A very complex settlement agreement, with a bit of sloppy drafting, torpedoed a patent infringement suit over a drug with $1.4 billion dollars a year in sales. Amgen, Inc. sued generic drug maker Cipla, Ltd. over sales of Sensipar a calcium -control drug.

Dissecting a complex settlement agreement that controlled between the parties took a full 38 pages of decision (read the full opinion here), but in the end, it really boiled down to a single word in a single sentence. Here it is, with the Court’s emphasis included:

Notwithstanding anything to the contrary in this Settlement Agreement, if [i] any Third Party that has made an At Risk Launch of a Generic Cinacalcet Product (where such At Risk Launch is before or after an at risk launch by Defendants) is not found to have infringed one or more valid and enforceable claims of the ‘405 patent or [ii] has not ceased or agreed to cease selling such Generic Cinacalcet Product following an At Risk Launch, then Amgen shall not be entitled to seek or recover any relief from Defendants for Defendants’ at risk sales, offers for sale, distribution, or importation of Defendants’ Product.

So it all came down to the “or” immediately preceding sentence [ii]. Amgen argued that the language required both sentences [i] and [ii] for enforcement. The judge disagree, saying basic principles of construction mandated that the language has set up two separate qualifications, and that the use of the word “or” clearly meant that only one of the two was required. Done deal.

THE BUSINESS TAKE-AWAY: Words matter. Every word. And I think that the court’s holding of the term is how we should look at them in contracts of all kinds. “And” and “or” are among the shortest words in the dictionary, but they can have the greatest impact. Never read past one of them to think about what they mean, and see if they actually mean what you intend.