Arent Fox Wins for Luitpold Pharmaceuticals at Second Circuit Court of Appeals

The appeals panel’s ruling clears the way for a trial on Luitpold’s contention that Switzerland-based Geistlich Söhne A.G., a manufacturer of dental surgical products, improperly terminated Luitpold’s contract to develop a market and distribute products in the US. Luitpold seeks damages of $251 million.

“The Second Circuit’s decision means that Luitpold has achieved complete victory, in the sense that the company can pursue all of its stated claims and all damages against the defendants,” Mr. Carter said.

In addition to Mr. Carter, the Arent Fox team representing Luitpold included Complex Litigation partner Mark A. Bloom, counsel Jennifer L. Bougher, senior attorney Martin F. Cunniff, and associates Jeff Leung and Eric Roman.

The companies signed a marketing and distribution agreement in 1994 for a line of products aiding bone and tissue growth in post-surgery dental patients. In 2010 Geistlich moved to terminate the agreement; it cited no breach of contract or other failure on Luitpold’s part, asserting instead that the contract had been in force for a “reasonable” length of time and that Geistlich was therefore permitted to unilaterally terminate it.

In early 2013 the US District Court for the Southern District of New York granted summary judgment to Geistlich on Luitpold’s claims, concluding the parties’ commercial and license agreements were unilaterally terminable at will. In its just-announced decision, the Second Circuit agreed with Luitpold and vacated the District Court’s order, concluding “that the Commercial Agreement unambiguously provides no right of unilateral, at-will termination,” while sending the dispute back to the District Court for a trial on Luitpold’s claims and damages.

“The appeals court could have simply concluded that the agreements at issue were ambiguous as to the parties’ intent regarding termination,” said Mr. Carter. “Instead it went much further, with a ruling that limits the arguments available to Geistlich at trial while preserving Luitpold’s claims, including for damages.”

The Second Circuit also green-lighted Luitpold’s claims against Geistlich for breaching the exclusive license granted to Luitpold when Geistlich itself marketed the products licensed to Luitpold in the same territories granted to Luitpold during the term of the license agreement. The District Court in 2011 granted Geistlich’s motion to dismiss those claims, but the Second Circuit disagreed and reinstated those claims. With that, all claims stated in Luitpold’s complaint remain alive and ready for trial.

In remanding the case, the circuit also reinstated the counterclaims asserted by Geistlich, which the District Court dismissed in a 2013 order.

Arent Fox’s Complex Litigation group has been recognized by Chambers USA for its “streamlined” approach that delivers “quality” results. With more than 125 litigators, the practice boasts a deep bench and international reach while having extensive experience in high-stakes litigation before federal and state courts and regulatory agencies. The group is especially proficient at managing parallel litigation in multiple jurisdictions and represents clients in matters that include intellectual property, health care, life sciences, trade, automotive, insurance, and human rights abuses.