Ipsen Biopharm Ltd v. Galderma Labs.
| Decision Date | 08 March 2023 |
| Docket Number | Civil Action 4:22-cv-00662-O |
| Court | U.S. District Court — Northern District of Texas |
| Parties | IPSEN BIOPHARM LTD., Plaintiff, v. GALDERMA LABORATORIES, L.P., and GALDERMA RESEARCH & DEVELOPMENT, LLC, Defendants. |
Before the Court is Defendants' Motion to Dismiss Complaint for Injunctive Relief (ECF No. 21), filed August 23, 2022. On October 20, 2022, Plaintiff filed its Response (ECF No. 29) and Defendants filed their Reply (ECF No. 34) on November 3 2022. At the Court's request, Defendants subsequently filed a Supplement to Motion to Dismiss (ECF No. 45) on November 14, 2022.[1] Accordingly, the Motion to Dismiss is now ripe for review. Having considered the briefing and applicable law, the Court finds that the Motion to Dismiss Complaint for Injunctive Relief (ECF No. 21) should be GRANTED.
In many respects, this case puts the “complex” in complex commercial litigation, given that it involves two multinational bio-pharmaceutical companies suing one another in courts and tribunals across the globe. Bolstered by talented legal teams, the parties have raised nuanced legal arguments touching on topics such as civil procedure, international arbitration, contracts, and regulatory law. On a factual level, the parties' briefing is equally thorough, replete with details on everything from bacterial neurotoxins to molecular chemistry to transnational business strategies.[2]Yet despite this dispute's byzantine trappings, the pertinent factual backdrop for Defendants' Motion to Dismiss can be distilled to five main categories: the QM Agreement, the ICC Arbitration, the Tribunal's Interim Procedural Order No. 3, Galderma's QM License Application to the FDA, and Galderma Affiliates Consent to Arbitration.
Ipsen Biopharm Ltd. (“Ipsen”) is a bio-pharmaceutical company that has partnered with another bio-pharmaceutical company Galderma S.A. (“Galderma”) since 2007. Galderma is the parent company of Galderma Laboratories, L.P. (“Galderma Labs”) and Galderma Research & Development, LLC (“Galderma R&D”). Galderma Labs and Galderma R&D are now both parties to this litigation, but their parent company Galderma is not.
Beginning almost a decade ago, Ipsen and Galderma partnered to develop QM-1114, a Botox®-like drug used primarily for cosmetic purposes. In 2014, this partnership was memorialized through the QM Agreement. The QM Agreement applies to Ipsen and its Affiliates and Galderma and its Affiliates. The QM Agreement specifies, “For this Agreement, ‘Affiliates' has the meaning given to it in the Europe DDA.”[3] At present, the parties dispute whether Galderma Labs and Galderma R&D are “Affiliates” of Galderma, and thus subject to the terms of the QM Agreement.
Among other sections outlining the terms of the partnership between Ipsen and Galderma, the QM Agreement included the following dispute resolution provision:
This Agreement shall be governed by the laws of Belgium. All disputes arising out of or in connection with the present Agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the said Rules. The seat of arbitration shall be Brussels and the language of arbitration shall be English.[4]
Ultimately, while the parties tried to build a lasting relationship through the QM Agreement that was more than skin-deep, they could not prevent discord from breaking out.
In the summer of 2021, the Ipsen-Galderma relationship hit a rough patch, as often occurs in long-term partnerships. The trouble first arose with a quarrel about the regulatory submission strategy for QM-1114. But as the situation developed, it became clear that the issues between them were more than merely cosmetic. To resolve these disagreements, the unhappy duo decided to settle their differences in court. More precisely, Galderma initiated an arbitration before the International Chamber of Commerce (“ICC”) in Brussels, Belgium pursuant to the dispute resolution provision of the QM Agreement. This ICC Arbitration is still ongoing.
About a year after the initiation of the ICC Arbitration, Galderma and Galderma Labs informed Ipsen that they intended to move forward with submitting regulatory applications for QM-1114. Ipsen considered this proposed course of action to be a violation of the QM Agreement, subversive of the ICC Arbitration, and a threat to Ipsen's trade secrets. In response, Ipsen filed a request for interim relief from the ICC Tribunal. Seeking similar relief, Ipsen also filed this lawsuit on August 2, 2023.
As just mentioned, Ipsen requested that the ICC Tribunal impose an interim order barring Galderma and Galderma Labs from submitting regulatory applications for QM-1114 while the ICC Arbitration is pending. In response, Galderma also requested interim orders from the ICC Tribunal that would grant it permission to file QM-1114 regulatory applications and that would require Ipsen to withdraw its Complaint before this Court.
The ICC Tribunal issued Procedural Order No. 3 addressing these requests for interim relief on September 9, 2022. According to their briefing, both sides seem to think that Procedural Order No. 3 was decided in their favor. Moreover, the Court has struggled to determine which side is correct since neither submitted a complete version of Procedural Order No. 3 for the Court's review. Instead, both sides have only submitted portions of Procedural Order No. 3, quite literally cherry-picking the sections that support their positions.[5]
Nevertheless, having reviewed the record, it is clear to the Court that the ICC Tribunal denied both Ipsen's and Galderma's requests for interim relief. This decision largely rests on the fact that ICC Tribunal's jurisdiction over all Galderma Affiliates, including Galderma Labs, remains uncertain. Referring to Galderma Labs as GLP, the Tribunal noted:
GLP is indeed not a party to the present arbitration. Moreover, whether or not “Affiliates” of the Parties (as determined in the QM Agreement) are bound by the Agreement and its arbitration clause, is a question to be determined later in this arbitration. In these circumstances, ordering Ipsen Biopharm to withdraw its complaint against GLP would imply that the Tribunal has jurisdiction or some measure of control over GLP. However, this is not the case.[6]
Ipsen spins this finding as the Tribunal's approval for this lawsuit to continue. Meanwhile, Galderma Labs insists that the instant lawsuit should be dismissed because the Tribunal plans to formally consider its status under the QM Agreement at a later date. Importantly, Procedural Order No. 3 also forbids Galderma from breaching the QM Agreement by submitting regulatory filings for QM-1114 in its own name.[7]
In late September of 2022, another wrinkle developed. Following the issuance of Procedural Order No. 3, Galderma sought a way to file QM-1114 License Applications despite the ICC Tribunal's directives to the contrary and despite this pending lawsuit. To this end, Galderma tapped one of its subsidiaries, Galderma R&D, to file a License Application for QM-1114 in Galderma's name with the U.S. Food and Drug Administration (“FDA”) on September 29, 2022. Galderma justifies this action by noting that Galderma R&D was neither a party to the ICC Arbitration nor this case at the time it filed the QM-1114 License Application. Ipsen forcefully objects to Galderma R&D's QM-1114 License Application, arguing that it usurps the jurisdiction of the ICC Tribunal for a Galderma Affiliate to take an action that Galderma itself is explicitly forbidden from doing, especially when the status of Galderma Affiliates remains an open question before the ICC Tribunal.
In response to Galderma R&D's QM-1114 License Application, Ipsen took three actions. First, Ipsen filed another request for interim relief with the ICC. The ICC Tribunal again declined to order interim relief, and instead determined that the new developments should be taken up in the course of the agreed timetable for the ICC Arbitration.[8] Second, Ipsen filed its Amended Complaint for Injunctive relief which added Galderma R&D as a party to this lawsuit for the first time and added new requests for injunctive relief relating to Galderma R&D's QM-1114 License Application.[9] And third, Ipsen filed its Motion for Preliminary Injunction which remains pending before this Court.[10]
As of October 20, 2022, neither Galderma Labs nor Galderma R&D had consented to the jurisdiction of the ICC Tribunal, according to Ipsen. However, on November 12, 2022, counsel for Defendants sent a letter to Ipsen consenting to the jurisdiction of the ICC Tribunal over Galderma Labs and Galderma R&D.[11] As Defendants frame it, their consent to the ICC Tribunal's jurisdiction allows the Court to freeze this dispute in place and send the parties on their way, without the need for any more intensive procedures. Ipsen has not accepted Defendants' consent to the ICC Tribunal's jurisdiction at this time.
Although the Court's recitation of the facts is extensive, it is still necessarily abridged. Because of this, the Court finds the need to emphasize one further fact about the overall tenor of this dispute, which is relevant to its disposition, but may not otherwise be apparent. Namely, neither party comes before the Court with perfectly clean hands. By this, the Court means that the parties have scrupulously abided by the letter of the law, but not always the spirit of the law.
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