Valeant Loses Ruling in Skin-Care Patent Dispute
Valeant Pharmaceuticals International, which changed its name from ICN Pharmaceuticals Inc. last year, must halt sales of a skin-care product that a jury found infringed a rival’s patents, a judge ruled.
U.S. District Judge Joseph J. Farnan Jr. in Wilmington, Del., concluded that Valeant should be permanently barred from selling its Glyquin line of skin lotions designed to bleach out age spots. In November, jurors concluded that Valeant intentionally infringed TriStrata Technology Inc.’s patents and awarded $846,000 in damages.
“The only issue before the court is whether ICN has presented a sound reason for denying the issuance of a permanent injunction,” Farnan said in his ruling Monday. “The court concludes it has not.”
The loss of Glyquin lotion sales, which totaled $3 million last year, is another blow for Valeant, which has lost money in two of the last three years. In March, the drug maker reported a net loss of $55.64 million for 2003.
The company has been selling plants and trimming workers to cut costs.
The Glyquin line of skin-care products isn’t among Valeant’s top 10 products, according to Securities and Exchange Commission filings.
Jeff Misakian, a spokesman for Costa Mesa-based Valeant, declined to comment on Farnan’s ruling.
Valeant argued in court papers that Farnan should allow sales of the Glyquin line to continue because TriStrata’s patents covering lotion ingredients were invalid. Farnan countered that jurors had rejected that argument in their verdict.
Because jurors found that Valeant officials had intentionally copied the skin-care product’s formula, TriStrata, a unit of closely held NeoStrata Co., asked Farnan to triple the damage award.
The judge declined, saying Valeant’s actions in the patent case didn’t warrant extra punishment. The “infringement in this case was not so obnoxious as to clearly call for assessing a punitive damage award to deter similar conduct in the future,” Farnan said in his decision.
NeoStrata officials were disappointed that Farnan had declined to triple the damage award, said Kevin McGovern, a lawyer who serves as the company’s patent-licensing coordinator.
“We were surprised given that we felt it was a clear victory,” McGovern said.
Princeton, N.J.-based NeoStrata’s products include acne treatments, wrinkle cream, facial cleanser and sun-protection ointments. The company, according to its website, distributes some products through an agreement with Johnson & Johnson.
In 2000, TriStrata settled other U.S. patent claims over skin-care products with Chanel and L’Oreal, the world’s largest cosmetics maker.
The companies now use NeoStrata’s patented formulation of alpha-hydroxy acids in their products, McGovern said.
Valeant’s shares, which have tripled in the last year, fell 78 cents, or 3%, to $25.10 on the New York Stock Exchange.
