Amylin Pharm. v. Eli Lilly Part I

By Jay Lewis

Amylin Pharmaceuticals, Inc. v. Eli Lilly and Company, Case No. 11-CV-1061 JLS (NLS) (S.D. Cal. June 8, 2011)

Background

Amylin Pharmaceuticals (“Amylin”) and Eli Lilly (“Defendant”) entered into a business relationship in 2002 to develop and commercialize exenatide, a drug used for treatment of type-2 diabetes.  In early 2011, Defendant announced that it was entering a similar alliance with Boehringer Ingelheim GmbH (“Boehringer”) to develop and commercialize linagliptin, also a drug used for treatment of type-2 diabetes.  Amylin and Boehringer are direct competitors so needless to say, Amylin was opposed to Defendant’s entering into the second agreement.

Amylin and Defendant held private negotiations regarding the Boehringer alliance.  The parties were unable to resolve the matter so Amylin filed for a temporary restraining order (“TRO”) and preliminary injunction.  Amylin requested the Court to restrain and enjoin Defendant and others acting in concert from 1) disclosing any of Amylin’s confidential information; 2) using the same sales force used for Amylin’s drug; and 3) falsely describing Amylin’s products.

Legal Standard

The Court applied the appropriate legal standard, citing Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) for the general factors a plaintiff must show to obtain a preliminary injunction:

  1. A likelihood of success on the merits of the legal claim,
  2. Irreparable harm in the absence of preliminary relief,
  3. The balance of equities tips in the favor plaintiff’s favor, and
  4. The relief is in the public interest.

The Court further applied the 9th Circuit’s sliding scale balancing test as articulated in Alliance for Wild Rockies v. Cottrell, 622 F.3d 1045 (9th Cir. 2010).  Under this test, a stronger application of one factor may offset a weaker application of another. Alliance, 1049-53.

Original TRO

The Court granted Amylin’s request for a TRO but would later deny all of Amylin’s requests in a subsequent hearing.  The Court’s analysis in the original TRO decision was focused on Amylin’s likelihood of success on the merits.  Specifically, the Court found that Amylin would likely prove that the Defendant-Boehringer alliance would violate the confidentiality clause in Defendant-Amylin’s existing agreement.  The Court reasoned that the sales force for Defendant was already privy to Amylin’s confidential information and to task that same individuals with the sale of the Boehringer drug ostensibly puts Amylin’s confidential information in the hands of its competitor.

After finding a likely success on the merits, the Court briefly discussed irreparable harm by reiterating the risk of loss of confidential information to a competitor.  The Court quoted TMX Funding, Inc., v. Impero Technologies, Inc., 2010 WL 1028254, at *8 (N.D. Cal. March 18, 2010), “California courts have presumed irreparable harm when proprietary information is misappropriated.”  The Court was similarly brief in discussing the balance of equities and public interest and held in favor of preventing the sales force from promoting Boehringer’s products.

Part II will discuss the subsequent denial of the preliminary injunction.