Haug Partners Secures Dismissal Before the Second Circuit in Favor of Shire

On April 26, 2022, the United States Court of Appeals for the Second Circuit ruled in favor of Haug Partners and its clients Shire LLC, Shire Development LLC, and Shire plc in the case LCS Group, LLC v. Shire LLC et al. (Nos. 20-2319-cv and 20-2587-cv). The operative complaint sought hundreds of millions of dollars in damages. The United States District Court for the Southern District of New York dismissed all claims by LCS Group with prejudice, including contract and tort claims relating to Haug Partners’ successful 2014 inter partes review of U.S. Patent No. 8,318,813. In addition to dismissing all claims, the Court imposed sanctions on LCS Group and its counsel under Federal Rule of Civil Procedure 11, ordering the award of reasonable attorney fees.  On appeal, LCS Group challenged the District Court’s dismissal of the contract claim, and LCS Group and its counsel challenged the rulings regarding sanctions.  With respect to the contract claim, the Second Circuit dismissed the appeal for lack of jurisdiction, holding that LCS Group had failed to timely file its appeal of the District Court’s judgment on the merits.  Moreover, the Second Circuit affirmed the District Court’s imposition of sanctions.  Specifically, the Second Circuit held that the District Court did not abuse its discretion in holding that sanctions were warranted, and that the District Court properly held that: (i) LCS Group’s fraud claims were filed for an improper purpose; and (ii) LCS Group’s RICO claim was frivolous.  Moreover, the Second Circuit declined to alter the amount of sanctions awarded by the District Court.