Patentee Sanctioned $3.1M For Litigating A Previously-Issued Patent

Apotex v. Eon Labs (case no. 01-cv-0482, EDNY)

Last month, Apotex was ordered by the EDNY to pay Eon Labs $3.1 million in attorney fees and expenses in a patent case that was battled for years before Apotex admitted that their patent was "technically" invalid.

In what can only be described as a "missing-the-boat" scenario, Apotex filed for the patent-in-suit in the U.S. more than one year after the invention was already granted a patent in New Zealand, which should have invalidated the patent under 35 U.S.C. 102(d).

The rub here was that nobody discovered this fact until, as Judge Cohn peevishly stated, on "the morning of the sixth day of a bench trial, following five years of hard fought and sometimes contentions pretrial proceedings." During prosecution, the USPTO examiner cited the New Zealand patent, but did not make the 102(d) connection. In fact, the examiner offered Apotex to claim priority to the related New Zealand patent - Apotex refused.

To add insult to injury, the court also found that Apotex "backdated" their inventor declaration during prosecution to conceal the issuance of the New Zealand patent:

Sherman's Rule 63 Declaration is dated September 14, 1996. Based on the record, it is clear that this date is incorrect . . . The only conclusion which can be drawn from the evidence is that Sherman backdated the Declaration because he had learned, after September 14, 1996, but before September 26, that the New Zealand patent had issued. There is no satisfactory explanation to the contrary. The '033 application was filed on September 17, 1996. Apotex's Toronto office received notice that the New Zealand patent issued in May, 1996, on September 18, 1996. No effort was made to notify its outside counsel of this fact. Indeed, the outside counsel did not learn of the New Zealand patent until after the case was dismissed.

Amazingly, Apotex characterized this fact as a "technicality," which prompted Judge Cohn to severly chide Apotex in the opinion (see footnote 21 on page 20 for more juicy bits).

Judge Cohn did not spare Eon either, noting that he found it "mystifying" why Eon did not investigate the New Zealand patent "until after five (5) days of trial, and only then after the Court's comments relating to the New Zealand patent."

Accordingly, the original $4.4M award was reduced by 30% "because the defendant bears some responsibility for the debacle which this case represents."

Read the opinion here.

Special Thanks to the Orange Book Blog for breaking this story.