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APOTEX CORP. v. ISTITUTO BIOLOGICO CHEMIOTERAPICO

July 30, 2003

APOTEX CORP. AND APOTEX, INC., PLAINTIFFS
v.
ISTITUTO BIOLOGICO CHEMIOTERAPICO S.P.A., GLAXOSMITHKLINE PLC, GLAXOSMITHKLINE SERVICES PLC, AND THE WELLCOME FOUNDATION, LTD., DEFENDANTS



The opinion of the court was delivered by: Rebecca Pallmeyer, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs Apotex Corp. and Apotex Inc.*fn1 (collectively "Apotex" or "Plaintiffs"), brought suit in this court against Defendants Istituto Biologico Chemiterapico s.p.a. ("Unibios"), GlaxoSmithKline pic ("GSK plc"), GlaxoSmithKline Services Unlimited*fn2 ("GSK Services"), and The Wellcome Foundation Ltd. ("Wellcome"), for breach of contract and tortious interference.*fn3 The lawsuit stems from a contract entered into by the Plaintiffs and Unibios, an Italian company, in which Unibios agreed to supply Apotex with acyclovir, a drug used to treat the herpes virus. The GSK Defendants, owners of an Italian patent for the acyclovir drug, sued Unibios for patent infringement in an Italian court, and won. Unibios subsequently severed its business dealings with Apotex, leading Apotex to file this lawsuit. [ Page 2]

Defendants now move to dismiss on the ground of forum non conveniens,*fn4 arguing that the dispute belongs in an Italian court because Unibios and Apotex agreed to litigate there, and because it would be a more convenient forum for the parties and witnesses. After a review of the record, the court concludes that resolving this case in an Italian tribunal will be more efficient and therefore grants the Defendants' motions to dismiss.

FACTUAL BACKGROUND

The Parties

Plaintiff Apotex Corp. markets pharmaceutical products in the United States. Apotex Corp. is incorporated in Delaware and has its principal place of business in Vernon Hills, Illinois.*fn5 (First Amended Complaint ¶ 1.) Plaintiff Apotex Inc., a Canadian corporation with its principal place of business in Weston, Ontario, develops, manufactures and markets pharmaceutical products. (Id. ¶ 2.) Plaintiffs refer to each other as "affiliates"; the record does not reveal their precise relationship. (Plaintiffs' Amended Consolidated Memorandum of Law in Opposition to the GSK Defendants' and Unibios' Motions to Dismiss, hereinafter "Pls.' Mem." at 2.)

Defendant Istituto Biologico Chemioterapico s.p.a. ("Unibios"), an Italian corporation with its principal place of business in Turin, Italy, manufactures active pharmaceutical ingredients which are used to manufacture pharmaceutical products. (First Amended Complaint ¶ 3.) [ Page 3]

Defendant GSK plc is a United Kingdom corporation with its corporate headquarters in Brentford, Middlesex, England, and operational headquarters in Philadelphia, Pennsylvania and Research Triangle Park, North Carolina. (Id. ¶ 4.) GSK plc is the corporate parent of the GlaxoSmithKline Group (GSK Group), a global healthcare organization engaged in the development, manufacturing and marketing of pharmaceutical products. The GSK Group is comprised of GSK plc and various subsidiaries, including Defendants GSK Services and Wellcome. (Id. ¶¶ 5, 6.) Defendant GSK Services is a United Kingdom corporation with its principal place of business located in Greenford, Middlesex. (Id. ¶ 6.) Defendant Wellcome is engaged in the development, manufacturing and marketing of pharmaceutical products. A United Kingdom corporation located in Greenford, Middlesex, Wellcome is an indirect subsidiary of GSK plc and a direct subsidiary of GSK Services. (Id. ¶ 7.)

History Between Apotex and Unibios

In 1994, Apotex*fn6 decided to begin product development for the eventual manufacture and marketing of generic acyclovir products in the United States. Acyclovir is an anti-viral drug used against herpes viruses.*fn7 In 1994, Apotex officials entered into discussions with Unibios regarding Unibios' acyclovir production. (First Amended Complaint ¶ 15.) Apotex Corp. (the U.S. company) entered into a Supply Agreement with Unibios in 1995. Under the terms of the agreement, Unibios agreed to sell acyclovir to Apotex Corp., and also promised to do everything necessary to ensure that its manufacturing facility, and the acyclovir manufactured by Unibios, were approved by the U.S. Food and Drug Administration ("FDA"), a prerequisite to marketing drugs in the United States. (Id. ¶¶ 12, 17.) [ Page 4]

Plaintiffs provide a description in their First Amended Complaint of the method for obtaining approval to market a generic drug in the United States, which Defendants do not contest. Drug manufacturers obtain approval by filing an Abbreviated New Drug Application ("ANDA") with the FDA. The ANDA must include information to show that the generic drug has the same "route of administration,"*fn8 dosage form and strength as the previously approved brand name drug. (Id. ¶ 12.) The ANDA must identify the supplier from which the manufacturer will acquire the active pharmaceutical ingredient ("API") necessary to manufacture the product.*fn9 (Id. ¶ 13.) The drug manufacturer must also include with its ANDA a "letter of access" from the designated API supplier. In the letter of access, the API supplier authorizes the FDA to review the supplier's Drug Master File ("DMF") in connection with the FDA's consideration of the ANDA. The DMF summarizes the equipment, manufacturing steps, raw materials, and laboratory controls used by the API supplier to prepare the particular API. (Id. ¶ 14.)

The Agreement of Mutual Exclusivity between Unibios and Apotex (referred to by the parties to this action as the "Supply Agreement"), stated that Apotex would purchase all its requirements of acyclovir exclusively from Unibios, and Unibios agreed to exclusively provide acyclovir to Apotex for the United States market. (Supply Agreement ¶¶ 1, 2, Ex. C to Pis.' Mem.) The Supply Agreement required Apotex to place orders via "ATLANTIC CHEMICALS & PHARMACEUTICALS — Canada." (Id. ¶ 9.) The record does not reflect Atlantic's relationship with the parties, but shows that Atlantic played a role in the formulation of the Supply Agreement, and requested the above language to be placed into the contract to ensure that the company would receive a commission on all orders placed by Apotex (the agreement does not specifically mention commissions). [ Page 5]

(Memorandum from E.A. Relle of Atlantic to Bruno Garibaldi of Unibios of Dec. 7, 1994, Ex. C to Pls.' Mem.) Absent any information to the contrary, the court presumes that all orders for acyclovir were placed through Atlantic in Canada. The final paragraph of the Supply Agreement provides that "[f]or any controversy which might arise from the interpretation or execution of the present contract, the competent Forum is TORINO (Italy)." (Supply Agreement ¶ 10.) A note at the bottom of the Supply Agreement lists an Italian address for Unibios, and the agreement is printed on Unibios stationery, listing several Italian addresses on the letterhead. (Id.) Bruno Garibaldi, the Commercial Director for Unibios at the time, negotiated the terms of the agreement from Trecate, Italy, and signed the agreement in Trecate as well. (Declaration of Vito Ruisi ¶ 9, Ex. A to Unibios' Memorandum in Support of its Motion to Dismiss.) Though the court suspects its record is incomplete, several documents submitted by the parties show that Barry Sherman of Apotex Inc. (the Canadian company) was actively involved in negotiating the terms of the Supply Agreement. (Ex. 6 to GSK Defendants' Memorandum in Support of their Motion to Dismiss, hereinafter "GSK Defs.' Mem.") The Supply Agreement was apparently only drafted in English; none of the parties have mentioned an Italian version of the document.

On approximately May 29, 1996, Unibios submitted a DMF to the FDA for acyclovir, and on or near June 16 of that year, Unibios provided a letter of access to Unibios' DMF to TorPharm, an affiliate of Apotex. (First Amended Complaint ¶¶ 19, 20.) Through TorPharm, Apotex filed an ANDA for acyclovir tablets on December 5, 1997, and an ANDA for acyclovir capsules on July 27, 1999. In these ANDAs, Apotex requested FDA approval for acyclovir tablets and capsules to be sold in the United States. Apotex advised the FDA that Unibios would be the supplier of the acyclovir used in manufacturing the drugs. (Id. ¶ 21.) [ Page 6]

Italian Litigation

Defendant Wellcome,*fn10 the owner of an Italian patent for acyclovir, determined that Unibios' manufacture of acyclovir infringed that patent. On a date not identified in this record, Wellcome notified Unibios of the infringement. (Declaration of Giancarlo Del Corno ¶ 4, hereinafter "Del Corno Decl.", Ex. 1 to GSK Defs.' Mem.) Presumably in response to this notice, Unibios filed a preemptive suit in an Italian tribunal (on a date unknown to this court), seeking a judicial determination that the patent was a nullity or was not infringed. (Id.) Wellcome counterclaimed for a declaration of infringement. (Del Corno Decl. ¶ 6(c).)

In 1996, the Italian Tribunal ruled in Wellcome's favor, finding that its Italian patent was valid and had been infringed. (Id.) The proceeding was continued for assessment of damages at a later date. (Id.) In the interim, Unibios appealed the partial judgment to the Court of Appeal of Rome. (Id. ¶ 6(e).) In the meantime, a parallel infringement suit was pending before the Tribunal of Novara between Unibios and Glaxo Wellcome s.p.a. ("Glaxo Wellcome"), an Italian company and licensee of the patent from Wellcome.*fn11 (Id. ¶ 6(f).)

The parties reached a settlement of these pending matters in August 1998. Their settlement called for Unibios to pay a certain amount to Wellcome. Unibios agreed, further, that the Tribunal's findings of validity and infringement would be published in two Italian newspapers and a periodical. (Settlement Agreement, ΒΆΒΆ 3, 5, Ex. 1(B) to GSK Defs.' Mem.) In this agreement, Unibios acknowledged the validity of Wellcome's Italian patent and agreed to cease manufacturing or marketing acyclovir prior to the expiration of the patent, "save different supply agreements which could be executed between the parties." (Id. ...


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