Short Summary: Implied license denied for patents lacking an explicit cross-reference to the non-provisional application from which the licensed patents issued.
Case: Endo Pharm. Inc. v. Actavis, Inc., No. 2013-1658 (Fed. Cir. Mar. 31, 2014) (precedential). On appeal from S.D.N.Y. Before Newman, Dyk, and Moore.
Procedural Posture: Plaintiff patentee appealed district court’s denial of its motions for preliminary injunction. CAFC vacated and remanded.
- Estoppel: Plaintiff argued that the district court erroneously found the parties’ settlement of an ANDA litigation for the drug product Opana® granted defendants an express license, or at the very least an implied license, for later issued patents that do not share a non-provisional priority application with the patents licensed explicitly under the agreement. On that basis, the court concluded that plaintiff was legally estopped from seeking a preliminary injunction against the release of defendants’ generic version. In overturning the district court, the Federal Circuit ruled that because the agreement did not provide for a license to patents that lack an explicit cross-reference to the non-provisional application from which the licensed patents issued, defendants were not entitled to an express license of those patents. Nor were the defendants entitled to an implied license because, unlike defendants inTransCore, LP v. Electronic Transaction Consultants Corp., 563 F.3d 1271 (Fed. Cir. 2009), defendants here sought a license to “subject matter in addition to that for which they bargained.” (emphasis in original). Defendants were not prevented from practicing the patent claims licensed under the agreement, and it is of no consequence whether they could release their generic product.
- Estoppel: Defendant-Actavis was entitled to an implied license to later issued patents stemming from same provisional application as the licensed patents, because those patents were intentionally concealed during the settlement negotiations. By incentivizing plaintiffs to hide the existence of applications in an ANDA litigation settlement, the majority creates an inefficient and unfair bargaining system that only serves to incentivize further litigation.