Sanofi–aventis v. Apotex Inc.

• Decision Date: 19 October 2010
• Docket Number: No. 02 Civ. 2255(SHS).,02 Civ. 2255(SHS).
• Citation: 748 F.Supp.2d 293
• Parties: SANOFI–AVENTIS, Sanofi–Synthelabo Inc., and Bristol–Myers Squibb Sanofi Pharmaceuticals Holding Partnership, Plaintiff,v.APOTEX INC. and Apotex Corp., Defendants.
• Court: U.S. District Court — Southern District of New York

748 F.Supp.2d 293

SANOFI–AVENTIS, Sanofi–Synthelabo Inc., and Bristol–Myers Squibb Sanofi Pharmaceuticals Holding Partnership, Plaintiff,

v.APOTEX INC. and Apotex Corp., Defendants.

No. 02 Civ. 2255(SHS).

United States District Court, S.D. New York.

Oct. 19, 2010.

David Noah Greenwald, Evan R. Chesler, Richard J. Stark, Cravath, Swaine & Moore LLP, Robert Louis Baechtold, William Ericson Solander, John D. Murnane, Fitzpatrick, Cella, Harper & Scinto(NYC), New York, NY, for Plaintiff.Allan H. Fried, Bruce J. Chasan, Kevin Alan Keeling, Manny D. Pokotilow, Mona Gupta, Robert S. Silver, William Joseph Castillo, William C. Youngblood, Caesar, Rivise, Bernstein, Cohen & Pokotilow, Ltd., James Kozuch, Philadelphia, PA, Jonathan Jay Faust, Katten Muchin Rosenman, LLP(NYC), New York, NY, Robert Burton Breisblatt, Welsh & Katz, Ltd., Chicago, IL, for Defendants.

OPINION & ORDER

SIDNEY H. STEIN, District Judge.

Plaintiffs Sanofi–Aventis, Sanofi–Synthelabo Inc., and Bristol–Myers Squibb Sanofi Pharmaceuticals Holding Partnership (collectively, “Sanofi”) seek summary judgment on the issue of damages in this patent dispute concerning the drug Plavix. Because defendants Apotex Inc. and Apotex Corp. (collectively, “Apotex”) are liable to Sanofi for fifty percent of a net sales figure that the parties agree is $884,418,724, Sanofi's motion for $442,209,362 in damages is granted. Sanofi is also entitled to interest and costs pursuant to 35 U.S.C. section 284.

I. BACKGROUND

On March 21, 2002, Sanofi filed this patent infringement suit against Apotex. This Court's Opinion dated August 31, 2006 recounted the history of this protracted litigation and granted Sanofi's motion for a preliminary injunction. See Sanofi–Synthelabo v. Apotex Inc., 488 F.Supp.2d 317 (S.D.N.Y.2006), aff'd, 470 F.3d 1368 (Fed.Cir.2006). The Court assumes familiarity with that Opinion. In 2007, the Court held a five-week bench trial on the merits, after which it found that Sanofi's patent on clopidogrel bisulfate (the chemical name for Plavix)—U.S. Patent No. 4,847,265 (“'265 patent”)—was valid and enforceable, and that Apotex had violated the patent by manufacturing and distributing a generic form of the drug. The Federal Circuit affirmed that determination in December 2008, and the United States Supreme Court denied Apotex's petition for certiorari in November 2009. See Sanofi–Synthelabo v. Apotex Inc., 492 F.Supp.2d 353 (S.D.N.Y.2007), aff'd, 550 F.3d 1075 (Fed.Cir.2008), cert. denied, ––– U.S. ––––, 130 S.Ct. 493, 175 L.Ed.2d 346 (2009).¹

The only aspect of this action that remains unresolved is the amount of damages to be awarded plaintiffs. The parties specifically limited the amount of damages awardable in this action in a settlement agreement entered into prior to trial (Settlement Agreement between Sanofi and Apotex dated May 26, 2006 (“Settlement Agreement”), attached to Decl. of David Armillei dated Dec. 18, 2009, Ex. 2.) Sanofi has moved for summary judgment in the amount of $442,209,362, plus prejudgment interest—at the average annual prime rate, compounding daily, from August 2006 to the present—as well as the costs of the action and statutory post-judgment interest. Defendants contend that only Apotex Corp.—and not Apotex Inc.—is liable for damages and that Sanofi is not entitled to any prejudgment interest. Defendants also argue that if the Court does award prejudgment interest, material issues of fact preclude summary judgment as to how it should be calculated.

II. DISCUSSIONA. Legal Standard

Summary judgment is appropriate only if the evidence shows that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In determining whether a genuine issue of material fact exists, the Court “is to resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought.” Patterson v. Cnty. of Oneida, 375 F.3d 206, 219 (2d Cir.2004). Nonetheless, the party opposing summary judgment “may not rely on mere conclusory allegations nor speculation, but instead must offer some hard evidence” in support of its factual assertions. D'Amico v. City of New York, 132 F.3d 145, 149 (2d Cir.1998).

B. Apotex's Liability

The parties entered into the Settlement Agreement to govern the damages from Apotex's patent infringement. This agreement specifically defines “Apotex” as “Apotex Inc. and Apotex Corp., collectively and individually, and including any entity now or hereafter owned or controlled by any of them.” (Settlement Agreement ¶ 1.) Bernard Sherman, CEO of Apotex Inc., signed the agreement explicitly “[f]or Apotex Inc[.] and Apotex Corp.” ( Id. at 5). Accordingly, Apotex Inc. and Apotex Corp. are jointly and severally liable for damages pursuant to the Settlement Agreement.²

C. Damages Amount

Sanofi seeks summary judgment awarding 50% of the agreed upon net sales figure of $884,418,724. The Settlement Agreement provides that:

If the litigation results in a judgment that the '265 patent is not invalid or unenforceable, Sanofi agrees that its actual damages for any past infringement by Apotex, up to the date on which Apotex is enjoined, will be 50% of Apotex's net sales of clopidogrel products if Sanofi has not launched an authorized generic and 40% of Apotex's net sales if Sanofi has launched an authorized generic. Sanofi further agrees that it will not seek increased damages under 35 U.S.C. § 284.

(Settlement Agreement at ¶ 14(ii).) Pursuant to this agreement, Apotex is liable to Sanofi for fifty percent of its net sales resulting from a three-week period in August 2006 during which it flooded the market with its generic product before being preliminarily enjoined from doing so by this Court, which found the '265 patent to be valid and enforceable.³ ( See id.) See also Sanofi–Synthelabo, 488 F.Supp.2d at 321.

The parties have conducted discovery and fully briefed Sanofi's motion for summary judgment on damages. They have agreed that Apotex's net sales for the relevant period were $884,418,724. (Pl.'s Local Civil Rule 56.1 Statement of Undisputed Facts ¶ 1; Def.'s Local Civil Rule 56.1 Statement of Undisputed Facts ¶ 1.) Thus, the underlying damages are 50 percent of that figure—or $442,209,362. ( See Settlement Agreement at ¶ 14(ii).)

D. Prejudgment Interest

1. Sanofi is Entitled to Prejudgment Interest

The parties dispute whether prejudgment interest applies to this damage award. While the Settlement Agreement sets the measure of damages, it is silent as to prejudgment interest on those damages. ( See Settlement Agreement ¶ 14(ii).) The parties' dispute turns on the relationship between 35 U.S.C. sections 271(e) and 284, which govern liability and damages, respectively, in patent infringement actions.

Apotex contends that because Sanofi alleged and proved infringement only under section 271(e)(2), Sanofi is not entitled to recovery under section 284. Section 271(e)(4) states that the remedies a court may order upon a finding of infringement are 1) directing that the effective date of the approval of a drug be not earlier than the expiration date of the infringed patent, 2) an injunction, and 3) “damages or other monetary relief.” The statute goes on to state that those three remedies “are the only remedies which may be granted by a court for an act of infringement described in [section 271(e)(2) ], except that a court may award attorney fees under section 285.” 35 U.S.C. § 271(e)(4). Because section 271(e) does not list prejudgment interest as one of its three exclusive remedies, Apotex argues that prejudgment interest is not authorized by the Patent Act.

It is undisputed that one of the available remedies for patent infringement is “damages or other monetary relief” pursuant to 35 U.S.C. section 271(e)(4)(c). In addition to filing an Abbreviated New Drug Application in violation of section 271(e)(2), Apotex also imported the drug and sold it commercially within the United States—conduct that makes “damages or other monetary relief” available pursuant to section 271(e)(4)(c). Section 284 defines what constitutes “damages” in patent infringement cases. That section provides, in pertinent part, that: “[u]pon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.” 35 U.S.C. § 284 (emphasis added). See Gen. Motors Corp. v. Devex Corp., 461 U.S. 648, 657, 103 S.Ct. 2058, 76 L.Ed.2d 211 (1983) (“[P]rejudgment interest should be awarded under § 284 absent some justification for withholding such an award.”)

The court finds no justification to withhold prejudgment interest here. Sanofi has a right to interest and costs pursuant to section 284 ⁴ on the basis of Apotex's violation of section 271(e).⁵ While the Settlement Agreement explicitly limits damages, it does not in any way restrict an award of interest on those damages. ( See Settlement Agreement ¶ 14(ii).) Damages and interest are distinct categories of recovery. See 35 U.S.C. § 284. Moreover, the fact that the parties agreed on an interest rate for one obligation ( see Settlement Agreement ¶ 10), but not for damages, does not vitiate Sanofi's statutory right pursuant to section 284 to prejudgment interest. In the absence of any agreement to the contrary, the general rule awarding interest on damages in patent infringement actions remains unaltered. See 35 U.S.C. § 284; Devex, 461 U.S. at 657, 103 S.Ct. 2058.

Years of litigation have only confirmed Apotex's liability to Sanofi. Apotex has had the use of money Sanofi was entitled to since the patent infringement occurred, and Sanofi deserves complete compensation. Id. at 655, 103 S.Ct. 2058 (“[A]n award of prejudgment...