Allergan Owes Only Limited Botox Patent Royalties

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By Blake Brittain

Oct. 6 — Drug company Allergan Inc. only owes royalties for sales of Botox to treat migraine headaches in limited, specific ways, the U.S. District Court for the Central District of California ruled Oct. 5 (Miotox LLC v. Allergan, Inc., C.D. Cal., No. 2:14-cv-08723, 10/5/15).

The original licensing agreement between Allergan and Miotox LLC concerned a patent for Botox-based migraine treatment that expired in 2014, at which time Miotox sought to amend the agreement to cover four new Miotox patents and another new patent application, all of which also covered the treatment of migraines with Botox.

The expired patent—U.S. Patent No. 5,714,468—covered the use of Botox to treat migraines broadly, while the newpatents were “much more limited in scope,” the court said.

The language of the agreement only covered “bona fide, unexpired claim[s] in the Licensed Patents for the Licensed Use.”

Miotox argued that the amended agreement included uses of Botox covered by both the expired and new patents, whileAllergan argued that the agreement only covered uses outlined in the new patents. Miotox sued for breach of contract, and Allergan countersued for a declaration that its Botox sales didn't infringe any Miotox patents.

The court said that the language of the licensing agreement was clear in covering only valid patents, and disallowed outside evidence to the contrary from Miotox because the language was unambiguous.

The court called Miotox's arguments “tortured.”

“There is no language in the License Agreement to suggest that the parties intended for Allergan to pay royalties beyond the expiration of the ‘468 patent. As Allergan points out, the opposite is true, as the agreement was limited specifically to uses covered by “bona fide, unexpired” patent claims, the court said.

The court, therefore, said the patent licensing agreement at issue only applied to royalties from Allergan's sales of Botoxfor the limited treatments covered by the new patents, and not the broader treatment covered by the expired ‘468 patent.

Judge Otis D. Wright II wrote the opinion.

Miotox was represented by Deborah E. Fishman, of Kaye Scholer LLP, Palo Alto, Calif. Allergan was represented by Anne Y. Brody, of Gibson Dunn & Crutcher LLP, Irvine, Calif.

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