On December 8th, the Federal Circuit handed down a decision that is a significant development in ANDA litigations in Takeda v. Mylan. The trial court awarded plaintiff Takeda over $16MM in attorney fees based on its conclusion that the generic defendants had asserted baseless invalidity and unenforceability defenses in their Paragraph IV certifications and at trial, and the Federal Circuit affirmed.

This decision resuscitates the seminal decision our firm obtained in Yamanouchi v. Danbury, 231 F.3d 1339 (Fed. Cir. 2000) in which we obtained an award of attorney fees for the plaintiff in an ANDA litigation. The viability of that decision had been weakened by the later decision in Glaxo Group Limited, et al. v. Apotex, 376 F.3d 1339 (Fed. Cir. 2004)in which the court held that infringement under 35 U.S.C. 271(e)(2) - by filing an ANDA with a patent challenge - could not, as a matter of law, be willful. Because willful infringement has been the principal basis for an award of attorney fees under 35 U.S.C. 285, it became questionable whether a baseless Paragraph IV certification could be relied on to support such an award.

In Takeda, the Federal Circuit held that it was proper for the trial judge to consider the lack of merit in the Paragraph IV certification defenses and the generic's abandonment of those defenses and shifting its invalidity theories as the rationale for deeming the case "exceptional" and therefore awarding attorney fees. It did not rely on willfulness and, significantly, it relied heavily on Yamanouchi and never mentioned GSK.

However, it is clear that baseless certifications and shifting theories will not alone be sufficient to make the case "exceptional" under section 285. It was essential that the trial court found the theories that were actually litigated were "not even close". Nevertheless, the lack of merit in the certifications was a significant factor. This means that patentees can continue to seek attorney fees in ANDA cases, and can rely on and take discovery relating to the defenses asserted in the certification as relevant to that claim. The court reaffirmed the statements in Yamanouchi that generics have a duty of good faith in making Paragraph IV challenges and it rejected the generics' argument that enforcing that duty would be unduly "chilling".

It is also noteworthy that the majority opinion affirms the award of expert witness fees. Those do not fall under section 285 and are allowed only in rare cases, when there has been "fraud or abuse of the judicial process". The concurring opinion does not agree that standard was met in Takeda, but finds the trial court could justify it under an alternative theory of enhancing the attorney fee award above the actual expenses.