Alkermes Pharma Ireland Limited v. Janssen Pharmaceutica N.V.

Background

Alkermes Pharma Ireland Limited filed an unopposed petition under the Federal Arbitration Act to confirm a final arbitration award against Janssen Pharmaceutica N.V. The arbitration concerned a dispute arising from two license agreements dated March 31, 1999, and July 31, 2003. Both agreements required disputes concerning the agreements' validity, interpretation, enforcement, performance, breach, or termination to be resolved through arbitration in New York, New York.

The arbitrators issued interim awards before issuing their Final Award on May 31, 2023. The Final Award determined, among other things, that Janssen could terminate the agreements but could not continue selling products developed during the agreements' terms without paying royalties; that the 1999 Agreement expired on May 26, 2030; and that know-how royalty periods applied separately to SUSTENNA, TRINZA, and HAFYERA. The award also determined that the interim award did not violate laws against patent misuse and tying and that back royalties and interest were owed under both agreements.

As of March 15, 2023, the award included $192,434,565 in back royalties and interest under the 1999 Agreement and $1,702,068 under the 2003 Agreement. The award also provided that royalties for CABENUVA in the United States would run for 15 years from its first commercial sale, through December 31, 2036. Janssen paid Alkermes $194,136,633 in back royalties and interest, plus additional interest for royalties owed for the first quarter of 2023. Janssen filed a notice stating that it did not oppose the petition.

Legal standard

Under the Federal Arbitration Act, a court may confirm or vacate an arbitration award, in whole or in part. Confirmation is a summary proceeding that turns a final arbitration award into a court judgment. Courts give strong deference to arbitration awards and generally do not review the arbitrators' decision for factual errors or mistaken interpretations of the parties' agreement.

The court may vacate an award in specific circumstances, including corruption or fraud, partiality by an arbitrator, serious procedural misconduct, or an arbitrator's exceeding the authority granted by the parties.

Court's analysis

The court found that the Final Award was within the authority granted to the arbitrators by the two license agreements and the arbitration rules incorporated into those agreements. The court also found no evidence that the arbitrators' decision was unlawful, arbitrary, or beyond their powers. Janssen had not raised any objection to the award.

Disposition

The court granted the petition to confirm the arbitration award. The Clerk of Court was directed to enter judgment confirming the Final Award and to close the case.