3
Obtained $106.7 Million Verdict for
Pharmaceutical Company
A multi-office Alston & Bird litigation team
recently won a major victory for its client
Mylan Inc., the largest generic pharmaceuti-
cal company located in the United States,
against GlaxoSmithKline Plc. (GSK), a U.K.-
based brand name pharmaceutical company.
Mylan contended that GSK had breached a
patent license and settlement agreement that
the parties entered in 2007. The case was tried
before a seven-person jury in the Trenton Divi-
sion of United States District Court for the Dis-
trict of New Jersey. After a nine-day trial, the
jury returned a verdict in favor of Mylan and
awarded Mylan $106.7 million in damages.
The dispute between Mylan and GSK con-
cerned rights to market and sell Paroxetine
CR, which is a generic version of GSK’s pat-
ented antidepressant drug Paxil CR®. Mylan
developed its own formulation of Paroxetine
CR, and in 2005, filed an Abbreviated New
Drug Application (ANDA) with the Food and
Drug Administration (FDA) in order to obtain
regulatory approval to manufacture and sell
generic Paroxetine CR. In its ANDA, Mylan
asserted that it did not infringe GSK’s patents
for Paxil CR and that GSK’s patents were invalid.
Immediately before the FDA approved Mylan’s
ANDA, GSK sued Mylan for allegedly infring-
ing GSK’s patents on Paxil CR. Within weeks,
the parties settled GSK’s claims on terms that
were very favorable to Mylan, with GSK grant-
ing Mylan an exclusive license to market
and sell generic Paroxetine CR in exchange
for royalty payments based on Mylan’s sales
of the generic drug. A subsequent amend-
ment to the settlement agreement between
GSK and Mylan (“Amended GSK-Mylan Settle-
ment Agreement”) provided for two limited
exceptions to Mylan’s exclusive license: first,
GSK could license other generic ANDA-filers
and grant them non-exclusive licenses to sell
generic Paroxetine CR; second, GSK or an affili-
ated company could “commence marketing
and selling” generic Paroxetine CR two years
after Mylan launched its generic product.
In 2010, more than two years after Mylan
had launched its generic Paroxetine CR, GSK
settled a separate lawsuit that Apotex, a Cana-
dian generic pharmaceutical company, had
brought against GSK several years earlier.
As part of that settlement, GSK and Apotex
entered into a supply agreement (“GSK-
Apotex Supply Agreement”) in which GSK
agreed to supply Apotex with Paroxetine CR
for Apotex to market and sell as generic Parox-
etine CR—in direct competition with Mylan.
Mylan immediately filed suit against GSK
and Apotex, alleging that GSK had breached
its contract with Mylan and that Apotex had
induced GSK’s breach and tortiously interfered
with Mylan’s contract with GSK. After discov-
ery, GSK and Apotex moved for summary
judgment and the district court granted their
motions, ruling that one of the exceptions to
Mylan’s exclusivity under the Amended GSK-
Mylan Settlement Agreement did not limit to
whom GSK could market and sell and there-
fore did not prohibit GSK from entering into
the GSK-Apotex Supply Agreement.
Mylan appealed the district court’s grant of
summary judgment to the Third Circuit, argu-
ing that the district court failed to consider,
among other things, the intent of the par-
ties in entering into the Amended GSK-Mylan
Settlement Agreement, as required by New
Jersey law, which governed the contract.
The Third Circuit agreed with Mylan on this
point and held that a genuine issue of mate-
rial fact existed based on evidence presented
by Mylan concerning the negotiations of
the parties, custom and usage of the phrase
