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Everett Laboratories, Inc. v. Acella Pharmaceuticals, LLC

United States District Court, Third Circuit

August 29, 2013

EVERETT LABORATORIES, INC., Plaintiff,
v.
ACELLA PHARMACEUTICALS, LLC, Defendant.

RIKER DANZIG SCHERER HYLAND PERRETTI LLP, Robert J. Schoenberg, Esq., Morristown, NJ, Counsel for Plaintiff

SHEPPARD MULLIN RICHTER & HAMPTON LLP, M. Roy Goldberg, Nathaniel Bruno, Don Pelto, Pro Hac Vice, Washington, DC, and Bradley Graveline, Chicago, IL, Counsel for Plaintiff.

FOX ROTHSCHILD LLP Christopher R. Kinkade, Esq., Lawrenceville, NJ, Counsel for Defendant.

NELSON MULLINS RILEY & SCARBOROUGH, Neil C. Jones, Ashley B. Summer, Pro Hac Vice, Greenville, SC, and William H. Latham, Jennifer Mallory, Columbia, SC, Counsel for Defendant.

OPINION

JOSEPH E. IRENAS, District Judge.

This is a patent infringement case. Plaintiff Everett Laboratories, Inc. ("Everett") has filed several actions against Defendant Acella Pharmaceuticals, LLC ("Acella") alleging that Acella has infringed Everett's patents for a variety of nutritional supplements. Presently before the Court are three Motions for Preliminary Injunction by Everett. For the reasons discussed below, these Motions will be denied.[1]

I.

Plaintiff Everett is a company that develops, markets, and sells prescription-only branded nutritional supplements. Defendant Acella sells lower cost versions of similar supplements. The three instant suits involve three prenatal supplements that Everett sells. Those supplements are Vitafol-OB౰, Select-OB౰, and Vitafol-One.[2] All three products have different compositions of vitamins and minerals as well as different delivery forms. For example, Vitafol-OB౰ is a caplet; Select-OB౰ is a two-component kit consisting of a chewable caplet containing vitamins and minerals as well as a soft gel capsule containing docosahexaenoic acid ("DHA") and lauric acid; and Vitafol-One is a soft gel capsule containing vitamins, minerals, and DHA.

Everett has spent considerable amounts of money researching, developing, manufacturing, and promoting its products. A significant portion of its marketing strategy involves in-person, one-on-one visits with doctors. These strategies have been effective, as each of the supplements has shown a high degree of commercial success, generating tens of millions of dollars in sales for Everett since the first supplement, Vitafol-OB౰, was introduced in February 2007.

Sales of prescription-only nutraceuticals take place through a multitiered system. Manufacturers, such as Everett, sell their products to wholesalers who then sell the products to retail pharmacies.[3] The wholesalers select the amount of product to buy in anticipation of what their expected future sales will be. Approximately 93% of Everett's sales are to wholesalers.

Commercial drug databases are another aspect of the pharmaceutical and nutraceutical industry. These databases provide information to wholesalers, pharmacies, pharmacists, and third-party payers about pricing and generic versions of branded products, which in turn help the pharmacies decide whether to dispense a branded product or its generic equivalent. For products to be linked in these databases, their key ingredients must be identical in type, content, and amount. After this linkage occurs, a pharmacist filling a prescription for a brand-name product will see all of the available substitutable products for that branded product on her computer system. The pharmacist may then substitute a lower-cost generic version of the product. States have varying laws on whether a patient must consent to or be notified of a substitution before it occurs.

Starting in June 2013, Acella began selling lower-cost versions of Everett's supplements. Acella's allegedly infringing products are PNV-OB with DHA, Choice-OB౰, and PNV-First. These products correspond to Vitafol-OB౰, Select-OB౰, and Vitafol-One, respectively. Acella's supplements are linked to Everett's supplements in various drug databases.

Everett filed these three actions in early June 2013. Everett claims that Acella has infringed its patents for Vitafol-OB౰, Select-OB౰, and Vitafol-One. There are four patents-in-suit: U.S. Patent Nos. 6, 814, 983 ("the '983 patent"), 7, 390, 509 ("the '509 patent"), 8, 197, 855 ("the '855 patent"), and 8, 183, 227 ("the '227 patent"). The '983 and the '509 patents cover Vitafol-OB౰; the '855 patent covers Select-OB౰; and the claims in the '227 patent cover Vitafol-One. In late June and early July 2013, Everett filed the instant Motions for Preliminary Injunction. The Court held a three-day hearing on these motions on August 19-21, 2013.

II.

A preliminary injunction is a drastic remedy that is not routinely granted. Nat'l Steel Car, Ltd. v. Canadian Pacific Ry., Ltd. , 357 F.3d 1319, 1324 (Fed. Cir. 2004). In deciding whether to grant a preliminary injunction, a court must consider four factors: 1) whether there is a reasonable likelihood of success on the merits; 2) the likelihood of irreparable harm if the injunction is not granted; 3) whether the balance of hardships tips in the moving party's favor; and 4) whether an injunction is in the public interest. Apple Inc. v. Samsung Elecs. Co., Ltd. , 695 F.3d 1370, 1373-74 (Fed. Cir. 2013) (citing Winter v. Natural Res. Def. Council, Inc. , 555 U.S. 7, 20 (2008)). "[A] movant cannot be granted a preliminary injunction unless it establishes both of ...


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