HORIZON PHARMA IRELAND LIMITED et al v. ACTAVIS LABORATORIES, UT, INC.

Filing 234

OPINION. Signed by Judge Noel L. Hillman on 1/6/2017. (tf, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

HORIZON PHARMA IRELAND
LIMITED, et al.,
Plaintiffs,

Civil No. 14-7992 (NLH/AMD)

OPINION

v.
ACTAVIS LABORATORIES, UT,
INC., et al.,
Defendants.

APPEARANCES:
John E. Flaherty
Ravin R. Patel
McCARTER & ENGLISH LLP
Four Gateway Center
100 Mulberry St.
Newark, NJ 07102
Robert F. Green
Christopher T. Griffith
Caryn C. Borg-Breen
L. Scott Beall
Jessica M. Tyrus
Benjamin D. Witte
GREEN, GRIFFITH & BORG-BREEN LLP
NBC Tower, Suite 3100
455 North Cityfront Plaza Drive
Chicago, Illinois 60611
Dennis A. Bennett
GLOBAL PATENT GROUP, LLC
1005 North Warson Road, Suite 404
St. Louis, Missouri 63132
On behalf of HORIZON PHARMA IRELAND LIMITED, et al.
Liza M. Walsh
Christine I. Gannon
Katelyn O'Reilly
WALSH PIZZI O'REILLY FALANGA LLP

One Riverfront Plaza
1037 Raymond Blvd.
6th Floor
Newark, NJ 07102
Ralph J. Gabric
Laura A. Lydigsen
Joshua E. Ney, Ph.D.
Joshua H. James
Andrew S. McElligott
BRINKS GILSON & LIONE
455 North Cityfront Plaza Drive, Suite 3600
Chicago, Illinois 60611
On behalf of ACTAVIS LABORATORIES, UT, INC., et al.
HILLMAN, District Judge
Before the Court is the motion of Plaintiff Horizon
(Horizon Pharma Ireland Limited, HZNP Limited and Horizon Pharma
USA, Inc.) for reconsideration (Docket No. 192) of the Court’s
August 17, 2016 Markman Opinion (Docket No. 188).

Horizon is

the current owner and assignee of the patents-in-issue and of
the PENNSAID® 2% New Drug Application, which is the first FDAapproved twice-daily topical diclofenac sodium formulation for
the treatment of the pain of osteoarthritis of the knees.
Horizon has filed several Hatch-Waxman actions alleging
patent infringement against generic companies seeking to market
copies of Horizon’s PENNSAID® 2% formulation prior to the
expiration of Horizon’s patents, and this particular action
concerns Horizon’s claims against Actavis Laboratories UT, Inc.

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(“Actavis”). 1

Horizon brought this action 2 in response to

Actavis’ assertion that the generic copy of PENNSAID® 2%
described in Actavis’ Abbreviated New Drug Application No.
207238 (“ANDA”), if approved by the FDA, would not infringe any
valid and enforceable patent owned by Horizon.
In the Markman phase of the case, 3

the Court was tasked

with construing the following terms in the ’838 Patent Family 4:
A.

“the topical formulation produces less than 0.1%
impurity A after 6 months at 25°C and 60% humidity”

B.

“the formulation degrades by less than 1% over 6
months”

C.

“consisting essentially of”

1

Another group of cases filed by Horizon against a generic
company seeking to market copies of Horizon’s PENNSAID® 2%
formulation prior to the expiration of Horizon’s patents is
against Lupin Ltd. and Lupin Pharmaceuticals, Inc. Because the
Court’s findings in the Actavis actions directly impact the
claims in the Lupin actions, Lupin filed a brief in opposition
to Horizon’s motion for reconsideration and appeared at the
January 4, 2017 hearing on that motion. (See Civil Action No.
15-3051, Docket No. 137.)
2

This Court has jurisdiction over the subject matter of this
action pursuant to 28 U.S.C. §§ 1331, 1338(a), 2201, 2202 and 35
U.S.C. § 271.
3

Claim construction is “an issue for the judge, not the jury.”
Markman v. Westview Instruments, Inc., 517 U.S. 370, 391 (1996).
4

There are nine patents asserted in this matter. Of these, five
patents - U.S. Patent Nos. 8,252,838; 8,563,613; 8,871,809;
9,066,913; and 9,101,591 - are part of the “’838 Patent Family”
and all agreed to have the same specification. The other four
patents - U.S. Patent Nos. 8,546,450; 8,217,078; 8,618,164; and
9,132,110 - are part of the “’450 Patent Family” and similarly
agreed to have the same specification.
3

The Court found each of these terms to be indefinite.
(Docket No. 188 at 12, 14, 27.)

Specially with regard to

“consisting essentially of,” the Court noted that Horizon
identified five basic and novel properties for the claimed
invention: (1) better drying time; (2) higher viscosity; (3)
increased transdermal flux; (4) greater pharmacokinetic
absorption; and (5) favorable stability.

(Id. at 23.)

The

Court found that the basic and novel property of “better drying
time” was indefinite, which therefore caused the term
“consisting essentially of” to be indefinite.

(Id. at 27.)

Horizon has filed the instant motion for reconsideration,
arguing that the Court erred in two ways:
The Court did not consider the alleged “indefiniteness”
on a claim-by-claim basis, but instead broadly held the term
“consisting essentially of” to be indefinite.
When claims
requiring use of hydroxypropyl cellulose (HPC) as a
thickening agent are considered as independent inventions,
those claims should not be found to be indefinite because the
test results for such inventions are consistent. The only
evidence of alleged inconsistent testing results was in the
context of different claimed inventions that require carbopol
thickening agents; and
The Court’s finding of indefiniteness is based on
allegedly “unrebutted” expert testimony that the patent
discloses two methods for comparing drying rates, which
provide inconsistent results. However, Horizon’s responsive
expert evidence on this issue was not presented to the Court
because of an agreement between the parties to not brief the
definiteness of “greater drying rate” in Responsive Markman
briefs.
At the time of the Markman briefing and Markman
Hearing, Actavis had not sought leave to amend their
contentions to include the argument that the basic and novel
properties were themselves indefinite. Indeed, to date, the
only indefiniteness argument presented with respect to
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“consisting essentially of” in Actavis’ Contentions is that
a person of ordinary skill (“POSA”) cannot identify the basic
and novel properties.
(Docket No. 192-1 at 7.)

Horizon also objects to the Court’s

application of Nautilus, Inc. v. Biosig Instruments, Inc., 134
S. Ct. 2120, 2129 (2014) to the analysis of the invention’s
basic and novel properties.

(Docket No. 192-1 at 10.)

The Court will grant Horizon’s request that it reconsider
its Markman decision, but after having fully considered the
parties’ briefing and oral argument, the Court stands by its
prior findings. 5
With regard to Horizon’s argument that it was precluded
from fully presenting its evidence to support its construction

5

A motion for reconsideration may be treated as a motion to
alter or amend judgment under Fed. R. Civ. P. 59(e), or as a
motion for relief from judgment or order under Fed. R. Civ. P.
60(b), or it may be filed pursuant to Local Civil Rule 7.1(i).
The purpose of a motion for reconsideration “is to correct
manifest errors of law or fact or to present newly discovered
evidence.” Max's Seafood Cafe ex rel. Lou–Ann, Inc. v.
Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). A judgment may be
altered or amended only if the party seeking reconsideration
shows: (1) an intervening change in the controlling law; (2) the
availability of new evidence that was not available when the
court granted the motion for summary judgment; or (3) the need
to correct a clear error of law or fact or to prevent manifest
injustice. Id. A motion for reconsideration may not be used to
re-litigate old matters or argue new matters that could have
been raised before the original decision was reached, P.
Schoenfeld Asset Mgmt., L.L.C. v. Cendant Corp., 161 F.Supp.2d
349, 352 (D.N.J. 2001), and mere disagreement with the Court
will not suffice to show that the Court overlooked relevant
facts or controlling law, United States v. Compaction Sys.
Corp., 88 F.Supp.2d 339, 345 (D.N.J. 1999).
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of the term “better drying time,” the Court does not agree.

The

timeline of events, detailed by Actavis in its presentation at
the January 4, 2017 hearing, demonstrates that Horizon had ample
notice of Actavis’s indefiniteness challenge to “better drying
time,” and several opportunities – including during the two
Markman hearings on March 2, 2016 and June 7, 2016, the
supplemental briefing in between, and during the ten weeks after
the second Markman hearing and the issuance of the Court’s
Markman Opinion on August 17, 2016 – to voice its concerns about
presenting all of its evidence to support its construction of
“better drying time.”
Similarly, Horizon chose to present its position on the
`838 Patent Family as a whole, and has only raised the request
that each claim of every patent should be considered
individually in its motion for reconsideration.

It is clear

that Horizon was not “sandbagged” by the course of the claim
construction process that took place over many months.
Even considering, however, Horizon’s belated arguments to
support its construction of “better dying time” and request for
claim-by-claim construction, the Court comes to the same
conclusion as detailed in the Markman Opinion.

As the Court

summed up its analysis, (1) the specification describes two
different methods for evaluating “better drying time,” and the
two methods do not provide consistent results at consistent
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times, (2) the claimed results are not seen across all
formulations of the claimed invention, and when “dryness” is
evaluated at any time shorter than four hours, not all
formulations of the claimed invention actually exhibit “better
drying time,” and (3) Horizon’s expert Dr. Walters’ reasoning
does not comport with the plain language of the specification,
and his references to the prosecution history do not provide any
clarity on the appropriate time frame under which to evaluate
the drying rate, while Actavis’ expert Dr. Kohn is more
persuasive that a POSA would not know under what standard to
evaluate the drying rate of the claimed invention.
188 at 26-27.)

(Docket No.

Thus, Horizon’s requested relief in its motion

for reconsideration, even if granted, does not change the
Court’s conclusion.
Putting aside the construction of “better drying time,” the
finding that the term “consisting essentially of” is indefinite
is also confirmed by the finding that the stability and
degradation claims are indefinite.

As noted above, one of the

basic and novel properties of Horizon’s claimed invention is
“favorable stability.”

The Court did not specifically address

this term in the context of assessing the definiteness of the
basic and novel properties, but earlier in the Markman Opinion
the Court extensively analyzed the terms “the topical
formulation produces less than 0.1% impurity A after 6 months at
7

25°C and 60% humidity” and “the formulation degrades by less
than 1% over 6 months.”

In construing those terms, the Court

found that the identity of “impurity A” was unknowable to a
reasonable certainty to a POSA.

(Docket No 188 at 7-12.)

The

Court further found that the patent did not provide guidance on
how to evaluate degradation because it was either equated with
“impurity A”, which had already been deemed indefinite, or could
be determined by multiple methods for how to evaluate stability
without further guidance.

(Id. at 7-13.)

Thus, the Court

concluded that both terms relating to stability were indefinite. 6
The finding that the claim terms relating to stability are
indefinite renders the claim term “consisting essentially of”
indefinite.

This is because the basic and novel property of

“favorable stability” is indefinite.

As stated in the Court’s

Markman Opinion, if a POSA reading the patent would understand
the five principles identified by Horizon to be the basic and
novel properties of the claimed invention, then once one of them
is indefinite, they all become problematic.

(Id. at 27.)

When

one property does not have “reasonable certainty,” it follows
that the group of properties itself does not have the requisite
“reasonable certainty.”

Consequently, the term “consisting

6

Horizon has not specifically challenged this finding in its
motion for reconsideration.
8

essentially of” must be construed as indefinite due to the
inability for a POSA to have “reasonable certainty” about what
the basic and novel properties of the invention are, and the
POSA would lack “reasonable certainty” about whether an
additional ingredient would materially alter the basic and novel
properties of the claimed invention.

(Id.)

Thus, regardless of

the Court’s construction of “better drying time,” the
indefiniteness of the stability terms also warrants the finding
that “consisting essentially of” is indefinite.
Finally, with regard to Horizon’s argument that the
standard for an indefiniteness analysis reiterated by the
Supreme Court in Nautilis should not be performed as to the
basic and novel properties, the Court stands by its Markman
Opinion, which explained why Nautilis should, and does, apply
here.

(Id. at 17-23.)

Horizon’s bases for reconsideration were ably briefed and
argued at the January 4, 2017 hearing, such that Horizon
persuaded the Court to reconsider its August 17, 2016 Markman
Opinion.

But after reconsideration, the Court is not persuaded

to disturb the prior result.
An appropriate Order will be entered.

Date:
January 6, 2017
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

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