In Otsuka America Pharmaceutical, Inc. v. Hetero Labs Limited, [2025-2016] (July 1, 2026), the Federal Circuit affirmed a preliminary injunction based on infringement of U.S. Patent No. 7,659,282against Hetero’s introduction of a generic version of Nuedexta (a drug used for treating neurological disorders), but vacated the district court’s waiving the requirement of the bond required by FRCP 65(c).

After Hetero signaled its intention ot launch its generic product on or after July 10, 2025, Otsuka sued them in the District of Delaware. After issuing a temporary restraining order against them, the district court granted a preliminary injunction on July 23, 2025. The district court did not require Otsuka to post a bond pending appeal because the equities weighed strongly in favor of waiving the Rule 65(c) bond.

The Federal Circuit affirmed the injunction, and turned the district court’s decision not to require a bond. The Federal Circuit began its analysis with the language of FRCP 65(c), noting the injunction is appropriate “only if the movant gives security in an amount that teh court considered proper to pay the costs and damages sustained by any party found to be wrongfully enjoined or restrained. The Federal Circuit noted that the Third Circuit has recognized only limited exceptions to the bond requirement, and has said that waiver is “so rare that the requirement is almost mandatory.”

The district court found that the risk of financial harm to Hetero “speculative at best” and expressed concern over the “chilling effect on access to justice” if a multi-million-dolllar bond were required,

Bound by the Third Circuit’s narrow exceptions to Rule 65(c), the Federal Circuit noted that the Third Circuit has never excused a district court from requiring a bond where an injunction prevents commercial, money-making activities. Because Hetero’s attempt to enter the market with its generic pharmaceutical product is clearly a commercial, money-making activity, the Federal Circuit vacated th Rule 65(c) bond waiver and remanded the bond issue to the district court for reconsideration.

The decision is important because it reinforces the requirement for a bond for injunctions, but in the present case, with the patent expiring within 43 days, on August 13, 2026, so the impact Otsuka and Hetero is limited.