Momenta Pharmaceuticals, Inc. et al v. Amphastar Pharmaceuticals, Inc. et al

Filing 116

Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER "In accordance with the foregoing, defendants motion to stay or dissolve the preliminary injunction pending appeal (Docket No. 96 ) is DENIED without prejudice.So ordered."(Moore, Kellyann)

United States District Court
District of Massachusetts
________________________________
)
MOMENTA PHARMACEUTICALS, INC.,
)
SANDOZ INC.,
)
Plaintiffs,
)
)
Civil Action No.
v.
)
11-11681-NMG
)
AMPHASTAR PHARMACEUTICALS, INC., )
INTERNATIONAL MEDICATION
)
SYSTEMS, LTD., WATSON
)
PHARMACEUTICALS, INC.,
)
Defendants.
)
________________________________ )
MEMORANDUM & ORDER
GORTON, J.
Plaintiffs Momenta Pharmaceuticals, Inc. (“Momenta”) and
Sandoz Inc. (collectively, “the plaintiffs”) bring suit against
Amphastar Pharmaceuticals, Inc. (“Amphastar”), International
Medication Systems, Ltd. (“IMS”) and Watson Pharmaceuticals, Inc.
(“Watson”) (collectively, “the defendants”) for patent
infringement.
On October 28, 2011, this Court allowed plaintiffs’ motion
for a preliminary injunction based on alleged infringement of
U.S. Patent No. 7,575,886 (“the ’886 patent”).

Before the Court

is the defendants’ emergency motion to stay or dissolve that
preliminary injunction.

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III. Analysis
Pursuant to Federal Rule of Civil Procedure 62(c), the Court
has discretion to stay enforcement of a preliminary injunction
when appropriate.

To determine if a stay is warranted, the court

considers: (1) whether the moving party has demonstrated a strong
showing that he is likely to succeed on the merits, (2) whether
the moving party will be irreparably injured absent a stay, (3)
whether the stay would substantially injure the other parties,
and (4) where the public interest lies.

Standard Havens Prods.,

Inc. v. Gencor Indus., Inc., 897 F.2d 511, 512 (Fed. Cir. 1990).
No one factor is determinative and all may be considered on a
sliding scale.

Id. at 512-13.

The Federal Circuit has stated:

To obtain a stay, pending appeal, a movant must establish
a strong likelihood of success on the merits or, failing
that, nonetheless demonstrate a substantial case on the
merits provided that the harm factors militate in its
favor.
In deciding whether to grant a stay, pending
appeal, this court assesses the movant's chances of
success on the merits and weighs the equities as they
affect the parties and the public.
Eon-Net, L.P. v. Flagstar Bancorp, Inc., 222 Fed. Appx. 970,
971-72 (Fed. Cir. 2007) (internal citation and quotation
omitted).
The Court concludes that defendants have not met their
burden to obtain a stay of the preliminary injunction pursuant to
Rule 62(c).

First, defendants have not demonstrated a strong

likelihood of success on the merits.

The Court is unpersuaded by

defendants’ contentions that the legal standard for issuance of a
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preliminary injunction was misapplied or that the contested
claims were misconstrued.

Moreover, for essentially the same

reasons stated in the Memorandum and Order issued in conjunction
with the Preliminary Injunction, the Court does not agree that
the patent’s identification of the 1,6-anhydro structure by its
associational status raises a substantial question regarding
validity.
Second, the Court remains convinced that defendants have
failed to demonstrate irreparable injury absent a stay.

The

significant bond in place ($100,000,000) is adequate protection
in the event the patent is later found to be invalid or otherwise
not infringed.
Although the defendants motion fails under Fed. R. Civ. P.
62(c), the Court will consider whether relief from the
preliminary injunction is warranted under Fed. R. Civ. P. 60(b)
because defendants have now proffered new evidence on the issue
of irreparable harm.

Rule 60(b) states, in relevant part:

On motion and just terms, the court may relieve a party
or its legal representative from a final judgment, order,
or proceeding for the following reasons: (5) applying
[the judgment] prospectively is no longer equitable; or
(6) any other reason that justifies relief.
A preliminary injunction is a “judgment”.

See Fed. R. Civ.

P. 54(a) (“‘[J]udgment’ as used in these rules includes a decree
and any order from which an appeal lies.”).

According to the

First Circuit, Rule 60(b) is “a vehicle for extraordinary relief”

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and “motions invoking the rule should be granted only under
exceptional circumstances.”

Silva v. Massachusetts, Nos.

08-1956, 08-2559, 2009 WL 2902712, at *9 (1st Cir. 2009).

Rule

60(b)(5) requires a moving party to show it is no longer
equitable that the judgment should have prospective application
and that there has been a significant change in circumstances.
See Concilio de Salud Integral de Loiza, Inc. v. Perez-Perdomo,
551 F.3d 10, 16 (1st Cir. 2008).

Rule 60(b)(6) is a catch-all

provision which allows relief only in exceptional circumstances.
See Aspect Software, Inc. v. Barnett, 787 F. Supp. 2d 118, 132-33
(D. Mass. 2011).
When issuing the preliminary injunction, this Court
determined that the plaintiffs had demonstrated a likelihood of
success on the merits, applied a presumption of irreparable harm
and held that plaintiffs had submitted specific evidence to
support a finding of irreparable harm absent such a presumption.1
It accepted plaintiffs’ contention that allowing Amphastar to
enter a market in which plaintiffs sold the only generic
enoxaparin product would result in harm to plaintiffs in the form

1

Although not critical to the finding of irreparable harm,
application of that presumption was ill-advised. As defendants
point out, the Federal Circuit held two weeks prior to the
imposition of the preliminary injunction that the Supreme Court’s
decision in eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006)
“jettisoned the presumption of irreparable harm as it applies to
determining the appropriateness of injunctive relief.” See
Robert Bosch LLC v. Pylon Mfg. Corp., No. 2011-1096, 2011 WL
4834266, at *4 (Fed. Cir. Oct. 13, 2011).
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of price erosion, related loss of customer goodwill, lost market
share, loss of market capitalization, reputational injury and
threats to both the funding of ongoing research development and
the hiring and retention of critical scientific talent.

It

concluded that although some of the harm alleged was compensable
through money damages, allegations of price erosion, loss of
goodwill and reputational injury likely were not.
That decision was reached on October 28, 2011.

Defendants

now direct the Court’s attention to a press release issued by
Momenta on October 24, 2011 confirming that Sanofi-Aventis
(“Sanofi”), the manufacturer of the brand-name product, Lovenox,
launched an authorized generic in the fourth quarter of 2011
through its generic arm, Winthrop Pharmaceuticals (“Winthrop”).
The effect of such a launch was two-fold: first, Momenta’s share
from sales of generic enoxaparin shifted from a partnership to a
hybrid royalty/profit sharing arrangement, and second, the
authorized generic was offered at a significantly lower price
than plaintiffs’ generic product.

Plaintiffs apparently had to

match that lower price to retain at least one major customer.
Defendants contend that these new circumstances warrant a
dissolution or stay because 1) the injunction against them did
not prevent the launch of an authorized generic as plaintiffs had
said it would and 2) the injunction unfairly places defendants’
in a “deep-freeze” while the authorized generic alters market

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dynamics.
Indeed, plaintiffs have repeatedly asserted that such an
authorized generic would be introduced into the market if
defendants were not enjoined and would significantly add to their
risk of irreparable harm.

In early October, plaintiffs stated

that “[p]reliminary indications are that sales by Winthrop are
imminent” and that the introduction of an authorized generic
would permanently and irretrievably alter the enoxaparin market
to plaintiffs’ detriment.

Two weeks later, in support of their

motion for a preliminary injunction, plaintiffs declared that the
risk of irreparable harm, including the risk that Sanofi would
“begin selling” an authorized generic, remained unchanged.
It now appears, however, that Sanofi, through Winthrop, made
significant sales of a generic enoxaparin prior to the issuance
of either the temporary restraining order or the preliminary
injunction.

Winthrop apparently made inroads with two major

distributors (CVS and McKesson Corporation) and almost a third
(Walgreens) just as the temporary restraining order was entered.
Sandoz retained the third only by matching Winthrop’s price.
Then, four days before the Court issued the pending preliminary
injunction but after oral argument on plaintiffs’ motion,
plaintiffs issued a press release announcing that Sanofi was
launching an authorized generic.

They acknowledge that the

launch triggered a change in their collaboration agreement.

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Plaintiffs, nevertheless, oppose the dissolution or stay of
the preliminary injunction because, they say, 1) defendants’
evidence is not “newly discovered” insofar as plaintiffs’
announcement was made four days before the injunction was
entered, 2) the new information does not relate to any of the
reasons stated by the Court for its finding of irreparable harm
and 3) sales of the authorized generic have been suspended since
the Court enjoined the defendants.
The first two of plaintiffs’ arguments are unavailing.
First, evidence need not be “newly discovered” to relieve a party
of a final judgment under Fed. R. Civ. P. 60(b)(6) or even
60(b)(5), which requires only a significant change in
circumstances.2

Second, the information relates directly to 1)

the estimated 85% decline in company-wide revenues that would
allegedly result from defendants’ launch, 2) Momenta’s reputation
in the investment community and 3) price erosion and loss of
customer goodwill.

Indeed, the Court’s harm analysis proceeded

on the premise that Sandoz marketed the only generic enoxaparin.
Plaintiffs’ arguments to the contrary are disingenuous.
The third of plaintiffs’ arguments does, however, counsel

2

Plaintiffs’ additional contention (that defendants “said
nothing about Winthrop’s conduct or Momenta’s press release” in a
post-hearing memorandum filed Wednesday, October 26, 2011) is
misleading because the five-page memorandum filed on that date
was limited by Court order to a discrete claim construction
issue.
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against dissolution of the preliminary injunction.

Plaintiffs

consistently represented to the Court that defendants’ sales
activity, if not enjoined, would precipitate the launch of an
authorized generic which would, in turn, irrevocably alter the
status quo to plaintiffs’ detriment.

Apparently, Sanofi’s

initial sales were in response to the FDA’s approval of
Amphastar’s generic product and the suspension of such sales has
been in response to the injunction.

Although those sales have,

no doubt, had some effect on the market, it is presumed that a
full-blown launch of defendants’ generic would have a
substantially greater effect.
The Court concludes that, as the record now stands, it is
prudent to maintain the status quo during the pendency of this
litigation.

It will not, therefore, dissolve the preliminary

injunction at this juncture.

Defendants’ motion will be denied

without prejudice.
ORDER
In accordance with the foregoing, defendants’ motion to stay
or dissolve the preliminary injunction pending appeal (Docket No.
96) is DENIED without prejudice.

So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated November 23, 2011
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