Takeda Pharmaceuticals U.S.A., Inc. v. West-Ward Pharmaceutical Corporation et al

Filing 132

MEMORANDUM ORDER granting 124 MOTION to Alter Judgment of Dismissal and for Leave to Amend its Complaint. Signed by Judge Sue L. Robinson on 12/14/2016. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

TAKEDA PHARMACEUTICALS U.S.A., INC., )
)
Plaintiff,
)
)
v.
) Civ. No. 14-1268-SLR
)

WEST-WARD PHARMACEUTICAL
CORPORATION, HIKMA AMERICAS, INC.,
and HIKMA PHARMACEUTICALS PLC,

)
)
)
)

Defendants.

MEMORANDUM ORDER
At Wilmington this \~day of December, 2016, having reviewed plaintiff's motion
filed pursuant to Rules 59(e) and 15(a) of the Federal Rules of Civil Procedure, as well
as the papers filed in connection therewith;
IT IS ORDERED that said motion (D.I. 124) is granted, for the reasons that
follow:
1. Standard of review. After the entry of final judgment, Federal Rule of Civil
Procedure 59(e) provides a plaintiff with a "window in which to seek to reopen the
judgment and amend the complaint." Fletcher-Harlee Corp. v. Pote Concrete

Contractors, Inc., 482 F.3d 247, 253 (3d Cir. 2007). Under Rule 59(e), "[a] motion to
alter or amend a judgment must be filed no later than 28 days after the entry of
judgment." When a plaintiff files a Rule 59(e) motion accompanied by a Rule 15(a)
motion after the dismissal of a complaint under Rule 12(b)(6), "the appropriate manner

to dispose of this issue is to consider the motions together and determine what
outcome is permitted by consideration of the Rule 15(a) factors." Burtch v. Mi/berg
Factors, Inc., 662 F.3d 212, 231 (3d Cir. 2011). "Under Rule 15(a), if a plaintiff

requests leave to amend a complaint vulnerable to dismissal before a responsive
pleading if filed, such leave must be granted in the absence of undue delay, bad faith,
dilatory motive, unfair prejudice, or futility of amendment." Grayson v. Mayview State
Hosp., 293 F.3d 103, 108 (3d Cir. 2002). See also Foman v. Davis, 371 U.S. 178, 182

(1962).
2. Background. On October 3, 2014, plaintiff Takeda Pharmaceuticals U.S.A.,

Inc. ("Takeda") filed the instant suit, asserting induced infringement of five patents
under 35 U.S.C. § 271 (b). On October 9, 2014, the court issued a temporary
restraining order ("TRO"), but denied Takeda's request for a preliminary injunction ("Pl")
on November 4, 2014. On appeal, the Federal Circuit affirmed the court's denial of a Pl
and vacated the TRO. Takeda Parms. U.S.A., Inc. v. West-Ward Pharm. Corp., 785
F.3d 625, 627 (Fed. Cir. 2015). On September 10, 2015, Takeda filed its first amended
complaint, which defendants Hikma Americas Inc. and Hikma Pharmaceuticals PLC
(collectively, "Hikma") moved to dismiss. On May 18, 2016, the court granted Hikma's
motion, and the case was closed.
3. In its first amended complaint, Takeda alleged that Hikma's Mitigare™
product 1 induced infringement of certain of Takeda's patents, which contain one or
more claims covering methods of use of Takeda's colchicine product, Colcrys®. (D.I.
1

An oral single-ingredient colchicine product, "indicated for prophylaxis of gout
flares in adults." (D.I. 1, ex. Hat 1)

2

109) Colcrys® is approved and used to treat and prevent acute gout flares. Although
Mitigare TM has the same active ingredient, route of administration, and strength as
Colcrys®, Mitigare TM is approved only to prevent gout flares, and the Mitigare TM label
warns that it is not indicated for the treatment of acute gout flares. The court reviewed
the labels of the accused Mitigare TM products, as well as Hikma's FDA correspondence
and evidence of Hikma's marketing and sales activities. The court concluded that, on
its face, the Mitigare TM labels did not infringe. With respect to Hikma's marketing and
sales activities, the court concluded that Takeda had failed to satisfy the pleading
standard found in Bell At/. Corp. v. Twombly, 550 U.S. 544, 555 (2007), and Ashcroft v.
Iqbal, 556 U.S. 662 (2009); 2 i.e., Takeda had failed to provide adequate factual

allegations to set forth a plausible claim for induced infringement.
4. Analysis. Takeda comes to the court with a second amended complaint,
arguing that it "has amended its allegations to clearly state a claim based on Hikma's
active encouragement of third-party infringement, including Mitigare sales
representatives' statements telling healthcare providers to prescribe Mitigare for the
unapproved indications covered by Takeda's patents, including for the treatment of
acute gout flares, and its distribution of a sales aid which explicitly references the ACR
Guidelines that recommend Takeda's patented methods." (D.I. 125 at 2; see also D.I.
125, ex. A,

1f1f 49-66)

Hikma observes in its opposition brief that "Takeda offers no

details concerning any of these conversations - no particulars concerning which

2

Takeda notes that it was unfair for the court to judge the first amended
complaint against this heightened standard of review, as opposed to that related to
Form 18.

3

providers told which Takeda representatives of statements by which Hikma
representatives, or when these conversations supposedly occurred." (D.I. 127 at 2)
(emphasis in original)
5. With respect to the factors related to the Rule 15(a) motion, the motion was
timely, and there is no evidence of bad faith or dilatory motive under the circumstances
at bar, that is, patent litigation between aggressive competitors trying to achieve market
share. The court is mindful, however, that the purpose of a complaint is "to give the
defendant fair notice of what the ... claim is and the grounds upon which it rests."
Twombly, 550 U.S. at 545 (internal quotation marks omitted). So long as a plaintiff has

not used "boilerplate and conclusory allegations," and has accompanied its legal theory
with "factual allegations that make [its] theoretically viable claim plausible," the Third
Circuit has held "pleading upon information and belief [to be] permissible where it can
be shown that the requisite factual information is peculiarly within the defendant's
knowledge or control." McDermott v. Clondalkin Grp., Inc. 2016 WL 2893844, at *4 (3d
Cir. May 18, 2016) (quotation marks, citation, and emphasis omitted). A filed pleading
that rests upon information and belief must be "formed after an inquiry reasonable
under the circumstances," such that "the factual contents have evidentiary support, or if
so identified, will likely have evidentiary support after a reasonable opportunity to further
investigation or discovery." Anderson v. Bd. of Sch. Directors of Millcreek Twp. Sch.
Dist., 574 F. App'x 169, 174 (3d Cir. 2014) (quoting Fed. R. Civ. P. 11(b)). Allegations

that are more than conclusory are "entitled to the assumption of truth." Connelly v.
Lane Const. Corp., 809 F.3d 780, 787 (3d Cir. 2016).

4

6. The court recognizes that the proposed second amended complaint is not
written with all the who, what, when, and where's of the communications identified
therein. However, given the above standard for reviewing the sufficiency of a
complaint, and given that Hikma would be the actual source of the requisite factual
information, the court concludes that the proposed second amended complaint contains
sufficiently detailed allegations (1) to plausibly give rise to a claim for inducement of
patent infringement, and (2) to give Hikma fair notice of such claim. As a consequence,
amendment is not futile. Because the instant litigation has not progressed past initial
skirmishes, 3 there is no undue prejudice to Hikma.
7. Conclusion. For the reasons stated, Takeda's motion filed pursuant to Rules
59(e) and 15(a) of the Federal Rules of Civil Procedure (D.I. 124) is granted. The court
is aware that the instant litigation will likely have market consequences, and that the
court's decision to allow resurrection of the litigation rests upon the veracity of Takeda's
allegations. Therefore, under the rather convoluted procedural posture of this case, the
court will consider staged discovery, with an initial focus on the evidentiary support for
the allegations contained in the second amended complaint, with follow-up discovery by
both parties to vet the issue of inducement.

3

lndeed, Hikma has not yet filed an answer. Given the above analysis, one
might think that it is time to move past the pleading stage and on to the merits of the
litigation.

5