On Jul. 31, 2020, Federal Circuit affirmed district court’s decision in denying a preliminary injunction because Plaintiff failed to show that it was likely to succeed on the merits or that it would be irreparably harmed absent a preliminary injunction.
Takeda (Plaintiff) held NDA for Colcrys® (colchicine) tablet. Mylan (Defendant) filed ANDA with USFDA to market generic version of Colcrys®. Plaintiff sued defendant in 2016 for infringement of orange book patents. The parties ultimately resolved the litigation through a Settlement Agreement. The Agreement allowed Mylan to sell a generic colchicine product on a specified date, or in the event of certain circumstances defined in Section 1.2, on an earlier date. According to another Section 1.10 of the Agreement, if Mylan breaches Section 1.2, the parties stipulate that such breach “would cause Takeda irreparable harm.” Concurrent with its litigation against Mylan, Takeda also pursued patent infringement claims against Hikma for its 505(b)2 product, Mitigare®. Initially, Takeda asserted eight of the Licensed Patents against Hikma in the West-Ward Litigation. But after the parties voluntarily dismissed with prejudice five of those patents, only three patents remained at issue in the case. Ultimately, in December 2018, the district court granted summary judgment in favor of Hikma, holding that Hikma did not infringe any asserted claim of the three remaining Licensed Patents. The court entered its final judgment of noninfringement the same day. Takeda did not appeal.
In October 2019, Mylan notified Takeda that it planned to “immediately start selling” a generic colchicine product pursuant to Section 1.2(d) of the Agreement. Mylan asserted that the provision had been triggered by a “judgment of noninfringement” in favor of West Ward/Hikma. Shortly after Mylan launched its product, on December 2, 2019, Takeda filed a complaint in Delaware court, alleging breach of contract and aksed for preliminary injunction. After full briefing and oral argument, the district court issued an order denying Takeda’s motion for preliminary injunction. You can read the decision summary “here” on this blog. Takeda appealed.
Section 1.2(d) states that Mylan is entitled to launch a generic at:
“The date that is [a specified time period] after the date of a Final Court Decision (as defined in Exhibit A) holding that all unexpired claims of the Licensed Patents that were asserted and adjudicated against a Third Party are either (i) not infringed, or (ii) any combination of not infringed and invalid or unenforceable”
On appeal Takeda argued that the district court ignored the term “all” in Section 1.2(d), and by giving effect only to the word “adjudicated,” the court “read out the requirement that Section 1.2(d) is triggered only when ‘all’ asserted patents are adjudicated.” Takeda, therefore, argued that the West-Ward Litigation—which did not include a holding of noninfringement, invalidity, or unenforceability for five of the Licensed Patents—does not trigger Section 1.2(d) because “not all the claims that were asserted in that case were held to be not infringed . . . by a Final Court Decision.” Federal Circuit, however, disagreed with Takeda’s reading of the Agreement and said that plain language of Section 1.2(d), does not support Takeda’s interpretation. Section 1.2(d) clearly states that Mylan may launch its generic colchicine product following “a Final Court Decision . . . holding that all unexpired claims of the Licensed Patents that were asserted and adjudicated against a Third Party are . . . not infringed.” Section 1.2(d) does not require, as Takeda suggests, a Final Court Decision for all claims that have merely been asserted during the course of the litigation. Instead, the plain language of the clause requires a Final Court Decision for all claims that are both asserted and adjudicated.
Takeda further argued that the district court’s interpretation of the Agreement is counter to the parties’ intent to limit Section 1.2(d) to changes in status quo with respect to generic colchicine products, which do not include Hikma’s Mitigare® product at the center of the West-Ward Litigation. Federal Circuit again disagreed with Takeda’s interpretation. Court said that the parties’ “intent” to limit Mylan’s market entrance under Section 1.2(d) based on changes in the generic Colcrys® market is absent from the language of the provision. Section 1.2(d) makes no mention of generic Colcrys® products. Indeed, Takeda admited that Section 1.2(d) “does not expressly exclude a litigation that does not involve a generic Colcrys® product.” Furthermore, the West-Ward Litigation, which resulted in a change in the status quo of three Licensed Patents, is exactly a circumstance Takeda asserts Section 1.2(d) was intended to cover. Accordingly, even to the extent it is proper to allow the subjective intent of the parties to control interpretation of the License Agreement, Takeda has not shown that the parties intended to exclude the West-Ward Litigation from Section 1.2(d). The parties further agreed that all unexpired claims of the remaining three Licensed Patents were adjudicated when the district court entered summary judgment of noninfringement for those claims. Thus, the West-Ward Litigation triggered Section 1.2(d) because all unexpired claims of the three Licensed Patents that were “asserted and adjudicated” against a Third Party were held to be not infringed in a Final Court Decision. Thus, Federal Circuit held that Takeda is unlikely to succeed on the merits.
With respect to irreparable harm, Takeda primarily relied on Section 1.10 of the License Agreement to prove irreparable harm. By its terms, Section 1.10 only offers Takeda a basis for establishing irreparable harm in the event Mylan breached Section 1.2. Federal Circuit said that it is unlikely Takeda can show that Mylan breached the License Agreement, as discussed above. Therefore, Section 1.10 is not useful for establishing irreparable harm in this case. Without the stipulation of irreparable harm, Takeda made no credible assertion that it cannot be compensated by monetary damages. Takeda’s nonspecific and unsupported assertion that Mylan’s sales “likely will cause” irreparable harm falls far short of establishing that irreparable harm has occurred, or will likely occur, absent a preliminary injunction. Federal Circuit, thus, agreed with the district court that Takeda has not shown that it would be irreparably harmed absent a preliminary injunction.
Thus, district court’s denial of Takeda’s request for a preliminary injunction was affirmed.