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COLLAGENEX PHARMACEUTICALS, INC. v. IVAX CORPORATION

June 15, 2005.

CollaGenex Pharmaceuticals, Inc. et al., Plaintiffs,
v.
IVAX Corporation, et al., Defendants.



The opinion of the court was delivered by: SANDRA TOWNES, District Judge

MEMORANDUM & ORDER

By order dated January 21, 2005, this Court referred this matter to Magistrate Judge Viktor Pohorelsky for a Report and Recommendation on the Plaintiffs' motions for a temporary restraining order and a preliminary injunction.

A district court judge may designate a magistrate to hear and determine certain motions pending before the Court and to submit to the Court proposed findings of fact and a recommendation as to the disposition of the motion. See 28 U.S.C. § 636(b)(1). Within ten days of service of the recommendation, any party may file written objections to the magistrate's report. See id. Upon de novo review of those portions of the record to which objections were made, the district court judge may affirm or reject the recommendations. See id. The Court is not required to review the factual or legal conclusions of the magistrate judge as to those portions of the report and recommendation to which no objections are addressed. See Thomas v. Arn, 474 U.S. 140, 150, 106 S. Ct. 466, 88 L. Ed. 2d 435 (1985).

  Judge Pohorelsky has recommended that this Court deny the Plaintiffs' motions for a temporary restraining order and preliminary injunctive relief. Plaintiffs filed timely objection to the magistrate's report and the defendants IVAX Corporation and IVAX Pharmaceuticals, Inc. filed a timely response in opposition to Plaintiffs' objections.

  The Court has carefully reviewed all papers in connection with: (1) all submissions by the parties in support of and opposition to the grant of Plaintiffs' motions; (2) the transcript of the proceedings held before Judge Pohorelsky on January 31, 2005; and (3) the instant objections to the Report and Recommendation and response thereto. In addition, this Court reviewed additional submissions by the parties on the issue of irreparable harm and heard proof and futher argument regarding this issue on May 23, 2005.

  Applying the de novo standard of review, the Court adopts and affirms the Report and Recommendation.

  DISCUSSION

  "A preliminary injunction is a drastic and extraordinary remedy that is not to be routinely granted." Intel Corp. v. ULSI Sys. Tech. Inc., 995 F.2d 1566, 1568 (Fed. Cir. 1993). While "grant or denial of a preliminary injunction pursuant to 35 U.S.C. § 283 is within the discretion of the district court," Novo Nordisk of N. Am., Inc. v. Genentech, Inc., 77 F.3d 1364, 1367 (Fed. Cir. 1996), the burden is always on the movant to make a clear showing of entitlement to such relief. Intel, 995 F.2d at 1568. To obtain preliminary injunctive relief, the movant must show four factors: (1) reasonable likelihood of success on the merits; (2) irreparable harm if preliminary injunction is not granted; (3) that the balance of hardships tips in its favor; and (4) the impact of the injunction on the public interest. Reebok Int'l, Ltd. v. Baker, 32 F.3d 1552, 1555 (Fed. Cir. 1994); Hybritech, Inc. v. Abbott Labs., 849 F.2d 1446, 1451 (Fed. Cir. 1988). Upon a patentee's failure to make a clear showing of any one of the four factors, a trial court may deny the motion. Polymer Techs., Inc. v. Bridwell, 103 F.3d 970, 973-4 (Fed. Cir. 1996). Likelihood of Success on the Merits

  To show a reasonable likelihood of success on the merits, the movant must show infringement and validity of the patent. Reebok, 32 F.3d at 1555. In his Report and Recommendation, Judge Pohorelsky concluded that the Plaintiffs failed to satisfy their burden of proving that either of the Defendants' non-infringing and invalidity arguments lack substantial merit. The Plaintiffs object and argue that the recommendation as to each issue is clearly erroneous. This Court agrees with the sound logic employed by Judge Pohorelsky and adopts the findings made and the analysis performed by him.

  Serious issues are raised by the Defendants as to whether the Plaintiffs' claims fail under prior art or the doctrine of double patenting. It is premature on this incomplete record to make findings in that regard, but since the Plaintiffs have failed to meet their burden of establishing that these issues are lacking in merit, a preliminary injunction should not issue.

  Irreparable Harm

  Having failed at showing a likelihood of success on the merits, Plaintiffs are not entitled to the presumption of irreparable harm. Eli Lilly and Co. v. American Cyanamid Co., 82 F.3d 1568, 1578 (Fed Cir. 1996). Judge Pohorelsky determined that Plaintiffs failed to make a showing of irreparable harm based on the following factors: (1) "most of [the harms alleged] emanate from an expected sharp drop in revenue," which can be compensated with money damages, particularly when the defendant would be able to satisfy any judgment that may be entered against it; (2) loss of the opportunity to develop other drugs is insufficient to constitute irreparable harm; (3) Plaintiffs failed to allege loss of a business; (4) Plaintiffs' decision to bargain away its rights to Mutual did not weigh in favor of Plaintiffs; and (5) Plaintiffs' failure to disclose in its January 20, 2005, SEC Form 8-K that its viability was in danger. (Report and Recommendation at 13-16.)

  In their objections to Judge Pohorelsky's Report and Recommendation (the "Objections"), Plaintiffs ask the Court to consider that monetary damages do not preclude a finding of irreparable harm; that there is a short period of time remaining on the patent; that loss of research and development constitutes irreparable harm; and that the Court ignored a nonbinding ...


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