The Illinois Union Insurance Company contends that Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) did not notify it on time about the legal proceedings in the Protonix case, and argues that it therefore does not have to indemnify Teva. The argument is made in the complaint for declaratory relief filed with the US District Court for the Eastern District of Pennsylvania. "Globes" has obtained a copy of the petition.
Illinois Union has initiated civil proceedings against Teva. The insurance company contends that Teva is ineligible for indemnification in the case. The insurance is for costs related to patent infringement by generic drugs.
In 2007, Teva made an at-risk launch of anti-reflux drug Protonix. After the US District Court of the District of New Jersey ruled against Teva, it settled with Pfizer Inc. (NYSE: PFE; LSE: PFZ), which had acquired with Protonix's maker, Wyeth, for $1.6 billion. Teva believes that it is eligible for $560 million in insurance coverage.
Illinois Union argues that the insurance policy between the parties requires Teva to notify it in writing of any claim against the company as soon as possible. Illinois Union claims that Wyeth sued Teva for patent infringement in May 2004, and later consolidated the suit with other suits from subsequent years. The insurance company says that it was not notified of this in time.
To prove its case, Illinois Union cites e-mail correspondence from 2007 between an insurance agent who works for Teva and the insurance company, in which the agent asked for an update on claims, but was told that there weren’t any.
In April 2010, a US jury found that Protonix's patent was valid. Illinois Union contends that had it known of this on time, it would have taken measures to limit Teva's coverage for compensation.
Illinois Union says that Teva did not notify it of the Wyeth action "until August 31, 2011, four months after the expiration of the policy period, 16 months after the jury in the Wyeth action found Teva liable for patent infringement, and more than seven years after the first complaint in the Wyeth action was filed."
In another paragraph, Illinois Union contends that Teva refused to provide it with documents related to the Wyeth action before the compensation discussion stage.
Teva said in response that it is studying Illinois Union Insurance's claims, and that it will respond accordingly.
Published by Globes [online], Israel business news - www.globes-online.com - on July 8, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013