Replies to post #11099 on Momenta Pharmaceuticals, Inc. (MNTA)

[DewDiligence]

Thanks—that's clearly a good outcome for MNTA.

[mouton29]

Legal machinations, continued.

There are a number of things going on.

(i) Momenta is seeking entry of the magistrate's order for sanctions against Amphastar, which is the legal costs incurred, almost $1 million. Amphastar opposed this on a number of grounds, legal and factual, arguing the costs are outrageous. Aside from the amount involved, not trivial but modest in the overall scheme of things, evidently the Federal Circuit denied Momenta's appeal on the ground that it lacked jurisdiction so long as the sanctions issue is unresolved. Judge Gorton clearly wants this out of his courtroom and into appeals.

(ii) there is haggling over the entry of judgement against Momenta. Momenta is arguing that they withdrew claims under the '466 patent without prejudice and the order should reflect that. Judge Gorton is inclined to agree. Momenta is trying to argue that this is not covered by the HW safe harbor, here is part of their argument before the judge:

Your Honor probably won't remember this, but we
obtained evidence, for example, that Amphastar had used one of
the patented methods for a purpose that is not required by the
FDA and of which they kept no records. And the rationale of
the Federal Circuit's decision was that the FDA required the
use of the patented method and records were kept of it; and,
therefore, it fell within the language of 35 U.S.C. 271(e)(1)
that said that certain conduct is exempt if it's solely for use
as reasonably related to the development and submission of
information to the FDA. This was a procedure that had nothing
to do with the development of information for the FDA, and it
was a procedure that involved no recordkeeping, no possible --
nothing could plausibly be said to be a submission.
Your Honor held, adversely to us, that the -- that the
act in question was not an act of infringement as a matter of
patent law. I respectfully disagree with that. What there can
be no agreement -- what there can be no disagreement about is
that there's been no appellate determination on that question.
It's a completely new question.
To take another example, your Honor, certain issues of
law were presented at the time of the summary judgment
proceeding that the Court of Appeals never considered. Your
Honor may remember that we had -- we argued that there was a --
that Section 271(e)(1) did not apply because, among other
things, they had been -- Amphastar had been liable as an
infringer because they had made a product by a process that
infringed and then offered it for sale. And we had -- there's
no recordkeeping requirement with respect to that.
Your Honor ruled, adversely to us on that question,
that that only applied to activity -- manufacturing activity
that occurred outside the United States. We think that's
error. I'm not here to argue whether it's error or not. What
is inarguable is that the Court of Appeals has never considered
or passed on that and that, therefore, Mr. Weir's argument that
this has all been decided by the Court of Appeals is
demonstrably erroneous.

(iii) there is haggling over the bond and damages. Amphastar argues that their damages exceed the amount of the bond BUT clearly states they are only claiming the amount of the bond:

Your Honor
already decided the amount of the bond when your Honor issued
the preliminary injunction. We are not requesting as damages
in this case any more money than the amount of the bond that
your Honor set.

Amphastar then makes what seems to me a completely bogus argument, which is that Momenta sought the injunction and claimed the damages to them from entry into the market would be extremely large, Amphastar is using those computations to measure the damages to it. But it seems clear to me that this is not a zero sum game, and Momenta's counsel makes that point:

So they cite what they claim is their market share,
having produced no documents with respect to unit sales in the
relevant period, and they produce no pricing information that
tells you how they would get to that market share. You can
sell more product if you charge a lower price. If you charge a
lower price, that has an effect on the profit that you can earn
during that period. And if you want to project that back into
the injunction period, you can't just talk about market share.
You have to talk about the price that goes with it. We have
had no discovery on that subject. So I respectfully suggest
we're headed into a long fight.

There is also much legal jousting over the proper interpretation of a case dealing with bonds, Global Naps.