Late yesterday the Federal Circuit released two nonprecedential orders dismissing appeals. Today the Federal Circuit released two precedential opinions. In the first, the court affirmed a judgment of the Court of Federal Claims in an appeal of a tax case addressing whether patent litigation expenses are deductible and need not be capitalized. In the second, the Federal Circuit vacated in part a judgment of the District of Massachusetts in a patent case based on a misconstruction of a claim term. Here are the introductions to the opinions and links to the dismissals.
Actavis Laboratories FL, Inc. v. United States (Precedential)
Actavis Laboratories FL, Inc. (“Actavis”) filed Abbreviated New Drug Applications (“ANDAs”) with the United States Food and Drug Administration (“FDA”), seeking FDA approval to market and sell generic versions of branded drug products already being sold in the United States. In response to Actavis’ ANDA filings, the manufacturers of those branded drugs – who already hold New Drug Applications (“NDAs”) for their products, and also own patents covering those products – sued Actavis for patent infringement. These suits were filed pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585, commonly known as the “Hatch-Waxman Act.” Under the Hatch-Waxman Act, the submission of an ANDA is considered an act of patent infringement when, as is the case here, the ANDA filer (Actavis) seeks FDA approval that would be effective prior to the expiration of patents covering the related, branded drug product. In such circumstances, as long as the NDA holder files suit claiming infringement within 45 days after receiving the statutorily-required notice from the ANDA filer, the Hatch-Waxman Act generally mandates that a district court stay the FDA’s approval of the ANDA for 30 months, during which time the parties engage in litigation over infringement and invalidity of any pertinent patents. 21 U.S.C. § 355(j)(5)(B)(iii).
While some background explanation of pharmaceutical patent litigation is necessary to understand this appeal, this is not actually a patent case. It is, instead, a tax case.
Actavis treated the litigation expenses it incurred in defending itself in various Hatch-Waxman suits as ordinary and necessary business expenses and, therefore, deducted them on its tax returns in the years the expenses were incurred. The Commissioner of the Internal Revenue Service (“Commissioner,” “IRS,” or “government”), however, considered these expenses as capital expenditures. In his view they are incurred in pursuit of an intangible capital asset: namely, FDA approval to lawfully market a generic drug product in this country. Actavis eventually paid its tax liabilities as calculated by the IRS – that is, without deducting its Hatch-Waxman litigation expenses – and then sued the Commissioner in the Court of Federal Claims to recover what Actavis contended was an overpayment. The Court of Federal Claims sided with Actavis and held that the litigation expenses are deductible and need not be capitalized.
The Commissioner appeals. We affirm.
Maquet Cardiovascular LLC v. Abiomed Inc. (Precedential)
Maquet Cardiovascular LLC appeals a judgment from the United States District Court for the District of Massachusetts that appellees Abiomed Inc., Abiomed R&D, Inc., and Abiomed Europe GmbH do not infringe certain claims of U.S. Patent No. 10,238,783. Maquet does not challenge the district court’s judgment of non-infringement of U.S. Patent No. 9,789,238.
Below, the district court entered final judgment based on the parties’ stipulation of non-infringement in light of the district court’s construction of certain claims of the ’783 patent. Because we determine that the district court misconstrued the claim terms at issue, we reject its constructions, vacate, and remand as to the ’783 patent. We leave the judgment as to the ’238 patent undisturbed.