Eli Lilly 2010 Annual Report Download - page 43

FORM 10-K
LEGAL AND REGULATORY MATTERS
We are a party to various legal actions and government investigations. The most significant of these are described
below. While it is not possible to determine the outcome of these matters, we believe that, except as specifically
noted below, the resolution of all such matters will not have a material adverse effect on our consolidated financial
position or liquidity, but could possibly be material to our consolidated results of operations in any one accounting
period.
Patent Litigation
We are engaged in the following U.S. patent litigation matters brought pursuant to procedures set out in the
Hatch-Waxman Act (the Drug Price Competition and Patent Term Restoration Act of 1984):
• Cymbalta: Sixteen generic drug manufacturers have submitted Abbreviated New Drug Applications (ANDAs)
seeking permission to market generic versions of Cymbalta prior to the expiration of our relevant U.S. patents
(the earliest of which expires in 2013). Of these challengers, all allege non-infringement of the patent claims
directed to the commercial formulation, and nine allege invalidity (and some also allege nonenforceability) of
the patent claims directed to the active ingredient duloxetine. Of the nine challengers to the compound patent
claims, one further alleges invalidity of the claims directed to the use of Cymbalta for treating fibromyalgia. In
November 2008 we filed lawsuits in U.S. District Court for the Southern District of Indiana against Actavis
Elizabeth LLC; Aurobindo Pharma Ltd.; Cobalt Laboratories, Inc.; Impax Laboratories, Inc.; Lupin Limited;
Sandoz Inc.; and Wockhardt Limited, seeking rulings that the compound patent claims are valid, infringed, and
enforceable. We filed similar lawsuits in the same court against Sun Pharma Global, Inc. in December 2008 and
against Anchen Pharmaceuticals, Inc. in August 2009. The cases have been consolidated and actions against all
but Wockhardt Limited have been stayed pursuant to stipulations by the defendants to be bound by the outcome
of the litigation through appeal. The Wockhardt Limited trial is scheduled to begin in June 2011.
• Gemzar: Teva Parenteral Medicines, Inc. (Teva); Sun Pharmaceutical Industries Inc. (Sun) and several other
generic companies sought permission to market generic versions of Gemzar prior to the expiration of our
relevant U.S. patents (compound patent expiring in 2010 and method-of-use patent expiring in 2013). We filed
lawsuits in the U.S. District Court for the Southern District of Indiana against Teva (February 2006) and several
other generic companies, seeking rulings that our patents are valid and are being infringed. In November 2007,
Sun filed a declaratory judgment action in the U.S. District Court for the Eastern District of Michigan, seeking
rulings that our method-of-use and compound patents are invalid or unenforceable, or would not be infringed
by the sale of Sun’s generic product. In August 2009, the district court in Michigan granted a motion by Sun for
partial summary judgment, invalidating our method-of-use patent, and the opinion was affirmed by a panel of
the Court of Appeals for the Federal Circuit in July 2010. We are seeking review of this decision by the U.S.
Supreme Court. In March 2010, the district court in Indiana upheld the validity of our compound patent in the
Teva case, but applied collateral estoppel with regard to our method-of-use patent, given the ruling in the Sun
case. Generic gemcitabine was introduced to the U.S. market in mid-November 2010.
• Alimta: Teva; APP Pharmaceuticals, LLC (APP); and Barr Laboratories, Inc. (Barr) each submitted ANDAs
seeking approval to market generic versions of Alimta prior to the expiration of the relevant U.S. patent
(licensed from the Trustees of Princeton University and expiring in 2016), and alleging the patent is invalid. We,
along with Princeton, filed lawsuits in the U.S. District Court for the District of Delaware against Teva, APP, and
Barr seeking rulings that the compound patent is valid and infringed. In November 2010, the district court ruled
from the bench that judgment would be entered in Lilly’s favor, upholding the patent’s validity. Plaintiffs may
appeal this decision once the judgment is entered.
• Evista: In 2006, Teva Pharmaceuticals USA, Inc. (Teva USA) submitted an ANDA seeking permission to market
a generic version of Evista prior to the expiration of our relevant U.S. patents (expiring in 2012-2017) and
alleging that these patents are invalid, not enforceable, or not infringed. In June 2006, we filed a lawsuit against
Teva USA in the U.S. District Court for the Southern District of Indiana, seeking a ruling that these patents are
valid, enforceable, and being infringed by Teva USA. In September 2009, the court upheld our method-of-use
patents (the last expires in 2014) and the court held that our particle-size patents (expiring 2017) are invalid.
Both rulings were upheld by the appeals court in September 2010, and the period for further appeals has
expired.
• Strattera: Actavis Elizabeth LLC (Actavis), Apotex Inc. (Apotex), Aurobindo Pharma Ltd. (Aurobindo), Mylan
Pharmaceuticals Inc. (Mylan), Sandoz Inc. (Sandoz), Sun Pharmaceutical Industries Limited (Sun Ltd.), and Teva
USA each submitted an ANDA seeking permission to market generic versions of Strattera prior to the expiration
of our relevant U.S. patent (expiring in 2017), and alleging that this patent is invalid. In 2007, we brought a
lawsuit against Actavis, Apotex, Aurobindo, Mylan, Sandoz, Sun Ltd., and Teva USA in the U.S. District Court for
the District of New Jersey. In August 2010, the court ruled that our patent is invalid. Several companies have
received final approval to market generic atomoxetine, but the Court of Appeals for the Federal Circuit granted
an injunction prohibiting the launch of generic atomoxetine until the court renders an opinion. The appeal was
heard by the court in December 2010 and we are waiting for a ruling. Zydus Pharmaceuticals (Zydus) filed an
action in the New Jersey district court in October 2010 seeking a declaratory judgment that it has the right to
launch a generic atomoxetine product, based on the district court ruling. We believe that Zydus is subject to the
injunction issued by the court of appeals.
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