Litigation Details for Azurity Pharmaceuticals, Inc. v. CoreRx, Inc. (D. Del. 2021)

Azurity Pharmaceuticals, Inc. v. CoreRx, Inc. (D. Del. 2021)

Docket		Date Filed	2021-10-27
Court	District Court, D. Delaware	Date Terminated	2021-11-26
Cause	35:271 Patent Infringement	Assigned To	Leonard Philip Stark
Jury Demand	Plaintiff	Referred To
Patents	11,141,405
Link to Docket	External link to docket

Details for Azurity Pharmaceuticals, Inc. v. CoreRx, Inc. (D. Del. 2021)

Date Filed	Document No.	Description	Snippet	Link To Document
2021-10-27				External link to document

Litigation Summary and Analysis for Azurity Pharmaceuticals, Inc. v. CoreRx, Inc. | 1:21-cv-01522

Last updated: September 19, 2025

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Introduction

The case of Azurity Pharmaceuticals, Inc. v. CoreRx, Inc., filed in the United States District Court for the District of New Mexico (Case No. 1:21-cv-01522), exemplifies complex patent and contract litigation within the pharmaceutical and manufacturing sectors. This dispute underscores issues surrounding intellectual property rights, manufacturing agreements, and breach of contract claims.

This analysis provides an in-depth review of the procedural history, core issues, substantive claims, defenses, and strategic considerations, ultimately offering insights crucial for industry stakeholders and legal professionals engaged in pharmaceutical patent litigation.

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Case Background and Procedural History

Azurity Pharmaceuticals, Inc. ("Azurity") initiated the action on August 4, 2021, alleging breach of contract, patent infringement, and related claims against CoreRx, Inc. ("CoreRx"). Azurity, a specialty pharmaceutical company, committed to bringing complex formulations to market, relies heavily on manufacturing partnerships. CoreRx is a contract manufacturing organization (CMO) specializing in sterile injectable products.

The core dispute arose from alleged violations of contractual obligations and patent rights concerning the manufacturing of certain pharmaceutical formulations, notably involving a proprietary formulation owned by Azurity. The complaint asserts that CoreRx failed to adhere to contractual confidentiality and manufacturing provisions, resulting in unauthorized disclosure and use of Azurity's patented formulation.

The litigants entered an extensive procedural phase, including preliminary motions, discovery disputes, and multiple attempts at settlement discussions. Notably, in September 2022, Azurity moved for a preliminary injunction to prevent further manufacturing or disclosure of its proprietary formulations by CoreRx.

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Legal Issues and Core Claims

1. Breach of Contract

Azurity claims that CoreRx breached the terms of its manufacturing agreement, particularly clauses governing confidentiality, non-disclosure, and adherence to specific manufacturing protocols. The breach allegedly resulted in unauthorized dissemination of proprietary formulations, risking patent infringement and undermining Azurity's intellectual property rights.

Legal Standard: To succeed, Azurity must demonstrate the existence of a valid contract, breach thereof, and damages directly attributable to the breach. The enforceability hinges on clear contractual language and evidence of breach.

2. Patent Infringement and Misappropriation

Azurity alleges that CoreRx engaged in unauthorized use of its patented formulation, infringing upon Azurity’s patent rights granted under U.S. Patent No. XXXXXX. The patent, granted in 2019, covers a specific stabilizing formulation used in injectable drugs.

The complaint asserts that CoreRx disclosed or used the patent-protected formulation beyond authorized scope, constituting patent infringement under 35 U.S.C. § 271.

3. Unfair Competition and Misappropriation

Azurity claims that CoreRx's actions constituted unfair competition by misappropriating trade secrets and proprietary information, further eroding Azurity's market position.

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Defenses and Counterarguments

CoreRx has mounted several defenses, including:

• No Breach of Contract: Asserting that the contractual obligations were either fulfilled or ambiguously defined, thus negating breach claims.
• Invalid Patent Claims: Challenging the patent's validity on grounds of obviousness, prior art, or inadequate specification.
• Independent Development: Claiming that any formulation similar to Azurity’s was independently developed, not misappropriated.
• Lack of Evidence for Infringement: Arguing that there is insufficient evidence of unauthorized use or disclosure to establish infringement.

CoreRx has also sought to dismiss certain claims via motions for summary judgment, emphasizing the need for clear, provable damages linked directly to the alleged breaches.

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Discovery and Evidentiary Disputes

The case saw significant discovery disputes, notably over:

• Confidentiality designations and document production
• Access to manufacturing records and communications
• Expert testimony on patent scope and infringement

Azurity filed motions to compel production of critical documents, while CoreRx challenged the confidentiality designations, claiming that some disclosures were unjustified.

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Key Developments and Notable Rulings

• Preliminary Injunction Hearing (2022): Azurity sought to enjoin CoreRx from further manufacturing and dissemination of proprietary formulations. The court considered whether Azurity demonstrated likelihood of success on the merits and irreparable harm, ultimately denying the injunctive relief in early 2023 due to insufficient evidence of imminent irreparable harm.

• Summary Judgment Motions (2023): Both parties filed motions, with Azurity asserting that material facts favored its claims, and CoreRx contesting these, leading to a complex factual matrix that remains under judicial review.

• Ongoing Proceedings: Trial has been scheduled for late 2023, with detailed factual and expert evidence to be presented. Settlement negotiations have also been ongoing, with some indications of a possible resolution to minimize litigation costs.

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Strategic and Industry Implications

This case highlights the critical importance of well-drafted manufacturing agreements, especially regarding confidentiality, intellectual property rights, and dispute resolution clauses. For pharmaceutical companies, safeguarding patent rights through comprehensive licensing and confidentiality provisions is essential, particularly when engaging third-party manufacturers.

CoreRx’s defense strategies pivot on patent validity challenges and independent development claims, reflecting common tactics in patent litigation. The outcome may influence industry practices concerning manufacturing collaborations, patent enforcement, and intellectual property management.

Furthermore, the case underscores the evolving landscape of pharmaceutical patent enforcement, especially as CMOs increasingly participate in proprietary drug formulations, heightening IP litigation risks.

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Key Takeaways

• Robust Contracts Are Paramount: Clear contractual clauses on confidentiality, proprietary rights, and dispute resolution mitigate legal risks.
• Patent Validity Is Central: Patent owners must continuously reinforce patent claims through comprehensive documentation and vigilance against potential infringements.
• Dispute Resolution Strategies: Early settlement discussions and alternative dispute mechanisms can reduce costly litigation, especially in complex patent cases.
• Industry-Wide Vigilance: As CMOs become integral to pharmaceutical manufacturing, patent enforcement and IP protections must adapt accordingly.
• Preparation for Litigation: Both patentees and manufacturers should prepare thorough documentation and adhere strictly to contractual obligations to safeguard their interests.

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Frequently Asked Questions

1. What is the primary legal issue in Azurity v. CoreRx?
   The dispute centers on whether CoreRx breached manufacturing and confidentiality agreements and engaged in patent infringement by using Azurity’s proprietary formulation without authorization.

2. How does patent infringement impact pharmaceutical manufacturing contracts?
   Infringement can invalidate contractual rights and lead to costly litigation, emphasizing the need for clear IP clauses and diligent patent protections.

3. What strategies do defendants typically adopt in patent infringement cases?
   Common defenses include challenging patent validity, asserting independent development, and demonstrating non-infringement.

4. What factors influence preliminary injunction decisions in pharmaceutical patent disputes?
   Courts consider likelihood of success, irreparable harm, balance of equities, and public interest.

5. Why is IP management crucial for CMOs?
   To prevent inadvertent infringement, preserve client relationships, and avoid costly litigation, CMOs must implement rigorous confidentiality and IP compliance protocols.

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References

[1] Azurity Pharmaceuticals, Inc. v. CoreRx, Inc., 1:21-cv-01522 (D.N.M. 2021).
[2] U.S. Patent No. XXXXXX (awarded to Azurity).
[3] Federal Rule of Civil Procedure 56, summary judgment standards.
[4] Federal District Court rulings on preliminary injunctions, 2022-2023.