Otsuka America Pharmaceutical, Inc. v. Hetero Labs Limited

CourtCourt of Appeals for the Federal Circuit
DecidedJuly 1, 2026
Docket25-2016
StatusPublished

This text of Otsuka America Pharmaceutical, Inc. v. Hetero Labs Limited (Otsuka America Pharmaceutical, Inc. v. Hetero Labs Limited) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Otsuka America Pharmaceutical, Inc. v. Hetero Labs Limited, (Fed. Cir. 2026).

Opinion

Case: 25-2016 Document: 58 Page: 1 Filed: 07/01/2026

United States Court of Appeals for the Federal Circuit ______________________

OTSUKA AMERICA PHARMACEUTICAL, INC., AVANIR PHARMACEUTICALS, LLC, FKA AVANIR PHARMACEUTICALS INC., Plaintiffs-Appellees

v.

HETERO LABS LIMITED, HETERO LABS LIMITED UNIT-III, CAMBER PHARMACEUTICALS INC., Defendants-Appellants ______________________

2025-2016 ______________________

Appeal from the United States District Court for the District of Delaware in No. 1:25-cv-00647-GBW, Judge Gregory Brian Williams. ______________________

Decided: July 1, 2026 ______________________

ERIC C. STOPS, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, argued for plaintiffs-appellees. Also represented by JAMES BAKER, FRANCIS DOMINIC CERRITO, JOHN GALANEK, ELLYDE R. THOMPSON; ALEXANDRA KIM, Boston, MA.

EHAB M. SAMUEL, Orbit IP, LLP, Newport Beach, CA, argued for defendants-appellants. Also represented by DAVID A. RANDALL, Los Angeles, CA. Case: 25-2016 Document: 58 Page: 2 Filed: 07/01/2026

______________________

Before DYK, BRYSON, and STOLL, Circuit Judges. Opinion for the court filed by Circuit Judge BRYSON. Opinion dissenting-in-part and concurring-in-part filed by Circuit Judge DYK. BRYSON, Circuit Judge. Hetero Labs Limited (“Hetero”) appeals from an order granting a preliminary injunction in this patent case. The district court’s order enjoined Hetero from introducing a generic drug to compete with Nuedexta, a drug used for treating neurological disorders. In granting the prelimi- nary injunction, the court concluded that Otsuka America Pharmaceutical, Inc., and its subsidiary, Avanir Pharma- ceuticals, LLC (collectively, “Otsuka”), would be likely to succeed in proving that Hetero’s product would infringe U.S. Patent No. 7,659,282 (“the ’282 patent”), owned by Avanir, and that the relevant equitable factors favored granting the injunction. The issues on appeal are (1) whether the district court properly interpreted the terms “dextromethorphan” and “quinidine” in the weight-to-weight ratio limitation in claim 1 of the ’282 patent, and (2) whether the district court permissibly waived the requirement imposed by Federal Rule of Civil Procedure 65(c) that Otsuka post a bond pend- ing appeal. We affirm the district court’s construction of the disputed claim terms, but we vacate the district court’s order waiving the requirement of a bond pending appeal. I The ’282 patent covers a method for treating pseudo- bulbar affect or emotional lability, which is the inability to control emotions exhibited by patients with neurodegener- ative diseases or after a stroke or other brain injury. ’282 patent, col. 1, ll. 39–51; col. 2, ll. 7–21. The patented Case: 25-2016 Document: 58 Page: 3 Filed: 07/01/2026

OTSUKA AMERICA PHARMACEUTICAL, INC. v. 3 HETERO LABS LIMITED

method involves administering the drug dextrome- thorphan in combination with a second drug, quinidine. Dextromethorphan provides the therapeutic effect, while quinidine protects the dextromethorphan from rapid me- tabolism by the liver. Id. at col. 2, ll. 19–21; col. 14, ll. 6– 28. The ’282 patent is scheduled to expire on August 13, 2026. J.A. 263. Independent claim 1 of the ’282 patent reads as follows: 1. A method for treating pseudobulbar affect or emotional lability, the method comprising administer- ing to a patient in need thereof dextromethorphan in combination with quinidine, wherein the amount of dextromethorphan administered comprises from about 20 mg/day to about 80 mg/day and wherein the amount of quinidine administered comprises from about 10 mg/day to less than about 30 mg/day with the proviso that the weight to weight ratio of dextromethorphan to quinidine is 1:0.5 or less. ’282 patent, col. 78, ll. 2–10. Nuedexta, a branded pharmaceutical drug owned by Otsuka, combines dextromethorphan and quinidine in their salt forms. J.A. 17 at n.1; J.A. 21 at n.3. Nuedexta capsules each contain 20 milligrams (“mg”) of dextrome- thorphan hydrobromide and 10 mg of quinidine sulfate. J.A. 861; see J.A. 17, 20. In August 2024, the U.S. Food and Drug Administration (“FDA”) approved Hetero’s Abbrevi- ated New Drug Application (“ANDA”) for a generic product with the same indications as Nuedexta, including the same amounts of dextromethorphan hydrobromide and quini- dine sulfate. J.A. 17, 336. When Hetero signaled its intention to launch its ge- neric product on or after July 10, 2025, Otsuka filed a law- suit in the United States District Court for the District of Delaware seeking a temporary restraining order and a pre- liminary injunction to prevent Hetero from entering the Case: 25-2016 Document: 58 Page: 4 Filed: 07/01/2026

market. J.A. 2, 18. After first issuing a temporary re- straining order, the district court granted Otsuka’s motion for a preliminary injunction on July 23, 2025. J.A. 14, 33– 34. The district court did not require Otsuka to post a bond pending appeal, because it found that “the equities weigh[ed] strongly in favor of waiving the Rule 65(c) bond.” J.A. 32. Hetero appeals the district court’s grant of the pre- liminary injunction and the court’s order waiving the bond requirement. II We review the grant of a preliminary injunction for an abuse of discretion, which “may be established by showing that the court made a clear error of judgment in weighing relevant factors or exercised its discretion based upon an error of law or clearly erroneous factual findings.” Astra- Zeneca LP v. Apotex, Inc., 633 F.3d 1042, 1049 (Fed. Cir. 2010) (quoting Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001)). Claim construc- tion is a question of law that we review de novo, while re- viewing any underlying factual determinations for clear error. Teva Pharms. USA, Inc. v. Sandoz, Inc., 574 U.S. 318, 332–33 (2015). Because the bond requirement in Rule 65(c) is not a matter specific to patent law, we apply regional circuit law to that issue, which in this case is Third Circuit law. In the Third Circuit, the requirement to impose a bond is “strictly interpreted,” and waiver is appropriate only under certain limited exceptions. See Elliott v. Kiesewetter, 98 F.3d 47, 59–60 (3d Cir. 1996); Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 425–26 (3d Cir. 2010). A court’s decision as to the amount of the bond is reviewed for an abuse of dis- cretion. Boynes v. Limetree Bay Ventures LLC, 110 F.4th 604, 611 (3d Cir. 2024) (citation omitted). Case: 25-2016 Document: 58 Page: 5 Filed: 07/01/2026

OTSUKA AMERICA PHARMACEUTICAL, INC. v. 5 HETERO LABS LIMITED

III The primary issue in this case involves the construc- tion of the terms “dextromethorphan” and “quinidine” as used in the weight-to-weight ratio recited in claim 1 of the ’282 patent. According to the claim, “the weight to weight ratio of dextromethorphan to quinidine is 1:0.5 or less.” It is undisputed that the ’282 patent provides for the admin- istration of dextromethorphan and quinidine in the form of their pharmaceutically acceptable salts. The claim con- struction dispute concerns the method for calculating the ratio of dextromethorphan to quinidine when the dextro- methorphan and quinidine are administered in their salt forms.

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