Endo Pharms. Inc. v. Mylan Pharms. Inc.

ENDO PHARMACEUTICALS INC., Plaintiff, v. MYLAN PHARMACEUTICALS INC., and MYLAN INC., Defendants.

Civil Action No. 11-cv-717 (RMB/KW)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

Date: April 8, 2014

[Dkt. Ent. 230, 231, 235]

SEALED OPINION

Appearances

Jack B. Blumenfeld

Jeremy A. Tigan

Julia Heaney

Morris, Nichols, Arsht & Tunnell LLP

Attorneys for Plaintiff

Jeffrey I.D. Lewis

Richard Maidman

Edward R. Tempesta

Patterson Belknap Webb & Tyler LLP

Of Counsel for Plaintiff

Richard L. Horwitz

Bindu Ann George Palapura

Potter Anderson & Corroon, LLP

Attorneys for Defendants

Michael S. Sommer

Wilson Sonsini Goodrich & Rosati PC

Douglas Carsten

Katherine Van Gunst

Elham F. Steiner

Matthew J. Bresnahan

Wilson Sonsini Goodrich & Rosati PC

T.O. Kong

Wilson Sonsini Goodrich & Rosati PC

Nicole Stafford

Wilson Sonsini Goodrich & Rosati PC

Arnold B. Calmann

Jeffrey Soos

Katherine A. Escanlar

Saiber LLC

Of Counsel for Defendants

BUMB, United States District Judge:

After holding an eight-day trial in this patent infringement case, the Court issued an Opinion and Order on January 28, 2014, finding in favor of Plaintiff Endo Pharmaceuticals, Inc. (the "Plaintiff" or "Endo"). (Dkt. Ents. 226, 227.) Less than an hour later, Defendants MylanPharmaceuticals, Inc. and Mylan Inc. (the "Defendants" or "Mylan") filed a letter informing the Court that the parties had reached a settlement in principle prior to receiving the Court's Opinion. (Dkt. Ent. 228.) Later that day, Endo filed a responding letter that claimed the parties "did not reach an agreement to settle, and are not working on drafting settlement papers." (Dkt. Ent. 229.) Thereafter, Defendants sought the Court's intervention and moved to enforce the purported settlement agreement. (Dkt. Ent. 231.) On March 18, 2014, the Court conducted a hearing on Defendants' motion.

In the meantime, Defendants separately moved under Federal Rule of Civil Procedure 60(b) for relief from this Court's Opinion and Order, arguing such relief was justified in light of the parties' purported settlement. (Dkt. Ent. 253.) For its part, Plaintiff moved for entry of final judgment, essentially requesting the Court modify its prior Order by directing the effective date of Defendants' ANDA drug pursuant to 35 U.S.C. § 271(e)(4)(A), and enjoining Defendants pursuant to 35 U.S.C. § 271(e)(4)(B). (See Dkt. Ent. 230.) For the reasons set forth below, Defendants' motions are GRANTED and Plaintiffs motion is DENIED as moot.¹

I. FACTUAL BACKGROUND

At the conclusion of the patent infringement trial, the Court directed the parties to meet and confer regarding settlement. Pursuant to this Order, Minaksi Bhatt, Assistant Global General Counsel for Patent Litigation at Mylan, Inc. and Guy Donatiello, Senior Vice President of Intellectual Property, at Endo, scheduled an in-person meeting to take place on December 4, 2013 at the Airport Marriott in Philadelphia, Pennsylvania (the "December 4th Meeting"). (Bhatt Tr.² 126:15-22.) In advance of that meeting, Bhatt conveyed Mylan's initial settlement offer to Donatiello by phone. Bhatt testified that the offer consisted of the following terms:

Donatiello testified on direct examination that, during the December 4th Meeting, Endo made a counteroffer:

Bhatt confirmed Donatiello's direct testimony. (Bhatt Tr. 127:8-15.) (On cross-examination, Donatiello's recollection as to these terms differed somewhat. (Donatiello Tr. 175:22-176:5 (explaining counteroffer also included a but that he "did not discuss whether we'd be permitted .)) Specifically, Bhatt testified that the parties "talked about the concept of a but that Donatiello did not include this term as part of his counteroffer and they "didn't reach agreement on that term that day." (Bhatt Tr. 127:17-19.) Donatiello acknowledged that Endo could accept the concept of a (Donatiello Tr. 141:11-18 (Endo agreed to this term "in principle" at that meeting, although no specifics were discussed).)

On the following day, December 5, 2013, Bhatt and Donatiello spoke again, by phone. Bhatt and Donatiello testified consistently that, during this call, Mylan countered with:

Both Bhatt and Donatiello on his direct examination agreed that they did not discuss the : on December 5. (Bhatt Tr. 128:5-7; Donatiello Tr. 142:5-8.) (On cross-examination, however, Donatiello testified that "[t]he was discussed during that call []." Donatiello Tr. 176:20-23.) By this point, though, Mylan had determined the was not important to it in this case for several reasons:

(Bhatt Tr. 128:8-21.)⁴ Forthese reasons, Mylan ceased pushing this term almost immediately.⁵

During the following weeks, Bhatt and Donatiello spoke several more times and always about the same three terms. (Bhatt Tr. 129:1-4.) During one of those calls, which Donatiello thought may have occurred sometime in mid-December, Donatiello testified that he offered the following terms:

Donatiello testified that Bhatt specifically raised the during this call, and asked if it remained a part of Endo's offer. Donatiello replied that Endo had agreed to the ' in principle and Bhatt could assume for the purposes of negotiations that it was still part of the offer. (Donatiello Tr. 142:17-143:3.) Bhatt, however, firmly stated that she did not mention the again after the December 4th Meeting. (Bhatt Tr. 129:5-7, 138:9-20.)

On December 19, Bhatt and Donatiello spoke again. Donatiello testified on direct examination that this time Mylan offered:

Andrea D. Tiglio, Patent Litigation Counsel for Mylan Inc., confirmed that this was her understanding of the terms as of this time. (Tiglio Tr. 43:1-24.) (On cross-examination, however, Donatiello testified that the offer included a Donatiello Tr. 177:11-18.) On December 20, Donatiello met with Tiglio. (See Tiglio Tr. 42:15-19; DX-328.) Both Donatiello and Tiglio testified consistently that, at this time, the parties had already agreed to (Tiglio Tr. 44:2-5; see also Donatiello Tr. 145:12-13.) They both testified, also consistently, that Endo proposed:

Donatiello testified that he intended his offer to include the possibility of a but he acknowledged that he did not discuss the with Tiglio. (Donatiello Tr.144:22-25.) Tiglio confirmed that the was not discussed. (Tiglio Tr. 46:6-8.) Thus, by this date, both parties are in agreement as to the status of the negotiations.

During this same meeting or shortly thereafter,⁶ both Donatiello on direct examination and Tiglio testified that Mylan counter proposed:

(On cross-examination, however, Donatiello suggested that this counter-offer included a ;. Donatiello Tr. 178:1-9.) Donatiello agreed to discuss the counterproposal regarding the with his business people. (Donatiello Tr. 145:24-14 6:2; see also DX-352.) Tiglio testified that the focus of this meeting was the term and there were no other settlement terms thathad been raised or were being discussed at that time. (Tiglio Tr. 44:19-22, 45:1-5, 46:6-22.)

After the New Year, discussions resumed between Bhatt and Donatiello. On or around January 7, 2014,⁷ Donatiello offered:

From at least this point forward, the parties were in agreement as to (See id. at 146:12-18.)

Mylan countered with:

Endo responded with:

Then, on January 10, Bhatt and Donatiello had a phone call during which Mylan again offered the same term:Donatiello responded with by which he meant that Endo would be permitted ; (Id. at 150:2 0-151:8.) Specifically,

(Donatiello Tr. 150:25-151:4.) In other words, the only term discussed at that point was Endo's which is consistent with the course of negotiations up to this point. Thus, Endo's "final" settlement offer (the "January 10 Offer") consisted of:

Neither party raised the during the January 10 call and, as Bhatt persuasively testified, this issue was no longer relevant to Mylan as of at least December 5, 2013.

Between January 10 and 24, the parties exchanged one or two communications in which Mylan advised Endo that it was still waiting on internal approval of Endo's January 10 Offer. (Donatiello Tr. 151:11-22.) On January 24, Tiglio emailed a draft settlement agreement to Donatiello (the "January 2 4 Draft"). (DX-368; DX-369.) The cover email states, "We are still awaiting final management approval, but in the meantime, in order to keep the ball rolling, we have put together a draft settlement and license agreement for your review." (DX-368 (emphasis added).) The email also notes that Mylan is still "tweaking" provisions in the draft and that Bhatt had not reviewed the draft because she had been out of the office that week. (Id.) Significantly, neither party viewed this draft agreement as a counteroffer.¹⁰ In fact, Donatiello testified thathe did not review the draft thoroughly because the parties had not yet agreed to any terms. (Donatiello Tr. 152:12-17.) The draft included a number of miscellaneous terms that had never been discussed by the parties, and also set forth the specifics of a DX-369.) In Mylan's view, these other terms were either boilerplate or "belt and suspenders [] provisions that we like to have in" but none were material. (Tiglio Tr. 57:16-18.)

In the meantime, the Court held a teleconference with the parties on January 23 to discuss the status of settlement negotiations. During that call, Jeffrey Lewis, Esq., advised the Court that Endo had made an offer that had been outstanding for nearly two weeks, and that he understood this "was probably the final [offer] or extremely close to it."¹¹ (Jan. 23, 2014 H'rg Tr. 3:22-25.) Douglas Carsten, Esq., advised that the offer had been elevated to Mylan's senior management and they were still awaiting final approval or disapproval. (Id. at 4:22-24.)

Bhatt testified that final approval of the January 10 Offer was obtained from senior management on January 27, although she did not learn of this approval until the morning of January 28.(Bhatt Tr. 132:8-17.) At that time, she told Tiglio to contact Donatiello and accept Endo's offer. (Id. at 132 :18-20.) Tiglio called Donatiello's office on January 28 around 11:35 a.m. and...