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Federal Circuit Vacates Injunction Against Generic Drug Manufacturer, Determining That A Settlement Agreement Term Is Ambiguous

December 29, 2010

By Joseph M. OMalley, Jr., Preston K. Ratliff II & Isaac S. Ashkenazi

On December 22, 2010, the Federal Circuit vacated an injunction preventing Sun Pharmaceutical Industries, Ltd. and Caraco Pharmaceutical Laboratories, Ltd. (collectively Sun) from manufacturing and selling a generic oxaliplatin product. Sanofi-Aventis v. Sandoz, Inc., No. 2010-1338 (Fed. Cir. Dec. 22, 2010). The district courts injunction was based on the entry of a contested consent judgment resulting from a settlement agreement between Sanofi-Aventis, Sanofi-Aventis U.S. LLC, and Debiopharm S.A. (collectively Sanofi) and Sun. In vacating the injunction, the Federal Circuit ruled that the term decision(s) enjoining in the settlement agreement was objectively ambiguous, and that the district court erred in entering a contested consent judgment without first determining the parties obligations under the terms of the settlement agreement after a full and fair hearing.