U.S. courts have the power to enjoin parties from pursuing litigation before foreign tribunals. "[I]n evaluating a request for an anti-suit injunction, [the district court] must determine (1) 'whether or not the parties and the issues are the same, and whether or not the first action is dispositive of the action to be enjoined'; (2) whether the foreign litigation would 'frustrate a policy of the forum issuing the injunction'; and (3) 'whether the impact on comity would be tolerable.

On May 10, 2013, in Sanofi-Aventis Deutschland GmbH v. Genentech, Inc., the U.S. Court of Appeals for the Federal Circuit (Rader, Dyk, Reyna*) affirmed the district court's denial of Genentech's motion to enjoin Sanofi from continuing with a foreign arbitration concerning a license to U.S. Patents No. 5,849,522 and No. 6,218,140, which related to certain DNA sequences know as enhancers used in the manufacture of drugs such as Rituxan and Avastin. The Federal Circuit stated:

It is well-settled that U.S. courts have the power to enjoin parties from pursuing litigation before foreign tribunals. "[I]n evaluating a request for an anti-suit injunction, [the district court] must determine (1) 'whether or not the parties and the issues are the same, and whether or not the first action is dispositive of the action to be enjoined'; (2) whether the foreign litigation would 'frustrate a policy of the forum issuing the injunction'; and (3) 'whether the impact on comity would be tolerable.'" . . .

"The first step . . . in deciding if an anti-suit injunction is appropriate is determining 'whether or not the parties and the issues are the same, and whether or not the first action is dispositive of the action to be enjoined.'" The issues need not be identical; it is enough that they are functionally the same such that the result in one action is dispositive of the other. If they are not identical or functionally the same, no injunction will lie. [T]he Agreement [here] is governed by German law, the forum selection clause specifies arbitration at the ICC, and the initial suit was brought pursuant to the Agreement in Europe. . . . Whether Genentech had infringed, and therefore owed royalties under the Agreement, would be a claim arising out of the Agreement and subject to the Agreement's forum selection clause. By electing to terminate the license, however, Genentech created a situation where, at least for the period after it had terminated the license, neither the Agreement nor the forum selection clause applied, and Genentech was free to litigate infringement in the United States. It has done so, obtaining a judgment of non-infringement.

To the extent that that judgment concerns Genentech's actions after the Agreement was terminated, it does not arise out of the Agreement. The question, then, is whether that judgment is dispositive of the foreign arbitration for the period during which the Agreement was in effect. The answer to this question turns on whether the issues are functionally identical . . . . We agree with Sanofi that the U.S. judgment of non-infringement is not dispositive as to breach of the Agreement. [T]he dispute arises out of the Agreement and is subject to the Agreement's forum selection clause. The issue in the foreign arbitration is breach of the Agreement, not patent infringement. Applying German law, the arbitrator has already deviated from U.S. patent law by concluding that infringement is possible even if the patents are invalid. In addition, the arbitrator has adopted a definition of infringement that includes using the enhancer to produce Rituxan, even if the enhancer is not in the ultimate product. The arbitrator thus appears to have adopted a definition of infringement that is both over-and under-inclusive compared to U.S. law. The district court came to the same conclusion, stating that "[t]o the extent that the arbitration involves the same infringement questions, under U.S. law, Genentech can present its arguments to the arbitrator regarding why the judgment of this court should be respected." In our view, this statement correctly recognizes that the meaning of infringement under the Agreement and the meaning of infringement under U.S. law are not functionally the same. We also note that Sanofi has not asked the U.S. courts to decide the meaning of infringement under German law. . . .

The district court's denial of the anti-suit injunction is further grounded in the second Gallo factor: whether the foreign litigation would frustrate a policy of the forum issuing the injunction. Genentech argues that res judicata requires us to ensure that the arbitrator respects the judgment of the U.S. courts, and that the U.S. policy in favor of arbitration does not apply here. Sanofi responds primarily that the strong interest in enforcing forum selection clauses requires the injunction to be denied. Genentech's res judicata argument is without merit. Genentech suggests that the judgment of non-infringement has res judicata effects on the foreign arbitration. But Genentech is not arguing that the district court in this case is bound by res judicata -- it is in essence asking us to find that res judicata should apply in another case, the foreign arbitration. [A]lthough arbitrators may not ignore res judicata, they "generally are entitled to determine in the first instance whether to give the prior judicial determination preclusive effect." This is especially appropriate here, where there is no reason to believe that res judicata operates identically under German law. Furthermore, given that we have acknowledged that the issues are not the same, and the named parties in the foreign arbitration are different from those in the U.S. litigation, the res judicata argument is not persuasive.

Turning to whether the injunction would frustrate the policies of the forum, it is undeniable that the United States has a strong policy in favor of forum selection clauses. . . . Although the forum selection clause in this case weighs against jurisdiction in the United States, the same reasoning applies: enjoining suit would undermine the parties' choice of forum. The parties in this case entered into an agreement in 1991 that remained in force until Genentech terminated it in 2008. They agreed that disputes under that agreement would be governed by German law and heard by the ICC. Hoechst remained faithful to that agreement, initially seeking relief in the ICC after Genentech asserted that Rituxan and Avastin were not licensed articles. Only after Genentech terminated the license did the parties seek relief in a different forum -- the United States. To the extent that the parties sought relief for the period after the license was terminated, there was no frustration of the policy in favor of enforcing forum selection clauses. By seeking to impose the U.S. judgment of non-infringement on the foreign arbitration, however, Genentech effectively asked this court to relieve it of its obligation to settle such disputes at the ICC. We conclude that Genentech's request would frustrate the interest in enforcing forum selection clauses, and therefore reject Genentech's argument.

The third and final factor when reviewing an anti-suit injunction is "whether the impact on comity would be tolerable." Here, because forum selection is involved, this factor overlaps with the second factor. [T]he parties in this case agreed to the ICC as a forum for disputes over the license. "In a situation like this one, where private parties have previously agreed to litigate their disputes in a certain forum, one party's filing first in a different forum would not implicate comity at all."