Locke Lord QuickStudy: Speculation of ANDA Product Launch Before FDA Approval Does Not Warrant Permanent Injunction

Locke Lord LLP
January 11, 2017
On December 28, 2016, Judge Stark of the District of Delaware, despite having previously found infringement, held that plaintiffs Bayer Pharma AG, Bayer Intellectual Property GmbH, and Bayer HealthCare Pharmaceuticals Inc. (Bayer) in an ANDA litigation failed to show that a permanent injunction is warranted against defendant Watson Laboratories, Inc. (Watson). See Bayer Pharma AG et al. v. Watson Laboratories, Inc., C.A. No. 12-1726-LPS, slip. op. (D. Del. Dec. 28, 2016).  

Following a bench trial, the Court found that Watson’s proposed ANDA product would infringe Bayer’s U.S. Patent No. 8,071,577 (“the ‘577 patent”).  See id. at 1.  A dispute arose as to  whether the final judgment order should include a permanent injunction against Watson  from making, selling, using, or offering for sale its proposed ANDA product in addition to the § 271(e)(4)(B) remedy.  See id. at 1-2.  Bayer argued, in part, that the permanent injunction was necessary “because otherwise there is no Court Order preventing [Defendant] from infringing the [patent-in-suit] before it expires.”  Id. at 2.  Watson argued, in response, that a permanent injunction would be redundant “as it would not preclude any commercial activity that is not otherwise already precluded by the agreed-upon order the Court will direct to the FDA” – i.e., preventing FDA approval of Watson’s ANDA before expiration of the ‘577 patent.  Id.  

In order to support a permanent injunction, the party seeking the injunction must establish that the following factors favor such remedy: (1) the patent holder has suffered or will suffer irreparable injury or harm; (2) legal remedies are inadequate to compensate that injury; (3) balance of hardships; and (4) the public interest.  See id. at 3 (citing Alcon, Inc. v. Teva Pharm. USA, Inc., 2010 WL 3081327, at *2 (D. Del. Aug. 5, 2010) (explaining that prevailing patentee in ANDA case is not automatically entitled to § 271(e)(4)(B) injunction)).  

Bayer failed to establish factors (1) and (2), resulting in the Court’s holding that a permanent injunction was not warranted.  Id. at 6.  

Of particular interest is Bayer’s reliance upon speculation that Watson may launch its proposed ANDA product before to the expiration of the ‘577 patent—i.e., before it receives FDA approval—in support of its alleged irreparable harm and inadequacy of remedies available at law.  See id. at 4-5. The Court was not persuaded by Bayer’s conjecture, noting, inter alia:

Plaintiffs’ speculation that Defendant will risk criminal sanctions by launching its generic product into the market without FDA approval strikes the Court as entirely unfounded, and FDA approval will not happen until after the expiration of the patent.

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It seems unlikely that if Watson – which is in the business of developing and marketing drug products in the Unites States, all of which require FDA approval – proves willing to risk its relationship with the FDA in order to prematurely and unlawfully launch its generic version of this one product, Natazia®, that an additional order from this Court would prove to be the dispositive deterrent to such unlawful conduct.  

Id.  Accordingly, the Court held that Bayer failed to establish that it would suffer irreparable harm and that the remedies available at law are inadequate.  Id. at 6-7.  

This decision is further support for the general proposition that a finding of infringement in an ANDA litigation does not automatically warrant a permanent injunction against the ANDA applicant. Rather, the patentee must demonstrate that the four permanent injunction factors support such relief. The Bayer decision is also illustrative of the lack of necessity for a permanent injunction when FDA approval is restricted to the expiration of the patent-in-suit.  An ANDA applicant is unlikely to launch a product before it has received FDA approval.