Cadence Pharmaceuticals Inc. et al. v. Paddock Laboratories et al

Filing 225

MEMORANDUM OPINION re 26 motion to strike is DENIED. Signed by Judge Leonard P. Stark on 10/1/12. (ntl)

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IN THE UNITED STATES PISTRICT COURT FOR THE DISTRICT dF DELAWARE CADENCE PHARMACEUTICAL, INC. and SCRPHARMATOP, Plaintiffs, I : 1 I ~.A. v. No. 11-733-LPS PADDOCK LABORATORIES, INC.; PERRIGO COMPANY PAD DOCK LABORATORIES, LLC; EXLEA PHARMA SCIENCES, LLC; EXELA PHARMASCI, INC.; and EXELA HOLDING, INC., Defendants. MEMORANDUM OPINION 1. On August 8, 2011, Cadence Pharma uticals Inc. and SCR Pharmatop (together, "Plaintiffs") filed this action for patent infringement gainst Paddock Laboratories, Inc.; Perrigo Company; Paddock Laboratories, LLC; Exela Pharm Sciences, LLC; Exela Pharmsci, Inc.; and Exela Holdings, Inc. (together, "Defendants"). (D.I. ) In their Complaint, Plaintiffs allege infringement of U.S. Patent Nos. 6,028,222 and 6,99 ,218 as a result of an Abbreviated New Drug Application filed by Exela Phanna Sciences, LtC, Exela Phannsci, Inc., and Exela I Holdings, Inc. (D.I. 1 at 10-11) 2. I Defendants filed their Answer on Sepjember 7, 2011. (D.I. 21) In it, among other things, Defendants assert nine affirmative defenses. !d.) At issue here are Defendants' Fifth Affirmative Defense, alleging patent misuse, and Defendants' Seventh Affirmative Defense, alleging Plaintiffs have asserted invalid patent cl~~- (D.!. 21 ,, 6-7 at 27-28) ' I I ! I I I ! I I ¥ ' 1 i ! ! I ! l 3. On October 31, 2011, Plaintiffs filed~ Motion to Strike Defendant's Fifth and Seventh Affirmative Defenses. (D.I. 26) 4. I Federal Rule of Civil Procedure 12(1) rrovides that a court "may strike from a pleading any insufficient defense or any redundant, i aterial, impertinent, or scandalous matter." "Motions to strike are generally disfavored d ordinarily are denied unless the allegations have no possible relation to the controver y and may cause prejudice to one of the parties, or if the allegations confuse the issues." Sun icrosystems, Inc. v. Versata Entm 't., Inc., 630 F. Supp. 2d 395, 400 (D. Del. 2009) (internal qu tation marks omitted). "A motion to strike will not be granted where the sufficiency of the defe se depends on disputed issues of facts or where it is used to determine disputed and substantia questions of law." Weed v. Ally Financial, Inc., 2012 WL 2469544, at *2 (E.D. Pa. June 28, 201 ). "Such a motion should be denied if disputed issues of fact or law are implicated or if the lleged insufficiency is not clearly apparent from the pleadings." Floyd v. Black Swan Shipping o., Ltd., 2001 WL 799848, at * 1 (E.D. Pa. July 13, 2001) (internal quotation marks omitted). hen assessing a motion to strike, the Court may only rely on the pleadings. See Environ Produc , Inc. v. Total Containment, Inc., 951 F. I Supp. 57, 60 (E.D. Pa. 1996). 5. I It appears that a majority of the Distrir Courts within the Third Circuit that have addressed the issue have determined that the heighte1ed pleading requirements of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcro v. Iqbal, 556 U.S. 662 (2009), do not apply to the pleading of affirmative defenses. See Bayer C opscience AG v. Dow Agrosciences LLC, 2011 WL 6934557, at* 1 (D. Del. Dec. 30, 2011) (" bile the Third Circuit has not yet opined as to whether Twombly! Iqbal is applicable to affirmativ defenses, this Court agrees with those 2 I ' ! l 'I ~ I l I 1 1 i courts that have found Twombly!Iqbal inapplicable t~ affirmative defenses."); see also Internet Media Corp. v. Hearst Newspapers, LLC, 2012 WL (agreeing with "well-articulated rationale" that "[i]n ight of the differences between Rules 8(a) 1 l and 8(c) in text and purpose, [] Twombly and Iqbal d not apply to affirmative defenses, which 1 1 need not be plausible to survive. [An affirmative de nse] must merely provide fair notice of the { issue involved.") (internal quotation marks omitted); pertUniverse, Inc. v. Cisco Systems, Inc., t 2012 WL 2335938, at *7 n.3 (D. Del. June 19, 2012) (joining ''the majority ofthe District Courts l ~i l 1 l I l ! l l I ~ l i I ' ~ l' in the Third Circuit [that] have rejected the applicati n of Twombly and Iqbal" to affirmative defenses). The Court agrees with these authorities. 1 i l i l l l I i 1 f ! J l' I I I ij l i { herefore, Plaintiffs' contention that I I i ~ er that would satisfy Twombly and Iqbal Defendants' affirmative defenses are not pled in am 6. I ~ ' I ! (see 0.1. 27 at 5 n.1) is unavailing. "Patent misuse is an affirmative defen e to an accusation of patent infringement, the successful assertion of which requires that the all ged infringer must show that the patentee has impermissibly broadened the physical or tempor 1 scope of the patent grant with anticompetitive effect." Virginia Panel Corp. v. MA Panel Co., 133 F. 3d 860, 868 (Fed. Cir. 1997) (internal quotation marks omitted). Filing of al suit for patent infringement can constitute I I I I i I ' I patent misuse if the suit was filed in bad faith (i.e., "1ham" litigation), based on findings that the 1 l 1 ! ~ ' ! l l t ~867165, at *3 (D. Del. Sept. 6, 2012) j I 1 ! t I 1 See, e.g., Weed, 2012 WL 24695444, at *3 ('Rule 8(a), which is governed by Twombly, is distinct from the pleading standard that applies to ule 8(c). Rule 8(a)(2) applies to claims (including counterclaims and cross-claims) and requi es the pleader to aver 'a short and plain statement of the claims showing his entitlement to re ief.' By contrast, Rule 8( c) sets for the standard for affirmative defenses and requires a p to affirmatively state any affirmative defense. In light of this distinction, the court conclu e[ s] that a party must merely state, not show, an affirmative defense."); Bayer Cropscience, 011 WL 6934557, at *1-2 (listing reasons for conclusion). I i ~ I I I 3 I I l 'II i claim is "objectively baseless in the sense that no reatonable litigant could realistically expect r ! ! ! t success on the merits" and "the baseless lawsuit concfals an attempt to interfere directly with the I ! I business relationships of a competitor." Prof Real lfstate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60-61 (1993) (internal quo ation marks omitted). However, pursuant I I ~ to 35 U.S.C. § 271(d)(3), "[n]o patent owner otherwi e entitled to relief for infringement or contributory infringement of a patent shall be denied elief or deemed guilty of misuse or illegal I ! ! ! I I extension of the patent right by reason of his having i j I I I ·I·. sought to enforce his patent rights against infringement or contributory infringement .. j ." "It is not patent misuse to bring suit to enforce patent rights not fraudulently obtained." C.~ Bard, Inc. v. M3 Systems, Inc., 157 F. 3d 1340, 1373 (Fed. Cir. 1998) (emphasis added). On t*e other hand, "[o]bviously, ifthe patentee knows that the patent is invalid, unenforceable, or no infringed, yet represents to the marketplace that a competitor is infringing the patent, a clear case of bad faith representation is made out." ~ Zenith Elec. Corp. v. Exzec, Inc., 182 F. 3d 1340, 13 4 (Fed. Cir. 1999). f ~ i I ! l '! l ! 6. I I t i ' I I I I The Court will not strike Defendants' ifth Affirmative Defense, asserting patent I ! I ll l l I t l ! ~ misuse. Defendants predicate their patent misuse af rmative defense on the paragraph IV notification letter they provided to Plaintiffs prior to he filing ofthe instant suit. (D .I. 21 ~ 5 at 27-28) In that letter, Defendants provide a detailed xplanation of how, in Defendants' view, the I patents-in-suit are not infringed by Defendants' prop sed ANDA product, and how (in any event) J the patents-in-suit are invalid and/or unenforceable. i information, Plaintiffs and their counsel filed the pre ent suit with no reasonable bases for doing J l so" and, "[a]s such, Plaintiffs have attempted to exte d the scope ofthe '218 and '222 patents I efendants contend that "[d]espite this J j beyond their legally permissible scope with intended anticompetitive effects." (D.I. 21 ~ 5 at 28) l ;l ! ! l I l j 4 l f I I I I I I Although Defendants have not nearly proven the putrted facts on which their patent misuse defense is based (and may never do so), neither does he Court perceive any clear deficiency in I l [ the pleading that would justify the relief of striking t e affirmative defense and removing it from this case. See Cipollone v. Liggett Group, 789 F .2d 81, 188 (3d Cir. 1986) ("[A] court should not grant a motion to strike a defense unless the insu 1ciency of the defense is 'clearly apparent.' I l I The underpinning of this principle rests on a concern that a court should refrain from evaluating the merits of a defense where, as here, the factual ba ground for a case is largely undeveloped.") l 1 i (internal citations omitted). Plaintiffs have adequate otice ofDefendants' allegations. 2 7. t I I Whenever, without deceptive intentio invalid, an action may be maintained claim of the patent which may be vali no costs unless a disclaimer of the inv at the Patent and Trademark Office be the suit. , a claim of a patent is r the infringement of a . The patentee shall recover lid claim has been entered ore the commencement of Defendants contend that§ 288 bars Plaintiffs from re overing costs because Plaintiffs did not enter a disclaimer of their invalid claims at the PTO rior to commencement of this suit. (D.I. 21 ~ 7 at 28) 8. 1 ative Defense, pertinent is 35 U.S. C. § 288, which states: 1 I Turning to Defendants' Seventh Affi It is undisputed that Plaintiffs did not Ile a disclaimer prior to filing suit. It is likewise undisputed that there has been, as yet, no fi ing that any claim of the patents-in-suit is 1 l l j j ' ~ l l 2 Plaintiffs' contend that an affirmative defens particularity to satisfy Federal Rule of Civil Procedu unclear from the pleadings whether the defense soun cases that hold that patent misuse claims inherently s WL 6934557, at *4. 5 of patent misuse must be pled with 9(b). (See D.I. 35 at 2) However, "[i]t is s in fraud and this Court is unaware of any und in fraud." Bayer Cropscience, 2011 I i ' ! I I I I I j i j f f i I !. ' l either invalid or unenforceable. Plaintiffs cite persuafive authority, in the form ofnon- l- l l l l precedential decisions from the Federal Circuit and t is District, to the effect that§ 288 applies J ! i only when patent litigation is commenced after a det rmination of invalidity. See Bradford Co. I v. Jefferson Smurjit Corp., 2001 WL 35738792, at *1, 7 (Fed. Cir. Oct. 31, 2001) ("[W]e J disagree that section 288 obligated [plaintiff] to gues about the invalidity of its patent claims ! t I I I before a jury or some other authority had even ruled n their validity and that [plaintiff] therefore had to file a disclaimer about those claims' validity b fore filing suit .... [Defendant] overlooks the language of[§ 288] itself, which requires that ad sclaimer of the invalid claim be entered at I j l I ~ I ~ ! I I I I I I sought.") (internal citation omitted; emphasis added) Cordance Corp. v. Amazon. com, Inc., 631 I F. Supp. 2d 484, 503 (D. Del. 2009) (explaining that 288 "addresses a situation where 'a claim I I I l of a patent is invalid,"' but "an issued patent is presu ed valid," so if no finding regarding validity of a patent claim "was made by an entity pri r to the commencement of this suit ... l section 288 is not implicated"). 3 Indeed, the Federal ircuit has observed that the argument I essentially relied on here by Defendants "borders on he ridiculous." Bradford, 2001 WL j I a prior determination of invalidity before the patent-i fringement suit for which costs are now the Patent Office 'before the commencement of the uit.' Obviously, then, there must have been 1 1 ,, f 35738792, at *7. Nevertheless, Defendants cite to ar uably inconsistent authority from the I I i I J I ! I I ' l ! ~ i 3 Contrary to Plaintiffs' assertion, Cordance is not "precedential authority." (D.I. 34 at 4) See Threadgill v. Armstrong World Industries, Inc., 28 F.2d 1366, 1371 (3d Cir. 1991) ("[T]here is no such thing as 'the law of the district.' . . . The doctrine of stare decisis does not compel one district court judge to follow the decisio of another. Where a second judge believes that a different result may obtain, independent analys sis appropriate.") (internal quotation marks and citations omitted); Mosel Vitelic Corp. v. Micron Technology, Inc., 162 F. Supp.2d 307, 311 (D. Del. 2000) ("[W]hile the opinion of one district j dge may be found to be persuasive, it is not binding on another district judge (even ifthatjudge appens to sit in the same district)."). 6 l l I j I ! ' ! f I I I I I I ! r l l f i l. ' I j j Supreme Court and the Third Circuit, among others, onstruing the predecessor statute to § 288 I (Rev. Stat. 4922). (See D.I. 31 at 7-11 (citing, inter lia, 0 'Reilly v. Morse, 56 U.S. 62, 120-21 I (1853); Novelty Glass Mfg. Co. v. Brookfield, 172 F. 21,222-23 (3d Cir. 1999))). A motion to l I i 1 strike is not the appropriate vehicle to resolve this di uted question oflaw. See Cipollone, 789 1 j F.2d at 188; Floyd, 2001 WL 799848, at *1. Therefo e, the Court will not strike Defendants' l j Seventh Affirmative Defense. See generally Sun Mi rosystems, Inc. v. Versata Enterprises, Inc., I 630 F. Supp.2d 395, 411-12 (D. Del. 2009) (denying 1 otion to strike affirmative defense I i l i I I asserted under 35 U.S.C. § 288). Accordingly, IT IS HEREBY ORDERED t at Plaintiffs' Motion to Strike (D.I. 26) is I DENIED. I 7 j I \

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