URL PHARMA, INC. et al v. RECKITT BENCKISER INC.
MEMORANDUM AND/OR OPINION. SIGNED BY CHIEF JUDGE PETRESE B. TUCKER ON 4/20/16. 4/20/16 ENTERED AND COPIES MAILED AND E-MAILED.(kw, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
URL PHARMA, INC., et al.,
RECKITT BENCKISER INC.,
April 20, 2016
Presently before the Court are Plaintiffs’ Motion for Preliminary Injunction (Doc. 36),
Defendant’s Response in Opposition (Doc. 50), Plaintiffs’ Supplement in Support of Their
Motion for Preliminary Injunction (Doc. 97), and Defendant’s Supplemental Memorandum in
Law in Opposition to Plaintiffs’ Motion for Mandatory Preliminary Injunction (Doc. 100). Upon
consideration of the parties’ submissions and exhibits and for the reasons set forth below, this
Court DENIES Plaintiffs’ Motion.
Plaintiffs URL Pharma, Inc., Mutual Pharmaceutical Company, Inc., and United
Research Laboratories, Inc. (collectively “Plaintiffs” or “Mutual”) filed an antitrust and breach of
contract action against Defendant Reckitt Benckiser Inc. (“Defendant” or “Reckitt”) for alleged
violations of the Sherman Antitrust Act and the Clayton Antitrust Act as well as a breach of a
Defendant owns the patent for an over-the-counter drug, extended-release guaifenesin
(“ERG”), and sells it under the brand name Mucinex® (“Mucinex ERG”). Reckitt’s Mucinex
ERG was the only ERG product consumers could purchase at the relevant time periods. Though
other immediate-release guaifenesin (“IRG”) products were available, these IRG products were
not directly comparable to the effects of the ERG product because they “provide short-term relief
and must be taken every 3 to 4 hours to approach the long-lasting benefit of ERG.” Compl. ¶ 32.
Prior to the instant action, Mutual was in the process of developing a generic ERG, but
Reckitt sued Mutual for patent infringement on October 4, 2006 and December 15, 2006.
Compl. Exh. A at 2. Mutual subsequently brought an antitrust action against Reckitt on January
18, 2007. Id. On March 21, 2007, the parties entered into a settlement agreement wherein
Mutual agreed to refrain from entering the ERG market until, inter alia, another generic
manufacturer began offering generic ERG to the public (the “Agreement”). The relevant terms of
the 2007 Agreement are as follows:
Adams1 hereby grants to Mutual a non-exclusive, royalty-free, perpetual
and irrevocable license under the Licensed Patents (the “License”) to
make, have made, sell or offer for sale to the Retail Trade, use and import
each Licensed Product commencing on or after the applicable Marketing
License Effective Date for such Licensed Product (as defined below in
5. (a) Mutual 600 mg Guaifenesin Product: Subject to Section 5(b) below, the
Marketing License Effective Date for the Mutual 600 mg Guaifenesin
Product shall be the later of (i) July 1, 2012 or (ii) the date Mutual obtains
FDA approval to market such Licensed Product.
Adams Respiratory Therapeutics, Inc., Adams Respiratory Operations, Inc., and Adams Respiratory
Products, Inc. (collectively “Adams”) merged into Reckitt at some point after the execution of the
Settlement Agreement. Compl. ¶ 20. “As a consequence of the merger, Reckitt assumed the rights and
obligations of Adams under the [Agreement].” Id.
(b)(ii) If Mutual does not obtain approval from FDA to market a Licensed
Product prior to the Launch Date of a corresponding Third Party
Formulation or Adams Guaifenesin Product, then the Marketing
License Effective Date shall be the date on which Mutual obtains FDA
approval to market such Licensed Product corresponding to such
FDA-approved Third Party Formulation. Mutual, in its sole
discretion, may purchase from Adams and Adams shall supply,
pursuant to the terms of Section 6 of this Agreement, tablets of the
Adams Guaifenesin Product corresponding to such Third Party
Formulation, for sale by Mutual, its Affiliates or a single independent
Sublicensee to the Retail Trade under a private label or a brand name other
than Adams’ brand names for the Adams Guaifenesin Product, in the
Territory Date. To the extent that Mutual purchases tablets of Adams
Guaifenesin Product pursuant to the Supply Agreement, Adams grants
Mutual a non-exclusive, perpetual and irrevocable right to sell and offer
for sale to the Retail Trade such tablets supplied by Adams under the
Licensed Patents in the Territory and agrees, in a timely manner, to take
all steps with respect to the New Drug Applications and/or other
marketing authorizations for such Adams Guaifenesin Product that are
necessary in order to manufacture and supply such Adams Guaifenesin
Product tablets to Mutual hereunder and under the Supply Agreement and
to ensure that Mutual and its Affiliates or its single Sublicensee, as the
case may be, is authorized to sell such Adams Guaifenesin Product.
6. (a) Mutual shall notify Adams in writing of its election to purchase
tablets of Adams Guaifenesin Product pursuant to Section 5(b)(ii),
and the Parties shall promptly execute a supply agreement. . . . The
tablets supplied by Adams shall be white and/or in such other reasonable
mono-colored configuration mutually agreeable to the Parties, and shall be
manufactured using Adams’ and its Affiliates’ bilayered technology.
Compl., Exh. A. at 10–13 (emphasis added). Thus, pursuant to the Agreement, if Mutual failed
to obtain FDA approval to market its generic ERG product, then after a third party launched a
third-party formulation of the ERG product, Mutual could arrange to execute a supply agreement
with Reckitt (the “Bulk Supply Agreement”). The Bulk Supply Agreement would allow Mutual
to purchase from Reckitt tablets corresponding to the third-party formulation of the ERG
product. See Compl. Exh. B.
Mutual alleges that “[b]y October 2013, a third party, Perrigo Company PLC (“Perrigo”)
had been legally selling and delivering to the market a generic version of the Mucinex 600 mg
ERG product.” Compl. ¶ 22. Mutual had not obtained FDA approval to market an ERG product
by this time. Accordingly, Mutual claims that Perrigo’s entry into the market with the “generic
ERG product triggered Reckitt’s obligation to supply Reckitt’s 600 mg ERG product to Mutual.
Id. ¶ 23. Mutual alleges that on October 24, 2013, pursuant to the Settlement Agreement, Mutual
provided Reckitt with written notice that it was electing to purchase for resale the generic
equivalent of Mucinex ERG from Reckitt. Id. ¶ 24. As of this date, Reckitt has not supplied
Mutual with the tablets.
On February 3, 2015, Plaintiffs filed their complaint against Defendant in this Court (the
“Complaint”). Doc. 1. In Count I of its Complaint, Plaintiffs allege monopolization in violation
of the Sherman Antitrust Act, 15 U.S.C. § 2, and the Clayton Antitrust Act, 15 U.S.C. § 15, and
request treble damages. In Count II, Plaintiffs allege monopolization under the Sherman Act, 15
U.S.C. § 2, and the Clayton Act, 15 U.S.C. § 26, and request injunctive relief in the form of
specific performance. In Count III, Plaintiffs allege attempted monopolization in violation of the
Sherman Act, 15 U.S.C. § 2, and the Clayton Act, 15 U.S.C. §§ 15, 26, and request treble
damages and injunctive relief in the form of specific performance.
In addition to the antitrust claims, Plaintiffs allege that Defendant breached the
Agreement by failing to provide the 600 mg version of Mucinex ERG when Perrigo entered the
market. Counts IV and V of the Complaint assert a breach of contract claim and requests direct
and consequential damages, as well as specific performance. Count VI seeks declaratory
judgment as to the validity of the Agreement and Reckitt’s duty to perform pursuant to the
On April 6, 2015, Defendant filed a motion to dismiss for failure to state a claim upon
which relief could be granted. Doc. 20. This Court granted in part and denied in part
Defendant’s Motion. Doc. 32. Specifically, the Court denied Defendant’s motion to dismiss
Plaintiffs’ antitrust claims, state law claims, and claim for declaratory judgment pertaining to
Perrigo’s 600 mg ERG formulation of Defendant’s ERG product. Id. The Court granted
Defendant’s motion to dismiss Plaintiffs’ claim for declaratory judgment relating to all other
third-party formulations of Reckitt’s Mucinex® product. Id.
On September 9, 2015, Plaintiffs filed the instant Motion for Preliminary Injunction.
Doc. 36. Plaintiffs request that this Court (1) compel Defendant to commence supply of
Plaintiffs’ requirements of 600 mg ERG tablets within 30 days and/or (2) prohibit Defendant
from continuing to prioritize its own requirements of 600 mg ERG over those of Plaintiffs, which
is allegedly in breach of Section 2.7 of the Bulk Supply Agreement. Id. at 2.
The district court will grant a motion for preliminary injunction if the movant can
“establish that [it] is likely to succeed on the merits, that [it] is likely to suffer irreparable harm in
the absence of preliminary relief, that the balance of equities tips in [its] favor, and that an
injunction is in the public interest.’” Ferring Pharm., Inc. v. Watson Pharm., Inc., 765 F.3d 205,
210 (3d Cir. 2014) (quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008)). The
moving party “bears the burden of showing that these four factors weigh in favor of granting the
injunction.” Id. The movant’s “‘failure to establish any element ... renders a preliminary
injunction inappropriate.’” Id. (quoting NutraSweet Co. v. Vit-Mar Enters., Inc., 176 F.3d 151,
153 (3d Cir. 1999)). The court is mindful that the preliminary injunction “is an extraordinary
remedy” that is “never awarded as of right.” Winter, 555 U.S. at 24. Accordingly, a preliminary
injunction, as “an exercise of a court’s equitable authority” will only be granted after “taking into
account all of the circumstances that bear on the need for prospective relief.” Salazar v. Buono,
559 U.S. 700, 714 (2010). The court will not issue a preliminary injunction “merely to allay the
fears and apprehensions or to soothe the anxieties of the parties.” Grant Heilman Photography,
Inc. v. John Wiley & Sons, Inc., 864 F. Supp. 2d 316, 325 (E.D. Pa. 2012).
In the present case, Plaintiffs request, inter alia, that the Court order Defendant “to
commence supply of Plaintiffs’ requirements of 600 mg ERG tablets within 30 days.” Pl. Mot.
for Preliminary Injunction at 2, Doc. 36. An injunction that “require[s] [a] defendant to take
some affirmative action” is considered a mandatory injunction. Snyder v. Millersville Univ.,
Civil Action No. 07–1660, 2008 WL 5093140, at *11 (E.D. Pa. Dec. 3, 2008). A mandatory
injunction is “‘looked upon disfavorably and [is] generally only granted in compelling
circumstances.’” Id. (quoting Florham Park Chevron, Inc. v. Chevron U.S.A., Inc., 680 F. Supp.
159, 166 (D.N.J. 1988)). Courts rarely grant mandatory injunctions “‘because mandatory
injunctions are more burdensome than prohibitory injunctions, and disturb the status quo prior to
final adjudication.’” Tri-Realty Co. v. Ursinus Coll., Civil Action No. 11–5885, 2013 WL
5298469, at *12 (E.D. Pa. Sept. 19, 2013) (quoting Christie-Spencer Corp. v. Hausman Realty
Co., 118 F. Supp. 2d 408, 418 (S.D.N.Y. 2000)). In light of the fact that a mandatory injunction
“will alter the status quo, the party seeking the injunction must meet a higher standard of
showing irreparable harm in the absence of an injunction.” Bennington Foods LLC v. St. Croix
Renaissance Grp., LLP, 528 F.3d 176, 179 (3d Cir. 2008). Accordingly, the court may only
grant a mandatory injunction if the movant’s “‘right to relief [is] indisputably clear.’” Trinity
Indus., Inc. v. Chi. Bridge & Iron Co., 735 F.3d 131, 139 (3d Cir. 2013) (quoting Communist
Party of Ind. V. Whitcomb, 409 U.S. 1235, 1235 (1972)).
Courts will issue a preliminary injunction only if the movant “establish[es] that [it] is
likely to succeed on the merits, that [it] is likely to suffer irreparable harm in the absence of
preliminary relief, that the balance of equities tips in [its] favor, and that an injunction is in the
public interest.’” Ferring Pharm., Inc., 765 F.3d at 210 (quoting Winter, 555 U.S. at 20).
Accordingly, the Court must determine whether Plaintiffs satisfied these requirements and met
their “‘particularly heavy’” burden for the Court to grant mandatory injunctive relief. Trinity
Indus., Inc., 735 F.3d at 139 (quoting Punnett v. Carter, 621 F.2d 578, 582 (3d Cir. 1980)).
A. Likelihood of Success on the Merits
In order “[t]o state a claim for breach of contract under New York law, ‘the complaint
must allege: (i) the formation of a contract between the parties; (ii) performance by the plaintiff;
(iii) failure of defendant to perform; and (iv) damages.’” Orlander v. Staples, Inc., 802 F.3d 289,
294 (2d Cir. 2015) (quoting Johnson v. Nextel Commc’ns, Inc., 660 F.3d 131, 142 (2d Cir.
2011)).2 In New York, “a plaintiff bears the burden of proving a breach of contract by a
preponderance of the evidence.” Meda AB v. 3M Co., 969 F. Supp. 2d. 360, 378 (S.D.N.Y.
2013). Plaintiffs contend that “[t]he Agreement is a standard industry agreement including all
material terms customarily seen in agreements to supply bulk tablets.” Pl. Supp. Br. at 4, Doc.
97. Furthermore, Plaintiffs claim that “[t]he [Settlement] Agreement at issue unambiguously
proves Reckitt has breached by failing to supply Mutual.” Pl. Mot. for Preliminary Injunction at
15. In contrast, Defendant maintains that “on the face of the [Settlement Agreement] and [Bulk
Supply Agreement], shape, color, price, delivery or quantity are missing.” Def. Resp. at 22, Doc.
Section 28 of the Settlement Agreement provides that “[t]his Agreement and any dispute arising out of
or related to this Agreement shall be governed by and construed in accordance with the internal laws of
the State of New York.” Compl., Exh. A at 21. The Court is required to apply “the ordinary rules of
contract construction” to the Agreement. Texas 1845, LLC v. Kyaw, 986 N.Y.S.2d 574, 576 (App. Div.
2d Dep’t 2014).
50. Additionally, “where, as here, a defendant has substantial, unrebutted defenses to the
validity of the contract that require fact-finding, a preliminary injunction is inappropriate.” Id. at
23. Therefore, the Court will assess, in accordance with New York law, whether Plaintiffs have
met their burden of demonstrating a likelihood of success on the merits of the breach of contract
claim. The Court is not required to determine that Plaintiffs’ “‘right to a final decision after trial
[is] wholly without doubt; rather, the burden is on [Plaintiffs] to make a Prima [sic] facie case
showing a reasonable probability that it will prevail on the merits.’” Am. Freedom Def. Initiative
v. S.E. Pa. Transp. Auth., 92 F. Supp. 3d 314, 322 (E.D. Pa. 2015) (quoting Oburn v. Shapp, 521
F.2d 142, 148 (3d Cir. 1975)).
1. Existence of a Contract
Under the first prong, “[c]ourts look to the basic elements of the offer and the acceptance
to determine whether there is an objective meeting of the minds sufficient to give rise to a
binding and enforceable contract.” Silber v. N.Y. Life Ins. Co., 938 N.Y.S.2d 46, 50 (App. Div.
1st Dep’t 2012). In particular, the courts examine whether “[a]n agreement . . . [has] sufficiently
definite terms and the parties . . . express[ed] their assent to those terms.” Id.; see also Judal
Indus., Inc. v. Welsbach Elec. Corp., 526 N.Y.S.2d 154, 156 (App. Div. 2d Dep’t 1988)
(concluding that “[f]or a contract to be enforceable, it must be definite as to its essential terms.”).
When the contract is a “‘contract for a sale of goods, the essential terms are quantity, price, and
time and manner of delivery.’” Dell’s Maraschino Cherries Co. v. Shoreline Fruit Growers,
Inc., 887 F. Supp. 2d 459, 471 (E.D.N.Y. 2012) (quoting DiMare Homestead, Inc. v. Alphas Co.
of N.Y., Inc., No. 09 Civ. 6644(PKC), 2012 WL 1155133, at *24 (S.D.N.Y. Apr. 5, 2012)). If
“one or more terms are left open in a contract for sale” it does not automatically follow that the
contract will “fail for indefiniteness if the parties have intended to make a contract and there is a
reasonably certain basis for giving an appropriate remedy.” N.Y. U.C.C. § 2-204(3).
In Aiello v. Burns International Security Services, Corp., the New York Supreme Court
Appellate Division, distinguished contracts that have essential terms missing and that are left for
future negotiations that are enforceable and those that are unenforceable. 973 N.Y.S.2d 88, 94
(App. Div. 1st Dep’t 2013). The issue before the court was “whether the security service
agreement, which disavows any third-party beneficiaries, was rendered unenforceable by the
contracting parties’ failure to set forth, in writing, the security agency’s duties.” Aiello, 973
N.Y.S.2d at 91. The court found that “‘a mere agreement to agree, in which a material term is
left for future negotiations, is unenforceable.’” Id. at 94 (quoting 166 Mamaroneck Ave. Corp. v.
151 E. Post Rd. Corp., 575 N.E.2d 104, 105 (N.Y. 1991). In contrast, the court found that a
contract may be enforceable even though “‘it expresses the idea that something is left to future
agreement.’” Id. (quoting Four Seasons Hotels v. Vinnik, 515 N.Y.S.2d 1, 6 (App Div. 1st Dep’t
1987)). The court explained that, “court[s] shall enforce a contract if the parties have completed
negotiations of essential elements, even when ‘the parties have expressly left ... other elements
for future negotiation and agreement.’” Id. (quoting Vinnik, 515 N.Y.S.2d at 6). The court
ultimately concluded that “the security service agreement here is sufficiently definite to establish
that the parties intended to be bound and sufficiently definite to establish the nature of the
parties’ agreement.” Id. at 94–95.
As stated above, Defendant’s principal contention is that the contract lacks essential
terms. Specifically, Defendant maintains that “shape, color, price, delivery, or quantity are
missing” from the Agreement. Def. Resp. at 22. The Agreement provided that:
If Mutual does not obtain approval from FDA to market a Licensed Product prior
to the Launch Date of a corresponding Third Party Formulation or Adams
Guaifenesin Product, then the Marketing License Effective Date shall be the date
on which Mutual obtains FDA approval to market such Licensed Product
corresponding to such FDA-approved Third Party Formulation. Mutual, in its sole
discretion, may purchase from Adams and Adams shall supply, pursuant to the
terms of Section 6 of this Agreement, tablets of the Adams Guaifenesin Product
corresponding to such Third Party Formulation, for sale by Mutual.
Compl., Exh. A. at 12. Mutual did not obtain FDA approval to market a Licensed Product and
instead decided to purchase the tablets from Reckitt after Perrigo entered the market in October
2013. Compl. ¶¶ 22–24. Thus, Mutual was required to “notify [Reckitt] in writing of its election
to purchase tablets of [Reckitt’s] Guaifenesin Product pursuant to Section 5(b)(ii).” Compl. Exh.
A. at 13. The parties were then required to “promptly execute a supply agreement.” Id.
According to the Agreement, Reckitt was to supply Mutual with tablets that were “white
and/or in such other reasonable mono-colored configuration mutually agreeable to the Parties
and [that were] manufactured using [Reckitt’s] and its Affiliates’ bilayered technology.” Id.
Mutual would sell the tablets “under a private label or a brand name other than [Reckitt’s] brand
names for the [Reckitt] Guaifensin Product.” Id. at 12. The amount of tablets that Mutual would
purchase would be determined “[a]t least ninety (90) days prior to the Mutual Launch Date for a
Product” when “Mutual [would] make a good faith estimate of Mutual’s projected requirement
of such Product for delivery during each of the following six (6) Calendar Quarters.” Id. at 35.
Mutual would then complete a purchase order “at least thirty (30) days before the desired
delivery date. . . . [and] [s]uch purchase orders shall specify the quantity of Product ordered and
the requested delivery date.” Id. Mutual was required to “purchase at least one hundred percent
(100%) of the Product quantities in the first Calendar Quarter of each Forecast for each such
Product.” Id. Once the tablets were manufactured, Reckitt was to “ship all Product FCA Facility
(Incoterms 2000) to Mutual’s facilities in Philadelphia, Pennsylvania or such other destination in
the Territory mutually agreed upon by [Reckitt] and Mutual.” Id. Lastly, “[i]n consideration for
such supply, Mutual [would] pay [Reckitt] a supply price equal to the sum of the Fully Allocated
Cost basis for such tablets, and a royalty of ten percent (10%) of the Net Sales of Mutual. . . .”
Id. at 13.
Based upon the terms of the Agreement, Reckitt was to supply Mutual with white tablets,
unless they could agree upon another monocolor, “no earlier than ninety (90) days after the
corresponding Launch Date.” Id. at 12. Price, delivery, and the manner to determine quantity
were all contemplated in the Agreement. The language of the Agreement suggests that the
Agreement was entered into by two sophisticated parties that endeavored to minimize
unnecessary litigation costs and fairly resolve an antitrust dispute. Further, the Agreement does
not reflect a mere agreement to agree but rather an intention to enter into a binding agreement
that provided Mutual with the option to either pursue FDA approval of its own generic drug or
purchase tablets from Reckitt after a third party entered the market. Accordingly, because the
essential terms of a contract for the sale of goods are present in the contract and the parties
manifested a clear intention to be bound, it is likely that a contract was formed.
2. Plaintiffs’ Performance
Since the Court found that the parties did form a contract, Plaintiffs are required to prove
that they performed their obligations under the contract. Plaintiffs claim that they performed
their obligations under the Agreement by (1) dismissing the pending claims against Defendant in
the 2007 litigation and (2) requesting, in writing, the 600 mg ERG tablets from Defendant. Pl.
Mot. for Preliminary Injunction at 18–19. The Court agrees. The Agreement provided that “this
[Settlement] Agreement and the Consent Judgment and Dismissal Without Prejudice (attached
hereto as Appendix B) are the only consideration exchanged by or on behalf of Mutual on the
one side, and Adams on the other side, in reaching the agreement to dismiss the Lawsuits.”
Compl., Exh. A at 3. After executing the Agreement, Plaintiffs ceased their pursuit of litigation
against Adams. On October 24, 2013, Plaintiffs did exercise their right, under the Agreement, to
request that Defendant begin to supply Plaintiffs with the 600 mg ERG tablets. Compl. ¶ 24.
Consequently, Plaintiffs sustained their burden of proving that they performed their obligations
under the Agreement.
3. Defendant’s Failure to Perform
Next, Plaintiffs are required to prove that Defendant failed to perform its obligation under
the Agreement. Plaintiffs argue that “[d]espite its unambiguous contractual obligations, Reckitt
refuses to supply Mutual and is in breach of the Agreement.” Pl. Mot. for Preliminary Injunction
at 20. In contrast, Defendant claims that it “attempted to negotiate, offered terms, dates, and
quantities that Mutual deemed unacceptable.” Def. Resp. at 25. Further, Defendant maintains
that “[n]one of [Plaintiffs’] witnesses could testify, or even identify, the factual basis of RB’s3
purported breach and ‘repudiation’ of the Agreements—because none exists.” Def. Supp. Br. at
7, Doc. 100. There are, however, facts to support each party’s contentions.
It is true that as of the present date, Defendant has failed to supply Plaintiffs with the 600
mg ERG tablets and execute a supply agreement. It is also true, however, that the parties have
been unable to reach an agreement as to the volume of the initial forecast and the characteristics
of the tablets, thus precluding Defendant from initiating the supply of the tablets. The parties
disagreed that Plaintiffs’ projection for 28 million tablets in its first year was reasonable.
Plaintiff avers that “[d]espite Mutual’s effort to get Reckitt to change its position by reducing its
initial year volume forecast from 90 million to 28 million tablets, . . . Reckitt never agreed to
supply Mutual more than 9 million tablets per year.” Pl. Supp. Br. at 3. On the other hand,
Defendant alleges that Plaintiffs’ “witnesses confirmed under oath that despite RB’s repeated
In its supplementary brief, Defendant refers to itself as “RB.” Def. Supp. Br. at 1.
request for a commitment for the volume of Tablets [Plaintiffs] did not place an Order, as
required under [Bulk Supply Agreement] § 2.3, stating a definitive amount; they discussed
various options with RB but went no further.” Def. Supp. Br. at 4.4
Additionally, and perhaps more importantly, besides color, it is unclear as to what the
tablet would look like in finished form. For example, shape is not contemplated in the
Agreement. Plaintiffs contend that “Mutual was clear from the beginning, it preferred the oval
tablets described in Reckitts’s NDA, but would accept whatever would get Mutual in the market
ASAP[,]” however Defendant maintains that shape is still an open item. Pl. Supp. Br. at 3.
Moreover, there is no mention as to whether there will be embossing on the tablets. The
Agreement does state that “Mutual, in its sole discretion, may purchase from Adams and Adams
shall supply, pursuant to the terms of Section 6 of this Agreement, tablets of the Adams
Guaifensin Product corresponding to such Third Party Formulation, for sale by Mutual . . .
under a private label or a brand name other than Adams’ brand names for the Adams Guaifensin
Product” but it does not mention whether the tablets would be embossed and if so, what the
embossing would entail. Compl., Exh. A at 12 (emphasis added).
According to the Agreement, once Mutual notified Reckitt in writing that it sought to
purchase the 600 mg ERG tablets, the parties were to “promptly execute a supply agreement.”
Compl., Exh. A. at 13. Prior to the filing of the instant motion, the parties were discussing the
remaining open terms. As noted by Plaintiffs, “Reckitt wants to honor the contract.” Pl. Supp.
Br. at 6. There is no indication that the parties have ceased communication and that Reckitt
intends to breach the Agreement by not executing a supply agreement with Mutual.
Accordingly, because Defendant has not affirmatively breached the agreement and there is the
Defendant acknowledges that Plaintiffs did send a purchase order after they filed the instant Motion,
however the purchase order “fails to identify the Material terms.” Def. Supp. Br. at 4.
possibility that the parties can, in good faith, continue to engage in talks to resolve the open
items, Plaintiffs have not proven beyond a preponderance of the evidence that Defendant
breached the Agreement.5
Lastly, Plaintiffs are required to prove that they were damaged by Defendant’s breach of
the Agreement. Plaintiffs allege that they have not only suffered monetarily in the form of lost
sales and lost profit, but also “Mutual’s ability to compete is completely foreclosed and it is
losing the opportunity to gain a firm foothold in the OTC market by offering ERG.” Pl. Mot. for
Preliminary Injunction at 22. Thus, if Plaintiffs were able to prove that Defendant breached the
Agreement, it is also likely that they will be able to prove that they suffered damages as a result
of the breach.
At this stage, Plaintiffs are not required to prove that their “‘right to a final decision after
trial [is] wholly without doubt.’” Am. Freedom Def. Initiative, 92 F. Supp. 3d at 322 (quoting
Oburn, 521 F.2d at 148). Rather, Plaintiffs are only required to demonstrate “‘a reasonable
probability’” that they will prevail on the merits of the breach of contract claim. Id. (quoting
Oburn, 521 F.2d at 148). As previously discussed, there is some doubt as to whether Plaintiffs
Plaintiffs also argue that Defendant “is also prioritizing its own requirements of 600 mg ERG over those
of Mutual, in direct breach of Section 2.7 of the Supply Agreement.” Pl. Mot. for Preliminary Injunction
at 20–21. This argument is without merit. Section 2.7, entitled “Problems with Supply” provides:
Adams shall promptly notify Mutual of any circumstances that result or are likely to
result in any failure or delay in the supply or delivery of any Product. . . . Adams shall
allocate to Mutual an amount of such Product proportionate to Mutual’s requirements
divided by the total demand for such Product for the ensuing one–year period. In making
any such allocation, Adams shall not give any priority to its own requirements of those or
of its Affiliates.
Plaintiffs fail to cite where Defendant indicated that it would be unable to supply Plaintiffs with the
tablets because there were problems with the supply. Rather, the issue is that the parties have yet to
execute a supply agreement. Therefore, Plaintiffs fail to demonstrate that Defendant breached the
Agreement by prioritizing its supply requirements over Plaintiffs’ requirements.
will ultimately succeed on their breach of contract action. However, they have demonstrated a
reasonable probability that they could succeed on the merits of the breach of contract claim.
Therefore, the Court will proceed to the second prong of the preliminary injunction analysis.
B. Irreparable Harm
The Third Circuit has “stressed that ‘[b]efore granting a preliminary injunction, a district
court must consider the extent to which the moving party will suffer irreparable harm without
injunctive relief.’” Liberty Lincoln-Mercury, Inc. v. Ford Motor Co., 562 F.3d 553, 557 (3d Cir.
2009) (quoting Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharm.
Co., 290 F.3d 578, 595 (3d Cir. 2002)). The movant will sustain its burden if it “demonstrates a
potential harm which cannot be redressed by a legal or an equitable remedy following a trial.”
Grant Heilman Photography, Inc., 864 F. Supp. 2d at 325. In cases such as the instant matter,
“the claim is based on a breach of contract, irreparable injury may be found in two
situations: (1) where the subject matter of the contract is of such a special nature
or peculiar value that damages would be inadequate; or (2) where because of
some special and practical features of the contract, it is impossible to ascertain the
legal measure of loss so that money damages are impracticable.”
EUSA Pharma (US), Inc. v. Innocoll Pharm. Ltd., 594 F. Supp. 2d 570, 581 (E.D. Pa. 2009)
(quoting ECRI v. McGraw-Hill, Inc., 809 F.2d 223, 226 (3d Cir. 1987)). Nevertheless,
“establishing the risk of irreparable harm is not enough to support a preliminary injunction.”
Grant Heilman Photography, 864 F. Supp. 2d at 325. Rather, the movant “has the burden of
proving a ‘clear showing of immediate irreparable injury.’” Id. (quoting ECRI, 809 F.2d at 226).
Further, the irreparable injury must not be “‘remote or speculative, but actual and imminent and
for which monetary damages cannot adequately compensate.’” FMC Corp. v. Control Sols.,
Inc., 369 F. Supp. 2d 539, 573 (E.D. Pa. 2005) (quoting Air Transp. Int’l L.L.C. v. Aerolease Fin.
Grp., Inc., 993 F. Supp. 118, 123 (D. Conn. 1998)). Accordingly, courts may not grant
preliminary injunctions “‘unless the moving party shows that it specifically and personally risks
irreparable harm.’” Liberty Lincoln-Mercury, Inc., 562 F.3d at 557 (quoting Adams v. Freedom
Forge Corp., 204 F.3d 475, 487 (3d Cir. 2000)).
Plaintiffs argue that the Agreement presented Plaintiffs with “a unique, non-replicable
business opportunity. . . . [and] Reckitt’s continuing failure to supply Mutual with 600 mg ERG
tablets is causing Mutual irreparable harm and preventing it from benefiting from this unique,
bargained for business opportunity.” Pl. Supp. Br. at 8. Further, Plaintiffs allege that “[b]ecause
there are currently so few players in the ERG market, Mutual’s ability to offer a generic version
of the 600mg ERG product would instantly create its credibility as supplier of generic [over-thecounter] products.” Pl. Mot. for Preliminary Injunction at 23. In particular, Mutual contends
that “by offering a generic 600 mg ERG product Mutual could build relationships, create new
ones, gain market share, and dramatically advance its reputation as a generic [over-the-counter]
marker.” Id. In contrast, Defendant claims that “Mutual is only alleging that it has lost an
opportunity to sell goods, i.e., lost profits. . . . [which] are not irreparable harm and do not form
the basis for an injunction motion.” Def. Resp. at 26. Plaintiffs rely on Allegheny Energy, Inc. v.
DQE, Inc., 171 F.3d 153, 154 (3d Cir. 1999) and Tom Doherty Associates Inc. v. Saban
Entertainment Inc., 869 F. Supp. 1130, 1132 (S.D.N.Y. 1994), inter alia, to support their
argument that if the Court does not enter the preliminary injunction Plaintiffs will suffer
In Allegheny Energy, Inc. v. DQE, Inc., the plaintiff and the defendant were “utility
companies whose shares [were] traded on the New York Stock Exchange [and who] entered into
a merger agreement on April 7, 1997.” 171 F.3d 153, 154 (3d Cir. 1999). Section 8.2(a) of the
merger agreement provided that each party “reserved the right to terminate the contract on
October 5, 1998 in the event that the merger was not consummated by that date.” Allegheny
Energy, 171 F.3d at 157. Section 8.2(a) also provided that “the October 5, 1998 date is
automatically moved forward six months, to April 5, 1999, if, on October 5, 1998, certain
conditions have been met, among them that ‘each of the other conditions to the consummation of
the Merger ... has been satisfied or waived or can readily be satisfied.’” Id. (quoting App. At
42). On October 5, 1998, the defendant informed the plaintiff that the defendant was terminating
the merger agreement pursuant to Section 8.2(a). Id. The plaintiff then filed an action in the
Western District of Pennsylvania and a motion seeking a temporary restraining order and a
preliminary injunction. Id. at 158.
The court examined precedent outside this circuit to assess whether specific performance
was appropriate for an alleged breach of a merger agreement. Id. at 161–163. The Third Circuit
found that the case law “could be interpreted as imposing upon a plaintiff (the would-be
acquirer) the burden of showing with some particularity that the business to be acquired is either
inherently unique or offers a unique opportunity to the buyer.” Id. at 163. The court determined
that “the agreed-upon Allegheny–DQE merger constitutes a unique, non-replicable business
opportunity for Allegheny.” Id. The court found the Joint Proxy Statement that was filed with
the SEC and distributed to both Allegheny’s and DQE’s shareholders to be particularly
illustrative of the “considerable business opportunities” that the merger presented for both
companies. Id. at 163–64. The Third Circuit held that “Allegheny would be at serious risk
of irreparable harm if preliminary injunctive relief were withheld” and vacated the district
court’s judgment denying the preliminary injunction. Id. at 166–67. The Third Circuit
remanded the matter to the District Court to “reassess—in light of [the] opinion—the three
remaining factors in the four-factor determination of whether a preliminary injunction should
issue.” Id. at 167.
In Tom Doherty Associates Inc. v. Saban Entertainment Inc., the plaintiff brought a
breach of contract action against the defendant and
moved for a preliminary injunction requiring Saban to offer TOR the right to
publish juvenile story books based on the Mighty Morphin Power Rangers
(“Power Rangers”), prohibiting Saban from licensing or facilitating the
publication of books based on the Power Rangers (except coloring, comic or
activity books), and prohibiting Saban from licensing the publication of juvenile
story books based on other Saban properties unless TOR is first offered the right
to publish such books.
869 F. Supp. 1130, 1132 (S.D.N.Y. 1994). The plaintiff was “a major publisher of fantasy and
science fiction books for adults.” Tom Doherty Assocs. Inc., 869 F. Supp. at 1132. The
defendant was a “creator, producer, and distributor of video entertainment for children.” Id. The
parties entered into an agreement which provided that the plaintiff “would immediately publish
six books based on Saban properties” and that there was a possibility of “publication of further
books in the future.” Id. at 1132–33. After the defendant gained popularity with its creation of
the Power Rangers, the defendant “entered into a variety of licensing agreements with companies
in various fields of children’s merchandising, including children’s book publishing.” Id. at 1134.
The plaintiff then filed a breach of contract action in the district court and moved for a
preliminary injunction. Id. at 1135.
The district court determined that the plaintiff “demonstrated that it will suffer irreparable
harm unless Saban is ordered to license to it publishing rights to Power Ranger books.” Id. The
court found that “[t]he loss of the opportunity to distribute and market a commodity may
constitute irreparable harm. . . . [and] [w]here the property is unique, injunctive relief is
appropriate.” Id. After examining precedent, the court concluded that “the determination to grant
injunctive relief when a source refuses to supply a commodity is necessarily fact sensitive.” Id.
at 1136. Therefore, “[t]he issue can be resolved by asking whether the plaintiff seeks something
more than lost profits.” Id. The court reasoned that the plaintiff not only sought lost profits, but
also “the opportunity to establish itself in the children’s publishing industry as a reputable and
responsible publisher of books.” Id. Therefore, “[a]s a relative unknown and unproven entity in
the industry” there could have been “few better opportunities than as the exclusive publisher of
Power Rangers books.” Id. The court ultimately granted the motion for preliminary injunction
and held that “when, in circumstances such as those in the present case, the supplier of a unique,
lucrative, and possibly short-lived property refuses to supply that property in breach of a
contract, the distributor is entitled to an injunction compelling performance.” Id. at 1141.
Conversely, Defendant relies on Bennington Foods LLC v. St Croix Renaissance Group,
LLC, 528 F.3d 176, 179 (3d Cir. 2008), inter alia, to support its contention that Plaintiffs failed
to demonstrate that they were irreparably harmed. In Bennington Foods, the plaintiff argued
“that it has a reputation for delivering scrap metal on time and that this reputation will be
irreparably harmed if it is not allowed to remove the scrap metal at issue here.” 528 F.3d at 179.
The district court agreed with Plaintiff and “concluded that this represented an irreparable harm
analogous to those faced by the plaintiffs in Pappan Enterprises, Inc. v. Hardee’s Food Systems,
Inc., 143 F.3d 800 (3d Cir. 1998) and Fitzgerald v. Mountain Laurel Racing, Inc., 607 F.2d 589
(3d Cir.1979).” Bennington Foods LLC, 528 F.3d at 179. The Third Circuit disagreed and
concluded that “[i]n both of those cases the reputation of the plaintiff was directly endangered by
the defendant’s actions—the misleading use of trademarks and a suspension based on suspicion
of cheating can, in and of themselves, harm plaintiffs’ reputations.” Id. at 179–80. The Third
Circuit found that unlike in Pappan and Fitzgerald, “any damage to Bennington’s reputation will
result only indirectly from SCRG’s actions.” Id. at 180. The court reasoned that the defendant
was “not doing anything (or refraining from doing anything) that will directly harm
Bennington’s reputation with its suppliers in India.” Id. Moreover, “the claim is a two-step one:
(1) because SCRG is not delivering (allegedly breaching the contract), Bennington is unable to
deliver, and (2) lack of delivery harms Bennington's reputation with third parties with whom
Bennington has contracted to resell the scrap.” Id. Accordingly, the Third Circuit found that the
plaintiff could not demonstrate irreparable harm. Id. at 179–80.
The Court also finds EUSA Pharma (US) Inc. v. Innocoll Pharmaceuticals Ltd., 594 F.
Supp. 2d 570, 573 (E.D. Pa. 2009) to be instructive. In EUSA Pharma, the plaintiff “requested a
preliminary injunction to prevent Innocoll from beginning a clinical trial that might trigger
EUSA’s option to purchase the exclusive license to commercialize a product being developed by
Innocoll.” 594 F. Supp. 2d at 573. The district court initially “entered a temporary restraining
order preventing the option’s expiration” and then held an evidentiary hearing and oral argument
to determine whether issuance of a preliminary injunction was appropriate. EUSA Pharma (US)
Inc., 594 F. Supp. 2d at 573. The court reasoned that the plaintiff “show[ed] a threat of
immediate harm because Innocoll clearly intends to begin the OLSS immediately and not to
recognize EUSA’s Option once that occurs.” Id. at 581. Further, “[i]f Innocoll's refusal prevents
EUSA from exercising the Option, EUSA will suffer irreparable harm by losing ‘a unique, nonreplicable business opportunity.’” Id. at 582 (quoting Allegheny Energy, Inc., 171 F.3d at 163).
The court concluded that “the uniqueness of the B–Implant, a novel innovation in post-surgical
pain relief still under development, cannot be denied.” Id.
The present case is analogous to Allegheny Energy, Tom Dougherty Associates, and
EUSA Pharma. In those cases, the courts identified a “unique, non-replicable business
opportunity” that the movant would be denied if the preliminary injunction was not entered. In
the instant matter, when the parties executed the Agreement, Plaintiffs were not only expecting
to cease litigation with Defendant, but to also have the opportunity to become the generic
supplier of the Mucinex 600 mg ERG tablet. Consequently, “[t]he market for generic, over the
counter . . . alternatives to Reckitt’s Mucinex® family of ERG products is one of the largest
[over-the-counter] markets existing today.” Pl. Mot. for Preliminary Injunction at 9. Thus, if
Defendant fails to execute a supply agreement and supply the 600 mg ERG tablets, Plaintiffs
would be denied the unique, non-replicable business opportunity to enter the over-the-counter
market by supplying the 600 mg ERG tablets at a time when there are few alternative providers.6
The 600 mg ERG tablets are “‘of such a special nature or peculiar value that damages
would be inadequate.’” EUSA, 594 F. Supp. 2d at 581 (quoting ECRI, 809 F.2d at 226).
Furthermore, the parties contemplated the “special nature” and “peculiar value” of the
Agreement when they included a provision in the Agreement that “there is no adequate remedy
at law for the damage which either Party might sustain for breach of this Agreement and,
accordingly, each Party shall be entitled, as its option, to specific performance, in addition to any
other remedy at law or in equity, to enforce the terms hereof.” Compl., Exh. A at 20.
Accordingly, Plaintiffs’ ability to penetrate the over-the-counter market and establish itself as a
legitimate generic provider of a top-selling drug by selling the 600 mg ERG tablets is not
quantifiable. Therefore, Plaintiffs have sustained their burden of proving that if the Court did not
enter the injunction and require Defendant to begin to supply the 600 mg ERG tablets they would
suffer irreparable harm.
Presently, the only other provider of a 600 mg ERG product is Perrigo. See Pl. Mot. for Preliminary
Injunction at 13 (explaining that “Reckitt became obligated to supply Mutual on October 24, 2013 after
Perrigo launched a 600 mg ERG product”). In 2015, Actavis also “announced the FDA approved its
ANDA for guaifenesin/pseudophedrine tablets (‘combination product’), and that it plans to work with
Perrigo to start shipping its product.” Id. at 23.
The Court’s inquiry does not end with a finding of irreparable harm. The Court must also
determine whether Plaintiffs’ injury is not “‘remote or speculative, but actual and imminent.’”
FMC Corp., 369 F. Supp. 2d at 573 (quoting Air Transp. Int’l L.L.C., 993 F. Supp. 118 at 123).
Plaintiffs have the burden of demonstrating “a ‘clear showing of immediate irreparable injury,’
or a ‘presently existing actual threat’” because an injunction “‘may not be used simply to
eliminate a possibility of a remote future injury.’” Acierno v. New Castle Cty., 40 F.3d 645, 655
(3d Cir. 1994) (quoting Cont’l Grp., Inc. v. Amoco Chems. Corp., 614 F.2d 351, 358 (3d Cir.
1980)); see also Grant Heilman Photography, 864 F. Supp. 2d at 325. A party’s delay in
seeking a preliminary injunction could “belie its claim of irreparable injury.” Laminations, Inc.
v. Roma Direct Mktg. LLC, 516 F. Supp. 2d 404, 420 (M.D. Pa. 2007); see also MNI Mgmt., Inc.
v. Wine King, LLC, 542 F. Supp. 2d 389, 403 (D.N.J. 2008) (explaining that “inexcusable delay
in seeking a preliminary injunction may defeat a movant’s assertion of irreparable harm”).
Plaintiffs argue that “[t]here is an imminent risk of what Mutual bargained for
disappearing completely.” Pl. Mot. for Preliminary Injunction at 23. More specifically,
Plaintiffs allege that “while Reckitt’s motion [to dismiss] was pending, Actavis announced the
FDA approved its ANDA for guaifenesin/pseudoephedrine tablets (‘combination product’), and
that it plans to work with Perrigo to start shipping its product ‘in time for the cough/cold
season.’” Id. (quoting Press Release, Actavis, Actavis and Perrigo Receive FDA Approval of
Guaifenesin/Pseudoephedrine, The Store Brand Equivalent to Mucinex® D Tablets (June 2,
2015), http://www.actavis.com/news/news/thomson-reuters/actavis-and-perrigo-receive-fdaapproval-of-guaife). On September 15, 2015, Actavis released another press release7 that it
received FDA “approval for its Abbreviated New Drug Applications for three Mucinex®
Actavis and Allergan merged and is now identified as Allergan PLC. Press Release, Allergan, Actavis
PLC is Now Allergan PLC (June 15, 2015), http://www.allergan.com/news/news/thomsonreuters/actavis-plc-is-now-allergan-plc.
equivalent products . . . [and] Perrigo [would] begin shipments of the products to its retail and
wholesale customers in the U.S. in time for the 2016 cough and cold season.” Press Release,
Allergan, Allergan and Perrigo Receive FDA Approval of Three Extended Release Products
Equivalent to Mucinex® and Mucinex® DM (Sept. 10, 2015),
http://www.allergan.com/news/news/thomson-reuters/allergan-and-perrigo-receive-fda-approvalof-three. Thus, Plaintiffs contend that if they have to “wait until trial before Reckitt is ordered to
enter into a supply agreement, the generic ERG market will be dominated by Perrigo and Actavis
and Mutual’s chance to instantly establish itself in the generic OTC market will be gone.” Pl.
Mot. for Preliminary Injunction at 24.
On the other hand, Defendant contends that Plaintiffs “have not offered any proof that
there is an ‘emergency,’ so as to compel issuance of a preliminary injunction.” Def. Supp. Br. at
9. For example, “[i]f Mutual truly believed it was facing irreparable harm, it had plenty of time
to seek a preliminary injunction shortly after it sent the notice in October 2013.” Def. Resp. at
28. Defendant maintains that instead of seeking a preliminary injunction, “Mutual negotiated for
a year, filed a state court action for breach of contract in August 2014, the same breach of
contract claim later filed in this Court. . . . [and] it filed still another action: this antitrust action in
this Court.” Id. Therefore, “Mutual’s delay of 13 months after it first filed suit against RB belies
its newly claimed need for a preliminary injunction and demonstrates that, at best, it was
sleeping on its rights, thereby precluding preliminary injunctive relief.” Id.
By seeking this mandatory preliminary injunction, Plaintiffs are held to a “higher
standard of showing irreparable harm in the absence of an injunction.” Bennington Foods LLC,
528 F.3d at 179. Plaintiffs failed to sustain this burden. Plaintiffs waited to bring the motion for
preliminary injunction until September 10, 2015—seven months after the filing of the suit in this
Court and almost two years after Perrigo began selling the generic Mucinex ERG. This delay,
alone, does not preclude a finding that Plaintiffs would suffer immediate irreparable harm.
However, together, the delay and the speculative nature of the irreparable harm weigh against a
finding that Plaintiffs would be immediately harmed. Plaintiffs contend that if they have to
““wait until trial before Reckitt is ordered to enter into a supply agreement, the generic ERG
market will be dominated by Perrigo and Actavis.” Pl. Mot. for Preliminary Injunction at 24.
However, Plaintiffs concede that “[a]t this time, Perrigo would be Mutual’s only generic
competition.” Pl. Supp. Br. at 8. Plaintiffs have not sufficiently demonstrated that Allergan has
entered the market or will enter into the market shortly, thereby diluting Plaintiffs’ ability to
capture a portion of the market and receive the benefits of the Agreement. Therefore, Plaintiffs
failed to sustain its burden of “a ‘clear showing of immediate irreparable injury,’ or a ‘presently
existing actual threat.’” Acierno, 40 F.3d at 655 (quoting Cont’l Grp., Inc., 614 F.2d at 358.
C. Balance of Harms
The third prong of the preliminary injunction analysis requires the Court to “balance the
relative harm to the parties, i.e., the potential injury to the plaintiff if an injunction does not issue
versus the potential injury to the defendant if the injunction is issued.” Novartis Consumer
Health, Inc., 290 F.3d at 596. This “balancing test is intended to ensure that the issuance of an
injunction would not harm the [non-moving party] more than a denial would harm the party
seeking an injunction.” MarbleLife, Inc. v. Stone Res., Inc., 759 F. Supp. 2d 552, 563 (E.D. Pa.
Plaintiffs claim that “[t]he Court’s issuance of a preliminary injunction will do Reckitt no
harm, but simply force it to do that which it agreed to do.” Pl. Mot. for Preliminary Injunction at
26. More specifically, Plaintiffs allege that because “Reckitt’s witnesses testified they want to
comply with the Agreement, . . . [this] illustrat[es] Mutual’s point [that] there is no harm to
Reckitt by requiring it to fulfill its contractual obligations.” Pl. Supp. Br. at 9. In contrast,
Defendant argues that “as the holder of the NDA[,] [it] is given the responsibility, indeed the
obligation, to assure [the] FDA that any drug produced under its NDA is safe and effective and
meets all requires specifications.” Def. Resp. at 19. Defendant maintains that it
cannot possibly bring a 600 mg ERG Product to market within 30 days. There are
manufacturing steps required to modify the Mucinex tablets in color, logo
embossing and shape which take approximately 18 weeks. There are new product
specifications and a Quality Agreement for shared responsibility to package the
drug under [Bulk Supply Agreement] ¶ 4.7 to prepare; there is punch tooling and
obtaining drawing approval from Mutual. There are trial/results evaluations to test
whether when the dye is removed and replaced with a buffer, the blend as slightly
altered still performs properly. There are issues involved with FDA compliance,
including FDA bulk validation production, and whether Mutual has an approved
and fully validated packaging and labeling plant as required by FDA’s cGMPs.
There are studies to be made for reports that RB must keep on hand in the event
that the FDA performs a site inspection.
Id. at 17.
The Court finds that the harm Defendant would incur if required to comply with the entry
of the preliminary injunction exceeds the harm Plaintiffs would incur absent the entry of the
injunction. If Defendant hastily completes the production of the tablets in thirty days, Defendant
jeopardizes its reputation as a reputable provider of over-the-counter drugs. Further, Plaintiffs
misinterpret Defendant’s obligations under the Agreement. While it is true that in executing the
Agreement Defendant committed to supplying Plaintiffs with the 600 mg ERG tablets if a third
party entered the market, the Agreement does not provide that Defendant must produce the
tablets in thirty days. The Agreement only states that the Plaintiffs can begin purchasing and
Defendant can begin supplying the tablets “no earlier than ninety (90) days after the
corresponding Launch Date.” Compl., Exh. A at 12. Thus, Defendant could suffer irreparable
damage to its reputation and financial security if it is required to swiftly produce these tablets
and suffer the prospect of an ineffective drug, FDA investigation, and litigation from consumers.
Therefore, the harm to Defendant if the injunction is entered surpasses the harm that Plaintiffs
would suffer if the injunction was not entered.
D. Public Interest
Lastly, the Court is required to consider the public interest in granting Plaintiffs’ motion
for preliminary injunction. In a breach of contract action, “the public interest favors enforcing
valid contracts and making parties live up to their agreements.” MarbleLife, Inc., 759 F. Supp.
2d at 563. Additionally, “the public . . . has a well-recognized interest in ‘receiving generic
competition to brand-name drugs as soon as is possible,’ Boehringer Ingelheim Corp. v.
Shalala, 993 F.Supp. 1, 3 (D.D.C.1997), and a ‘delay in the marketing of [the generic] drug
could easily be against the public interest in reduced prices.’” Biovail Corp. v. U.S. Food & Drug
Admin., 519 F. Supp. 2d 39, 50 (D.D.C. 2007) (quoting Schering Corp. v. Sullivan, 782 F.Supp.
645, 652 (D.D.C.1992)). On the other hand, “[t]he public will suffer harm if the FDA does not
follow proper procedures in approving generic drugs and if harmful drugs enter the marketplace
as a result.” Id.
The Court agrees with Plaintiff that “[i]f . . . Reckitt was ordered to perform its
bargained-for contractual duties, Mutual would be able to offer a generic product to consumers. .
. . [which] would increase competition and consequently lower costs for consumers.” Pl. Mot.
for Preliminary Injunction at 28. The Court also agrees that “[t]he public interest is also served
by enforcing settlement agreements.” Id. The Court cannot agree, however, that the production
of 600 mg ERG tablets in thirty days would serve the public’s interest. As noted by Defendant,
“were RB to be ordered to produce pills on [a] shorter . . . timeframe . . . without any of the
required tests, reports, validation studies or Quality Agreements, it will be doing so in direct
violation of the FDA regulations, putting the consumer in harm’s way.” Def. Resp. at 31.
Furthermore, the Court would usurp the FDA of its role as the administrative body tasked with
ensuring generic drug safety. The FDA explained that
[g]eneric drugs are important options that allow greater access to health care for
all Americans. They are copies of brand-name drugs and are the same as those
brand name drugs in dosage form, safety, strength, route of administration,
quality, performance characteristics and intended use. Health care professionals
and consumers can be assured that FDA approved generic drug products have met
the same rigid standards as the innovator drug. All generic drugs approved by
FDA have the same high quality, strength, purity and stability as brand-name
drugs. And, the generic manufacturing, packaging, and testing sites must pass the
same quality standards as those of brand name drugs.
Understanding Generic Drugs, U.S. FOOD & DRUG ADMIN.,
ndingGenericDrugs/default.htm (last updated Feb. 5, 2016). Accordingly, ordering Defendant to
produce the 600 mg ERG tablets in thirty days would not be in the public’s interest and would
not ensure that this generic drug “met the same rigid standards as the innovator drug.” Id. Thus,
it is not in the public’s interest to grant this injunction.
For the reasons explained herein, Plaintiffs have not sustained their burden in proving
that they have suffered immediate irreparable harm, that the balance of the harms tips in their
favor, and that granting the injunction would serve the public’s interest. Plaintiffs’ “‘failure to
establish any element ... renders a preliminary injunction inappropriate.’” Ferring Pharm., Inc.,
765 F.3d at 210 (quoting NutraSweet Co., 176 F.3d at 153). Accordingly, this Court DENIES
Plaintiffs’ motion for preliminary injunction. An appropriate order follows.
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