Cephalon Inc. et al v. Impax Laboratories Inc.

Filing 65

MEMORANDUM ORDER granting 9 MOTION to Dismiss Based upon Collateral Estoppel (Dismiss Counts I-IV of the Complaint) and declining plaintiffs' request for a stay. Signed by Judge Sue L. Robinson on 9/6/2012. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

CEPHALON, INC. and CIMA LABS,
INC.,

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Plaintiffs,

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V.

Civ. No. 11-1152-SLR

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IMPAX LABORATORIES, INC.,
Defendant.

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MEMORANDUM ORDER
At Wilmington this 6th day of September, 2012, having considered defendant
lmpax Labs., Inc.'s ("lmpax's") motion to dismiss and the papers submitted therewith;
IT IS ORDERED that said motion (D. I. 9) is granted, as follows.
1. Background. On November 18, 2011, plaintiffs Cephalon, Inc. ("Cephalon")
and CIMA Labs., Inc. ("CIMA") (collectively, "plaintiffs") filed the present lawsuit alleging
infringement of U.S. Patent Nos. 6,200,604 ("the '604 patent"), 6,974,590 ("the '590
patent"), 7,862,832 ("the '832 patent") and 7,862,833 ("the '833 patent") by lmpax. (D.I.
1) Plaintiffs' action arises out of the filing of an Abbreviated New Drug Application
("ANDA") 1 by lmpax in 2011 2 for a generic version of Fentora® (fentanyl buccal tablets),
used to treat breakthrough pain in cancer patients. The '604 and '590 patents,
assigned to CIMA and exclusively licensed to Cephalon, have been addressed in
previous ANDA litigation in this court, wherein the court found both patents invalid for

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No. 203357.

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Piaintiffs received notice of lmpax's ANDA on October 7, 2011. (D. I. 4)

lack of enablement. See Cephalon, Inc. v. Watson Pharma., Inc., Civ. No. 08-330, 769
F. Supp. 2d 729 (D. Del. 2011) (hereinafter, "Watson"). 3
2. Plaintiffs allege that lmpax infringes each of the patents in suit by virtue of its
filing of an ANDA containing a paragraph IV certification 4 as to the '604, '590, '832 and
'833 patents (hereinafter, "the patents-in-suit"). 5 "Count I" through "Count IV" of
plaintiffs' complaint are directed to the '604 and '590 patents, and are the subject of
lmpax's currently-pending motion to dismiss. (D.I. 9) Therein, lmpax argues that there
is no reason to litigate any issues involving the invalid '604 and '590 patents, as validity
was actually litigated in the Watson litigation, culminating with a final judgment of
invalidity against plaintiffs. (D.I. 10)
3. Standard. In Blonder- Tongue Laboratories, Inc. v. University of Illinois
Foundation, 402 U.S. 313 (1971 ), the Supreme Court held that, in the patent context,
defensive collateral estoppel may be used if the accused infringer shows: "(1) that a
patent was found invalid in a prior case that had proceeded through final judgment and
in which all procedural opportunities were available to the patentee; (2) that the issues
litigated were identical; and (3) that the party against whom estoppel is applied had a
full and fair opportunity to litigate." Abbott Labs. v. Andrx Pharma., Inc., 473 F.3d 1196,

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The court incorporates its prior opinion by reference here and henceforth
presumes familiarity with that decision.
4

See 21 U.S.C. § 355U)(2)(A)(vii)(IV).

5

See 35 U.S.C. § 271 (e)(2)(A) ("(2) It shall be an act of infringement to submit(A) an application under section 505U) of the Federal Food, Drug, and Cosmetic Act or
described in section 505(b)(2) of such Act for a drug claimed in a patent or the use of
which is claimed in a patent[.]").

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1203 (Fed. Cir. 2007). Regional Circuit law controls the determination of whether prior
findings invoke collateral estoppel pursuant to these guidelines. /d. at 1202-03.
4. In this regard, the Third Circuit has held that collateral estoppel applies when
"(1) the identical issue was previously adjudicated; (2) the issue was actually litigated;
(3) the previous determination was necessary to the decision; and (4) the party being
precluded from relitigating the issue was fully represented in the prior action." Jean

Alexander Cosmetics, Inc. v. L'Oreal USA, Inc., 458 F.3d 244, 249 (3d Cir. 2006)
(citations omitted). The Third Circuit has also considered whether the party being
precluded had "a full and fair opportunity to litigate the issue in question in the prior
litigation" and, in addition, whether the issue was determined by final judgment. /d.
(citations omitted).
5. Discussion. Plaintiffs' response to lmpax's motion is two-fold. First,
plaintiffs argue that collateral estoppel does not apply to bar its claims on the '604 and
'590 patents because it did not have a "full and fair opportunity" to litigate enablement
defenses in the Watson action. (D. I. 23 at 5-9) Specifically, plaintiffs assert that the
court improperly supplemented the trial evidence (i.e., the testimony of Watson's
expert, Dr. Mumper) with party briefing and attorney argument in order to arrive at its
non-enablement conclusion post-trial. (/d. at 8) "[W]hile Cephalon was able to address
-and rebut- Watson's inadequate trial evidence, it had no opportunity to answer the
attorney argument back-filled by the court into the evidentiary holes in Watson's
enablement case." (/d.) Plaintiffs also argue that the court improperly applied the
reasoning from Watson's failed non-adopted claim construction position to the

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enablement inquiry. (/d. at 8-9)
6. The court does not agree with plaintiffs' characterizations of the Watson
decision and, upon review, is not inclined to find that plaintiffs did not have an
opportunity to address enablement. The court took into considertaion plaintiffs'
enablement arguments in the Watson opinion, with accompanying citations to the
record. See Watson, 769 F. Supp. 2d at 752-54. Pursuant to Blonder- Tongue,
collateral estoppel applies to bar the re-litigation of the invalid '604 and '590 patents.
Therefore, the court grants lmpax's motion to dismiss the related claims.
7. Alternatively, plaintiffs request that the court stay this litigation pending the
Federal Circuit's review of the court's Watson decision on appeal. 6 (D.I. 23 at 9-1 0)
lmpax opposes a stay on the basis that the '832 and '833 patents "issued from
unrelated patent applications, name entirely different inventors, and will be unaffected
by the Watson appeal." 7 (D.I. 27 at 6)
8. Motions to stay invoke the broad discretionary powers of the court. Oentsply
lnt'l, Inc. v. Kerr Mfg. Co., 734 F.Supp. 656, 658 (D. Del. 1990) (citing Bechtel Corp. v.
Laborers' lnt'l Union, 544 F.2d 1207, 1215 (3d Cir. 1976)). Three general factors inform
the court in this regard:
(1) whether the granting of a stay would cause the non-moving party to suffer
undue prejudice from any delay or allow the moving party to gain a clear tactical

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According to the Federal Circuit's PACER site, the Watson case was appealed
to the Federal Circuit on April 18, 2011. Plaintiffs filed several extensions of time to file
its opening brief between May 19, 2011 and May 4, 2012; briefing commenced in the
appeal on May 18, 2012 and has only recently been completed. Oral argument does
not appear to have been scheduled.
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1mpax also lists the "'981 patent" in this regard, which appears to be in error.

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advantage over the non-moving party; (2) whether a stay will simplify the issues
for trial; and (3) whether discovery is complete and a trial date set.
Enhanced Security Research, LLC v. Cisco Sys., Inc., Civ. No. 09-571, 2010 WL

2573925, at *3 (D. Del. June 25, 201 0) (citing St. Clair Intellectual Prop. Consultants v.
Sony Corp., Civ. No. 01-557, 2003 WL 25283239, at *1 (D. Del. Jan. 30, 2003)).

9. The court has entered a schedule in this case with a trial date of June 24,
2013. (D.I. 26) Plaintiffs have stated that the 30-month stay deadline is April?, 2014.
(D. I. 4) The court is currently scheduling trials in October 2014. Thus, the court could
not resolve the present dispute within thirty months if the remaining claims are stayed.
Given the public interest at stake, the court declines plaintiffs' request for a stay.

United Sta s D1stnct Judge

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