Indivior vs. Alvogen: Motion to Seal Confidential Information

On December 6, 2022, the United States District Court for the District of New Jersey ruled on a motion to seal portions of a transcript from a hearing in the case of Indivior Inc., Indivior UK Limited, and Aquestive Therapeutics, Inc. v. Alvogen Pine Brook LLC and Alvogen, Inc. The decision revolved around Alvogen’s request to protect confidential business information disclosed during the proceedings. The case was presided over by Magistrate Judge Cathy L. Waldor.

The Dispute Between Indivior and Alvogen

The litigation centered on a patent dispute between the two pharmaceutical companies, Indivior and Alvogen. Indivior, along with its co-plaintiffs Indivior UK Limited and Aquestive Therapeutics, focused on the development of treatments for opioid addiction. Alvogen, a manufacturer of generic drugs, was involved in the production of competing pharmaceutical products. The details of the case involved claims over proprietary drug formulas, manufacturing processes, and other sensitive business information. 

Alvogen’s primary concern was that the hearing transcript contained confidential information about their pharmaceutical products and business strategies, information that could potentially harm their competitive standing if it became public.

Alvogen’s Motion to Seal

Alvogen filed a motion to seal under Local Civil Rule 5.3(c), which allows parties to request the sealing of judicial records that contain sensitive material. The rule requires the moving party to demonstrate the need for sealing by explaining the nature of the materials, identifying the private or public interests that warrant protection, detailing the potential harm from disclosure, and proving that no less restrictive alternative exists.

In its motion, Alvogen argued that the transcript contained proprietary commercial information related to its pharmaceutical products and business operations. This information had not been made public, and the company maintained that its release could damage its competitive position in the market. The hearing transcript included details about Alvogen’s product development processes, research data, and internal business practices, all of which are critical in the generic pharmaceutical industry.

The Court’s Findings

In granting the motion, the court made several key determinations. First, the court agreed that the transcript contained sensitive proprietary information, which Alvogen had taken steps to protect from public disclosure. The court emphasized that this type of information is often subject to protection under federal law, especially in cases where public disclosure could harm a company’s ability to compete.

The court also acknowledged the competitive nature of the pharmaceutical industry, where proprietary information such as research and development processes plays a crucial role in maintaining a company’s market position. Alvogen’s argument that public access to this information could enable competitors to gain an unfair advantage was persuasive to the court. Therefore, the court concluded that there was a legitimate private interest in keeping this information sealed.

The court further found that public disclosure of the confidential material would cause Alvogen significant harm. The information, which included trade secrets and proprietary business strategies, was not publicly available and would expose Alvogen to substantial competitive risks if made public. The court cited relevant case law, including Republic of the Philippines v. Westinghouse Electric Corp., which supports the sealing of judicial records that contain confidential business information, and Littlejohn v. BIC Corp., which established that courts may restrict access to records to prevent improper use of the information, such as giving a competitor an unfair advantage.

Balancing Public and Private Interests

While public access to judicial records is a general principle, the court recognized that this right is not absolute. In cases where the release of information could harm a party’s business interests, courts have the authority to restrict access to protect those interests. The court noted that Alvogen’s need to protect its confidential commercial information outweighed any public interest in accessing the sealed portions of the transcript. The public’s interest in this case was minimal, and the court found that disclosing the sensitive information would not serve a significant public purpose.

Judge Waldor ruled that sealing only the specific portions of the transcript containing proprietary information was the most appropriate course of action. This approach ensured that the public would still have access to the non-confidential parts of the transcript, while Alvogen’s trade secrets remained protected.

The Court’s Final Ruling

Ultimately, the court granted Alvogen’s motion to seal the confidential portions of the transcript from the November 2, 2022 hearing. The court ordered that the unredacted transcript be sealed permanently, while a redacted version of the document, excluding the proprietary information, would be made available to the public docket. The court tasked Alvogen with preparing the redacted version in accordance with its guidelines.

The decision highlights the court’s responsibility to balance the interests of transparency in legal proceedings with the need to protect sensitive business information. In industries like pharmaceuticals, where intellectual property and proprietary data are critical to success, courts often have to navigate complex issues related to confidentiality and competition. This ruling serves as a reminder that the courts are willing to protect business interests when disclosure could lead to irreparable harm.