Dapsone – USA

On June 04, 2020, Federal Circuit denied Almirall’s request for attorney fees pursuant to 35 U.S.C. § 285.

Background:

Amneal filed IPRs against US 9,161,926 and US 9,517,219 patents in Feb. 2018 and in Oct. 2018 respectively. These patents are listed  in Orange Book for ACZONE® (dapsone) 7.5% topical gel. In Feb. 2019, Amneal filed ANDA with the FDA, submitting Paragraph IV certifications for the ’219 patent and the ’926 patent. Almirall sued amneal for infringement of ’219 patent only. Therefore, Amneal filed a counterclaim seeking declaratory judgment that the ’926 patent is invalid and is not infringed. After that parties engaged in settlement discussions between Apr. 22  - Apr. 29, 2019. It appeared that Almirall offered covenant-not-to-sue on the ’926 patent contingent on dismissal of this IPR. But the final settlement was not reached & in Aug. 2019 PTAB issued final written decision finding claims 1–6 of the ’926 patent not unpatentable. Amneal filed appeal on Oct. 28, 2019 & on Mar. 30, 2020, Amneal filed motion to voluntarily dismiss its appeal. Almirall thus sought attorney fees pursuant to 35 U.S.C. § 285. Almirall argued that Amneal litigated this matter in an unreasonable manner by continuing to litigate the IPR after the covenant-not-to-sue was offered, and Almirall had asked the FDA to remove the patent from the Orange Book. Almirall sought only fees and costs incurred during the relatively marginal window of time from [April 29, 2019], the date settlement negotiations were terminated, to the date of trial in the underlying IPR [June 5, 2019].

Court’s analysis:

Almirall specifically argued that Federal Circuit is authorised to award attorney fees in an appeal lies from the decision of PTAB. But, Federal Circuit disagreed & said that this court can award attorney fees under section 285 for work done in district court patent infringement actions. Appeals from the Board are a different matter as these are administrative proceedings. Moreover, the plain meaning of section 285’s reference to “[t]he court” speaks only to awarding fees that were incurred during, in close relation to, or as a direct result of, judicial proceedings. Though in some cases court has awarded attorney fees but these cases are different from present one. It is true that in Sullivan (Sullivan v. Hudson, 490 U.S. 877; 1989), the Supreme Court explained that fees could be awarded for administrative proceedings that are “intimately tied to the resolution of the judicial action and necessary to the attainment of the results Congress sought to promote by providing for fees.” But the “narrow class of qualifying administrative proceedings” that Sullivan was referring to were those “where ‘a suit has been brought in a court,’ and where ‘a formal complaint within the jurisdiction of a court of law’ remains pending and depends for its resolution upon the outcome of the administrative proceedings.” In another case, PPG (PPG Indus., Inc. v. Celanese Polymer Specialties Co., 840 F.2d 1565, 1569; Fed. Cir. 1988), this court allowed for the award of fees where Patent Office “proceedings substituted for the district court litigation on all issues considered by the PTO and the Board.” But it did so only with respect to fees incurred after the filing of a civil action, and the fees were awarded in that district court proceeding. The Patent Office proceedings were found by the district court to be intimately tied to the resolution of that action. Those are clearly not the circumstances here.

For these reasons, Federal Circuit rejected Almirall’s request for attorney fees under section 285.