LEONARD P. STARK, UNITED STATES DISTRICT JUDGE.
This highly contentious case is not yet four months old. In its short life, the Court has held four hearings (two telephonically and two in-person) (see D.I. 24, 109, 173, 181, 182), resolved at least nine motions (see, e.g., D.I. 1, 8, 37, 47, 61, 86, 105, 114, 115), reviewed hundreds of pages of briefing (see D.I. 7, 9, 11, 12, 17, 18, 21, 22, 23, 25, 34, 36, 38, 40, 41, 42, 44, 48, 67, 71, 74, 77, 79, 81, 83, 97, 98, 100, 101, 103, 110, 111, 112, 122, 131, 143, 163, 170, 178), and approved hundreds of pages of redacted filings. Both sides have sought expedited relief (see D.I. 34, 121) and pressed upon the Court the urgency and high-stakes nature of their dispute. (See, e.g., D.I. 24 at 18 (Plaintiffs: "[W]e think this factual scenario cries out for expedition."); D.I. 181 ("Tr.") at 11 (Defendant: "[T]his case is a particularly strong one for the existence of irreparable harm to Amgen."))
Most simply stated (a more detailed recitation appears below), Plaintiffs Cipla Ltd.
Thereafter, four other manufacturers of proposed pharmaceutical products that also would allegedly infringe the '405 patent went to trial in this Court. The Honorable Mitchell S. Goldberg, United States District Judge for the Eastern District of Pennsylvania sitting by designation in this District, issued a detailed opinion finding that the products proposed to be marketed by three of those entities — Watson Laboratories, Inc., a wholly-owned subsidiary of Teva, and hereinafter referred to as "Teva";
Shortly after Teva's brief entry and exit from the market, Cipla filed the instant suit, seeking a declaratory judgment that, under the terms of the Amgen-Cipla Agreement, and due to circumstances arising from the launch of the Teva Product, Cipla now had the right to launch the Cipla Product. (D.I. 2) When, soon thereafter, Cipla did begin to sell and offer for sale its Cipla Product, Amgen filed a motion for a preliminary injunction (D.I. 121), which is pending before the Court.
Having considered the parties' extensive filings (see, e.g., D.I. 122, 163, 170), and having heard lengthy oral argument on April 2 (see D.I. 181 ("Tr."); D.I. 182 ("Sealed Tr.")), the Court will deny Amgen's preliminary injunction motion.
Amgen owns the '405 patent, which claims pharmaceutical compositions of cinacalcet. Cinacalcet can be used to treat hyperparathyroidism, hyperphosphonia, hypercalcemia, and elevated calcium-phosphorus product. ('405 patent 4:15-25) Amgen markets a branded drug, SENSIPAR®, that practices the '405 patent. (D.I. 73 ¶ 46; D.I. 120 ¶ 10)
Several other drug companies, including Cipla, Teva, and Piramal, filed Abbreviated New Drug Applications ("ANDAs") seeking to market generic bioequivalents to SENISPAR® before the expiration of the '405 patent. (See, e.g., C.A. No. 16-880
In particular, Amgen sued Cipla for infringement of the '405 patent on September 29, 2016. (C.A. No. 16-880 D.I. 1) On February 26, 2018, before any trial, these parties executed the Amgen-Cipla Agreement. In doing so, "Cipla conceded that, among other things, the '405 patent is `valid and enforceable in this and in any other or future causes of action, litigation or proceeding relating to [the Cipla] Product.'" (D.I. 122 at 3) (quoting Amgen-Cipla Agreement § 4.1) In exchange, Amgen licensed Cipla to launch its generic product no later than 97 days before expiration of the '405 patent — and earlier in certain specified circumstances. (Amgen-Cipla Agreement §§ 5.2, 5.3, 5.6) On March 5, 2018, Judge Goldberg entered the Amgen and Cipla's jointly-proposed consent judgment. (C.A. No. 16-853 D.I. 320; D.I. 122 at 3)
Teva and Piramal continued to challenge Amgen's assertions of patent infringement, so those parties (along with Zydus and Amneal) proceeded to trial. On August 24, 2018, following a bench trial, Judge Goldberg entered judgment finding that Teva and Piramal did not infringe any of the asserted claims of the '405 patent. (C.A. No. 16-853 D.I. 386) Amgen appealed these final judgments of non-infringement to the Federal Circuit, where the appeals remain pending. (C.A. No. 16-853 D.I. 397)
On December 28, 2018, Teva launched its generic cinacalcet product by shipping 409,128 bottles to wholesalers. (D.I. 164 ¶ 5) An internal Teva email estimates this quantity of cinacalcet constitutes 1.6 to 3.6 months of supply for the United States, depending on the dosage form. (D.I. 171-1 Ex. A, Baeder
On January 2, 2019, just five days after Teva launched its generic product, Amgen and Teva entered into the Amgen-Teva Agreement. Under this Agreement, and despite having prevailed at trial and obtained a final judgment of non-infringement, Teva stipulated that the Teva Product
On January 9, 2019, Amgen and Teva jointly moved this Court for an indicative ruling.
Meanwhile, Cipla had filed the instant lawsuit on January 8, 2019. (D.I. 1) In its original complaint, Cipla sought (among other things) a declaratory judgment that it is entitled to launch its generic product, claiming that the Amgen-Teva Agreement violates the Sherman Act and the California Business and Professions Code. (D.I. 2) After the Court granted Cipla's request for expedited discovery (see D.I. 24 at 50), by which Cipla obtained a copy of the Amgen-Teva Agreement, Cipla amended its complaint to join Teva as a defendant, add a new claim of fraud, and provide greater factual specificity to its allegations. (D.I. 73) ("First Amended Complaint")
On March 8, at an in-person status conference, Cipla announced that it had launched its generic cinacalcet product. (D.I. 173 at 13-14) The parties appear to agree, and the Court finds, that Cipla's launch of its Cipla Product was an "At Risk Launch" within the meaning of the Amgen-Cipla Agreement. (See D.I. 122 at 5; D.I. 163 at 13; see also Sealed Tr. at 5) That is, Cipla began selling and offering to sell its generic product "without authorization from Amgen (whether directly or indirectly, by way of license, sub license, covenant not to sue, release or by any other means)" and without a "Final Court Decision
Subsequently, on March 11, pursuant to a process the Court had discussed with the parties and expressly approved on March 8, Amgen filed a Partial Answer (D.I. 120) to Cipla's First Amended Complaint, and concurrently moved for a preliminary injunction to stop Cipla from continuing to sell the Cipla Product. (D.I. 121) In its motion, Amgen contends that the launch of the Cipla Product is a breach of Cipla's obligations under the Amgen-Cipla Agreement. (See D.I. 122 at 6-15; see also D.I. 120 ¶¶ 24-48) Amgen further contends that it is being irreparably harmed by sales of the Cipla Product and will continue to be so harmed prior to trial in this matter unless the Court grants preliminary injunctive relief. (See, e.g., D.I. 121)
As Amgen's preliminary injunction motion is based on its breach of contract counterclaim, the Court must apply the law of the Third Circuit. See Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharmaceuticals Co., 290 F.3d 578 (3d Cir. 2002). A preliminary injunction is "extraordinary" relief. Id. at 586. It may be awarded only after the Court considers whether the moving party is likely to succeed on the merits of its claim, whether the moving party is likely to suffer irreparable harm in the absence of preliminary relief, the balance of equities between the parties, and the public interest. See Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008).
As the moving party, Amgen must demonstrate both a likelihood of success on the merits of its breach of contract counterclaim and that it will likely suffer irreparable harm (of a type that would be prevented by an immediate grant of relief it could be awarded after prevailing on the merits of its claims at trial). See Bennington Foods LLC v. St. Croix Renaissance, Grp., LLP, 528 F.3d 176, 180 (3d Cir. 2008); see also Lujan v. Defs. of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (noting that standing to assert claim requires that "it must be likely, as opposed to merely speculative, that [the alleged] injury will be redressed by a favorable decision") (internal quotation marks omitted); Macom Tech. Sols. Holdings, Inc. v. Infineon Techs. AG, 881 F.3d 1323, 1330 (Fed. Cir. 2018). A party that does not meet its burden on either of these first two prongs of the preliminary injunction standard cannot be granted preliminary relief. See Reilly v. City of Harrisburg, 858 F.3d 173, 179-80 (3d Cir. 2017). Provided the first two prongs are satisfied, a preliminary injunction may issue even if the balance of harms and/or the public interest do not favor the moving party. See id. at 177-80.
A preliminary injunction is an equitable remedy. See Weinberger v. Romero-Barcelo, 456 U.S. 305, 311, 102 S.Ct. 1798, 72 L.Ed.2d 91 (1982). Therefore, a party with unclean hands, or which has otherwise acted inequitably, should not be granted such relief. See Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240, 244, 54 S.Ct. 146, 78 S.Ct. 293 (1933) (stating movant for equitable relief must show "not only has he a good and meritorious cause of action, but he must come into court with clean hands"). Pertinent here is that patent misuse — which Cipla contends Amgen engaged in — is a type of inequitable conduct, and a party engaging in patent misuse should not be rewarded with a
The elements of a breach of contract claim under Delaware
As set forth below, Amgen has not met its burden to establish a likelihood of success on the merits of its breach of contract claim. Amgen has met its burden to show that it will likely suffer irreparable harm in the absence of preliminary injunctive relief. The balance of the harms somewhat favors Amgen, even accounting for Cipla's equitable defense of patent misuse. The public interest also somewhat favors granting the requested relief. However, because Amgen has not met its burden to show a likelihood of success, the Court will deny Amgen's motion for a preliminary injunction.
Amgen seeks a preliminary injunction based on its claim that Cipla's launch of the Cipla Product constitutes a breach of the Amgen-Cipla Agreement. (See D.I. 122 at 1) (Amgen contending Cipla's launch is "flagrant breach" of contract) Amgen has failed to show a likelihood of success on the merits of this claim. In order to explain how the Court has reached this conclusion, it will be necessary to discuss and dissect multiple provisions of the Amgen-Cipla Agreement.
Section 7.1 of the Amgen-Cipla Agreement provides, in relevant part, that "unless otherwise permitted under this Settlement Agreement," Cipla will not market any generic cinacalcet product between the "Effective Date of this Settlement Agreement" and the "Entry Date." (Amgen-Cipla Agreement § 7.1) The "Effective Date" of the Amgen-Cipla Agreement is March 5, 2018. (C.A. No. 16-853 D.I. 320) ("Consent Judgment") The "Entry Date" is defined as the earliest of three events, which are identified Sections 5.2(a), (b), and (c), reproduced below:
(Amgen-Cipla Agreement § 5.2)
It is undisputed that neither 5.2(a) or (c) have occurred. Thus, the parties' dispute is whether Cipla has obtained the right to launch its generic product pursuant to Section 5.2(b), or some other provision of the Agreement allows Cipla to launch before the Entry Date (i.e., "unless otherwise permitted"). Resolving this dispute requires consideration of Sections 5.6, 5.3, and 5.5, to which the Court now turns.
Section 5.6 of the Amgen-Cipla Agreement reads as follows (with emphasis, bracketed numbers, and spacing added for ease of explanation):
(Amgen-Cipla Agreement § 5.6) (emphasis, bracketed numbering, and spacing added)
Amgen, largely relying on the first sentence (marked [1] by the Court) of Section 5.6, contends that "[n]othing" in the Amgen-Cipla Agreement prevents it from seeking "any relief" against Cipla, including a preliminary injunction, except that Amgen can seek such relief against Cipla only if a third-party which launched its own product — here, the Teva Product — "is later found to infringe, or admits infringing, a valid and enforceable claim of the '405 patent and ... is required to pay, or agrees to pay, damages relating to its At Risk Launch." (See D.I. 122 at 14-15) To Amgen, this first sentence of Section 5.6 is operative here because Teva, pursuant to the Amgen-Teva Agreement, has admitted infringing the '405 patent, which Teva has further admitted is valid and enforceable, and Teva has agreed to pay Amgen damages associated with its launch of the Teva Product. (Id.)
Cipla, by contrast, relies almost entirely on the second sentence (marked [2] by the Court) of Section 5.6. Because sentence [2] begins "[n]otwithstanding anything to the contrary in this Settlement Agreement," Cipla insists that if its launch is authorized by this single sentence, then the Court need not be concerned with any other provision in the Amgen-Cipla Agreement, as this one sentence unambiguously authorizes the launch of the Cipla Product. (D.I. 163 at 9) Cipla further contends that this sentence [2] prohibits Amgen from seeking any relief — including a preliminary injunction, as well as damages following final judgment — for two independently sufficient reasons: (1) because Teva has been "not found to have infringed" the '405 patent (id. at 19); and (2) because Teva "has not ceased or agreed to cease selling" the Teva Product (id. at 19-20).
Amgen responds that Cipla is misreading the word "or" that appears between clauses [i] and [ii] in sentence [2]. (D.I. 122 at 14-15) To Amgen, Section 5.6's prohibition on Amgen's ability to seek relief concerning Cipla's at-risk launch of the Cipla Product is triggered if and only if it is proven that [i] Teva "is not found to have infringed"
The Court ultimately agrees with Cipla's reading of Section 5.6, although not with every aspect of Cipla's characterization of the record. Hence, it is necessary to address each of the subparts of the parties' dispute with respect to Section 5.6.
Cipla contends that "the court need not go beyond the second sentence of § 5.6 of the Amgen-Cipla Agreement to conclude that Amgen is not likely to succeed on the merits of its claims for breach of that agreement." (D.I. 163 at 14) The Court is persuaded that, based on the record before it, this one sentence does have the effect of precluding Amgen from obtaining the relief
Sentence [2] begins "[n]otwithstanding anything to the contrary in this Settlement Agreement." The clear and unambiguous meaning of this phrase is that regardless of whatever else one might find in any other provision or sentence of the Amgen-Cipla Agreement, the consequences of sentence [2] must be enforced. See Cisneros v. Alpine Ridge Grp., 508 U.S. 10, 18, 113 S.Ct. 1898, 123 L.Ed.2d 572 (1993) ("[T]he use of such a `notwithstanding' clause clearly signals the drafter's intention that the provisions of the `notwithstanding' section override conflicting provisions of any other section.").
Amgen argues against this conclusion on two grounds, both of which lack merit. First, Amgen points to sentence [1] of Section 5.6, claiming that this "first sentence of section 5.6 affirmatively grants Amgen a right to seek relief against Cipla: Teva admitted infringing the '405 patent, admitted the patent is valid and enforceable, and agreed to pay damages relating to its at-risk launch." (D.I. 170 at 3) The Court disagrees. Sentence [1] establishes that "[n]othing in Section 5.5" or any other part of the Amgen-Cipla Agreement "shall be construed to prevent Amgen from seeking any relief it is legally entitled to" — but, to the extent this conflicts with sentence [2], the "
Moreover, the Court does not find a conflict between sentences [1] and [2]. Instead, the two sentences contain different restrictions on rights Amgen would otherwise have to seek relief from Cipla. It is
Sentence [1] permits Amgen to "seek[] any relief it is legally entitled to ... provided that Amgen can only seek such relief... if" each third party which has launched at risk (i.e., here Teva) "is later found to infringe, or admits infringing, a valid and enforceable claim of the '405 patent" and "is required to pay, or agrees to pay, damages relating to its At Risk Launch." This sentence does not affirmatively grant Amgen any entitlement to relief but rather imposes conditions on when Amgen can obtain relief. See generally Twp. of Tinicum v. U.S. Dep't of Transp., 582 F.3d 482, 488 (3d Cir. 2009) ("The phrase `only if' describes a necessary condition, not a sufficient condition."). Here, Teva has, by executing the Amgen-Teva Agreement, admitted infringement and agreed to pay damages relating to its December 2018 launch of the Teva Product. Had Teva not agreed to these conditions, Amgen's motion would falter at sentence [1] of Section 5.6. Because these conditions are, in fact, satisfied, sentence [1] does not bar Amgen's requested relief — but neither does this sentence entitle Amgen to relief. Instead, again, sentence [1] states necessary, but not sufficient, conditions that Amgen must satisfy in order to obtain relief directed to Cipla's At Risk Launch.
Amgen also argues that Cipla's reliance on the second sentence of Section 5.6, and treatment of it as essentially dispositive, erroneously renders other provisions of the Amgen-Cipla Agreement superfluous, including Section 5.5(a).
In sum, then, the Court agrees with Cipla that if the conditions of sentence [2] are met, triggering the restrictions in Section 5.6 on Amgen's ability to seek relief, then Amgen's preliminary injunction motion fails based on sentence [2] of Section 5.6 alone, "[n]otwithstanding" any other provision of the Amgen-Cipla Agreement.
The parties' next dispute involves how to read the conditions set out in sentence [2]. Amgen contends that the sentence [2] restriction on its entitlement to seek or recover relief relating to Cipla's At Risk Launch applies
It is helpful to set out sentence [2] once more:
(Amgen-Cipla Agreement § 5.6) (emphasis added)
In the Court's view, this sentence clearly and unambiguously sets out two separate conditions, [i] and [ii], either of which, if satisfied, render applicable the restriction on Amgen contained in this provision. Sentence [2] uses the word "or" and so expresses two conditions, each of which is sufficient to bar Amgen from obtaining relief: (1) if a third party was "not found to have infringed;"
The pertinent portion of sentence [2] can fairly be read as "if [i] or [ii], then Amgen shall not be entitled to seek or recover any
Amgen's reading would, instead, effectively change the "
The Court further agrees with Cipla that condition [i] of sentence [2] of Section 5.6 has been satisfied: Teva has been "not found to have infringed" the '405 patent. (See D.I. 163 at 19) In the earlier litigation, after trial and post-trial briefing, Judge Goldberg entered final judgment that "Watson [Teva] does not infringe any of the claims asserted against it." (C.A. No. 16-853 D.I. 376 at 1)
Section 5.6's reference to "not found to have infringed" does
Amgen also argues that condition [i] is not satisfied because Judge Goldberg's finding of non-infringement did not occur "following [the] At Risk Launch." (See, e.g., Sealed Tr. at 15) Instead, the Court's finding of non-infringement by the Teva Product predated the launches of both the
For its contrary conclusion, Amgen points out that Section 5.6 bars Amgen from relief if, in relevant part, a third party "is not found to have infringed one or more valid and enforceable claims of the '405 patent or has not ceased or agreed to cease selling such Generic Cinacalcet Product
Yet another effort by Amgen to evade the restriction of sentence [2] of Section 5.6 is to argue that this provision restricts Amgen only from seeking
The plain language of sentence [2] precludes Amgen from seeking "
Given the Court's analysis to this point, the Court must deny the preliminary injunction motion because Amgen is unlikely to succeed on the merits of its breach of contract counterclaim, since condition [i] of sentence [2] of Section 5.6 — that Teva "is not found to have infringed" — is satisfied, triggering the restriction on Amgen's ability to seek relief for Cipla's At Risk Launch of its Cipla Product. Nevertheless, given the urgency of the parties' disputes, and
In pertinent part, Section 5.6 provides that if a third party that has made an at-risk launch "has not ceased or agreed to cease selling" its generic product, then Amgen is barred from seeking relief against Cipla for Cipla's At Risk Launch. (Amgen-Cipla Agreement § 5.6) Hence, for condition [ii] to be satisfied — making applicable the restriction on Amgen's ability to seek relief against Cipla — Teva must
Amgen insists that the language of the Amgen-Teva Agreement "can only fairly be read as a commitment by Teva not to sell its generic product between the Signing Date and the Effective Date." (D.I. 170 at 4) For this contention Amgen relies principally on Section 7.3 of that Agreement (see, e.g., D.I. 122 at 10 n.5), by which Teva "represent[s] and warrant[s]" that it has not "sold or otherwise transferred" any Teva Product "prior to the Effective Date other than the Previously Sold" Teva Product (Amgen-Teva Agreement § 7.3). Teva further agreed that if it is "found to be in breach of this Section 7.3, Amgen shall be entitled to seek relief including but not limited to damages and/or a permanent injunction." (Id.) Because "Previously Sold Defendants' Products" is defined (in § 1.7) as Teva Product sold "prior to the Signing Date" of the Amgen-Teva Agreement, it follows that any additional sales of the Teva Product after execution of that Agreement would be a breach of contract. Therefore, in Amgen's view, the Amgen-Teva Agreement imposes current restrictions on Teva's conduct.
The Court agrees. The plain language of Section 7.3 covers Teva's conduct both before signing the Amgen-Teva Agreement and after signing it and up until the Effective Date of the Agreement. (See Amgen-Teva Agreement § 7.3) (stating that warranty and representation is for product sold "prior to the Effective Date") The Amgen-Teva Agreement defines the term "Signing Date" (Amgen-Teva Agreement § 2.1) and yet does not use it in Section 7.3, which suggests a conscious choice not to limit Section 7.3's warranty and representation to past sales. This construction is supported by the context of the Agreement; it would make little sense for the Agreement to include a representation of sales before the signing date and to bar all sales after the Effective Date, but not govern whatsoever sales between the signing date and the Effective Date. Therefore, since the Effective Date has not yet occurred, Teva remains bound by Section 7.3 not to "[sell] or otherwise transfer[]" its generic product.
But this conclusion does not answer whether condition [ii] of sentence [2] of Section 5.6 of the Amgen-Cipla Agreement is satisfied. There is uncertainty in the record as to the meaning of "sold or transferred" in Section 7.3 of the Amgen-Teva Agreement and as to the meaning of "selling" as that term is used in Section 5.6 the Amgen-Cipla Agreement — including ambiguity as to whether the respective terms in the two agreements have precisely the same meaning and scope. In particular, it is unclear whether Section 5.6 requires that Teva have agreed to cease (or to have
It is undisputed that neither Teva nor any of its affiliates has transferred title to any Teva Product since January 2, 2019. (D.I. 125, Ragan
The Amgen-Cipla Agreement is silent (and ambiguous) as to whether "selling" includes indirect sales or is limited to direct sales. If, as Amgen contends (Sealed Tr. at 8-9), "selling" only covers direct sales, then Teva's undisputed lack of direct sales since January 2 means that Teva actually ceased selling its product. If, however, as Cipla contends (Sealed Tr. at 25-26), "selling" covers both direct and indirect sales, then Teva's undisputed ongoing indirect sales mean that Teva has not actually ceased selling its product. Without more evidentiary development — as to, for instance, whether "selling" has an accepted meaning in the pharmaceutical industry, whether Teva does or does not consider transactions other than its direct sales to be "indirect sales" by Teva, whether and to what extent the transactions that occur after Teva's direct sales impact the amount of revenues Teva ultimately realizes for its sales of Teva Product — the Court is unable to determine whether Teva has ceased or agreed to cease "selling" the Teva Product within the meaning of the Amgen-Cipla Agreement.
Because the Court has held that Section 5.6 defeats Amgen's ability to prove it is likely to succeed on the merits of its breach of contract claim, it is not strictly necessary to consider the other provisions of the Amgen-Cipla Agreement the parties have put in dispute. The Court will proceed to consider other such provisions, however, in the interests of completeness, and also because Amgen contends that certain other provisions allow it to prevail on its motion, independent of any ruling the Court makes as to Section 5.6.
Section 5.2(b) of the Amgen-Cipla Agreement provides that Cipla may launch its generic upon "the Launch of a Generic Cinacalcet Product by a Third Party ... except as provided in Section 5.5." (Amgen-Cipla Agreement § 5.2(b)) Therefore, as Amgen correctly explains, "[i]n section 5.2(b), the [Amgen-Cipla] [A]greement provides that a launch by another generic manufacturer will
Section 5.5 provides, in pertinent part:
(Amgen-Cipla Agreement § 5.5(a)) (bracketed numbering and emphasis added)
The circumstances here satisfy conditions [1] and [2]: [1] a third party, Teva, launched a generic product, the Teva Product, without authorization from Amgen;
In addition, Section 5.5 (in combination with Section 5.2(b)) does not allow Amgen to demonstrate a likelihood of success on the merits because it is, at best (from Amgen's perspective), in conflict with Section 5.6. For the reasons already given in connection with analysis of Section 5.6, Cipla's rights under the clear and unambiguous sentence [2] of Section 5.6 trump any conflicting provision in the Amgen-Cipla Agreement, including (if viewed as a conflict) Section 5.5. In other words, not being barred by Section 5.5 is a necessary but not sufficient condition for Amgen to prevail on its preliminary injunction motion.
Section 5.3 of the Amgen-Cipla Agreement provides what is colloquially known as a "most favored nation" clause. It states, in pertinent part:
(Amgen-Cipla Agreement § 5.3)
The Court disagrees with Cipla's contention that Section 5.3 is applicable and (on
Under the Amgen-Cipla Agreement, the "Entry Date" is the first date on which Cipla has a permanent, royalty-free license to practice Amgen's '405 patent. (Amgen-Cipla Agreement § 5.1) For a provision in another Amgen agreement to be an "Entry Date term," it must provide a perpetual, paid-up license to the licensee on a certain date. The Amgen-Teva Agreement's release of claims is not an ongoing license but rather (at most) an after-the-fact authorization of prior Teva sales that were unauthorized by Amgen at the time made. As such, the Amgen-Teva Agreement's release is not an Entry Date term and, so, does not create additional rights for Cipla.
In sum, Amgen has not met its burden to show a likelihood of success on its claim that Cipla breached the Amgen-Cipla Agreement by selling Cipla Product. While Amgen has persuaded the Court that Section 5.3 does not entitle Cipla to sell its generic product at this time, Amgen has failed to show it is likely to succeed on the merits of its contentions that Cipla has breached Section 5.6 and/or Section 5.5. Instead, the Court is persuaded that Section 5.6, sentence [2], condition [i] bars Amgen from seeking any relief, including preliminary injunctive relief, with respect to Cipla's At Risk Launch. The Court also finds that Amgen has not met its burden to show that neither Section 5.6, sentence [2], condition [ii], nor Section 5.5, bars Amgen's requested relief. Accordingly, the Court must and will deny Amgen's motion. See Winter, 555 U.S. at 20, 129 S.Ct. 365 ("A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits.").
Having found that Amgen has failed to show a likelihood of success on the merits, the Court must deny the preliminary injunction motion. Nonetheless, for reasons already given above with respect to other issues, the Court will proceed to address (in less depth) the other prerequisites to granting Amgen relief, beginning with irreparable harm. For the reasons to be explained, the Court finds that Amgen has demonstrated it will suffer irreparable harm in the absence of a preliminary injunction.
The Court is persuaded that in the time between now and trial Amgen will experience
The Court disagrees with Cipla's contention that all of Amgen's harms can be remedied by money damages. (See D.I. 163 at 20) Cipla's reliance for this point on AstraZeneca AB v. Apotex Corp., 782 F.3d 1324 (Fed. Cir. 2015), is unavailing. (D.I. 163 at 20) That a post-trial reasonable royalty was awarded to the branded drug company in that case does not mean that money damages are adequate relief here. Also unpersuasive is Cipla's citation to Chemipal Ltd. v. Slim-Fast Nutritional Foods Intern., Inc., 350 F.Supp.2d 582, 595 (D. Del. 2004), for the proposition that "under Delaware law, consequential damages in the form of goodwill, lost future profits, and lost customers have been consistently found to be too speculative and barred from recovery on breach of contract claims." (D.I. 163 at 20) The Court does not view Chemipal to sweep so broadly. The damages claim in Chemipal was "speculative" after the Court struck a proposed expert; here, Cipla has not sought to strike the opinions of Amgen's experts. In any event, even if it were true that Delaware law always excludes these consequential damages from final relief, if Amgen has a contractual right to preliminary injunctive relief to prevent the consequences of a breach, the Court would be able to enforce that contractual right.
Nor does the Court agree with Cipla that the harms Amgen will suffer are not fairly traceable to Cipla. It is, of course, true that other players in the market have sold generic versions of Amgen's SENSIPAR®. But the quantities of generic product Cipla appears to have sold and is willing and able to sell in the absence of a preliminary injunction,
Finally, while it is undisputed that the market for cinacalcet will go completely generic by mid-2021 (see Tr. at 24, 39), that is still two years away. Just because the market is essentially guaranteed to be fully genericized two years from now, Amgen may still be — and indeed has shown that it will be — irreparably harmed by what occurs between now and that time, absent a preliminary injunction.
Hence, Amgen has met its burden to show irreparable harm.
A court considering a motion for a preliminary injunction "must balance the competing claims of injury and must consider the effect on each party of the granting or withholding of the requested relief." Winter, 555 U.S. at 24, 129 S.Ct. 365. Here, the Court must balance the harm to Amgen in allowing Cipla to sell its Cipla Product until the time of final judgment against the harm to Cipla in prohibiting it from making additional sales of the Cipla Product until that same time. The Court finds that this balance favors Amgen, although not by much.
As discussed above, the Court has found that Amgen will experience irreparable harm as a result of price erosion, loss of market share, harm to its goodwill, and other non-quantifiable harm. (D.I. 122 at 21-22) For its part, Cipla would also face harm if it were enjoined from further sales of its generic product until after trial. (See D.I. 163 at 20-21) In particular, Cipla contends that it currently has a "unique" opportunity to be the sole (or at least the major) generic player in the market for cinacalcet, a market in which prices are still relatively high; this opportunity may very well be fleeting, given the potential entry of other generic challengers. (Tr. at 29-30) The "lost" revenue that Cipla would not be able to earn if a preliminary injunction is entered (but that it could earn in the absence of a preliminary injunction) would not seem to be recoverable from Amgen or anyone else, since it would be caused by lawful third-party developments in the marketplace. (See, e.g., Tr. at 31-32 ("Somebody else will catch up, and someone else will then enter the market, and Cipla will have no recourse."); see also D.I. 24 at 52-54)
On balance, it appears that the magnitude of the harm to Amgen in having its market genericized by Cipla is greater than the harm to Cipla in missing out on pre-genericization sales. See generally Pfizer, Inc. v. Teva Pharm., USA, Inc., 429 F.3d 1364, 1382 (Fed. Cir. 2005) ("Simply put, an alleged infringer's loss of market share and customer relationships, without more, does not rise to the level necessary to overcome the loss of exclusivity experienced by a patent owner due to infringing conduct."). Moreover, it is unclear whether Cipla actually has a substantially unique opportunity to be in the market for generic cinacalcet or whether, instead, other generic competitors will follow Cipla into the market very shortly (or may already have done so).
Second, the Court will address Cipla's contention that Amgen has engaged in patent misuse,
While Cipla may eventually demonstrate patent misuse under a rule of reason analysis, it has not done so at this stage. In order to do so, Cipla will need to show that the Amgen-Teva Agreement "imposes an unreasonable restraint on competition, taking into account a variety of factors, including specific information about the relevant business, its condition before and after the restraint was imposed, and the restraint's history, nature, and effect." Va. Panel Corp. v. MAC Panel Co., 133 F.3d 860, 869 (Fed. Cir. 1997) (internal quotation marks omitted). Based on the record evidence, it seems plausible that Amgen and Teva may have colluded to divide up the market for cinacalcet, in order to share supracompetitive profits and deter true generic competition.
For the reasons given above, the Court concludes that the balance of the equities narrowly favors Amgen. Amgen will be more harmed by the denial of an injunction than Cipla would be harmed were the Court to grant the injunction. Cipla's allegations of patent misuse do not appreciably change this balance.
Finally, a "district court should consider the effect of the issuance of a preliminary injunction on other interested persons and the public interest." Reilly, 858 F.3d at 176. Here, the Court agrees with Amgen that the public interest would favor granting its motion if Amgen had succeeded in showing a likelihood of success on the merits, albeit only slightly.
No doubt there are important public interests on both sides of the scale here. The public has a strong interest in protecting valid patent rights, particularly as "the patent system provides incentive to the innovative drug companies to continue costly development efforts." Sanofi-Synthelabo, 470 F.3d at 1383. Yet the public also has a strong interest in enforcing contractual rights and encouraging the widespread distribution of life-saving pharmaceuticals to patients in need of them, an interest fostered by careful adherence to the laws permitting approval and marketing of less expensive generic versions of drugs. See King Drug, 791 F.3d at 388 (noting that Hatch-Waxman Act "attempted to balance the goal of making available more low cost generic drugs, with the value of patent monopolies in incentivizing beneficial pharmaceutical advancement") (internal citations, alterations, and quotation marks omitted). It appears to the Court that the public interests favoring Amgen slightly exceed those favoring Cipla, under the circumstances of this case.
There is also a public interest in promoting settlement of litigation. See Baseload Energy, Inc. v. Roberts, 619 F.3d 1357, 1361 (Fed. Cir. 2010). The parties dispute whether this interest favors or disfavors the relief requested by Amgen. It is difficult for the Court to assess who is right on this question. For now, it is enough to say that the Court does not believe (and certainly does not intend) that its denial of the motion — which, in the Court's view, turns on honoring the clear and unambiguous settlement agreement to which Amgen and Cipla voluntarily bound themselves — will make it even more difficult to settle pharmaceutical patent litigation.
An appropriate Order follows.
At Wilmington this
1. Amgen's motion for a preliminary injunction (D.I. 121) is
2. As the Opinion was filed under seal, the parties shall meet and confer and shall, no later than
3. The parties shall meet and confer and, no later than May 9, submit a joint status report, including their proposal(s) as to how this case should now proceed.
