Takeda Chemical Industries Ltd. v. Mylan Laboratories Inc. 549 F.3d 1381 (Fed. Cir. 2008)

In one of the most significant rulings on attorneys fees in patent litigation, the Federal Circuit affirmed a $16.8 million attorneys’ fee award for Takeda Chemical Industries Ltd., the manufacturer of Actos, a market leader in the treatment of Type 2 diabetes. Mylan Laboratories Inc. and Alphapharm Pty. Ltd. filed abbreviated new drug applications (“ANDAs”) for generic versions of the active ingredient in Actos 1/µ, pioglitizone 1/µ, pursuant to the Hatch-Waxman amendments to 21 U.S.C. §355(j) et. seq., seeking approval from the FDA to produce generic versions of the drug. As part of their ANDAs, defendants made certifications under 21 U.S.C. §355(j)(2)(A)(vii)(IV), certifying that the Takeda’s patent was invalid for obviousness. As the Paragraph IV filings constitute technical acts of infringement, Takeda sued both companies. The district court held Takeda’s patent was valid and enforceable and, finding it was an exceptional case, awarded Takeda attorneys’ fees totaling $16.8 million. In addressing the defendants’ appeal of the fees award, the appellate court found support for the district court’s statement that the Paragraph IV filings for generic pioglitazone were “so devoid of merit and so completely fail[ed] to establish a prima facie case of invalidity that [they] must be described as “baseless”.” The court further agreed that the defendants made these filings in bad faith and engaged in vexatious litigation. The Court noted, “[g]iven the court’s specific articulation that its ruling was directed toward baseless ANDA filings and litigation in bad faith, we decline to disturb the court’s finding of an exceptional case as potentially chilling non-frivolous ANDA filings under the Hatch-Waxman Act.” The Court added that the district court “left no doubt as to its opinion of the litigation and work performed by counsel”. Indeed, the [district] court indicated that an even higher award would have been justified.