United States District Court, D. Delaware
W. Bourke and Daniel M. Attaway, WOMBLE BOND DICKINSON (US)
LLP, Wilmington, DE; Jeffrey I. Weinberger, Ted G. Dane
(argued), Heather E. Takahashi, Elizabeth L. Laughton, and
Hannah L. Dubina, MUNGER, TOLLES & OLSON LLP, Los
Angeles, CA; Celia R. Chby, MUNGER, TOLLES & OLSON LLP,
Washington, DC; Peter A. Detre, MUNGER, TOLLES & OLSON
LLP, San Francisco, CA, attorneys for Plaintiff.
Dominick T. Gattuso, HEYMAN ENERIO GATTUSO & HIRZEL LLP,
Wilmington, DE; Lauren C. Tortorella, WINSTON & STRAWN
LLP, Chicago, IL; Charles B. Klein and Han Wurman, WINSTON
& STRAWN LLP, Washington, DC; Elaine H. Blais, Robert D.
Carroll (argued), Lana S. Shiferman, Robyn R. Schwartz, and
Louis L. Lobel, GOODWIN PROCTER LLP, Boston, MA, attorneys
ANDREWS, U.S. DISTRICT JUDGE
pending before the Court is Defendants West-Ward
Pharmaceuticals, Hikma Americas, and Hikma
Pharmaceuticals' Motion for Recovery of Damages on Bond.
(D.I. 323). The parties have fully briefed the issues. (D.I.
324; D.I. 339; D.I. 354). The Court heard oral argument on
October 16, 2018.. (D.I. 409). For the following reasons, the
Court GRANTS Defendants' Motion for Recovery of Damages
on the Bond in the amount of $31, 871, 072.09.
Takeda Pharmaceuticals manufactures and markets Colcrys, a
branded 0.6 mg colchicine tablet, for the treatment of gout
prophylaxis and acute gout flares. In 2009, Colcrys became
the only FDA-authorized colchicine product on the
pharmaceutical market when the FDA removed all unauthorized
colchicine products from the market. Plaintiff owns two sets
of patents claiming methods of administering colchicine. One
set of patents ("the Acute Gout Flare Patents") is
directed to a method of treating acute gout flares with
colchicine by administering 1.2 mg oral colchicine at the
onset of an acute flare, followed by 0.6 mg oral colchicine
one hour later. U.S. Patent No. 7, 964, 647 cl. 1; U.S.
Patent No. 7, 981, 938 cl. 1. The second set of patents
("the DDI Patents") are directed to a method of
treating patients by reducing the dose of colchicine when
prescribed with certain other medication. U.S. Patent No. 7,
964, 648 abstract; U.S. Patent No. 8, 097, 655 abstract; U.S.
Patent No. 8, 440, 722 abstract.
September 26, 2014, Defendant Hikma Pharmaceuticals received
FDA approval of a paper New Drug Application ("paper
NDA") for Mitigare. Mitigare is a 0.6 mg colchicine
capsule indicated solely for gout prophylaxis-a non-patented
use of colchicine. (D.I. 324 at 8). Defendants were in the
process of bringing a branded version and a generic version
(Mitigare AG) to the market in early October 2014.
(Id. at 10-11). On October 3, 2014, Plaintiff filed
suit against Defendants West-Ward Pharmaceuticals, Hikma
Americas, and Hikma Pharmaceuticals ("Defendants")
alleging that Defendants induced infringement of both the DDI
Patents and the Acute Gout Flare Patents based upon
Mitigare's label. (D.I. 1). The Complaint asserts United
States Patent Nos. 7, 964, 647 ("the '647
Patent"), 7, 964, 648 ("the '648 Patent"),
7, 981, 938 ("the '938 Patent"), 8, 097, 655
("the '655 Patent"), and 8, 440, 722 ("the
'722 Patent"). (Id. ¶ 22).
filed a Motion for a Temporary Restraining Order and
Preliminary Injunction on October 6, 2014, just four days
before Defendants planned to launch Mitigare and Mitigare AG.
(D.I. 5). Plaintiff alleged that it would be
immediately and irreparably harmed if Defendants were allowed
to launch their generic colchicine product, Mitigare AG.
(D.I. 6 at 16). The Court entered a temporary restraining
order ("TRO") on October 9, 2014, prohibiting
Defendants from launching or making any preparations for a
launch of Mitigare or Mitigare AG. (D.I. 21). The Court also
issued an order setting a TRO bond of $13 million, but noted,
"The amount of the bond does not currently reflect any
harm that [Defendants] may suffer and demonstrate as a result
of loss of a first-mover advantage in the marketplace....
[T]he issue will be addressed [at] a later time if
necessary." (D.I. 72). On November 4, 2014, thei Court
held that the TRO had been improvidently granted and denied
Plaintiffs request for a preliminary injunction. (D.I. 79).
However, the Court extended the TRO during the pendency of
Plaintiff s appeal from the denial of the preliminary
injunction. (Id.). The Court also determined that
the TRO bond would increase by $500, 000 per day until the
preliminary injunction appeal was decided. (Id.).
The Federal Circuit affirmed the denial of the preliminary
injunction and lifted the TRO on January 9, 2015. Takeda
Pharm. U.S.A., Inc. v. West-WardPharm. Corp., 785 F.3d
625, 628 (Fed. Cir. 2015). By that time, the bond had
increased to $46 million. (D.I. 324 at 6).
the TRO was lifted, the parties engaged in a simultaneous
product launch- Defendants launched Mitigare and Mitigare AG
and Plaintiff launched Colcrys AG, an authorized generic of
Colcrys. (Id. at 10). Defendants now seek recovery
under the bond. Specifically, Defendants seek the lost
profits they would have achieved if not wrongfully enjoined,
including from the loss of a first-mover advantage.
(Id. at 7).
may recover a posted security where the party has "been
wrongfully enjoined or restrained." Fed.R.Civ.P. 65(c).
Rule 65 requires that a security be posted "to protect
the enjoined party in the event the injunction should not
have been imposed." Howmedica Osteonics v. Zimmer,
Inc., 461 Fed.Appx. 192, 198 (3d Cir. 2012). "[A]
party is wrongfully enjoined when it had a right all along to
do what is was enjoined from doing." Latuszewski v.
VALIC Fin. Advisors, Inc., 393 Fed.Appx. 962, 966 (3d
Cir. 2010) (internal quotations omitted).
seeking recovery under the bond "must establish what
damages were proximately caused by the erroneously issued
injunction in order to recover and the alleged damages cannot
be speculative." Va. Plastics Co. v. Biostim
Inc., 820 F.2d 76, 80 n.6 (3d Cir. 1987). However,
"[g]iven the inherent difficulty of identifying a
'but-for-world,' [the courts] do not require that
damages be measured with certainty, but rather that they be
demonstrated as 'a matter of just and reasonable
inference.'" Behrend v. Comcast Corp., 655
F.3d 182, 203 (3d Cir. 2011), rev 'd on other
grounds, 569 U.S. 27, 35 (2013) (requiring that
"damages case must be consistent with liability
case"); see also Latuszewski, 393 Fed.Appx. at
966-67 ("Although proof of damages on an injunction bond
need not be to a mathematical certainty, a damages award
cannot be speculative.") (cleaned up).
Recovery Under the Bond is not Premature
parties dispute whether Defendants' motion is premature.
Defendants assert that the motion "is ripe because this
Court and the Federal Circuit have determined, through final
adjudication, that [Defendants were] wrongfully restrained
from selling its colchicine products" by the TRO. (D.I.
324 at 18). Plaintiff asserts that Third Circuit law is clear
that "[n]o liability can arise on an injunction bond
unless there is a final judgment in favor of the party
enjoined." (D.I. 339 at 19 (quoting Am. Bible
Soc'y v. Blount, 446 F.2d 588, 594-95 (3d. Cir.
1971))). However, at oral argument, Plaintiff conceded that
the only practical reason that recovery under the bond is
premature is the potential overlap between the recovery under
the bond and potential infringing sales. (D.I. 409 at
Court has entered summary judgment in favor of Defendants on
Plaintiffs claims of infringement. (D.I. 416). Therefore,
"there is a final judgment in favor of the party
enjoined," Am. Bible Soc'y, 446 F.2d at