IGI Laboratories Inc. v. Mallinckrodt LLC et al

Filing 24

MEMORANDUM ORDER Granting in part and Denying in part 15 MOTION to Dismiss. Counterclaims II and IV are Dismissed. Signed by Judge Richard G. Andrews on 4/22/2014. (nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

IGI Laboratories, Inc.,
Plaintiff,

v.

Civil Action No. 13-2044-RGA

Mallinckrodt LLC, Mallinckrodt Inc., and
Novo Research Inc.,
Defendants.
MEMORANDUM ORDER

Before the Court is IGI's Motion to Dismiss Counterclaim Pursuant to Rule 12(b)(6)
(D.I. 15) and related briefing. (D.I. 16, 21, 22). Mallinckrodt holds the NDA for a diclofenac
topical solution sold under the trade name Pennsaid. (D.I. 10 at~ 13). IGI submitted an ANDA to
the FDA seeking approval to market diclofenac topical solution for the treatment of signs and
symptoms of osteoarthritis of the knees. Mallinckrodt owns patents which cover the use of
diclofenac, in combination with agents such as non-steroidal anti-inflammatory drugs
("NSAIDs"), for treating osteoarthritis of the knees. IGI filed a declaratory judgment action
seeking a declaration of non-infringement of U.S. Patent Nos. 8,217,078 and 8,546,450. (D.I. 1).
Defendants counterclaimed for infringement under 35 U.S.C. §§ 271(e)(2)(A) and 271(b). (D.I.
10). IGI moved to dismiss the counterclaims. (D.I. 15).
Section 271 (b) states that "[w]hoever actively induces infringement of a patent shall be
liable as an infringer." 35 U.S.C. § 271(b). Section 271(e)(2)(A) states that it is an act of
infringement to file an ANDA "for a drug claimed in a patent or the use of which is claimed in a

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patent." 35 U.S.C. § 271(e)(2)(A). This section has been described "as creating a highly artificial
act of infringement ... so that courts could promptly resolve infringement and validity disputes
before the ANDA applicant had engaged in the traditional statutorily defined acts of
infringement." AstraZeneca Pharm. LP v. Apotex Corp., 669 F.3d 1370, 1377 (Fed. Cir. 2012)
(internal citations and quotation marks omitted). "Once jurisdiction is established, however, the
substantive determination whether actual infringement or inducement will take place is
determined by traditional patent infringement analysis." Warner-Lambert Co. v. Apotex Corp.,
316 F.3d 1348, 1365 (Fed. Cir. 2003).
Here, all ofDefendants' counterclaims sound in induced infringement. Mallinckrodt's
patents do not claim the composition, but a particular method of using the drug. Defendants
claim that IGI's proposed label will induce infringement of the patented methods. This does not
state a claim under § 271 (b). Section 271 (b) imposes liability on those who "actively induce[]
infringement," not on those who might some day induce infringement. "A claim is not ripe for
adjudication if it rests on contingent future events that may not occur as anticipated, or indeed
may not occur at all." Texas v. United States, 523 U.S. 296, 300 (1998) (internal quotations
omitted). Therefore I dismiss Defendants' § 271(b) counterclaims, counts II and IV.
As for Defendants' counterclaims under§ 271(e)(2)(A), IGI argues that the FDA
approved use for the drug is not claimed in the '078 and '450 patents, and therefore Defendants
fail to state a claim. IGI is correct that "section 271(e)(2)(A) lies only against a patented use that
has been approved by the FDA." Bayer Schering Pharma AG v. Lupin, Ltd., 676 F.3d 1316,
1319 (Fed. Cir. 2012) (internal quotation marks omitted). It is also true that "[t]he FDA does not
grant across-the-board approval to market a drug ... [I]t grants approval to make, use, and sell a

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drug for a specific purpose for which that drug has been demonstrated to be safe and
efficacious." Warner-Lambert Co. v. Apotex Corp., 316 F.3d at 1356.
The parties agree that the only FDA approved use of diclofenac is "the treatment of signs
and symptoms of osteoarthritis of the knee(s)." (D.I. 10

at~~

15, 16). The patents cover using

diclofenac for treating osteoarthritis of the knee via applying the diclofenac, waiting for it to dry,
and applying either a second medication, sunscreen, or insect repellent. (See '078 patent, claim 1;
'450 patent, claim 10). The parties disagree as to whether the FDA approved use is the same as
that claimed in the patents. 1 (D.I. 10 at~~ 23-28).
The Defendants allege that IGI will induce infringement ofMallinckrodt's patents via
IGI's proposed product label. 2 IGI's proposed product label is identical to that ofthe Pennsaid
label, except for the manufacturer. (D.I. 1 at~ 30). In the "Dosage and Administration" section,
the FDA approved label for Pennsaid instructs the reader to "[w]ait until the treated area is dry
before applying sunscreen, insect repell[ e]nt, lotion, moisturizer, cosmetics, or other topical
medication." (D.I. 1 Ex. A at 3). These allegations appear to be enough to state a claim for
induced infringement under§ 271(e)(2)(A). "The pertinent question is whether the proposed
label instructs users to perform the patented method. If so, the proposed label may provide
evidence of [the accused infringer's] affirmative intent to induce infringement." AstraZeneca LP
v. Apotex, Inc., 633 F.3d at 1060.

1 IGI points out that Defendants did not allege that its patented methods were approved by the FDA, and argues that
this alone is fatal to Defendants' 27l(e)(2)(A) claims. (D.I. 16 at 10). While Defendants did not explicitly state that
the FDA approved use is claimed in Mallinckrodt's patents, Defendants did answer paragraphs 23-28 ofiGI's
complaint, which stated that the claims of the '078 and '450 patents do not cover the only FDA approved indication
for diclofenac, with denials. In the counterclaims, reading the allegations in the light most favorable to Defendants,
they alleged that the patented methods are the same as what the FDA has approved. (D.I. 10 ~~ 20-25).
2 These allegations are under the § 271 (b) claims. While I am dismissing those claims, I understand that the
Defendants intended these allegations to be a part of the basis for their induced infringement claims arising under§
27l(e)(2)(A).

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IGI argues that the patented methods are also not FDA approved uses because
"indications or uses must not be implied or suggested in other sections of the labeling if not
included in [the Indications and Usage] section." Bayer Schering Pharma AG v. Lupin, Ltd., 676
F.3d at 1323. The Indications and Usage section ofiGI's proposed label states that the drug is
"indicated for the treatment of signs and symptoms of osteoarthritis ofthe knee(s)." (D.I. 1 Ex. A
at 2). IGI argues that this is like Bayer, where the Court decided that an FDA approved
indication for contraception did not include the uses of achieving anti-mineralocorticoid and antiandrogenic activity, where the latter two uses were not listed in the Indications and Usage
section. 676 F.3d at 1324. However, in Bayer, the parties agreed that the "patent [could] be
infringed only if the defendants' ANDAs [sought] FDA approval to market Yasmin for the three
simultaneous effects covered by the '652 patent." !d. at 1320-21. It was essentially agreed by the
parties in Bayer that the three effects were three separate indications. It is not so clear here that
treating osteoarthritis of the knee along with sunscreen, insect repellent, or an NSAID is a
different indication than just treating osteoarthritis ofthe knee. 3 Without context, deciding this
issue is inappropriate at the motion to dismiss stage.
The real issue, I think, is whether judgment on the pleadings is appropriate at this
juncture. Defendants point out that IGI seeks to dismiss counterclaims which are mirror images
ofiGI's declaratory judgment claims. (D.I. 21 at 6). It makes little sense to me that a plaintiffs
declaratory judgment claims state a claim, and yet defendant's equivalent counterclaims do not. I
therefore hold that Defendants have set forth sufficient factual allegations that the patents cover

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It would seem odd for the FDA to have to approve as a separate use the application of sunscreen or insect repellent
on top of a medication.

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the FDA approved use, and, even ifl were to interpret IGI's motion to dismiss as a motion for
judgment on the pleadings, I would find that it is inappropriate to do so.
Therefore, the Motion to Dismiss (D.I. 15) is GRANTED IN PART and DENIED IN

PART. Counterclaims II and IV are DISMISSED.

,J)

Entered this

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fl day of April, 2014.