ORDER

TIMOTHY J. CORRIGAN, District Judge.

Before the Court is CIBA Vision Corporation's ("CIBA") Motion for Permanent Injunction (Doc. 319) which seeks to enjoin Johnson & Johnson Vision Care, Inc. ("J & J") from future sales of the contact lens product which the Court has found to be infringing, J & J's ACUVUE®OASYS. See Johnson & Johnson Vision Care, Inc. v. CIBA Vision Corp., 648 F.Supp.2d 1294 (M.D.Fla.2009)1 After receiving the parties' papers both in support of and opposition to the Motion for Permanent Injunction (Docs. 319, 320, 347, 364, S-75, S-80), and allowing discovery, the Court conducted a two day evidentiary hearing on March 22-23, 2010, at which nine witnesses testified and the Court received one hundred fifteen exhibits in evidence. The entire record of the evidentiary hearing (Docs. 375, 376, 378, 379) and the parties' briefs are incorporated by reference.

In eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006), the Supreme Court held that in patent cases, a plaintiff seeking a permanent injunction must satisfy the same four-factor test applicable to other requests for permanent injunctive relief:

Id. at 391, 126 S.Ct. 1837. The patent plaintiff bears the burden of proving its entitlement to a permanent injunction. See Voda v. Cordis Corp., 536 F.3d 1311, 1329 (Fed.Cir.2008).

In many cases, and in this one, the issues of irreparable injury and the adequacy of monetary damages necessarily overlap. MercExchange, L.L.C. v. eBay, Inc., 500 F.Supp.2d 556, 569 n. 11 (E.D.Va. 2007). While a number of irreparable harm arguments were made at the hearing, the Court focuses on the issue of licensing. J & J argues that CIBA's previous licensing of the Nicolson patents is evidence that it will suffer no irreparable harm if future sales of ACUVUE®OASYS are not enjoined, and that money damages are adequate to redress future harm. In analyzing this contention, the Court accepts CIBA's position that the mere fact that a patent holder has previously licensed the patent to one party does not create a bar to the patent holder seeking permanent injunctive relief against a different, infringing competitor. The Court also accepts CIBA's premise that some of CIBA's licensing of the Nicolson patents occurred in the context of settling litigation and that this diminishes the significance of these licenses in the irreparable harm analysis. However, even granting both of these propositions, the Court still looks to the entire licensing history as relevant to whether CIBA will suffer future irreparable harm if an injunction does not issue.

In an instructive decision, Acumed LLC v. Stryker Corp., 551 F.3d 1323 (Fed.Cir. 2008), the Federal Circuit affirmed the district court's grant of a permanent injunction following a jury finding of infringement. In so doing the Federal Circuit found that the district court did not abuse its discretion in finding irreparable injury notwithstanding that the plaintiff Acumed had previously licensed the subject patent. The Federal Circuit first found that:

Id. at 1328. The Federal Circuit determined that, contrary to Stryker's argument that the district court had assigned no weight to the two licenses granted by Acumed, the district court had in fact considered the licenses, but simply did not find them to be persuasive to establish lack of irreparable injury. The Federal Circuit noted that:

Id. at 1328-29. Notably, the Federal Circuit concluded in a footnote:

Id. at 1329 n.*.

Turning to this case, the facts adduced at the evidentiary hearing establish that CIBA has entered into four licenses of the Nicolson patents (which are due to expire in 2014), and previously offered a fifth license to J & J. (Tr. I at 140-41, 150 (Saia); JDEMO 90.)2

In 2002, before this litigation commenced, J & J and CIBA discussed the possibility of CIBA licensing the Nicolson patents to J & J. While initial license discussions mentioned a royalty rate of 8% (Tr. I at 131-33 (Saia); JX 301, 302), CIBA, in a December 20, 2002 e-mail, offered to give J & J a license to the Nicolson patents in return for a 15% royalty. (Tr. I at 132 (Saia); JX 60 ("[w]e are willing to grant you a license to the Nicolson patents at a 15% flat royalty rate . . . . In exchange, you will give us a license to your [J & J's] EW [extended wear] developments"). J & J declined CIBA's 15% royalty rate offer. (Tr. I at 132, 175 (Saia); JX 302).) According to Andrea Saia, CIBA president and chief executive officer, CIBA made the offer in 2002 for several reasons: CIBA "was in a capacity constraint situation for silicone hydrogel [contact lenses];" "we weren't quite certain what was going to happen with the overall silicone hydrogel segment;" and CIBA was interested "in helping accelerate the overall segment in our business." (Tr. I at 99-100, 133, 138-39 (Saia); see also JX 303 ("[i]n 2002, there was uncertainty within CIBA Vision whether the new silicone hydrogel technology would ultimately become the dominant material class for contact lenses").)3

On July 1, 2004, CIBA licensed the Nicolson patents to competitor Bausch & Lomb ("B & L") in the context of a global litigation settlement. (JX 19 (under seal); JDEMO 90; DTX 1484, 1575.)4 CIBA and B & L compete in the extended wear silicone hydrogel market; B & L markets its lens as PureVision. (Tr. I at 142 (Saia).) In reaching that licensing agreement, the parties considered a number of legal and business factors, including the outcome of pending litigation, size and trends of market segments with and without competitors, pricing assumptions, product cost assumptions, time and opportunity cost, and future generations of technologies. (Tr. I at 149-53 (Saia); JX 184 (under seal).) CIBA and B & L issued a joint press release announcing the global settlement of their patent litigation, which specifically referenced this license. (JX 182.)

On November 19, 2007, also in the context of a patent litigation settlement, CIBA licensed the Nicolson patents to domestic competitor CooperVision. (JX 20 (under seal); DTX 1485; JDEMO 90.) CooperVision is also a large competitor of CIBA, marketing its lenses under the name Biofinity. (Tr. I at 157 (Saia).)

On February 1, 2009, CIBA entered into two license agreements with two smaller companies, Menicon and Visco Vision. No litigation was involved in these licenses. Menicon approached CIBA about the license and "they had some intellectual property that [CIBA was] interested in as well." (Tr. I at 213 (Chyatte).) Menicon is the largest silicone hydrogel contact lens producer in Japan and has expressed an interest in the United States market. Menicon is also an important CIBA customer in Japan. (Tr. I at 160-61 (Saia); Tr. I at 213-14 (Chyatte); JX 21 (under seal); JDEMO 90.)

The 2009 Visco Vision license is a worldwide license. Though a small company, Visco Vision is the largest contact lens maker in Taiwan, and also sells its lenses through private labels (under other companies' brand names) in Europe, which would be permitted under its CIBA license. According to CIBA, it entered the license agreement because it is interested in expanding its position in Taiwan and also was concerned about enforcing its patents in Taiwan. And "[t]his is a company that we're very interested in learning the market from." (Tr. I at 140, 162-64 (Saia); Tr. I at 214, 219-26 (Chyatte); JX 155 JDEMO 90.)

This evidence demonstrates that CIBA either offered or actually entered into licensing agreements with its three major domestic competitors (including J & J itself) and also entered into licenses with two foreign manufacturers. While the licenses with the domestic competitors B & L and CooperVision occurred in the litigation context, the licenses with the foreign manufacturers, at the same royalty rate, did not.5 Moreover, the two foreign licenses were entered into recently, on February 1, 2009, shortly before this case went to trial. Thus, the factors cited in Acumed as pertinent to determining whether licensing history counsels for or against an irreparable harm finding, largely favor J & J's position. Acumed, 551 F.3d at 1328.

Looking at CIBA's licensing behavior and the specific facts of this case, the Court, as it did at the preliminary injunction stage (see Doc. 49 at 15), finds compelling that CIBA has been willing to share the Nicolson patents with so many of its competitors (again, including J & J itself). This conduct, taken in its totality, is inconsistent with CIBA's assertion that only enforcement of its right to exclude J & J from using the Nicolson patents will redress the harm that CIBA will suffer in the future on account of J & J's infringement. The Court finds that CIBA has failed to prove that it will be irreparably harmed if a permanent injunction does not enter or that monetary damages are inadequate to compensate CIBA for future injuries due to J & J's continued infringement.6 See e.g. Advanced Cardiovascular Sys., Inc. v. Medtronic Vascular, Inc., 579 F.Supp.2d 554, 560 (D.Del.2008), appeal dismissed, 356 Fed.Appx. 389 (Fed.Cir. 2009) (patent owner's willingness to forego its patent rights for compensation supports the court's conclusion that patent owner will not suffer irreparable harm absent an injunction; "[t]he fact that ACS [patent owner] was selective regarding its licensing compensation—exchanging its technology only for other licenses to competing technology—does not rectify the fact that ACS was willing, ultimately, to forego its exclusive rights for some manner of compensation"); see also MercExchange, 500 F.Supp.2d at 577 ("decisions subsequent to the Supreme Court's opinion [in eBay] have rejected the broad classification that direct competitors always suffer irreparable harm from infringement"); Praxair, Inc. v. ATMI, Inc., 479 F.Supp.2d 440, 444 (D.Del.2007) (permanent injunction denied despite infringer being patentee's sole competitor).

Concerning the third eBay factor, for purposes of this Order, the Court will assume, without deciding, that the balance of hardships between CIBA and J & J dictates that injunctive relief is warranted.

The Court now addresses the public interest. CIBA relies upon the truism that the general public has an interest in enforcement of the patent laws. See e.g. Abbott Labs. v. Andrx Pharms., Inc., 452 F.3d 1331, 1348 (Fed.Cir.2006). While acknowledging that enjoining the future sales of ACUVUE®OASYS will cause some disruption to eye care practitioners and patients, CIBA seeks to minimize this concern by stating that it will entail "inconvenience" and no more. However, the persuasive evidence shows otherwise.

Sales of J & J's ACUVUE®OASYS lens began in the summer of 2005 and the product is now the largest single-selling contact lens in the United States market. It is undisputed that approximately 5.5 million American patients currently wear the ACUVUE®OASYS lens. ACUVUE®OASYS is the preferred choice for first fits among eye care practitioners. (Tr. I at 83 (Saia); Tr. II at 18 (Brown) (71 percent of the time eye care professionals rated ACUVUE®OASYS as the best lens); Tr. II at 65 (Cohen); JX 55 at W128235.) According to J & J's expert witness, optometrist Dr. Stephen Cohen, the "Acuvue Oasys is by far the most comfortable lens I've ever fit" due to its edge design and wettability, and "[c]omfort is often the determining factor about whether a patient is going to be able to wear contact lenses or not." (Tr. II at 53-54, 57 (Cohen).) Dr. Cohen testified that more than 1,000 of his patients are currently wearing the ACUVUE®OASYS lens. (Tr. II at 73 (Cohen).)

CIBA's expert optometrist and clinical professor Dr. Michael G. Harris opined that enjoining the sale of ACUVUE®OASYS lenses would not negatively affect public health or cause a substantial inconvenience for contact lens patients: "[T]he overwhelming majority of Acuvue Oasys lenses would be able to be refitted into another contact lens." However, Dr. Harris did acknowledge that the 5.5 million Oasys wearers would have to return to their eye care professional for a refitting when their current Oasys lens supply runs out or they are due for their annual prescription check up and renewal. This refitting takes 10 to 20 minutes, and the patient would then have to return to the eye care professional "for one, maybe two follow-up visits to make sure the patient has properly adapted to the [replacement] lens and that the lens is not adversely affecting the patient's eye." The follow-up visit would last 10 to 15 minutes, and the cost of the initial refitting plus the follow-up visits ranges between $50.00 and $125.00. (Tr. I at 281-83 (Harris).) J & J expert optometrist Cohen testified that his fee for a refitting is $110.00, and the refitting normally takes 15 minutes with one follow-up visit. (Tr. II at 55, 68 (Cohen).) And, according to Dr. Cohen, "since they'd be fitting these patients into products that don't work quite as well as Acuvue Oasys, it's conceivable it may take more than two visits to obtain a satisfactory result." (Tr. II at 57 (Cohen).) Thus, even using Dr. Harris' estimates, the total cost of refitting for all current ACUVUE®OASYS users would be between $275 million and $687.5 million. (Tr. I at 308-10 (Harris).) Averaging that cost at $80.00 ("into the 80s") per refitting would result in a total cost "close to $500 million." (Tr. II at 21 (Brown).)7

Retired Bausch & Lomb executive (former vice president of global vision care) Angela Panzarella testified about the impact of a 2002 court injunction of the sale of B & L's PureVision contact lens, which affected 250,000 contact lens wearers and was not "an orderly process." (Tr. II at 96-100 (Panzarella).)

(Tr. II at 97-100 (Panzarella).) Panzarella testified that the cost of the PureVision injunction and resulting refitting "was borne by the consumers and the practitioners." (Id. at 100.) She compared the effect of the 2002 injunction on the sale of B & L's PureVision lenses to an injunction on J & J's ACUVUE®OASYS with its 5.5 million wearers as "a bit like comparing. . . the wake from a small boat to a tsunami." (Id.)8

This evidence convinces the Court that millions of innocent contact lens wearers will suffer real adverse consequences if sale of ACUVUE®OASYS is enjoined. These are not just issues of comfort or cosmetics, as CIBA argues, but rather deal with the more substantive concerns of proper vision and eye care. There will also be significant disruption, confusion and cost (estimated to be in the hundreds of millions of dollars) caused by ACUVUE®OASYS patients being abruptly told that the contact lens for which they have been fitted and with which they are satisfied, is no longer available. Choosing a new lens will at minimum require refitting and the new lens may not prove as efficacious as the ACUVUE®OASYS lens. Moreover, patients may have to be refitted more than once until an appropriate lens is found. An undefined number will not be able to be refitted appropriately at all. CIBA's answer that "they can just wear glasses" is no answer, in this Court's view.

The preponderance of the evidence convinces the Court that an injunction will create consequential medical, practical and economic issues for large numbers of ACUVUE®OASYS users. The deleterious effects of the injunction on the general public would simply be too great to permit. Thus, CIBA has failed to carry its burden of proving that the public interest would not disserved by the entry of a permanent injunction.

In reaching this decision, the Court applies the same rationale as the district court in Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., No. CV-03-0597-PHX-MHM, 2009 WL 920300 (D.Ariz. March 31, 2009), appeal dismissed, 346 Fed.Appx. 580, 592 (Fed.Cir. 2009). In considering whether to grant a permanent injunction following a jury verdict of infringement, the court in Bard spoke of the court's task "sitting in equity" to "weigh[ ] the utility of [the infringing] products against potential harm to public health, and in doing so, [to] focus on the practical consequences—for real patients and surgeons—of granting Plaintiffs' requested remedy." Id. at *8:

Id.

The Court understands that the product in Bard Peripheral involved "potentially life saving technologies." Id. Here, the consequences of enjoining the ACUVUE®OASYS are not so grave; nevertheless, this Court, sitting in equity, finds those consequences to be sufficiently important and adverse to millions of ACUVUE®OASYS patients that the public interest would be disserved if an injunction were to be entered.

It is hereby

ORDERED:

1. CIBA's Motion for a Permanent Injunction (Doc. 319) is DENIED.

2. No later than May 21, 2010, the parties should either jointly or separately inform the Court of what further matters need to be addressed in this action at this time and provide a schedule for doing so. The parties should also propose a case management schedule for the remaining patent cases between these parties pending in this Court.9 If the parties disagree, they may each file a 10 page statement of their respective positions on these matters.

3. CIBA Vision Corporation's Motion In Limine To Exclude Declarations (Doc. 344) is MOOT; the declarations were not submitted or considered by the Court at the evidentiary hearing held on CIBA's Motion for a Permanent Injunction.10

4. CIBA Vision Corporation's Motion For Sanctions (Doc. 345) is DENIED.

5. CIBA Vision Corporation's Emergency Motion To Strike The Supplemental expert Report Of Dr. Stephen Cohen (Doc. 359) is GRANTED. (Tr. I at 28-29; Tr. II at 40.)

6. CooperVision, Inc.'s Motion To Intervene (Doc. 371) is GRANTED to the extent stated on the record. (Tr. I at 23-27.)