Purdue Pharma LP et al v. Collegium Pharmaceutical Inc.

Filing 29

MEMORANDUM OPINION. Signed by Judge Sue L. Robinson on 8/6/2015. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

PURDUE PHARMA L.P.,
)
THE P.F. LABORATORIES, INC.,
)
PURDUE PHARMACEUTRICALS L.P. )
and RHODES TECHNOLOGIES,
)
)
Plaintiffs,
)
)
v.
)
)
COLLEGIUM PHARMACEUTICAL,
)
INC.,
)
)
Defendant.
)

Civ. No. 15-260-SLR

Jack B Blumenfeld, Esquire, and Rodger D. Smith II, Esquire of Morris, Nicholas, Arsht
& Tunnell LLP. Counsel for Plaintiff. Of Counsel: Robert J. Goldman, Esquire, Henry
Y. Huang, Esquire, Thomas A. Wang, Esquire, Pablo D. Hendler, Esquire, and Sona
De, Esquire of Ropes & Gray LLP.
Frederick L. Cottrell, Ill, Esquire, and Christine D. Haynes, Esquire of Richards, Layton
& Finger, P.A. Counsel for Defendant. Of Counsel: Jake M. Holdreith, Esquire, Jamie
R. Kurtz, Esquire, and Kelsey J. Thorkelson, Esquire of Robins Kaplan LLP.

MEMORANDUM OPINION

Dated: August 6, 2015
Wilmington, Delaware

Rclsdo~udge
I. INTRODUCTION
On March 25, 2015, plaintiffs Purdue Pharma L.P, The P.F. Laboratories, Inc.,
Purdue Pharmaceuticals L.P., and Rhodes Technologies (collectively, "Purdue"), filed
this patent infringement action against Collegium Pharmaceutical, Inc. ("Collegium").
Purdue alleges that Collegium has infringed three patents listed in the FDA Orange
Book relating to an improved active pharmaceutical ingredient ("API"): U.S. Patent Nos.
7,674,799, 7,674,800, and 7,683,072 (''the listed patents"). Additionally, plaintiffs allege
infringement of one patent relating to an abuse deterrent feature of an extended-release
opioid formulation, U.S. Patent No. 8,652,497 ("the '497 patent"), which is not listed in
the FDA Orange Book. Presently before the court is Collegium's motion to dismiss for
lack of personal jurisdiction or, in the alternative, to transfer venue to the Southern
District of New York. (D.I. 8) The court has jurisdiction over this matter pursuant to 28
U.S.C. §§ 1331 and 1338(a). For the reasons that follow, Collegium's motion is granted
in part and denied in part.

II. BACKGROUND
A. The Parties

Purdue Pharma L.P. is a Delaware limited partnership with its principal place of
business in Stamford, Connecticut. The P.F. Laboratories is a New Jersey corporation
with its principal place of business in Totowa, New Jersey. Purdue Pharmaceuticals
L.P. is a Delaware limited partnership with its principal place of business in Wilson,
North Carolina. Rhodes Technologies is a Delaware general partnership with its
principal place of business in Coventry, Rhode Island.

Collegium is a Virginia corporation with its principal place of business in Canton,
Massachusetts. Collegium incorporated as an entity under the laws of the State of
Delaware on April 10, 2002, and then under the laws of the Commonwealth of Virginia
on July 1, 2014.

B. Background
In a case before Judge Sidney H. Stein in the Southern District of New York,
Purdue sued Teva Pharmaceuticals for infringement of the three listed patents
(hereinafter, "the New York litigation"). See Purdue Pharma L.P. v. Teva Pharms.,
USA, Inc., 994 F. Supp. 2d 367, 409, 437-38 (S.D.N.Y. 2014). In a 2014 decision,

Judge Stein found Purdue's listed patents invalid for obviousness. Purdue appealed the
invalidity rulings to the Federal Circuit, and briefing was scheduled to close on June 19,
2015. See Purdue Pharma L.P. v. Epic Pharma, LLC, No. 2014-1294, Order (Fed. Cir.
Apr. 15, 2015).
In 2014, Collegium filed a new drug application ("NDA") under§ 505(b )(2) of the
Food, Drug, and Cosmetic Act (21 U.S.C. § 355(b)(2)), with the intent to market and sell
an abuse-deterrent, extended-release formulation of oxycodone. (D.I. 9 at 1)
Collegium designed the branded product, Xtampza ER™, to be available for patients
who have difficulty swallowing pills. Id. The FDA committed to act on Collegium's
505(b)(2) application for its Xtampza ER™ product by October 12, 2015. (D.I. 12

at~

4)

On that date, the FDA will issue an action letter, which will consist either of an approval
of Collegium's proposed 505(b)(2) product or a complete response letter, describing
deficiencies that must be corrected in order to receive approval. (D.I. 24, ex. 2 at 2)

2

Purdue states that it holds data exclusivity for Oxycontin®'s abuse-deterrent clinical
studies until April 2016, precluding FDA approval until that point. 1 (D. I. 18, ex. B)
On February 12, 2015, Purdue received Collegium's Paragraph IV Notice Letter
and, pursuant to 21 U.S.C. § 271 (e)(2) of the Hatch-Waxman Act ("Hatch-Waxman"),
Purdue filed suit against Collegium in Delaware on March 25, 2015. 2 (D.I. 17 at 7) By
filing suit in Delaware, Purdue triggered a 30-month stay of FDA approval for Xtampza
ER™, set to expire in September 2017. 21 U.S.C. § 355U)(5)(B)(iii). On March 26,
2015, Purdue filed a protective suit in Massachusetts. Purdue has indicated that it
seeks to stay litigation of the listed patents pending a final decision in its appeal of the
invalidity finding in the New York litigation regardless of whether the present case is
litigated in Delaware, New York, or Massachusetts. (D.I. 17 at 16)
The New York litigation did not involve the '497 patent asserted in the instant
litigation. The listed patents are directed to and claim the API oxycodone with very low
levels of potentially genotoxic impurity, while the '497 patent discloses and claims the
use of irritants in the formulation of a drug susceptible to abuse. (D.I. 1, ex. A-D) The
New York litigation involved abuse-deterrence mechanisms such as increased breaking

1

Collegium argues that Purdue's claim of data exclusivity will not block FDA
approval of Collegium's product, because Collegium conducted its own clinical study.
(D. I. 21 at 6)
2

Without going into great detail about the Hatch-Waxman paradigm, submission
of an application in order to engage in the commercial manufacture, use or sale of a
patented drug "shall be an act of infringement." 21 U.S.C. § 271 (e)(2). By enacting
Hatch-Waxman, Congress attempted to "fairly balance[] the rights of'
patentees/branded drug companies (who were given the right to initiate infringement
lawsuits before market entry) and companies developing new and/or generic drugs
(who were given greater protection during the development and experimentation
process). See, e.g., H.R. Rep. No. 98-856, pt. 1, at 28 (1984).

3

strength and gel formation. See Teva, 994 F. Supp. 2d at 377; Purdue Pharma L.P. v.

Amneal Pharms., LLC, Civ. No. 13-3372, slip op. at 1-2 (S.D.N.Y. Apr. 8, 2015).

Ill. STANDARD OF REVIEW

A. Personal Jurisdiction
Rule 12(b )(2) directs the court to dismiss a case when the court lacks personal
jurisdiction over the defendant. Fed. R. Civ. P. 12(b)(2). When reviewing a motion to
dismiss pursuant to Rule 12(b)(2), a court must accept as true all allegations of
jurisdictional fact made by the plaintiff and resolve all factual disputes in the plaintiffs
favor. Traynor v. Liu, 495 F. Supp. 2d 444, 448 (D. Del. 2007). Once a jurisdictional
defense has been raised, the plaintiff bears the burden of establishing, with reasonable
particularity, that sufficient minimum contacts have occurred between the defendant and
the forum to support jurisdiction. See Provident Nat'/ Bank v. Cal. Fed. Sav. & Loan
Ass'n, 819 F.2d 434, 437 (3d Cir. 1987). To meet this burden, the plaintiff must produce
"sworn affidavits or other competent evidence," since a Rule 12(b )(2) motion "requires
resolution of factual issues outside the pleadings." Time Share Vacation Club v. Atlantic
Resorts, Ltd., 735 F.2d 61, 67 n.9 (3d Cir. 1984).
To establish personal jurisdiction, a plaintiff must produce facts sufficient to
satisfy two requirements by a preponderance of the evidence, one statutory and one
constitutional. See id. at 66; Reach & Assocs. v. Dencer, 269 F. Supp. 2d 497, 502 (D.
Del. 2003). With respect to the statutory requirement, the court must determine whether
there is a statutory basis for jurisdiction under the forum state's long-arm statute. See

Reach & Assocs., 269 F. Supp. 2d at 502. The constitutional basis requires the court to
determine whether the exercise of jurisdiction comports with the defendant's right to due

4

process. See id.; see also Int'/ Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct.
154, 90 L.Ed. 95 (1945).
Pursuant to the relevant portions of Delaware's long-arm statute, 10 Del. C. §
3104( c )( 1)-(4), a court may exercise personal jurisdiction over a defendant when the
defendant or its agent:
(1) Transacts any business or performs any character of work or
service in the State;
(2) Contracts to supply services or things in this State
(3) Causes tortious injury in the State by an act or omission in this
State;
(4) Causes tortious injury in the State or outside of the State by an
act or omission outside the State if the person regularly does or
solicits business, engages in any other persistent course of conduct
in the State or derives substantial revenue from services, or things
used or consumed in the State.
10 Del. C. § 3104(c)(1 )-(4). With the exception of (c)(4), the long-arm statute requires a
showing of specific jurisdiction. See Shoemaker v. McConnell, 556 F. Supp. 2d 351,
354, 355 (D. Del. 2008). Subsection (4) confers general jurisdiction, which requires a
greater number of contacts, but allows the exercise of personal jurisdiction even when
the _claim is unrelated to the forum contacts. See Applied Biosystems, Inc. v.

Cruachem, Ltd., 772 F. Supp. 1458, 1466 (D. Del. 1991).
If defendant is found to be within the reach of the long-arm statute, the court then
must analyze whether the exercise of personal jurisdiction comports with due process,
to wit, whether plaintiff has demonstrated that defendant "purposefully avail[ed] itself of
the privilege of conducting activities within the forum State," so that it should
"reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v.

Woodson, 444 U.S. 286, 297 (1980) (citations omitted). For the court to exercise
specific personal jurisdiction consistent with due process, plaintiff's cause of action must

5

have arisen from the defendant's activities in the forum state. See Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 472 (1985). For the court to exercise general personal

jurisdiction consistent with due process, plaintiff's cause of action can be unrelated to
defendant's activities in the forum state, so long as defendant has "continuous and
systematic contacts with the forum state." Applied Biosystems, Inc., 772 F. Supp. at
1458.
8. Venue

Section 1404(a) of Title 28 of the United States Code grants district courts the
authority to transfer venue "[f]or the convenience of parties and witnesses, in the
interests of justice ... to any other district or division where it might have been brought."
28 U.S.C. § 1404(a). Much has been written about the legal standard for motions to
transfer under 28 U.S.C. § 1404(a). See, e.g., In re Link_A_Media Devices Corp., 662
F.3d 1221 (Fed. Cir. 2011 ); Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995);
Helicos Biosciences Corp. v. 11/umina, Inc., 858 F. Supp. 2d 367 (D. Del. 2012).

Referring specifically to the analytical framework described in Helicos, the court
starts with the premise that a defendant's state of incorporation has always been "a
predictable, legitimate venue for bringing suit" and that "a plaintiff, as the injured party,
generally ha[s] been 'accorded [the] privilege of bringing an action where he chooses.'"
858 F. Supp. 2d at 371 (quoting Norwood v. Kirkpatrick, 349 U.S. 29, 31 (1955)).
Indeed, the Third Circuit in Jumara reminds the reader that "[t]he burden of establishing
the need for transfer ... rests with the movant" and that, "in ruling on defendants'
motion, the plaintiff's choice of venue should not be lightly disturbed." 55 F.3d at 879
(citation omitted).
The Third Circuit goes on to recognize that,

6

[i]n ruling on§ 1404(a) motions, courts have not limited their
consideration to the three enumerated factors in§ 1404(a)
(convenience of parties, convenience of witnesses, or interests of
justice), and, indeed, commentators have called on the courts to
"consider all relevant factors to determine whether on balance the
litigation would more conveniently proceed and the interests of
justice be better served by transfer to a different forum.
Id. (citation omitted). The Court then describes some of the "many variants of the

private and public interests protected by the language of§ 1404(a)." Id.
The private interests have included: plaintiff's forum of preference
as manifested in the original choice; the defendant's preference;
whether the claim arose elsewhere; the convenience of the parties
as indicated by their relative physical and financial condition; the
convenience of the witnesses - but only to the extent that the
witnesses may actually be unavailable for trial in one of the fora;
and the location of books and records (similarly limited to the extent
that the files could not be produced in the alternative forum).
The public interests have included: the enforceability of the
judgment; practical considerations that could make the trial easy,
expeditious, or inexpensive; the relative administrative difficulty in
the two fora resulting from court congestion; the local interest in
deciding local controversies at home; the public policies of the fora;
and the familiarity of the trial judge with the applicable state law in
diversity cases.
Id. (citations omitted).

IV. ANALYSIS
A. General Jurisdiction
In support of finding general jurisdiction, Purdue points to Collegium's longstanding former incorporation in the State of Delaware. (D.I. 1 at 1f 13) Although
Collegium changed its state of incorporation to Virginia prior to filing its NOA, it was
incorporated in Delaware from 2002 to 2014. (D.I. 1 at 1f 13) Collegium states that its
present activities are limited to drug development in Massachusetts and business
development and investment activities in Massachusetts and New York. (D.I. 9 at 6)

7

Collegium is not currently registered to do business in Delaware nor has it appointed a
registered agent to conduct business on its behalf in Delaware. 3 (D.I. 9 at 11)
The Supreme Court stated in Daimler AG v. Bauman, 134 S. Ct. 746, 749 (2014),
that the "paradigm all-purpose forums for general jurisdiction are a corporation's place
of incorporation and principal place of business." The Court did not hold that a
corporation may be subject to general jurisdiction only in one of these locations. The
Court, however, did reject the notion that "continuous and systematic" contacts alone
could confer general jurisdiction, clarifying that the role of general jurisdiction is to
"afford plaintiffs recourse to at least one clear and certain forum in which a corporate
defendant may be sued on any and all claims." Id. at 760-62. In shifting the standard
for general jurisdiction, the traditional grounds for exercising general jurisdiction over
drug company defendants in Hatch-Waxman litigation have been narrowed. See, e.g.,

In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 693 F.
Supp. 2d 409, 421 (D. Del. 2010).
In this regard, Collegium is not currently incorporated in Delaware, nor is
Delaware its principal place of business. No additional evidence suggests that
Delaware stands out as a "clear and certain" forum in which Collegium should be sued. 4
Accordingly, the court finds that it does not have general jurisdiction over Collegium.

B. Specific Jurisdiction
3

As Collegium is not registered to do business in Delaware, Collegium has not
consented to general jurisdiction in Delaware. See Forest Labs., Inc. v. Amnea/ Pharm.
LLC, Civ. No. 14-508-LPS, 2015 WL 880599, at *3 (D. Del. Feb. 26, 2015); see a/so
AstraZeneca AB v. Mylan Pharm., Inc., 72 F. Supp. 3d 549, 556-57 (D. Del. 2014).
4

The court does not rule out the possibility that Collegium may be subject to
general jurisdiction outside of Virginia and Massachusetts if its contacts in another state
are sufficient to make it stand out as a "clear and certain forum."

8

Purdue alleges that Collegium's contacts with Delaware are sufficient for the
court to exert specific jurisdiction over Collegium. A plaintiff making such a claim must
establish "a statutory basis for exercising jurisdiction under the Delaware long-arm
statute." Reach & Assocs., 269 F. Supp. 2d at 502. Under Delaware's long-arm
statute, the court may exercise personal jurisdiction over a defendant when the
defendant "[c]auses tortious injury in the State by an act or omission in this State." 10
Del. C. § 3104(3).
The question of what kind of conduct satisfies the above requirement has evoked
multiple analyses, especially in the context of Hatch-Waxman litigation. Courts, for
instance, have found contacts sufficient to establish specific jurisdiction based on: (1)
sending a Paragraph IV Notice Letter into the state; 5 (2) registration to do business in
the state; 6 (3) preparation of the FDA application (NOA or ANDA) in the state; 7 and (4)
design and development of the infringing product occurred in the state. 8 In addition,
one court has granted jurisdictional discovery based on the alleged existence of a

5

AstraZeneca, 72 F. Supp. 3d at 559-60.

6

Accorda Therapeutics, Inc. v. Mylan Pharmaceuticals Inc., 2015 WL 186833, at
*11 (D. Del. Jan. 14, 2015).
7

Pfizer Inc. v. Apotex, Inc., 2009 WL 2843288, at *3 n.5 (D. Del. Aug. 13, 2009);
Pfizer Inc. v. Synthon Holding, B. V., 386 F. Supp. 2d 666, 675-76 (M.D.N.C. 2005).
8

Bristol-Myers Squibb Co. v. Andrx Pharmaceuticals, LLC, 2003 WL 22888804,
at *3 (S.D.N.Y. Dec. 5, 2003); Reckitt Benckiser Inc. v. Watson Labs., Inc., 2009 WL
4756515, at *4 (S.D.N.Y. Dec. 8, 2009); lntendis, Inc. v. River's Edge Pharm., LLC,
2011 WL 5513195 at *4 (D.N.J. Nov. 10, 2011 ).

9

contract with an in-state API manufacturer, leaving open the question of whether such a
contact would be sufficient to establish specific jurisdiction. 9
Setting aside the debate over whether the artificial regime of Hatch-Waxman
litigation should impact the court's jurisdictional analysis, 10 the grounds for establishing
specific jurisdiction asserted at bar are not compelling. 11 Collegium did not send its
Paragraph IV Notice Letter to Purdue in Delaware; Collegium is not registered to do
business in Delaware; Purdue did not prepare its NOA in Delaware. Although
Collegium worked with a Delaware corporation to conduct clinical trials for its NOA
submission, there is no indication of record that the trials themselves took place in
Delaware. (0.1. 13, ex. A) Likewise, although oxycodone, the API used in Collegium's
Xtampza ER™ product, is manufactured in Wilmington, Delaware by Noramco, Inc. (0.1.
18, ex. A), oxycodone is a basic APl 12 that is the subject of numerous patents ('497
patent, col. 1:42-46) and is commercially available in at least two dosage forms (id. at
col. 9:14-22). Even if such a contact were held to satisfy Delaware's long-arm statute,
the court concludes that it would not pass constitutional muster. Purdue's cause of

9

Senju Pharm. Co. v. Metrics, Inc., 2015WL1472123, at *11 (D.N.J. Mar. 31,

2015).
10

I.e., just because Congress wanted to artificially control the trigger for such
litigation may not mean that it intended courts to ignore the real conduct of the parties
for all other purposes.
11

The court acknowledges that Purdue, a Delaware corporation, will be deemed
to have suffered injury in Delaware by the anticipated sale of an infringing product in
Delaware. However, the fact of injury only satisfies the first prong of the test; such
injury must be caused by conduct that occurred in Delaware.
12

The Drug Enforcement Administrated granted Noramco, Inc. registration as a
bulk manufacturer of various "basic classes of controlled substances," including
oxycodone. Manufacturer of Controlled Substances Registration: Noramco, Inc., 79
Fed. Reg. 60498-02 (Oct. 7, 2015).
10

action does not arise from the sale of the API to Collegium and, therefore, does not
logically establish a reasonable expectation of being haled into a Delaware court based
on such sales. There has been no court to date that has exercised specific jurisdiction
on this basis. The court concludes that Purdue has failed to carry its burden of
persuasion.

C. Venue
The court's conclusion above leaves the question: Where should this case be
litigated? Collegium urges the court to transfer the case to the Southern District of New
York, because it has consented to personal jurisdiction in that venue. Purdue, having
filed a "back-up action" in the District of Massachusetts, argues that if transfer is
required, the case should be transferred there.
The court agrees with Purdue. There is no doubt that jurisdiction can be
exercised over Collegium in Massachusetts, where Collegium continues to be
headquartered and to engage in drug and business development and investment
activities. The fact that the court in the Southern District of New York has adjudicated
the listed patents is not compelling under the circumstances at bar, where such
adjudication is on appeal and the issues presented by the '497 patent are new and
distinct. 13
In sum, under the unusual circumstances of this case, the court will dismiss the
instant litigation so that Purdue can pursue its protective lawsuit pending in the District
of Massachusetts, an entirely appropriate venue. The court finds that Purdue's litigation

13

To wit, the listed patents cover the formulation of an oxycodone hydrochloride
API with high breaking strength and which gels in water, whereas the '497 patent claims
an abuse-deterrent formulation that uses an irritant.
11

tactics 14 are no better or worse than Collegium's, 15 and that a straightforward venue like
Massachusetts is the most reasonable solution to the parties' dispute in this regard.

V. CONCLUSION
For the reasons discussed above, Collegium's motion to dismiss for lack of
personal jurisdiction or, in the alternative, to transfer venue to the Southern District of
New York, is granted in part and denied in part.
An appropriate order shall issue.

14

Filing suit in both Delaware and Massachusetts.

15

Changing its state of incorporation from Delaware to Virginia on the eve of a
litigation-triggering event and consenting to jurisdiction in the Southern District of New
York, not because of sufficient contacts but, ostensibly, because of the adverse decision
rendered by that court against Purdue and the potential for early market entry based on
that decision.

12