Sanofi-Aventis Deutschland, GMBH v. Genentech, Inc.

In 1985, Behringwerke filed a U.S. patent application directed to the use of DNA sequences (enhancers) identified in human cytomegalovirus. An enhancer, when introduced into a cell that produces a drug, can enable the cell to produce the drug at a much higher rate. In 1992, Behringwerke and Genentech entered into a licensing agreement related to enhancers that matured into the patents-in-suit; for fixed annual payments, Genentech could practice the patents for research purposes. Genentech was to pay a royalty on sales of commercially marketable goods incorporating a “Licensed Product.” The Agreement, governed by German law, required that disputes be settled by arbitration. Behringwerke sold its pharmaceutical business to Sanofi, but the Agreement and patent rights stayed with Hoechst; both are German entities. In 2008, Sanofi sued Genentech for infringement based on sales of the allegedly infringing drugs Rituxan and Avastin, which Genentech had not identified as licensed products. Hoechst demanded arbitration before a European arbitrator. The district court found no infringement. The Federal Circuit affirmed. Arbitration continued. On remand, Genentech sought to enjoin Sanofi from continuing the foreign arbitration. The district court denied the motion, finding that Hoechst is a party to the arbitration, but not a party to the litigation and that an injunction would frustrate policies favoring enforcement of forum selection clauses, and would not be in the interest of international comity. The arbitrator determined that German substantive law, not U.S. patent law, would be used, that a drug could be a licensed article even though it did not contain the patented enhancers, if those enhancers were used in its manufacture, and that Genentech was liable for damages. The Federal Circuit affirmed that Genentech was not entitled to an injunction. View "Sanofi-Aventis Deutschland, GMBH v. Genentech, Inc." on Justia Law