Ouch. In Nivagen Pharmaceuticals, Inc. v. Amneal Pharmaceuticals Inc., C.A. No. 24-846-GBW (D. Del.), the patentee plaintiff filed suit to stop a competitor from launching a drug that it says would infringe its patents, after the competitor received FDA approval.
(Because this was not an ANDA, there was no automatic stay.)
The plaintiff filed a TRO motion on August 13, shortly after its complaint. For at least two of the claims, the accused infringer responded by arguing invalidity but not non-infringement.
The Court granted the TRO just over a month after the motion, finding that as to those two claims, the accused infringer had failed to raise a substantial question of validity or enforceability and that the other factors (irreparable harm, balance of the equities, and the public interest) all favored the patentee.
The problem for the patentee, however, was the bond requirement. FRCP 65 requires the Court to order the moving party to post a bond if before the Court can issue a preliminary injunction or TRO:
(c) Security. The court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.
The Court ordered additional briefing as to the bond amount. I can't tell from the redacted briefing what numbers the parties proposed, but the Court ultimately ordered the patentee to post a $30 million bond to potentially compensate the accused infringer if the patentee did not prevail. The Court gave the plaintiff one week to post the bond.
The patentee immediately moved for reconsideration, arguing that it could not post that high of a bond amount in a week, and that the right bond amount was just $2.55 million. The Court was unpersuaded:
Plaintiff moves for reconsideration of the Court's Order setting the required bond amount (D.I. 63) on grounds that Plaintiff would be unable to "obtain financing for a $30 million bond within a few days." . . . This argument not only contradicts Plaintiff's earlier claims that it was "ready and able to post a bond," . . . it also presents arguments that Plaintiff should have and could have raised before. Thus, Plaintiff is not entitled to reconsideration of the Court's Order setting the required bond amount at $30 million.
Even had Plaintiff raised sufficient grounds for reconsideration, Plaintiff's arguments would not lead the Court to grant a lower bond. Indeed, the Court (like Defendants) finds that many of Plaintiff's arguments in support of a lower bond amount contradict Plaintiff's earlier claims of irreparable harm. . . . the Court notes that the purpose of the bond amount is to protect Defendants if the Court later finds that Defendants were wrongfully enjoined (i.e., lost the first-mover advantage they were rightly entitled to enjoy). . . . Given Plaintiff's insistence that the loss of the first-mover advantage could not be undone, the Court cannot find that a bond using Defendants' ramp-up numbers for a limited six-month period would be sufficient to remedy such a harm to Defendants if they are ultimately successful on the merits.
Id., D.I. 70 at 2-3. It denied reconsideration.
True to its word, the patentee informed the Court that it was unable to post the $30m bond amount by the deadline. D.I. 82. The Court waited for two weeks after the deadline, and then issued an order lifting the TRO:
[G]iven that Plaintiff still has not posted the required bond as of this date, and having considered [the accused infringers'] letters moving the Court to terminate or withdraw its award of injunctive relief in Plaintiff's favor . . . , IT IS HEREBY ORDERED THAT the temporary restraining order and preliminary injunction issued by the Court on September 23, 2024 . . . are hereby terminated due to Plaintiff's failure to post bond.
D.I. 86. The Court unsealed its opinions yesterday, along with its order lifting the TRO and injunction.
Too Bad
It's rare for a patentee to move for a TRO, and rarer still for the Court to grant one. It's a shame to see the parties' and the Court's work on this go to waste due to the patentee's inability to procure a bond—although I'm sure no one is more disappointed than the patentee themselves.
It's hard to tell from the docket exactly what led to the $30m bond amount. The Court's order setting the bond amount (D.I. 63), issued just one day after the parties' briefing, states the amount but doesn't include the exact reasoning.
Large parts of the parties' briefing is redacted, including their proposed bond amounts, but it looks like the patentee sought a bond covering just six months' worth of sales (they suggested that it could be re-evaluated at that point), while the accused infringer sought a bond covering more than three years' of sales, and potentially including prejudgment interest. It may be that the Court's decision to impose a $30m bond stemmed in part from a decision that a 3-year-plus timeline is much more realistic than a six-month timeline.
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