Glaxo Group, Ltd. v. Leavitt (Maryland U.S.D.C.) Approved for Publication

Order Signed April 6, 2007--Judge Andre M. Davis. Approved for publication.

Plaintiff Glaxo Group, Ltd., sought and obtained a temporary restraining order (TRO), which was secured by a $3 million bond, enjoining the effectiveness of the approval by the Food and Drug Administration of an application by intervening defendant Roxane Laboratories, Inc. (Roxane), to market fluticasone propionate, the generic form of Glaxo's patented Flonase, the patent for which had expired. Subsequently, after a hearing, the Court denied Glaxo's motion for a preliminary injunction. Now pending is Roxane's motion for execution on the bond.

In this opinion and order, Judge Davis sets forth findings of fact and conclusions of law determining that Roxane has suffered damages from the TRO and should have execution against the bond.

The Court concluded that:

The TRO prevented Roxane from marketing fluticasone for a total of 11 days, causing Roxane to lose profits that it would have otherwise realized. This harm is real and substantial for two reasons: (1) at the time of the TRO, Roxane's fluticasone products, which had already been shipped to the retailers, were prevented by the TRO from being sold to consumers; and (2) Roxane has established by the clear weight of the evidence an adequate, if modest, run rate for fluticasone sufficient to reasonably calculate lost profits.

The Court found that Roxane would have had net profit of $14.80 per unit and that, in the 11 days that the TRO was in effect, it would have sold 223,272 units. It thus suffered $3,304,423.97 in lost profits as a consequence of the TRO, which is an amount in excess of the $3 Million bond. Accordingly, it awarded Roxane the entire bond amount.

In a footnote, however, the Court denied Roxane full restitution damages, holding that:

Roxane is not entitled to a restitutionary measure of recovery. Glaxo did not act wrongfully under the circumstances of this case; indeed, its prompt decision to withdraw its appeal from the denial of the preliminary injunction evidences its good faith. While it is true that Glaxo had sales that it would not have enjoyed during the pendency of the TRO had the TRO not been issued, its right to seek such relief was not exercised maliciously or unlawfully. As an intervening defendant, Roxane had the right to urge the court to require a bond that was reasonable under the circumstances and it did so.

The full opinion is available in PDF.