Takeda Pharma Co. v. Zydus Pharma Inc.

Case Name: Takeda Pharma Co. v. Zydus Pharma Inc., No. 18-1994, 2021 WL 3144897 (D.N.J. July 26, 2021) (Wolfson, J.) 

Drug Product and Patent(s)-in-Suit: Prevacid® SoluTab™ (lansoprazole delayed-release orally-disintegrating tablets); U.S. Patents Nos.  6,328,994 (“the ’994 patent”), 7,431,942 (“the ’942 patent”), 7,875,292 (“the ’292 patents”), and 7,399,485 (“the ’485 patent”)

Nature of the Case and Issue(s) Presented: Takeda filed a patent infringement suit against Zydus. In response, Zydus counterclaimed, arguing that Takeda filed a “sham suit” to maintain its monopoly power. After testing Zydus’s generic product, Takeda voluntarily dismissed its patent infringement claims. Both parties moved for summary judgment on Zydus’s antitrust counterclaim. Takeda argued that its infringement suit was protected, First Amendment activity under the Noerr-Pennington doctrine, which immunizes citizens who “petition the government for redress” from antitrust liability. Zydus argued that Takeda weaponized the 30-month stay to maintain monopoly power. The court granted Takeda’s motion, denied Zydus’s motion, and dismissed Zydus’s counterclaims.

Why Takeda Prevailed: To succeed in its sham litigation claim, Zydus needed to demonstrate that the patent lawsuit was objectively baseless and that Takeda attempted to interfere directly with the business relationships of a competitor through the use of the governmental process.

Zydus first argued that the patent lawsuit was objectively baseless in light of its 2018 Paragraph IV Certification, arguing that the court should have taken its statement of non-infringement at face value. The Court found that Takeda was not required to take Zydus’s statements in its Paragraph IV Certification for the fact of the matter asserted.

Zydus next argued that because its ANDA stated that the d₅₀ of its product was outside of the range recited in the patent-in-suit, Takeda’s suit was objectively baseless. The court rejected this argument because Takeda had tested Zydus’s product during past litigations and found that it did not conform to the size specified in its ANDA. Regardless, even if Takeda had no information about Zydus’s formulation from past litigation, the court found that Takeda had a non-frivolous infringement theory under the doctrine-of-equivalents.

Zydus also faulted Takeda for failing to review its full ANDA during the 45-day notice period. But the court explained that Congress has never required a brand-name company to request and review more than the Paragraph IV certification during the 45-day notice period. Zydus also argued that Takeda did not conduct a sufficient pre-suit investigation because it did not request samples during the 45-day notice period. The court again found that nothing in the Hatch-Waxman Act demands that Takeda test samples prior to brining suit.

Finally, the court found no evidence that Takeda used the legal process as an anticompetitive weapon. In particular, the court relied on a letter from Takeda’s outside counsel that recited several legitimate grounds for filing suit, including Takeda’s usual practice of obtaining samples regardless of the assertions in an ANDA, its potential doctrine-of-equivalents claim, the parties’ prior litigation and testing history, and counsel’s experience with other generics.