[Ip-health] BMS / Mylan suit over sales of ATZ in Venezuela

Amy Kapczynski amy.kapczynski at gmail.com
Wed Apr 6 07:23:15 PDT 2016

Have people been following this case in the Second Circuit?  BMS is suing Mylan for selling atazanavir to Venezuela, under a licensing agreement that allegedly forbade sales to countries w/o patents.  

2nd Circ. Eyes BMS $30M Suit Over Mylan's Sale Of AIDS Drug

Share us on: By Pete Brush

Law360, New York (April 5, 2016, 2:16 PM ET) -- The Second Circuit appeared poised Tuesday to revive Bristol-Myers Squibb Co.'s $30 million breach of contract suit against Mylan Laboratories Ltd. over Mylan's alleged unlawful sale of a patented Bristol-Myers AIDS drug in Venezuela, with one judge saying Mylan was "hell-bent" to skirt the companies' no-suit agreement.

Mylan appeared to be pushing against headwinds before Judges Rosemary S. Pooler, Barrington D. Parker and Debra Ann Livingston in a case the Second Circuit already has revived once only to see it again thrown out in July by U.S. District Judge Paul A. Engelmayer on a motion to dismiss. Bristol Myers originally filed suit in 2013.

Bristol-Myers says Mylan profited from distribution of atazanavir, a generic version of its patented drug Reyataz, in Venezuela despite a deal forbidding export to counties where its drug did not enjoy patent protection. Venezuela is one such country.

The contract, charitable in nature and designed to give some developing nations access to a powerful antiretroviral medicine, gave Mylan access to drugmaking technology. It was geared primarily toward India and sub-Saharan Africa, Bristol-Myers says.

Mylan counters that Bristol-Myers has not stated a claim for relief among other things because the letter of the no-suit agreement only forbids third parties from exporting the drug into forbidden territories.

But Bristol-Myers says that is exactly what happened. Mylan sold atazanavir to the Pan American Health Organization while the drug was in India and the organization moved the drug to Venezuela, it says.

While Judge Engelmayer twice been unimpressed with Bristol-Myers' claims, the Second Circuit, which revived the case for the first time in October 2014, appeared to take the opposite view again. 

Judge Parker appeared especially piqued by Mylan's argument sounding in the letter of the contract.

“Your client was hell-bent on getting something that it hadn't bargained for and wasn't entitled to,” he told Mylan counsel Jessica L. Margolis of Wilson Sonsini Goodrich & Rosati PC.

Judge Parker stated flatly that the case appeared to contain questions of fact that were not ripe for a motion to dismiss.

And when Margolis asserted that Bristol-Myers — already on a third complaint in the trial court below — was simply “trying and trying to manufacture a breach of contract claim” related to the Venezuelan exports, it was Judge Pooler's turn to be unhappy.

Mylan's conduct was “not in the spirit of the contract,” she said.

If the case is reversed again, liability could hinge on whether the Washington, D.C.-based Pan American Health Organization was the exporter of the drug under Indian law.

Bristol-Myers is represented before the Second Circuit by John W. Nields of Covington & Burling LLP.

Matrix is represented by Jessica L. Margolis of Wilson Sonsini Goodrich & Rosati PC.

The appeal is Bristol-Myers Squibb v. Matrix Laboratories, case number 15-1922, in the U.S. Court of Appeals for the Second Circuit.

--Editing by Patricia K. Cole.     

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