Just after I posted about the awesome power of federal courts to enjoin other cases, the Federal Circuit reminds us the power is not absolute.  In Sanofi-Aventis Deutschland Gmbh v. Genentech, Inc., __ F.3d __, 2013 WL 1921073 (Fed. Cir. May 10, 2013), it affirmed the district court’s decision not to enjoin a foreign arbitration over a patent dispute, even though a very similar issue had been fully litigated in the U.S. courts.

Sanofi claimed that Genentech’s drug sales had infringed Sanofi’s patents. The parties had a licensing agreement, which called for the application of German law and for arbitration of disputes with the International Chamber of Commerce. The alleged infringement started in 1997 and constituted a breach of that agreement, but was first raised by Sanofi in 2008.  Once it was raised, Genentech terminated the agreement.

Sanofi started an ICC arbitration on October 24, 2008.  Genentech then filed an action in U.S. federal court, asking the court to find no infringement of the patent.  Genentech won; the district and appellate court found it had not infringed the patent.  However, the district court refused to enjoin Sanofi from continuing with the ICC arbitration.

[In a prime example of how proceeding in multiple venues can lead to conflicting results, the ICC arbitrator then ruled against Genentech.  Applying German substantive law, it found Genentech liable for damages under the licensing agreement.]

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Tags: Genentech