuit Affirms $16.8 Million Award of Fees to Takeda in Pioglitazone Case

Takeda v. Mylan and Alphapharm, Nos. 2007-1269, -1270 (Fed. Cir. 2008)

In an opinion released Monday, the Federal Circuit affirmed a district court decision granting $16.8 million for attorney fees, expenses and expert fees to Takeda for baseless paragraph IV certification letters and litigation misconduct by Mylan and Alphapharm in ANDA litigation involving Actos (pioglitazone).  We previously reported on the district court decision here; and on the Federal Circuit briefing here.

With respect to Alphapharm, the Federal Circuit observed that the district court "methodically examined a number of shortcomings in Alphapharm's Paragraph IV letter, which were made obvious by Alphapharm's 'constantly shifting set of arguments,' that supported the finding that the certification was baseless."  The court concluded that "the district court correctly found that Alphapharm's filing would amount to litigation misconduct supporting an exceptional case finding if it were 'baseless' and if it 'failed to present even a prima facie case of invalidity in filing the paragraph IV certification.'"

With respect to Mylan, the Federal Circuit stated, "Mylan's invalidity argument in its certification letter appears even more baseless than Alphapharm's."  Moreover, the court concluded, "the finding that Mylan engaged in litigation misconduct was well-supported and explained by the district court."  According to the court, "We do not find persuasive Mylan's argument that the district court took issue with the mere fact that Mylan changed its theory of invalidity and then lost.  Rather, the court determined that Mylan's initial certification letter was completely baseless and that the claims Mylan offered as substitutes were similarly frivolous."

The Federal Circuit was similarly unimpressed with the "chilling effect" argument put forward by Alphapharm and Mylan and supported by an amicus brief from GPhA:  namely, that a high fee award would deter paragraph IV ANDA filings.  The court stated, "It is clear from the district court's opinion that it was not faulting Alphapharm or Mylan for the act of filing an ANDA that challenged the pioglitazone patent, nor did it limit the filers to the theories raised in their certification letters.  Rather, the district court found the case exceptional based on the specific circumstances involved in this case, viz., baseless certification letters compounded with litigation misconduct."

Finally, the Federal Circuit affirmed the specific amount awarded by the district court, as well the "allocation of two-thirds of the fee burden to Mylan because it acted as lead defense counsel for discovery of the obviousness claims and then added considerably to the complexity of the case with an untimely assertion of an inequitable conduct claim."

Comments

[Pacific Reporter]

Great post. Thanks for the update. I've been anticipating this decision. Hopefully this will thwart a lot of frivolous Paragraph IV challenges.

[Wondering]

Can someone knowledgeable explain the reason why a generic company would make a baseless Paragraph IV challenge? What is the benefit here?