Astrazeneca AB, et al v. Apotex Corporation, et. al., 1-01-cv-09351 (NYSD December 3, 2013, Order) (Cote, J.)
Thursday, December 5, 2013
Royalty Rate of 50% of Defendant’s Profits Awarded for Infringement of Prilosec® Patent
Following a bench trial on damages, the court awarded plaintiffs $76 million for defendants' three-year infringement of plaintiffs' Prilosec patent based on a royalty rate of 50% of defendants' profits. "[Plaintiff] would have had no desire . . . at any time to issue a license to [defendant]. . . . Since it is necessary, however, to assume that both parties were willing to enter into a license, [plaintiff] has shown through overwhelming evidence that it was in the driver’s seat in the negotiations and would have required [defendant] to pay a hefty portion of its profits for a license. . . . [Plaintiff] would have tried to calculate whether the expected income stream from [defendant's] license would offset lost sales from Prilosec® and the increase in financial support required to keep [plaintiff's new product's] market share stable or to improve it. . . . . While there are no perfect benchmarks for this licensing fee, a 50% licensing fee fits comfortably within the range of negotiations that occurred in connection with the patents-in-suit. . . . Notably, [a nonparty] offered to buy a license from [plaintiff] for 70% of its profits on 40mg omeprazole, for which it would have been the exclusive generic supplier, and 50% of its profits on the 10 and 20mg doses, for which it would have been the sixth generic supplier."