IN RE: SELENIOUS ACID LITIGATION
Case No. 2:24-cv-07791 (BRM) (CLW)
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY
Filed 07/08/25
Document 239 | PageID: 16427
MARTINOTTI, DISTRICT JUDGE
NOT FOR PUBLICATION
MARTINOTTI, DISTRICT JUDGE
Before the Court is Plaintiff American Regent, Inc.‘s (“Plaintiff“) Motion for a Preliminary Injunction against Defendants in this consolidated matter (the “Motion“) (ECF No. 85), each of whom has filed an Abbreviated New Drug Application that Plaintiff alleges infringes on its Orange Book patents, U.S. Patent No. 11,998,565 (the “‘565 Patent“) and U.S. Patent No. 12,150,957 (the “‘957 Patent“).1 Having reviewed the parties’ submissions filed in connection with the Motion, having conducted a hearing on March 31, 2025 (ECF No. 163), and having considered the parties’ post-hearing submissions (ECF Nos. 170, 171, 200, 201), for the reasons set forth below and for good cause having been shown, Plaintiff‘s Motion is GRANTED.
I. BACKGROUND
A. Statutory Background
“[T]he regulatory scheme that governs the testing and approval of new drugs in the United States” was established by the Hatch-Waxman Act (“Hatch-Waxman“),
Second, to further its goal of “increas[ing] competition between generic and brand-name drugs,” Hatch-Waxman “allows the manufacturers of generic drugs to obtain FDA approval without having to endure the gauntlet of procedures associated with NDAs.” In re Wellbutrin, 868 F.3d at 143. Generic manufacturers may file an Abbreviated New Drug Application (“ANDA“) “specifying that the generic has the ‘same active ingredients as,’ and is ‘biologically equivalent’ to, the already-approved brand-name drug.” Actavis, 570 U.S. at 142 (quoting Caraco Pharm. Lab‘ys, Ltd. v. Novo Nordisk A/S, 566 U.S. 399, 405 (2012)). An ANDA allows a generic manufacturer to “avoid[] the ‘costly and time-consuming studies’ needed to obtain approval ‘for a pioneer drug,‘” thereby furthering competition. Id. (quoting Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 676 (1990)).
Third, a generic manufacturer may also submit a Section 505(b)(2) NDA, which “is appropriate for a company seeking to modify another company‘s brand-name drug.” F.T.C. v. AbbVie Inc., 976 F.3d 327, 339 (3d Cir. 2020); see also
“In addition to streamlining the drug approval process, the Hatch-Waxman Act provides specialized procedures for brand-name and generic drug manufacturers to resolve intellectual property disputes.” In re Wellbutrin, 868 F.3d at 144. A brand-name manufacturer is required to list in its NDA “the ‘number and the expiration date’ of any relevant patent.” Actavis, 570 U.S. at 143 (quoting
B. Factual Background
1. Plaintiff‘s Selenious Acid Injections
Plaintiff is a pharmaceutical corporation with a principal place of business in New York State. (ECF No. 1 (Accord Healthcare, Inc. Compl.) ¶ 2.) Plaintiff has an NDA for “three unit forms of Selenious Acid Injection—(1) eq. 600 mcg Selenium/10 mL (eq. 60 mcg Selenium/mL); (2) eq. 60 mcg Selenium/mL (eq. 60 mcg Selenium/mL); and (3) eq. 12 mcg Selenium/2 mL (eq. 6 mcg Selenium/mL)” (the “Selenious Acid Injections“). (ECF No. 95 at 5–6.) The FDA approved this NDA—No. 209379—on April 30, 2019, and conferred it New Chemical Entity status, which guarantees “an initial five (5) years of market exclusivity following approval.” (Id. at 6, 8.) However, the ‘565 and ‘957 Patents were issued later, on June 4, 2024, and November 26, 2024, respectively. See U.S. Patent No. 11,998,565 (filed Mar. 21, 2023) (“Pat. ‘565“); U.S. Patent No. 12,150,957 (filed May 23, 2024) (“Pat. ‘957“). The patents-in-suit are listed in the FDA‘s Orange Book. (ECF No. 95 at 1.) The ‘565 Patent describes the compositions of the Selenious Acid Injections, and the ‘957 Patent describes their methods of use. (Id. at 8.) Plaintiff contends “each Defendant infringes at least claims 1, 8, and 9 of the ‘565 [P]atent and claims 1, 6, and 9 of the ‘957 [P]atent.” (Id.)
Selenium is a “trace element . . . essential to various biological processes, and a deficiency can result in serious and potentially life-threatening issues such as cardiomyopathy” in both
Since launch, Plaintiff has made nearly
2. Defendants’ ANDAs
Defendants are generic pharmaceutical companies who submitted ANDAs to the FDA “seeking approval to make and sell generic copies of [Plaintiff‘s] Selenious Acid before the expiration of the ‘565 and ‘957 [P]atents,” pursuant to
Plaintiff alleges “each Defendant infringes at least claims 1, 8, and 9 of the ‘565 [P]atent and claims 1, 6, and 9 of the ‘957 [P]atent.” (Id. at 8.) Claim 1 of the ‘565 Patent claims
[a]n injectable composition comprising water, 6 µg or 60 µg of selenium, no chromium or chromium in an amount not to exceed 1 µg, no aluminum or aluminum in an amount not to exceed 6 µg, no iron or iron in an amount up to 10 µg, and fluoride in an amount of 0.0001 µg to 2.7 µg per 1 mL of the injectable composition.
‘565 Pat. col. 71 l. 36–41 (emphasis added). As described in further detail below, the italicized text describing a fluoride concentration is at the heart of Defendants’ invalidity contentions for both patents-in-suit, as well as their theories of non-infringement. (ECF No. 126.) The ‘565 Patent Claims 8 and 9 depend on Claim 1, describing a composition of Claim 1 that has “a pH of 1.8 to 2.4” and one that “further comprises nitric acid,” respectively. ‘565 Pat. col. 71 l. 60–63. Similarly, Claim 1 of the ‘957 Patent teaches
[a] method of providing an injectable composition to a patient in need thereof, the method comprising administer-ing at least the injectable composition to the patient, the injectable composition comprising water, 6 μg, 40 µg or 60 µg of selenium, no chromium or chromium in an amount not to exceed 1 µg, no aluminum or aluminum in an amount not to exceed 6 µg, no iron or iron in an amount not to exceed 10 µg, and fluoride in an amount of 0.0001 μg to 2.7 µg per 1 mL of the injectable composition.
‘957 Pat. col. 72 l. 61–col. 73 l. 2 (emphasis added). Claims 6 and 9 describe the same method for the compositions in Claims 8 and 9 of the ‘565 Patent. Id. col. 73 l. 17–18, 24–25.
In advance of oral argument on the Motion, Plaintiff provided the Court with an update on the ANDA bids of Defendants, indicating that, as of March 27, 2025, only Sun had received final FDA approval to market its ANDA Product. (ECF No. 152.) In their most recent post-hearing briefings, the parties agreed that, of the Defendants actively litigating this Motion, Sun remained the only one with FDA approval. (ECF Nos. 200, 201.)
C. Procedural Background
Plaintiff sued each Defendant separately for patent infringement in this Court between July 16, 2023, and December 13, 2024. On October 22, 2024, pursuant to the parties’ stipulation,
On January 17, 2025, Plaintiff filed the Motion for a Preliminary Injunction against all Defendants. (ECF Nos. 85–95.) On February 5, 2025, the Court entered a sealed Order
This Court held oral argument on the Motion on March 31, 2025. (ECF No. 163.) Subsequently, the parties submitted supplemental briefing on April 7, 2025. (ECF Nos. 170, 171.) On April 28, 2025, the Court requested additional briefing on the proper bond amount should an injunction issue (ECF No. 190), which the parties filed on May 5, 2025 (ECF Nos. 200, 201).
II. LEGAL STANDARD
Preliminary injunctive relief is an “extraordinary remedy, which should be granted only in limited circumstances.” Ferring Pharms., Inc. v. Watson Pharms., Inc., 765 F.3d 205, 210 (3d Cir. 2014) (quoting Novartis Consumer Health, Inc. v. Johnson-Merck Consumer Pharms. Co., 290 F.3d 578, 586 (3d Cir. 2002)). The primary purpose of preliminary injunctive relief is “maintenance
In order to obtain a temporary restraining order or preliminary injunction, the moving party must show:
(1) a reasonable probability of eventual success in the litigation, and (2) that it will be irreparably injured . . . if relief is not granted . . . [In addition,] the district court, in considering whether to grant a preliminary injunction, should take into account, when they are relevant, (3) the possibility of harm to other interested persons from the grant or denial of the injunction, and (4) the public interest.
Reilly v. City of Harrisburg, 858 F.3d 173, 176 (3d Cir. 2017) (quoting Del. River Auth. v. Transamerican Trailer Transp., Inc., 501 F.2d 917, 919–20 (3d Cir. 1974)).
The movant bears the burden of establishing “the threshold for the first two ‘most critical’ factors. . . . If these gateway factors are met, a court then considers the remaining two factors and determines in its sound discretion if all four factors, taken together, balance in favor of granting the requested preliminary relief.” Id. at 179. A court may issue an injunction to a plaintiff “only if the plaintiff produces evidence sufficient to convince the district court that all four factors favor preliminary relief.” AT&T v. Winback & Conserve Program, 42 F.3d 1421, 1427 (3d Cir. 1994); see also P.C. Yonkers, Inc. v. Celebrations the Party & Seasonal Superstore, LLC, 428 F.3d 504, 508 (3d Cir. 2005) (“The burden lies with the plaintiff to establish every element in its favor, or the grant of a preliminary injunction is inappropriate.“); Ferring, 765 F.3d at 210. A preliminary injunction also should not be issued where material issues of fact are in dispute. Vita-Pure, Inc. v. Bhatia, Civ. A. No. 2:14-7831, 2015 WL 1496396, at * 3 (D.N.J. Apr. 1, 2015) (denying injunction where factual disputes “preclude a determination that Plaintiffs have established a likelihood of success on the merits“); Watchung Spring Water Co. v. Nestle Waters N. Am. Inc., Civ. A. No. 14–04984, 2014 WL 5392065, at *2 (D.N.J. Oct. 23, 2014), aff‘d, 588 F. App‘x 197 (3d Cir. 2014).
III. DECISION
Plaintiff asks this Court to enjoin Defendants from selling their respective generic versions of the Selenious Acid Injections “pending the outcome of a trial on the merits” for Plaintiff‘s infringement claims, arguing the four preliminary injunction factors are met. (ECF No. 95 at 1.) Plaintiff asserts it is likely to succeed in proving the products in Defendants’ ANDAs would infringe on multiple valid claims in the ‘565 and ‘957 Patents, and it will suffer irreparable harm, through direct competition in violation of its exclusivity rights, if Defendants are not enjoined. (Id. at 3-4.) Plaintiff also contends this harm greatly outweighs any harm to Defendants, who have yet to enter the market,3 and that an injunction favors the public interest in rewarding innovation with patent exclusivity. (Id. at 5.) Should the Court grant its request, Plaintiff asserts Defendants should not be entitled to a bond. (Id. at 40.)
Defendants request the Court deny Plaintiff‘s Motion and also vacate the
A. Likelihood of Success on the Merits
Plaintiff asserts it is likely to succeed on the merits of its infringement claims against Defendants because it is highly likely “Defendants’ ANDA Products meet each and every element of . . . Claims 1, 8, and 9” of the ‘565 Patent (ECF No. 95 at 12) and “will induce infringement of [C]laims 1, 6, and 9” of the ‘957 Patent (id. at 18). Additionally, Plaintiff contends “Defendants cannot raise a substantial question concerning validity of the asserted claims,” as it argues they must do to defeat the presumption of validity to which patents are entitled. (Id. at 20.) Defendants reject each of these contentions, arguing the claim limitation, “fluoride in an amount of 0.0001 µg to 2.7 µg per 1 mL of the injectable composition,” fails to satisfy the written description requirement, meaning it does not provide “reasonable clarity to a person of ordinary skill that the inventors ‘possessed’ the full scope of the claimed subject matter at the time of filing.” (ECF No. 126 at 5.) As an invalid patent cannot be infringed, the Court addresses Plaintiff‘s likelihood of defeating Defendants’ invalidity argument first.
Similar to at trial, on a motion for preliminary injunction, “an issued patent comes with a statutory presumption of validity,” and an alleged infringer must “prove invalidity by clear and convincing evidence.”4 Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1376 (Fed. Cir. 2009). However, “when the question of validity arises at the preliminary injunction stage, the application of these burdens and presumptions is tailored to fit the . . . context.” Id. at 1377. Though the patentee and alleged infringer claiming invalidity face the same evidentiary burdens as at trial,
1. Likelihood of Patent Validity
To make the case that the ‘565 and ‘957 Patents are invalid, Defendants focus on the fluoride concentration described in Claim 1 of both patents and incorporated into their respective dependent clauses, arguing the claim limitation fails to satisfy the written description requirement.5 (ECF No. 126 at 5–15.) Defendants assert that the claim language describing “fluoride in an
Additionally, Defendants argue nothing else in the specification indicates to a POSA that the fluoride concentration is “an aspect of the alleged invention.” (Id. at 12 (citing Purdue Pharma, L.P. v. F.H. Faulding & Co., 230 F.3d 1320, 1326 (Fed. Cir. 2000))).) Defendants contend that Tables 2 and 4 in the specification of the ‘565 Patent list other elements to control for within the claimed injectable composition, but they do not include fluoride as an elemental impurity to control, nor does the specification instruct a POSA to test for it. (Id. at 12–13.) Because fluoride is added to water and other products in a wide range of concentrations, and the specification “identifies a commercially available injectable composition containing 95 µg/mL of fluoride,” Defendants argue a POSA has “no reason to interpret the specification as identifying compositions having fluoride amounts within the [claimed] range.” (Id. at 14.) Further, Defendants assert a POSA would not have known to consider the trace levels of fluoride absent such instruction “because no validated methods were known at that time to measure fluoride in amounts of 0.0001 to 2.7 µg/mL.” (Id. at 13.) To support this argument, Defendants point to statements made by Plaintiff‘s representatives in the prosecution history that Plaintiff developed “specialized tests and instruments . . . to detect and make sure our impurities, if any, were at no detectable levels or very low levels.” (Id. at 14 (quoting ECF No. 94-6 (Chevalier Decl., Ex. H), Decl. of Richard P. Lawrence Under
Separately, Defendants claim the written description fails because it does not provide “blaze marks” within the specification “leading to the claimed alleged invention as a whole,” meaning a POSA could only discern it “through hindsight,” in contravention of Federal Circuit
Plaintiff argues its patent claims are “entitled to a presumption of validity, which can sustain a finding of likelihood of success on the merits” for the purposes of a preliminary injunction (ECF No. 95 at 20 (citing Purdue Pharma, 237 F.3d at 1365–67; Abbott Labʼys v. Sandoz Inc., 544 F.3d 1341, 1346 (Fed. Cir. 2008)))), and Defendants’ lack of written description argument does not raise a substantial question of validity (ECF No. 131 at 8–9). First, Plaintiff refutes Defendants’ assertion that the patent examiner did not consider “written description for the fluoride limitation during prosecution of the asserted patents,” arguing this description instead “formed an explicit basis for the Examiner allowing the ‘565 and ‘957 [P]atents.” (Id. at 9.) Specifically, Plaintiff points to quotations from the prosecution history of the ‘565 Patent where the examiner “agreed
Second, Plaintiff asserts Defendants’ reading of the relevant passages of the specifications does not reflect the background and experience of a POSA.8 (Id. at 10.) In Plaintiff‘s view, the specifications list two criteria for the claimed injectable compositions: “optimal concentrations of certain trace elements, such as selenium, necessary for specific metabolic functions;” and “little to no other trace elements present as impurities or contaminants.” (Id. (internal quotation marks omitted).) Plaintiff also asserts the specification explains the inventors purposefully prepared the compositions “with lower, and thus ‘safer,’ amounts of impurities,” so the patented compositions
At oral argument and in its post-hearing brief, Plaintiff reasserted that the originally filed claims of the patents-in-suit contained the fluoride limitation language, and original claim language satisfies the written description requirement, as they are part of the specification. (ECF Nos. 170 at 1 (citing Allergan USA, Inc. v. MSN Labʼys Priv. Ltd., 111 F.4th 1358, 1374 (Fed. Cir. 2024)); 170-2 (Apr. 7, 2025 Hr‘g Trans.) at 18:21–21:21.) Plaintiff points to original claims (“OCs“) 1 and 4, as filed July 2, 2020, where OC 1 described “an injectable composition” containing selenium in “µg . . . per 1 mL of the injectable composition,” and OC 4 depended on OC 1 and “further compris[ed] . . . fluoride from about 0.0001 to about 2.7[.]” (ECF No. 170 at 1
In response, Defendants argue OC 4 does not accomplish what Plaintiff claims because it is “silent on the parties’ critical dispute—the units for the fluoride element.” (ECF No. 171 at 3.) Instead, Defendants highlight parts of Dr. Swartz‘s declaration where he considered OC 4 and determined it did not describe the claimed fluoride range because the units of measurement for fluoride were missing. (Id. at 4.) Defendants also further refute Plaintiff‘s argument (made during the hearing) that Dr. Swartz is not a POSA for the patents-in-suit. (ECF No. 170-2 at 18:17–20.)
a. Analysis
Under
Despite the Federal Circuit‘s emphasis on disclosure, however, a written description “need not recite the claimed invention in haec verba” or “ignore the perspective of the person of ordinary skill in the art and require literal description of every limitation,” so long as a POSA could recognize the claimed invention from the disclosure. Novartis Pharms. Corp. v. Accord
When it comes to claim limitations involving a numerical range, the Federal Circuit has specifically stated “a skilled artisan must be able to reasonably discern a disclosure of that range” to satisfy the written description requirement. Indivior, 18 F.4th at 1328 (finding patent did not satisfy written description requirement where specification and application did not include range of polymer stated in claims, in some places stated any polymer value was acceptable, and did not
Considering this background and the parties’ arguments, the Court finds Defendants have not raised a substantial question as to the validity of the patents-in-suit, meaning Plaintiff is likely to prevail on the merits. See Titan Tire, 566 F.3d at 1377. On the face of the patents-in-suit, the range that appears in the claim language, “0.0001 to 2.7 µg/mL,” appears in the specification, albeit in a different, related unit of measurement, “fluoride from about 0.0001 to about 2.7 mcg/kg/day.” ‘565 Pat. col. 17 l. 3–10; ‘957 Pat. col. 17 l. 8–15. The Federal Circuit and district courts have
Additionally, the patents-in-suits’ prosecution history shows the patent examiner specifically considered the fluoride limitation and recommended its inclusion to create conditions of patentability, “showing that the [Patent and Trademark Office (“PTO”)] read the specification to include that feature.” Metabolite Lab‘ys, 370 F.3d at 1366. OCs 1 and 4 confirm this was the examiner‘s understanding, as they disclose an injectable composition with components measured in µg per 1 mL and associate the range of 0.0001 to 2.7 with fluoride. (ECF No. 94-6 at 292.) In allowing the ‘565 and ‘957 Patents to issue, the examiner specifically stated “the prior art lacks a
Defendants argue the “0.0001 to about 2.7 mcg/kg/day” language in the specification does not adequately disclose the end points of the claimed range because, according to Dr. Swartz, the use of “mcg/kg/day” rather than “µg/mL” would indicate a significantly larger range of concentrations than “0.0001 to 2.7 µg/mL” to a POSA. There are two issues with this argument. First, it relies on Dr. Swartz‘s extrapolation, outside the intrinsic evidence of the patents-in-suit, as to what a POSA might understand. But as Plaintiff highlights, Defendants do not provide their understanding of who would be a POSA for the ‘565 and ‘957 Patents and rely on Plaintiff‘s definition. (ECF No. 171 at 1–2.) While Defendants’ expert, Dr. Swartz, opines as to what a POSA would understand from the patents-in-suit, he does not appear to have significant experience with injectable trace element compositions. In his declaration, Dr. Swartz briefly mentions his “test development and validation work supported . . . trace elemental analysis as well as impurity analysis” (ECF No. 127 ¶ 4), but it is not clear from his resume he has the years of experience with injectable trace element compositions the definition of a POSA expects (ECF No. 131-5 ¶ 10).
Second, and more importantly, Defendants’ reading divorces the reference to “fluoride from about 0.0001 to about 2.7 mcg/kg/day” from the specification‘s language about reducing impurities and improving safety, in particular for neonatal patients. See ‘565 Pat. col. 2 l. 57–629
Additionally, Plaintiffs’ experts present evidence grounded in the specification that a POSA would understand the inventors’ decision “to include ‘little or no impurities’ in their injectable compositions” and therefore that the inventors possessed a selenium injectable composition with “little or no impurities,” including from fluoride. (ECF No. 131-10 (Reply Decl. of Theresa A. Fessler) ¶ 24; see also ECF No. 131-5 ¶¶ 59–63.)
Because, as described supra, Defendants fail to raise a “substantial question” regarding the validity of the ‘565 and ‘957 Patents, the Court finds Plaintiff is likely to succeed in defeating Defendants’ invalidity contentions. Titan Tire, 566 F.3d at 1377.
2. Likelihood of Infringement
Plaintiff argues it is likely to succeed in proving Defendants’ ANDA Products will infringe “at least claims 1, 8, and 9 of the ‘565 [P]atent” and “will induce infringement of claims 1, 6, and 9 of the ‘957 [P]atent.” (ECF No. 95 at 12, 18.)
In addition, Plaintiff argues Defendants should not be rewarded for their failure to produce “samples or any discovery outside their ANDAs” prior to this Motion.13 (Id. at 17–18.) Plaintiff asserts Defendants “should not be allowed to rely on newly produced information or things to defend against an injunction.” (Id. at 18.) In support, it cites case law it contends demonstrates “samples are indisputably relevant [and discoverable] in patent infringement cases,” including in Hatch-Waxman cases where the ANDA specification “[does] not resolve the question of infringement in the first instance.” (Id. at 17 (quoting Sunovion Pharms., Inc. v. Teva Pharms. USA, Inc., 731 F.3d 1271, 1279–80 (Fed. Cir. 2013) (alteration in original))).
Plaintiff also claims “[t]he proposed labeling for Defendants’ ANDA products” is likely to induce infringement of the ‘957 Patent claims at issue. (Id.) Describing the elements of induced infringement in the Hatch-Waxman context as requiring “(a) there would be direct infringement if the ANDA product was marketed; and (b) the label for the ANDA product ‘encourage[s],
In their opposition, Defendants argue Plaintiff‘s infringement theory “relies on misplaced speculations and assumptions” that cannot meet its burden of establishing it is likely to succeed on the merits of its infringement claims, particularly because it relies on the assumption “that fluoride is present in high levels in ground water and that Defendants’ water purification techniques are inadequate to remove fluoride below the claimed range.” (ECF No. 126 at 17–18.) Defendants contend this is a problem because Plaintiff does not present “any direct evidence” of the required fluoride concentration in their ANDA Products, as required by Federal Circuit precedent, as it has not tested “Defendants’ source water, their water purification techniques, or Defendants’ ANDA [P]roducts” and acknowledges [REDACTED] (Id. at 18 (citing Becton, Dickinson & Co. v. Tyco Healthcare Grp., LP, 616 F.3d 1249, 1253 (Fed. Cir. 2010)).)
Defendants criticize Dr. Cizdziel‘s report, which assumes the water Defendants use comes from India or another country with levels of fluoride around “2.37 mg/L,” equivalent to 2.37 µg/mL, because the source on which Dr. Cizdziel relies, the “Ali 2019 Article” (ECF No. 88-3),
Additionally, Defendants argue Plaintiff did not adequately demonstrate their water purification processes will not remove fluoride from the source water because Plaintiff did not test their purification methods. (Id. at 21.) Defendants contend Plaintiff speculates about the efficacy of the purification processes based on processes for treating drinking water (which Defendants contend involves processes distinct from “producing water for injection”) and assumes the efficacy of fluoride removal based on “disparate sources.” (Id. at 22.) Defendants also critique Plaintiff‘s assumption that other components of the ANDA products likely introduce additional fluoride during the manufacturing process, as they contend this is based only on references to “impurities” in Plaintiff‘s own manufacturing. (Id. at 22–23.) As a result, Defendants argue Plaintiff presents only data “correlating to the claimed limitation” that does not sufficiently demonstrate literal
In reply, Plaintiff disputes it must provide “direct evidence,” rather than circumstantial evidence, to show likelihood of success on the merits at the preliminary injunction stage. (ECF No. 131 at 2 (citing Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981); Tinnus Enters., LLC v. Telebrands Corp., 846 F.3d 1190, 1204 (Fed. Cir. 2017); Martek Biosciences Corp. v. Nutrinova, Inc., 579 F.3d 1363, 1372 (Fed. Cir. 2009)).) Instead, Plaintiff asserts Defendants are trying to characterize Plaintiff‘s evidence as insufficient, despite meeting its infringement burden at this
As to the merits of Defendants’ arguments against infringement of the fluoride limitation, Plaintiff asserts Defendants’ critiques of Dr. Cizdziel‘s methodology are “unsupported attorney argument” that cannot alone overcome the expert evidence Dr. Cizdziel provides. (Id. at 4–5 (citing Invitrogen Corp. v. Clontech Lab‘ys, Inc., 429 F.3d 1052, 1068 (Fed. Cir. 2005); CryoLife, Inc. v. C.R. Bard, Inc., No. CV 14-559-SLR, 2015 WL 1093543, at *3 (D. Del. Mar. 10, 2015); Natera,
As neither party raises an issue of construction in this Motion,18 the Court will move directly to comparing the claims at issue in the ‘565 and ‘957 Patents to the ANDA Products.
The parties contest what type of evidence a patentee needs to present on a motion for preliminary injunction, and whether circumstantial evidence will suffice to show Plaintiff is likely to succeed on the merits of its infringement claims. “A patentee is entitled to rely on circumstantial evidence to establish infringement: . . . It is hornbook law that direct evidence of a fact is not necessary.” Tinnus Enters., 846 F.3d at 1204 (internal quotations omitted) (affirming district court‘s finding patentee was likely to succeed on merits of infringement claim based on circumstantial evidence in instruction manual of defendant‘s product); accord VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1318 (Fed. Cir. 2014) (evaluating circumstantial evidence that competition between parties created undue prejudice in reversing district court‘s denial of stay pending post-grant review of patent and acknowledging “direct evidence of such competition is
a. Literal Infringement of ‘565 Patent
“Literal [or direct] infringement requires that ‘every limitation set forth in a claim must be found in an accused product, exactly.‘” Advanced Transit Dynamics, Inc. v. Ridge Corp., Civ. A. No. 15-1877, 2015 WL 12516692, at *2 (C.D. Cal. Aug. 24, 2015) (quoting Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1575 (Fed. Cir. 1995)) (granting preliminary injunction based on reasonable likelihood of success on patent infringement claims). Defendants attempt to raise a substantial question about one element of the patents-in-suit, whether the ANDA Products satisfy the fluoride limitation, and the Court will therefore conclude Plaintiff is likely to prove the other elements of the claims at issue are met. See id. at *4 (accepting defendant‘s non-contestation elements of patent were present as satisfying requirement for preliminary injunction); Metalcraft of Mayville, Inc. v. The Toro Co., 848 F.3d 1358, 1364 (Fed. Cir. 2017) (same).
Defendants fault Plaintiff for “never test[ing] the source water used in Defendants’ manufacturing processes,” but Defendants do not dispute [REDACTED] Instead, Defendants attack Plaintiff‘s evidence about the prevalence of fluoride in India‘s groundwater, arguing the Ali 2019 and 2023 Articles show that, in some instances, groundwater in India is below 2.37 µg/mL of fluoride, but this argument is not persuasive for two reasons. First, while Defendants critique Dr. Cizdziel‘s logic, Defendants attempt to rebut an expert declaration with attorney argument, not their own expert, which the Court is inclined to treat as less authoritative than a credentialed expert. See, e.g., CryoLife, Inc., 2015 WL 1093543, at *3 (granting preliminary injunction after finding patentee likely to defeat defendant‘s obviousness defense, as defendant supported it with only attorney arguments); Allergan, Inc. v. Athena Cosms., Inc., Civ. A. No. 07-1316, 2013 WL 12141346, at *7 (C.D. Cal. Mar. 5, 2013) (granting summary judgment for patentee on infringement where defendant “proffer[ed] no rebuttal expert testimony or evidence other than its own conclusory statements”), aff‘d, 738 F.3d 1350 (Fed. Cir. 2013); Parker-Hannifin Corp. v. Champion Lab‘ys, Inc., Civ. A. No. 06-2616, 2008 WL 3166318, at *7 (N.D. Ohio Aug. 4, 2008) (affirming patentee established “prima facie case of infringement” through expert declaration where, “[i]nstead of offering a rebuttal expert, defendant chose to merely challenge [the expert] opinion with a motion to strike and other attorney argument”).
Nor does Plaintiff‘s failure to conduct “quantitative testing” on the ANDA Products to confirm their fluoride levels raise a substantial question as to Plaintiff‘s likelihood of success, particularly in light of the discovery disputes preceding this Motion; the Federal Circuit has cautioned against exactly that line of logic. Id.; see also Spin Master, Ltd. v. E. Mishan & Sons, Inc., Civ. A. No. 19-9035, 2019 WL 6681563, at *16 (S.D.N.Y. Dec. 6, 2019) (granting preliminary injunction despite inconclusive testing by defendants’ expert).
Because Plaintiff has shown it is very likely the ANDA Products meet every element of claims 1, 8, and 9 of the ‘565 Patent, and Defendants fail to raise a substantial question that casts doubt on their infringement, the Court finds Plaintiff is likely to succeed on the merits of its literal infringement claims. See Tinnus Enters., 846 F.3d at 1202.
b. Induced Infringement of ‘957 Patent
Typically, to prevail on a claim of induced infringement, “direct infringement is a necessary predicate.” Vanda Pharms., 887 F.3d at 1129. The plaintiff must establish “the defendant possessed specific intent to encourage another‘s infringement and not merely that the defendant had knowledge of the acts alleged,” which can be shown through circumstantial evidence. Id. (quoting DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006)). The Federal Circuit has held an ANDA‘s proposed label can constitute evidence of the applicant‘s “affirmative intent to induce infringement” if “the proposed label instructs the users to perform the patented method.” Id. (quoting AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1060 (Fed. Cir. 2010)). Filing a Hatch-Waxman lawsuit allows the patentee to frame the inducement claim as forward-looking, since the allegedly infringing product is not yet on the market, and therefore the patentee “can satisfy its burden to prove the predicate direct infringement by showing that if the proposed ANDA product were marketed, it would infringe the [patent-in-suit].” Id. at 1130.
Defendants do not explicitly contest Plaintiff is likely to succeed on the merits of these claims. (ECF No. 126.) Having found Plaintiff is likely to succeed on the merits of its direct infringement claims for the ‘565 Patent, it is also likely Defendants will directly infringe “the injectable composition limitations of claims 1, 6, and 9 of the ‘957 [P]atent.” (ECF No. 95 at 19.) Because Defendants’ ANDA labels are materially identical to Plaintiff‘s and recite essentially the same steps for administration of the ANDA Products, they constitute evidence of Defendants’ affirmative intent to induce infringement of the claimed methods. See Vanda Pharms., 887 F.3d at 1129. Therefore, Plaintiff is likely to prevail on the merits of its induced infringement claims.
B. Likelihood of Irreparable Harm
Plaintiff asserts it will suffer immediate and irreparable harm if not granted a preliminary injunction for several reasons. First, having established a likelihood of success on the merits, Plaintiff contends it is entitled to a presumption of irreparable harm. (ECF No. 95 at 27 (citing BorgWarner, Inc. v. Dorman Prods., Inc., Civ. A. No. 09-11602, 2009 WL 4885009, at *5 (E.D. Mich. Dec. 11, 2009); E.I. du Pont de Nemours & Co. v. MacDermid, Inc., Civ. A. No. 06-3383, 2007 WL 2332161 (D.N.J. Aug 13, 2007)).)
Second, Plaintiff argues that, absent an injunction, Defendants will flood the markets with generic products, at a fraction of the cost of Plaintiff’s, not only eroding Plaintiff’s sales and the prices it could charge for the Selenious Acid Injections before a trial on the merits could occur, but also disrupting Plaintiff’s status as the exclusive maker of such products in a manner that would be impossible to quantify or rectify. (Id. at 27–28.) Specifically, Plaintiff points to Federal Circuit and district court law indicating that, where a patentee faces infringement by a “direct competitor,” its lost revenue, market share, and brand status constitute irreparable harm. (Id. at 30 (citing Systemation, Inc. v. Engel Indus., Inc., 194 F.3d 1331, 1999 WL 129640, at *6 (Fed. Cir. 1999); Visto Corp. v. Seven Networks, Inc., Civ. A. No. 2:03-333, 2006 WL 3741891, at *4 (E.D. Tex. Dec. 19, 2006); Arlington Indus. v. Bridgeport Fittings, Inc., Civ. A. No. 3:06-1105, 2011 WL 2927817, at *10 (M.D. Pa. July 18, 2011))).)
Plaintiff argues Defendants’ entrance would likely disrupt [REDACTED]
Additionally, Plaintiff asserts generic entry by Defendants would substantially impact its standing and reputation in the marketplace, [REDACTED] (Id. at 28–29.) Plaintiff cites [REDACTED]
Plaintiff further argues there is a sufficient causal nexus between Defendants’ infringement of the patents-in-suit and its irreparable harm because there is a clear connection between “the patented features and demand for the infringing product[.]” (Id. at 37 (quoting Apple Inc. v. Samsung Elecs. Co., 809 F.3d 633, 641 (Fed. Cir. 2015))).) Plaintiff claims the compositions and methods from the patents-in-suit, which were key to the FDA’s approval of the Selenious Acid Injections as safe for parenteral nutrition, are what Defendants seek to emulate in the ANDA Products, and consumer demand for the product cannot be attributed to marketing or other factors. (Id. at 37–38.) Similarly, Plaintiff contends the harms it describes if Defendants are allowed to go to market “will be a direct result of the generic Defendants targeting [Plaintiff]’s customers with an infringing equivalent to [Plaintiff]’s Selenious Acid.” (Id. at 38.)
Defendants counter that Plaintiff’s alleged harm from a pre-trial launch of their products is “highly speculative” and easily remedied by money damages, counseling against a preliminary injunction. (ECF No. 126 at 24.) Defendants refute Plaintiff’s contention a showing it is likely to succeed on the merits creates a presumption of irreparable harm, quoting a court in this District as holding “[i]rreparable harm must be established as a separate element, independent of any showing of likelihood of success.” (Id. (quoting Sebela Int’l Ltd. v. Actavis Lab’ys FL, Inc., Civ. A. No. 17-4789, 2017 U.S. Dist. LEXIS 175318, at *7–8 (D.N.J. Oct. 20, 2017))).) Further, Defendants argue all the harms Plaintiff asserts it will suffer—price erosion, loss of market share, harm to Plaintiff’s reputation and goodwill, and overall harm to Plaintiff’s business—amount to “purely economic injury,” which cannot be considered irreparable. (Id. at 25 (citing Frank’s GMC Truck Ctr., Inc. v. GMC, 847 F.2d 100, 102 (3d Cir. 1988); Acierno, 40 F.3d at 655).) Defendants reference cases from the Federal Circuit and this district they contend reject the view that price erosion and loss of market share are non-economic harms and find them to be compensable by money damages. (Id. at 26 (citing Nutrition 21 v. United States, 930 F.2d 867, 870–71 (Fed. Cir. 1991); Eli Lilly & Co. v. Am. Cyanamid Co., 82 F.3d 1568, 1578 (Fed. Cir. 1996); Altana Pharma AG v. Teva Pharms. USA, Inc., 532 F. Supp. 2d 666, 682 (D.N.J. 2007); Novartis Pharms. Corp. v. Teva Pharms. USA, Inc., Civ. A. No. 05-1887, 2007 U.S. Dist. LEXIS 65792, 2007 WL 2669338, at *14 (D.N.J. Sept. 6, 2007))).) Citing their economic expert, Dr. DeForest McDuff, Defendants argue generic entry in the pharmaceutical market “is typical and expected,” and thus the resultant harm is “quantifiable” based on accepted modeling of the “impacts and dynamics of generic entry” in the market. (Id. at 27.) Defendants assert Plaintiff’s own data on sales of the Selenious Acid Injections from its five to six years of market exclusivity will allow it to “reasonably calculate and quantify any lost profits or other injury attributed to Defendants’ launch of competing products” and determine each Defendant’s proportional responsibility. (Id. at 27–28.) Defendants also contend the [REDACTED] will make it easier to determine the impact of generic market entry. (Id. at 28.)
Additionally, Defendants argue Plaintiff does not meet its burden to demonstrate its [REDACTED] and thus constitute irreversible harm. (Id.) First, Defendants fault Plaintiff’s reliance on a declaration from
Defendants also claim the reputational and other business impacts Plaintiff asserts it will suffer are not sufficiently supported. (Id. at 31.) In response to Plaintiff’s contention it will be hindered in its business operations, including research and development, Defendants argue courts have rejected these harms as supporting preliminary injunctive relief. (Id. (citing Eli Lilly, 82 F.3d at 1578; Sebela Int’l, 2017 U.S. Dist. LEXIS 175318 at *21–22).) Moreover, Defendants assert the proportion of overall revenue Plaintiff receives from the Selenious Acid Injections was [REDACTED] so a loss in revenue on those products would not “materially change[]” its operations. (Id. at 31–32.) Similarly, Defendants contend Plaintiff provides no specific evidence of how sales of its other products would be impacted by any decline in Selenious Acid Injections sales, including no evidence of [REDACTED] would be affected. (Id. at 32 and are unlikely to hold a return to pre-entry pricing against it. (Id. at 33.)
In reply, Plaintiff reasserts it has met its burden to demonstrate irreparable harm. (ECF No. 131 at 15.) Plaintiff argues its unrebutted and sworn declaration by Ms. Gioia is sufficient to attest to the provisions of [REDACTED], but it also submits a second declaration from Ms. Gioia with [REDACTED] (Id. at 15–16 (citing ECF Nos. 131-30, 131-31, 131-33, 131-34).) Attached to Ms. Gioia’s second declaration are two examples of significantly redacted [REDACTED], with what Plaintiff contends still has the relevant terms visible. (ECF Nos. 131-31–34.) Plaintiff also refutes Defendants’ assertion its [REDACTED] (Id. at 16 (citing ECF No. 131-34 at 4).) As a result, Plaintiff contends it would take years to reach pre-suit levels. (Id.) Plaintiff also critiques Defendants for ignoring the “downstream harms” of [REDACTED], including that it would be statutorily required to lower prices [REDACTED], and that customers would resist a subsequent price hike. (Id. at 16–17.) Plaintiff reiterates harms such as price erosion, loss of goodwill, and downstream portfolio and product development impacts have been recognized as not quantifiable by courts, including where the customer market is [REDACTED]. (Id. at 17.) Further, Plaintiff argues it “cannot know or quantify whether it would have won or retained any given contract . . . but for Defendants’ premature infringing sales,” and therefore its damages are not calculable. (Id. (citing Trebro Mfg., 748 F.3d at 1170).) Additionally, Plaintiff contends Defendants’ argument that it will not face unique harms because “all branded products eventually
At oral argument and in their post-hearing brief, Defendants argue Plaintiff’s provision of [REDACTED] does not satisfy Plaintiff’s burden to show irreparable harm. (ECF No. 171 at 8–9; ECF No. 170–2 at 80:14–86:25.) Among other problems, Defendants highlight that one of the provided contracts has [REDACTED] therefore, they and the Court have no way of knowing if the [REDACTED]. (ECF No. 171 at 9.) Defendants also argue [REDACTED] (Id.) Because Defendants contend Plaintiff has provided “no justification” for its redactions, Defendants argue the Court should give the contracts “little to no weight” and find they are insufficient to demonstrate irreparable harm. (Id.)
Following the Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 392–94 (2006), there is no longer a presumption “that harm from patent infringement [is] irreparable. . . . The burden is now on the patentee to demonstrate that its potential losses cannot be compensated by monetary damages.” Automated Merch. Sys., Inc. v. Crane Co., 357 F. App’x 297, 301 (Fed. Cir. 2009); see also Robert Bosch, 659 F.3d at 1149 (“We take this opportunity to put the question to rest and confirm that eBay jettisoned the presumption of irreparable harm as it applies to determining the appropriateness of injunctive relief.“). But though a patentee’s right to exclude does not provide sufficient justification to enjoin in and of itself, “it should not be ignored either.” Robert Bosch, 659 F.3d at 1149. The patentee must also demonstrate a causal nexus between the infringing feature of the defendant’s product and the harm felt, i.e., that “the patented feature [drives] the demand for the product.” Apple, Inc. v. Samsung Elecs. Co., 678 F.3d 1314, 1360 (Fed. Cir. 2012).
“[P]rice erosion, loss of goodwill, damage to reputation, and loss of business opportunities are all valid grounds for finding irreparable harm.” Celsis In Vitro[, 664 F.3d at 926]. Loss of market share, for example, “constitutes irreparable injury because market share is so difficult to recover.” Henkel Corp. v. Coral, Inc., 754 F. Supp. 1280, 1322 (N.D. Ill. 1991), aff’d, 945 F.2d 416 (Fed. Cir. 1991). Price erosion, because of the difficulty of reversal, may constitute irreparable harm. Canon, Inc. v. GCC Int’l Ltd., 263 [F.] App’x. 57, 62 (Fed. Cir. 2008). The right to exclude direct competition in a limited sphere, a right inherent in the grant of a patent, is irreparably harmed by the loss of sales and the competitive foothold that the infringer will gain. See Systemation, 194 F.3d 1331, 1999 WL 129640 at *6.
Id.; accord SmartSky Networks, LLC v. Gogo Bus. Aviation, LLC, No. 2023-1058, 2024 WL 358136, at *3 (Fed. Cir. Jan. 31, 2024) (“Price erosion, loss of goodwill, damage to reputation, and loss of business opportunities are examples of possible grounds for finding irreparable harm.“).
To demonstrate harms related to price erosion and loss of market share are incapable of calculation, the patentee must offer evidence the alleged infringement has resulted or will result in irregular or hard-to-predict impacts on its pricing, sales, or customer relationships. Compare Celsis In Vitro, 664 F.3d at 930–31 (affirming irreparable harm finding where patentee offered expert testimony on loss of customers, forced changes to pricing policies, and effect of loss of exclusivity on brand reputation); and Fresenius, 2016 WL 5348866 at *13–14 (finding irreparable harm based
Upon review of the parties’ briefings, supporting materials, and oral presentations, the Court finds Plaintiff will likely suffer irreparable harm absent a preliminary injunction. First, Plaintiff and Defendants are poised to be direct competitors in supplying selenium products for parenteral nutrition, a factor the Federal Circuit has found “suggest[s] strongly the potential for irreparable harm without enforcement of the right to exclude.” Presidio Components, Inc. v. Am. Tech. Ceramics Corp., 702 F.3d 1351, 1363 (Fed. Cir. 2012) (finding direct competition contributes to determination of irreparable harm even when patentee does not practice the patent); see also Trebro Mfg., 748 F.3d at 1171; In re Depomed Pat. Litig., Civ. A. No. 13-4507, 2016 WL 7163647, at *78–79 (D.N.J. Sept. 30, 2016) (considering direct competition by defendants’ generic products, resulting in “lost market share, lost revenue, and [plaintiff’s] business suffering,” as evidence of irreparable harm supporting injunction), aff’d sub nom. Grunenthal GMBH v. Alkem Lab’ys Ltd., 919 F.3d 1333 (Fed. Cir. 2019).
The Court also finds a sufficient causal nexus between the irreparable harm and the potential infringement by Defendants. See Apple, 678 F.3d at 1360. Because the ANDA Products seek to replicate key features of the Selenious Acid Injections (ECF Nos. 94-3–94-5), including those targeted to safety and efficacy that “drive consumer demand” for Plaintiff’s products and led to its FDA approval (ECF No. 95 at 37–38), and are likely to infringe the patents-in-suit, see supra, the irreparable harm Plaintiff faces stems from that infringement, see Mylan Institutional LLC v. Aurobindo Pharma Ltd., 857 F.3d 858, 872–73 (Fed. Cir. 2017) (affirming causal nexus existed where district court found patent subject matter integral to product described in defendant’s ANDA). Therefore, Plaintiff is likely to suffer irreparable harm attributable to Defendants’ infringement of the ’565 and ’957 Patents.
C. Balance of Equities and Public Interest
For their part, Defendants assert they will suffer significant harm outweighing Plaintiff’s should the Court issue a preliminary injunction. (Id. at 33–34.) Defendants contend they have
“A party seeking a preliminary injunction must establish that ‘the balance of equities tips in [its] favor, and that an injunction is in the public interest.’” Metalcraft, 848 F.3d at 1369 (quoting Luminara Worldwide, LLC v. Liown Elecs. Co., 814 F.3d 1343, 1352 (Fed. Cir. 2016)). The district court exercises its discretion to balance the harm to the moving party without the injunction against that to the non-moving party if granted. See id. (upholding preliminary injunction where patentee would suffer by “being forced to compete against its own patented invention” outweighing
The Court finds the equities favor Plaintiff, as it is likely to suffer more harm if not granted a preliminary injunction. The Federal Circuit has recognized a distinct harm when a patentee is forced to compete against its own invention, as Plaintiff would be if Defendants’ ANDA Products launched before trial. See id.; Apple Inc., 809 F.3d at 646. In contrast, Defendants’ theoretical harm if enjoined represents the kind of “sunk development costs” courts routinely discount in this balancing exercise. See, e.g., i4i Ltd., 598 F.3d at 862–63; Anderson, 927 F. Supp. 2d at 488. In addition, while not dispositive, the Court notes a preliminary injunction will be no more harmful
Regarding the public interest, the parties here “take the traditional positions of branded and generic pharmaceutical manufacturers,” Hoffmann-La Roche Inc., 2010 WL 4687839 at *13 (granting preliminary injunction following expiration of 30-month Hatch-Waxman stay), reflecting that Hatch-Waxman balances “the competing public interests of protecting valid patent rights and increasing competition in the pharmaceutical industry by facilitating the approval of generic versions of drugs,” Sebela, 2017 WL 4782807 at *9. “Both interests are at stake in this case.” Id. That said, Hatch-Waxman seeks to balance, rather than “entirely eliminat[e,] the exclusionary rights conveyed by pharmaceutical patents” with its pro-competition goals. King Pharms., Inc. v. Sandoz, Inc., Civ. A. No. 08-5974, 2010 WL 1957640, at *6 (D.N.J. May 17, 2010) (quoting Pfizer, Inc., 429 F.3d at 1382) (finding “public interest in protecting patent rights outweighs the public interest in low cost generic drugs,” despite denying motion for preliminary injunction). Given the statutory framework seeks to balance these public aims, the Court finds no “critical public interest” will be “injured” by an injunction, Metalcraft, 848 F.3d at 1369, and enjoining Defendants may carry a slight public benefit by protecting Plaintiff’s patent rights until the matter may be decided on the merits, see, e.g., Eisai Co., Ltd v. Teva Pharms. USA, Inc., Civ. A. No. 05-5727, 2008 WL 1722098, at *12 (D.N.J. Mar. 28, 2008) (“[T]he public benefits most from the protection of patent rights because those who cannot afford the branded drug would not have eventual access to the generic drug if the brand manufacturer’s patent were not adequately protected to ensure recovery of development costs and sufficient profit incentives.“).
D. Necessity of a Bond25
Accordingly, the Court finds a bond is necessary with its grant of a preliminary injunction. Plaintiff’s authorities to the contrary come from courts outside the Third Circuit and its strict interpretation of Rule 65(c), which the Federal Circuit would apply should Defendants appeal. Compare Tilden Rec., 786 F. App’x at 343 (holding district court must set bond even absent request of parties), with LEGO, 799 F. App’x. at 837–38 (applying Second Circuit law in determining defendant did not meet burden to establish basis for bond); see also AstraZeneca LP v. Breath Ltd., 542 F. App’x 971, 982 (Fed. Cir. 2013), as amended on reh’g in part (Dec. 12, 2013) (applying Third Circuit law to determine whether retroactive increase in bond amount is proper); Amstar Corp. v. Envirotech Corp., 823 F.2d 1538, 1550 (Fed. Cir. 1987) (noting Federal Circuit “appl[ies] the rule of the regional circuit where appeals from the district court would normally lie” on
Nonetheless, Plaintiff contends the necessary amount of a bond is effectively zero because “Defendants likely will have no profit and thus no losses while the injunction is in place,” based on the calculations of its economic expert, Dana Trexler (“Trexler“). (ECF No. 200 at 2 (citing ECF No. 200-2 (Supplemental Trexler Decl.) ¶¶ 12–13, 27, 25).) Plaintiff asserts at least 10 generics would likely enter the market absent an injunction, which would engender a “substantial amount of price erosion” and consequently mean Defendants’ production costs would exceed revenue “by nearly $300,000, resulting in a net loss.” (Id. at 2–3.) Plaintiff also argues Sun’s FDA approval does not alter the likely market dynamics because the injunction will not freeze the FDA approval process, and other Defendants could gain approval to sell their ANDA Products at any point.26 (Id. at 3.) According to Plaintiff, this means many generics are “poised to launch at risk . . . well before there is a final decision on the merits . . . severely eroding prices” and resulting in net losses for the market participants. (Id. at 3–4.) But even if Sun were to demonstrate it could launch ahead of other generics and enjoy a period of profits before the market is further subdivided, Plaintiff asserts its profits would be minimal.27 (Id. at 4.) Because there is already another generic
Relying on Plaintiff’s expected profits and market projections, which they contend is a permissible method of calculation under Third Circuit law, Defendants argue the Court should require Plaintiff to post a [REDACTED] bond. (ECF No. 201 at 3 (citing Rsch. Found. v. Mylan Pharms., Inc., 723 F. Supp. 2d 638, 664 (D. Del. June 28, 2010); Par Pharms., Inc. v. TWi Pharms., Inc., Civ. A. No. 11-2466, 2014 WL 3956024 (D. Md. Aug. 12, 2014))).) Defendants assert that because only Defendant Sun has FDA approval to date, Plaintiff’s market forecast when there is only one generic entrant is the proper estimate for lost profits. (Id. (citing ECF No. 90 (First Trexler Decl.) Schedule 1).) Defendants therefore contend each market participant would earn a gross profit of [REDACTED] over twelve months and estimate an eighteen-month period between issuance of a preliminary injunction and a decision on the merits (roughly from May 2025 to October 2026), resulting in a forecast of [REDACTED] in net profits for each player. (Id. at 4.) Accounting for prejudgment interest at the prime interest rate of 7.5%, which Defendants argue is commonly applied in the Third Circuit, Defendants argue the total bond should be [REDACTED].
The Third Circuit requires a district court to provide “analysis as to the economic impact of” the preliminary injunction. Globus Med., 605 F. App’x at 129; see also Mallet & Co. Inc. v. Lacayo, 16 F.4th 364, 392 (3d Cir. 2021) (“District courts should engage in a case-specific analysis that accounts for the factual circumstances . . . and they should place on the record their reasons for setting a bond amount, so as to provide a meaningful basis for appellate review.“). This is important because
[t]he bond limits the liability of the applicant and sets the price it can expect to pay if the injunction was wrongfully issued, since there is no other legal or equitable means to recover against the applicant for a wrongful grant of the injunction (i.e., where the applicant does not prevail in the main action), other than the bond.
Id. at 391 (cleaned up). In other words, the bond is the sole protection of the enjoined party against the harm incurred if it ultimately prevails, and district courts have an obligation to ensure they provides adequate protection because “the consequences of wrongfully enjoining a defendant could be dire if a district court were to significantly underestimate the economic impact of an
The parties here point to the same economic analyses by Trexler—her calculation of the “annual revenue per market participant” based on the number of generic entrants (ECF No. 90 Schedule 1)—but dispute how many market participants there will in fact be. Based on the evidence presented, the Court finds neither argument fully persuasive. As only two generic providers, Sun and Fresenius Kabi (which is not a defendant here), have received FDA approval, it cannot be the case the market for selenious acid projects will immediately have ten or more participants, as Plaintiff claims. While Plaintiff asserts other Defendants could obtain FDA approval [REDACTED], even if all remaining Defendants obtained approval on that timeline, this is less than ten, and Plaintiff provides no evidence to support its statement the would-be generic entrants not party to this litigation “could get final FDA approval at any time.” (ECF No. 200 at 3–4.) That said, it is also unreasonable to assume a completely static two-party market of Sun and Plaintiff through the conclusion of a trial on the merits, particularly when Fresenius Kabi also has FDA approval28 (ECF No. 200-3), and more than a dozen other ANDAs are under
Based on the analysis by Plaintiff’s economic expert, if there are four market participants (Plaintiff and three Defendants), each would likely take home revenue of [REDACTED] in a year. (ECF No. 90 Schedule 1.) Subtracting approximately [REDACTED], what Trexler estimates to be each Defendant’s total annual production costs (and which Defendants do not contest) (ECF No. 200-2 ¶ 27), the Court estimates each market participant’s net profit would be around [REDACTED]. In this best-case scenario, therefore, three Defendants would each be entitled to that amount, for a total of [REDACTED] over twelve months. Assuming Defendants are correct it will take this Court until October 2026 to decide this case on the merits, each Defendant would have six months to earn additional revenue, but the likelihood of other generics entering the market would also increase, thereby driving profits down. According to Trexler’s analysis, a fourth entrant would [REDACTED],29 and each additional market participant will shrink the collective net profits significantly until they cease to exceed costs.30 The Court will therefore impose a bond of [REDACTED], which should provide more than adequate protection for Defendants throughout
IV. CONCLUSION
For the reasons set forth above, and for good cause appearing, Plaintiff’s Motion for a Preliminary Injunction (ECF No. 85) is GRANTED. An appropriate order follows.
Date: May 27, 2025
/s/ Brian R. Martinotti
HON. BRIAN R. MARTINOTTI
UNITED STATES DISTRICT JUDGE
Notes
566 F.3d at 1379.[T]he trial court first must weigh the evidence both for and against validity that is available at this preliminary stage in the proceedings. Then, . . . if the trial court concludes there is a “substantial question” concerning the validity of the patent, meaning that the alleged infringer has presented an invalidity defense that the patentee has not shown lacks substantial merit, it necessarily follows that the patentee has not succeeded in showing it is likely to succeed at trial on the merits of the validity issue.
‘565 Pat. col. 71 l. 36–41. ‘565 Patent Claims 8 and 9 depend on Claim 1, describing a composition of Claim 1 that has “a pH of 1.8 to 2.4” and one that “further comprises nitric acid,” respectively. ‘565 Pat. col. 71 l. 60–63.[a]n injectable composition comprising water, 6 µg or 60 µg of selenium, no chromium or chromium in an amount not to exceed 1 µg, no aluminum or aluminum in an amount not to exceed 6 µg, no iron or iron in an amount up to 10 µg, and fluoride in an amount of 0.0001 µg to 2.7 µg per 1 mL of the injectable composition.
