Intercompany Sales From Patentee to Wholly-Owned Subsidiary May Constitute “Sales” for Purposes of Lost Profits

The court denied plaintiff's motion for summary judgment that defendant was not entitled to lost profits damages for infringement of its interferon therapy patent on the ground that only defendant's subsidiary sold treatments in the U.S. "⁠[Defendant] explains that it sells [its products] to [its non-party wholly owned subsidiary] in return for payment of an intercompany purchase price. [The subsidiary] then sells those products to wholesalers and pharmacies. The lost profits that [defendant] is principally seeking in this case are on the intercompany sales from [defendant] to [the subsidiary]. . . . [T]he intrafamily, intercompany sales from [defendant] to [its subsidiary] can constitute 'sales' by [defendant] for lost profits purposes. [Plaintiff] has not appeared to have cited a blanket rule prohibiting the fact finder from considering such transactions in a lost profits analysis. In addition, construing the facts in the light most favorable to [defendant], the Court finds that [defendant] has produced enough evidence that a rational juror could conclude that the profits of [the subsidiary] flow inexorably to [defendant]."

Bayer Healthcare Pharmaceuticals Inc. v. Biogen Idec Inc., 2-10-cv-02734 (NJD July 26, 2018, Order) (Cecchi, MJ)