HOFFMANN-LA ROCHE INC. v. MYLAN INC. et al

Filing 58

OPINION re 38 MOTION to Dismiss for Lack of Jurisdiction For Claims 1-5 of the Patent filed by HOFFMANN-LA ROCHE INC.. Signed by Judge William J. Martini on 12/9/09. (gh, )

UNITED STATES DISTRICT COURT D I S T R IC T OF NEW JERSEY

H O F F M A N -L A ROCHE INC., Plaintiff, v. M Y L A N INC., and MYLAN PHARMS. INC., Defendants.

C iv il Action Number: 2:09-01692

O P IN IO N H O N . WILLIAM J. MARTINI

M E M O R A N D U M OPINION 1 I. IN T R O D U C T IO N O n April 8, 2009, Plaintiff Hoffman-La Roche ("Roche") filed a complaint against D e f e n d a n ts Mylan Inc. and Mylan Pharmaceuticals Incs. ("Mylan") alleging that Mylan in f rin g e d United States Patent No. 5,472,949 (the "`949 Patent"), (Doc. No. 1-2), and seeking " to enforce its patent rights covering Xeloda® capecitabine 150 mg and 500 mg tablets." C o m p la in t 2, (Doc. No. 1). Mylan filed an Abbreviated New Drug Application ("ANDA") N o . 90-943 seeking FDA "approval to market a 150 mg and 500 mg generic copy of Roche's X e lo d a ® brand capecitabine drug product prior to expiration of Roche's patent rights."

For the convenience of the reader of this document in electronic format, hyperlinks to the Court's record and to authority cited herein may be inserted. No endorsement of any p ro v id e r of electronic or other resources is intended by the Court's practice of using h yp e r l i n k s .

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Complaint 6. Roche claims this is an act of infringement under 35 U.S.C. §§ 271(a), 271 (b), 2 7 1 (c ), 271(e)(2). Complaint 7-9. Mylan claims the `949 Patent "is invalid, unenforceable, o r would not be infringed by its generic product." Complaint 6. Mylan has since filed an A n s w e r and Counterclaim, (Doc. No. 16), and an Amended Answer and Amended C o u n te rc la im , (Doc. No. 33). Roche subsequently filed an Answer to Counterclaim, (Doc. N o . 19), and an Amended Answer to Counterclaim, (Doc. No. 34). Before this Court is Plaintiff's Motion to Dismiss Defendants' Defenses and C o u n te rc la im s Relating to Unasserted Claims 1-5 of the Patent-In-Suit (the "Motion"), (Doc. N o . 38 (notice of motion); Doc. No. 38-1 ("Opening Brief")), Defendants' Brief in O p p o s itio n to Motion to Dismiss All Claims and Defenses Related to Claims 1-5 of U.S. P a te n t 5,472,949 ("Opposition Brief"), (Doc. No. 46), and Plaintiff's Reply in Support of its M o tio n to Dismiss Defendants' Defenses and Counterclaims to Unasserted Claims 1-5 of the `9 4 9 Patent-In-Suit ("Reply Brief"), (Doc. No. 49). The matter is fully briefed. H a v in g considered the parties' filings, federal statutory law and rules, including local p a te n t rules, case law, and persuasive scholarly authority, the Court, for the reasons e la b o ra te d below, will GRANT Plaintiff's Motion to Dismiss.

II.

C O N T E N T I O N S OF THE PARTIES In accordance with a prior scheduling order and local rules, Roche identified only

c la im 6 as infringed by Mylan's ANDA (Roche's "Infringement Contentions").

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Subsequently, Roche provided Mylan with a covenant not to sue (the "Covenant") for in f rin g e m e n t of the remaining claims, i.e., claims 1, 2, 3, 4, and 5 of the `949 Patent. Based o n the Infringement Contentions and Covenant, Roche argues that the Court is without s u b je c t matter jurisdiction to determine any controversy, claims, counterclaims, or defenses in v o lv in g only claims 1, 2, 3, 4, and 5. Mylan takes the contrary position and argues that the C ourt retains jurisdiction over claims 1 through 5, i.e., the unasserted claims, notwithstanding th e Infringement Contentions and the Covenant.

III.

S T A N D A R D OF REVIEW T h e Plaintiff's motion to dismiss is brought pursuant to the provisions of Fed. R. Civ.

P . 12(b)(1) (dismissal based on lack of subject matter jurisdiction). In adjudicating a Rule 1 2 (b )(1 ) motion, "[a court] review[s] only whether the allegations on the face of the c o m p la in t, taken as true, allege facts sufficient to invoke the jurisdiction of the district court." C o m m o n Cause of Penn. v. Pennsylvania, 558 F.3d 249, 257 (3d Cir. 2009). "[T]he parties in v o k in g the federal courts' jurisdiction, bear the burden of establishing their standing." C o m m o n Cause of Penn., 558 F.3d at 257. "Accordingly, unlike a Rule 12(b)(6) motion, consideration of a Rule 12(b)(1) ju ris d ic tio n -typ e motion need not be limited; conflicting written and oral evidence may be c o n s id e re d and a court may decide for itself the factual issues which determine jurisdiction. W h e n resolving a factual challenge, the court may consult materials outside the pleadings ...."

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Koronthaly v. L'Oreal USA, Inc., Civil Action No. 07-5588, 2008 WL 2938045, at *2 (D.N.J. J u ly 29, 2008) (citations omitted). T h is Court has subject matter jurisdiction both over Plaintiff's patent infringement c la im s pursuant to 35 U.S.C. 1 et seq., 28 U.S.C. §§ 1331, 1338(a), and 35 U.S.C. §§ 271. T h is Court has subject matter jurisdiction over Mylan's counterclaims (that is, according to M yla n , albeit this is contested by Roche) seeking declaratory judgment under 35 U.S.C. § 1 e t seq., 28 U.S.C. §§ 1331, 1338(a) and, of course, under the Declaratory Judgment Act, 28 U .S .C . § 2201. (Doc. No. 33 at 16.) Since this action arises under the patent laws of the U n ite d States, i.e., 35 U.S.C. § 1 et seq., the Court must apply the precedents of the United S ta te s Court of Appeals for the Federal Circuit, which has jurisdiction over any appeal of this ju d g m e n t. See 28 U.S.C. § 1295(a); Daiichi Sankyo Co., Ltd. v. Mylan Pharms. Inc., Civil A c tio n Nos. 06-3462, 07-3039, 08-2752, 2009 WL 2356879, at *5 (D.N.J. July 30, 2009) (M a rtin i, J.).2

IV .

A N A L Y S IS " A party [such as Mylan] seeking to base jurisdiction on the Declaratory Judgment

A c t bears the burden of proving that the facts alleged, under all the circumstances, show that

Plaintiff suggests that Daiichi is on-point with the instant litigation. But the Daiichi o p in io n does not hold that a covenant not to sue extending only to some, but not all, patent c la im s divests the Court of jurisdiction of the unasserted claims (and counterclaims thereto). T e llin g ly, Plaintiff in this litigation does not argue for the application of claim or issue p re c lu sio n against Mylan based on Daiichi. 4

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there is a substantial controversy, between the parties having adverse legal interests, of s u f f ic ie n t immediacy and reality to warrant the issuance of a declaratory judgment." Benitec A u stl., Ltd. v. Nucleonics, Inc., 495 F.3d 1340, 1343 (Fed. Cir. 2007) (citing MedImmune, In c . v. Genentech, Inc., 549 U.S. 118, 127 S. Ct. 764, 771 (2007)) (quotation marks o m itte d ).3 Moreover, a case or controversy "must be extant at all stages of review, not merely a t the time the complaint [was] filed." Benitec, 495 F.3d at 1345 (citing Steffel v. Thompson, 4 1 5 U.S. 452, 459 n. 10 (1974)); see also Akzona Inc. v. E.I. du Pont de Nemours & Co., 662 F . Supp. 603, 610 & n.17 (1987) (noting that issue had been left open by Webb, but holding th a t "an actual `case' or `controversy' within the meaning of article III must exist at all times

The MedImmune Court's test represented a rejection of the Federal Circuit's prior " re a s o n a b le apprehension of suit" or "reasonable apprehension of imminent suit" tests. B e n ite c , 495 F.3d at 1343 n.2; see also Indium Corp. of Am. v. Semi-Alloys, Inc., 781 F.2d 8 7 9 (Fed. Cir. 1985): D e c la ra to ry judgment jurisdiction under 28 U.S.C. § 2201 exists when an e x a m in a tio n of the totality of the circumstances indicates that an actual c o n tro v e rs y exists between the parties involved. In the case of an action s e e k in g a declaratory judgment of patent invalidity or noninfringement, the a c tu a l controversy requirement is satisfied when a defendant's [that is, the p a rty defending against the declaratory judgment action] conduct has created o n the part of the declaratory plaintiff a reasonable apprehension that it will f a c e an infringement suit if it commences or continues the activity in question a n d when the plaintiff has `actually produced the accused device' or has `p re p a re d to produce such a device.' Id . at 882-83 (quoting Jervis B. Webb Co. v. S. Sys., Inc., 742 F.2d 1388, 1398-99 (Fed. C ir. 1984)) (emphasis added). 5

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during the action," as opposed to only when the suit was first filed).4 T h e Federal Circuit has held that in litigation seeking a declaratory judgment to the e f f e c t that a patent is invalid, as Mylan seeks here, "the existence of a case or controversy m u s t be evaluated on a claim-by-claim basis." Webb., 742 F.2d at 1399 (Fed. Cir. 1984); P h a r m a N e t, Inc. v. DataSci Ltd. Liability Co., Civil Action No. 08-2965, 2009 WL 396180, a t *3 (D.N.J. Feb. 17, 2009) (Brown, C.J.) (same) (citing Webb, supra).5 A. D o Roche's Infringement Contentions Divest the Court of Subject Matter J u r is d ic tio n ?

Plaintiff's complaint alleged that Mylan infringed the `949 Patent. The patent e n c o m p a s s e d six claims. See `949 Patent (noting that the patent has "6 Claims, [and] No D ra w in g s " ), (Doc. No. 1-2 at 2). It appears that at this stage Plaintiff was asserting that each o f the six claims were infringed. (As Mylan notes, Plaintiff's language to the effect that this C o u rt has been "divested" of jurisdiction in regard to the unasserted claims indicates that the C o u rt had jurisdiction over them, at least, initially.) Subsequent to filing its Complaint, P la in tif f filed, per local patent rules, its Infringement Contentions in which Plaintiff took the p o s itio n that only claim 6 is at issue. Plaintiff's position, then, is that although the Court o rig in a lly had jurisdiction over patent claims 1 to 5 (including counterclaims and defenses

Prior case law, expressly left open whether or not jurisdiction at the start of litigation w a s a sufficient basis "to sustain the case or controversy requirement to the conclusion of the a c tio n ...." Webb, 742 F.2d at 1398 n.6. This issue now appears to be settled. See generally 8 DONALD S. CHISUM, CHISUM ON PATENTS § 21.02[1][d][iii][C], at 2 1 -1 2 6 n.255 (2005) (collecting case law). 6
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relating to the unasserted claims), its Infringement Contentions divested the Court of ju ris d ic tio n because there is no longer a concrete present controversy in regard to those c la im s . Opening Brief 5-7. Roche primarily relies on Jervis B. Webb Co. v. S. Sys., Inc., 742 F .2 d 1388, 1398-99 (Fed. Cir. 1984), and Super Sack Mfg. Corp. v. Chase Packaging Corp., 5 7 F.3d 1054, 1058 (Fed. Cir. 1995). Although both cases have broad language consistent w ith Plaintiff's position, Mylan correctly points out that neither of these two cases squarely h o ld s that where a party generally alleges that a patent has been infringed or identifies a set o f patent claims as infringed but subsequently asserts only that a more limited set of patent c la im as being infringed, then the limitation divests the court of jurisdiction with regard to th e unasserted (or no longer asserted) patent claims . Furthermore, Mylan points out that R o c h e 's position was rejected by Lear Automotive Dearborn, Inc. v. Johnston Controls, Inc., 5 2 8 F. Supp. 2d 654 (E.D. Mich. 2007). Although Webb and Super Sack, supra, are not on-point, other case law is on-point. In Teradyne Inc. v. Hewlett-Packard Co., Civil Action No. 91-0344, 1994 WL 317560 (N.D. C a l. June 21, 1994) (Patel, J.), Hewlett-Packard ("HP") alleged that Teradyne infringed HP's `8 1 4 Patent. Teradyne counterclaimed that the `814 was invalid or otherwise not infringed. A s in the instant litigation, HP did not initially specify which patent claims of the `814 patent h a d been infringed by Teradyne. Subsequently, HP notified Teradyne that it was only a s s e rtin g patent claims 3, 9, and 10; and argued that there was no longer a live case or c o n tro v e rsy in regard to claims 1 to 2 and 4 to 7, the unasserted claims. Shortly thereafter,

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Teradyne brought a summary judgment motion seeking to base invalidity on the unasserted c la im s . The District Court for the Northern District of California held: T h e burden is on Teradyne to establish that such a case or controversy existed a t the filing of its request for declaratory judgment and continues to the present tim e . Since HP is no longer asserting claims 1-2 and 4-7 against Teradyne, T e r a d y n e must demonstrate that it has a reasonable apprehension that HP will d o so in the future; otherwise jurisdiction is lacking. Teradyne has not a tte m p te d to make this showing and indeed it seems likely that HP would be e s to p p e d from asserting these claims in the future, now that it has limited its c h a lle n g e to claims 3, 9 and 10. T e ra d yn e argues, however, that since claims 3, 9 and 10 all depend f ro m claims 1 and 2 there is still a live controversy with respect to those two c la im s . Although Teradyne may still attempt to prove that claims 3, 9 and 10 a re invalid because they depend on claims 1 and 2, the court does not have p o w e r to enter a declaratory judgment that the latter claims are invalid. T h e re f o re , since Teradyne's motion on the invalidity of the `814 concerned o n ly claims that are no longer being asserted against it, that portion of T e ra d yn e 's motion is denied for lack of jurisdiction. For the same reasons, the c o u rt will only address that portion of Teradyne's non-infringement argument th a t relates to the claims that Teradyne is currently accused of infringing. Id . at *3 (emphasis added) (quotation marks and citations omitted). But see Opposition Brief 8 n.3 (suggesting that the jurisdictional status of patent claim 1 is in doubt "because claim 6 is a dependent claim that incorporates claim 1"). Although the "reasonable apprehension" h a s since been superseded by the MedImmune test, see supra note 3 and accompanying text, it is still clear that the Teradyne court took the view that merely because patent claims were a t issue in one stage of a litigation, the court can nevertheless become divested of jurisdiction o v e r those particular patent claims, even by a parties' voluntary action to limit the court's ju ris d ic tio n . The fact that particular patent claims were put in issue in a complaint or in an e a rly stage of a litigation will not, without more, work to preserve the court's jurisdiction 8

over those patent claims at every subsequent stage. Furthermore, the position of the Teradyne c o u rt seems to have been espoused by other courts. See, e.g., Howes v. Zircon Corp., 992 F. S u p p . 957, 959-60 (N.D. Ill. 1998) ("As a preliminary matter I hold that I have no ju ris d ic tio n to address Zircon's motion for summary judgment [for noninfringement] on c la im s 1 or 16 of the `578 patent. To be justiciable, there must be a controversy at present and n o t merely at the time the complaint was filed. The Plaintiffs no longer allege infringement o f claims 1 and 16 and thus no present case or controversy exists regarding their infrin g e m e n t. Therefore I deny [defendant] Zircon's motion for summary judgment on claims 1 and 16 because I lack jurisdiction over those claims." (emphasis added) (citations o m itte d )); accord Therma-Tru Corp. v. Peachtree Doors Inc., Civil Action No. 89-73028, 1 9 9 2 WL 332100, at *4 (E.D. Mich. Feb. 25, 1992), aff'd in part, rev'd in part on other g r o u n d s , 44 F.3d 988 (Fed. Cir. 1995) ("Where a plaintiff limits its charge of infringement to only some claims of a patent, there is no case or controversy as to the remaining claims." (c itin g Grain Processing Corp. v. Am. Maize-Products Co., 840 F.2d 902, 905-06 (Fed. Cir. 1 9 8 8 )) (emphasis added)). Other courts have held that a claimant's unilateral action will only divest the court of ju ris d ic tio n over the counterclaimant's declaratory judgment in regard to no-longer or u n a s s e rte d claims if the claimant, the party alleging infringement, dismisses all his discrete p a te n t claims within a given patent, thereby "withdr[awing] the entire patent from c o n tro v e rsy." Syngenta Seeds, Inc. v. Monsanto Co., Civil Action No. 02-1331, 2004 WL

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2790498, at *1 n.1 (D. Del. Nov. 22, 2004); see also F.B. Leopold Co., Inc. v. Roberts Filter M fg . Co., Inc., Civil Action No. 92-2427, 1995 WL 776945, *1-2 (W.D. Pa. Aug. 2, 1995) ( s a m e ).6 A lth o u g h the cases appear to be in conflict, this Court believes that they can be la rg e ly, if not entirely, reconciled. In Jervis B. Webb Co. v. S. Sys., Inc., 742 F.2d 1388 (Fed. C ir. 1984), the United States Court of Appeals for the Federal Circuit explained:

As explained above, the decision of the District Court for Eastern District of M ic h ig a n in Lear, supra, seems to support Mylan's position. In Lear, plaintiff Lear asserted th a t Johnson Controls Inc. ("JCI") infringed its patent, and defendant JCI asserted n o n in f rin g e m e n t and invalidity in regard to patent claims 1 and 4. After the close of d is c o v e ry, in its opposition brief to JCI's summary judgment motion, Lear made the a rg u m e n t, for the first time, that the Court was divested of jurisdiction over patent claim 1. L e a r argued that it had not and would not assert that claim 1 had been infringed by JCI, and f u rth e rm o r e , Lear's counsel made a proffer at oral argument to provide a covenant to that e f f e c t, which it subsequently did. Lear, 528 F. Supp. at 669. In this situation, the Lear court h e ld : T o the contrary, it is difficult to view Lear's tactics in this case as anything o th e r than an eleventh-hour attempt to pull the jurisdictional rug out from u n d e r a counterclaim that it could not defend against on the merits. The parties h a v in g proceeded through discovery without Lear having affirmatively w ith d r a w n its allegation of infringement of claim 1, and [defendant] JCI h a v i n g filed a motion seeking summary judgment in its favor as to the in v a lid ity of this claim, the Court believes that it is far too late in the day for L e a r to now contend, after JCI's motion has been fully briefed and argued, that th e Court should refrain from deciding this matter. Id . at 674 (emphasis added). The fairness considerations which animated the Lear court are n o t at play in the instant litigation. Plaintiff has made no eleventh-hour submission. Roche lim ite d the patent claims in dispute in a written filing well prior to the end of discovery, and a t a time consistent with the local rules, and Roche has actively sought to litigate the lim ita tio n before proceedings advanced. This opinion responds to Roche's motion, not M yl a n ' s . 10

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Since Webb only asserted and litigated the infringement of claims 1, 3, 4, 8, 9 and 11, and the evidence in the record is inadequate to indicate the existence o f a case or controversy regarding the remaining claims in the invalidity d e c la r a to r y judgment counterclaim, we vacate that portion of the district c o u rt's holding regarding the invalidity of claims 2, 5-7, 10 and 12. Id . at 1399 (emphasis added).7 This Court understands the Federal Circuit to mean that when a claimant alleges infringement with regard to a claim within a patent, and litigates that c la im , its infringement claim creates a live case or controversy8 under the Declaratory J u d g m e n t Act so that a counterclaimant could assert invalidity or noninfringement in regard to that particular patent claim. (In the instant litigation, Roche is seeking not to litigate the u n a s s e rte d claims.) A counterclaimant seeking a declaratory judgment for invalidity or n o n in f r in g m e n t can bring a counterclaim in regard to a particular patent claim even if the c la im a n t does not allege infringement in regard to that particular claim, if and only if the c o u n te rc la im a n t could otherwise establish jurisdiction in regard to that particular patent
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Cf. S h e lc o r e , Inc. v. Durham Indus., Inc., 745 F.2d 621 (Fed. Cir. 1984) ("Durham a s s e rts that all of the claims of the `831 utility patent are invalid under section 103. We d is a g re e . The district court held only claims 1-12 invalid. By voluntarily dismissing with p re ju d ic e claim 13 of the `831 utility patent, Shelcore removed the issue of infringement of c la im 13 from the trial court's consideration. But Shelcore could not unilaterally remove the v a lid ity issue because Durham's counterclaim put validity of all the claims in issue." (e m p h a s is added) (footnotes omitted)). Shelcore's actions had no unilateral effect to the e x te n t that Durham could otherwise show jurisdiction remained. The recent shift away from the Federal Circuit's reasonable apprehension test to the S u p re m e Court's MedImmune test did not change who has the burden to establish jurisdiction u n d e r the Declaratory Judgment Act and when that burden must be met. See supra note 3. T h u s pre-MedImmune Federal Circuit authority remains informative, if not controlling. M e d Im m u n e changed what the standard is in regard to what a counterclaimant seeking to e s ta b lis h jurisdiction must show, but not in regard to who must make the showing and when th a t showing must be made. 11
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claim. See Webb, 742 F.2d at 1399 n.8 (noting that a counterclaimant can seek a declaratory ju d g m e n t on all claims, even if the patentee "asserted the infringement of less than all of the c la im s where the declaratory plaintiff is [otherwise] able to meet ... the case or controversy re q u ire m e n t" ). Nor does this result change if reasonably early in the litigation, a party c h a n g e s his litigation position from one generally alleging that a patent or all its claims have b e e n infringed to one alleging that only a subset of the claims have been infringed. In regard to those claims that have not been asserted or were never asserted, the counterclaimant s e e k in g a declaratory judgment in regard to the unasserted claims must meet its burden under M e d Im m u n e and show that a live case or controversy exists and continues to exist on a claimb y-c la im basis and at every stage of the litigation. Thus a claimaint's unilateral action to c h a n g e its litigation position, its decision to no longer assert that particular claims are in f rin g e d , does not, standing alone, divest a court of jurisdiction over the counterclaimant's d e c la ra to ry judgment relating to the unasserted claims. But once the claimant changes its litig a tio n position, the counterclaimant cannot go forward with its declaratory judgment a c tio n in regard to the unasserted claims unless it show the existence of a live case or c o n tro v e rsy. If the counterclaimant fails to make the requisite showing, then the court will la c k jurisdiction to reach the merits of any invalidity or noninfringement claim connected to th o s e discrete claims. In short, the claimant's change of position without more does not d iv e s t the district court of jurisdiction, but should a claimant change its position in this m a n n e r, the counterclaimant must otherwise show jurisdiction continues to exists as to those

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claims.9 H e re , Mylan, the counterclaimant argues that Roche's new litigation does not divest th e Court of jurisdiction. Mylan is correct as a doctrinal matter. Roche's new litigation p o s itio n , as put forward in its Infringement Contentions did not, standing alone, divest this C o u rt of jurisdiction over Mylan's counterclaims related to the unasserted claims. But Mylan h a s failed to make a showing that there is otherwise a live case or controversy as to those c la im s . Mylan is correct about the doctrinal point, but it appears that it has failed to meet its b u rd e n . M yla n 's position is not, as the Court understands it, that had Roche originally served a complaint asserting only claim 6 and continued with that position to date, that the Court w o u ld have jurisdiction to hear counterclaims relating to the unasserted claims. Rather, M yla n 's position is that once a claimant asserts a particular claim or asserts infringement w ith regard to a patent in its entirety, then subsequent limitations by the claimant leave the c o u r t ' s jurisdiction unchanged. Such a rule makes little policy sense. It would encourage c la im a n ts to make the most limited infringement claims at the opening of litigation and to a m e n d pleadings and contentions to make more expansive infringement claims as the

See 8 CHISUM, supra note 5, at 21-126 to 129 ("The existence of an actual c o n tro v e rsy must be evaluated on a patent by patent and claim by claim basis. The patent o w n e r may threaten suit or actually sue for infringement as to specified claims. The accused m a y respond with a suit or counterclaim for a declaratory judgment of invalidity or n o n in f rin g e m e n t as to other patents or claims if but only if an actual controversy is found to e x is t as to those other patents and claims." (footnote omitted)). 13

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litigation progresses. This result would seem to undermine notice pleading and punish parties f o r presenting alternative (i.e., expansive) theories of liability at early stages in litigation. Cf. M e d Im m u n e , Inc. v. Genentech, Inc., 535 F. Supp. 2d 1000, 1007 (C.D. Cal. 2008) ("[T]he p o lic y and fairness concerns underlying covenants not to sue do not turn on whether or not a plaintiff initially asserted all or only some claims."). B. D o e s Roche's Covenant not to Sue Divest the Court of Jurisdiction?

Likewise, Roche argues that Roche's Covenant not to sue, (Doc. No. 38-4 Ex.A), also d iv e s ts the Court of jurisdiction to hear Mylan's counterclaims and defenses relating e x c lu s iv e ly to the unasserted claims. The Covenant states, in part, that Roche "irrevocably a g re e s , promises and covenants not to sue, assert any claims of infringement of, or otherwise e n f o rc e or attempt to enforce claims 1 through 5 of the `949 patent." Id. at 3. In its moving p a p e rs , Roche explains that the covenant "promis[es] that it would not assert claims 1 th ro u g h 5 against Mylan for the manufacture, use, sale, offer for sale, or importation for the p ro d u c t capecitabine that is the subject of ANDA No. 90-493." Opening Brief 7; see also R e p ly Brief 1 ("The covenant provides Mylan with full immunity from suit for Claims 1 th ro u g h 5 of the `949 patent under Mylan's ANDA, regardless of whether the cause of action a rise s under 35 U.S.C. §§ 271(a), (b) or (c)."); id. at 3 ("[T]he covenant is not limited to any s p e c if ic causes of action (i.e., sections 271(a), (b), (c) or (e)(2)) ...." (emphasis in the o rig in a l)). Statements of counsel at oral argument and in briefs are binding. See Super Sack M fg . Corp., 57 F.3d at 1058 (explaining that a party is bound by the "statement of [its]

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counsel in motion papers and briefs"). "Whether a covenant to sue will divest the trial court of jurisdiction depends on what is covered by the covenant." Revolution Eyewear, Inc. v. Aspex Eyewear, Inc., 556 F.3d 1 2 9 4 , 1297 (Fed. Cir. 2009).1 0 As a matter of first impression, the Covenant seems s u f f ic ie n tly broad, at least, to effectuate a voluntary dismissal of Roche's claims grounded in claims 1 through 5. It would also appear to divest the Court of subject matter jurisdiction o f Mylan's counterclaims and defenses connected exclusively to those claims. M yla n 's responses are not convincing. First, Mylan argues that although the Federal C irc u it has held that a covenant not to sue divests a court of jurisdiction over counterclaims, th o s e cases involved a claimant that covenanted not to sue in regard to an entire patent. O p p o s itio n Brief 6, 8. In other words, Federal Circuit authority does not specifically address p a rtia l covenants. See Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353 (Fed. Cir. 2 0 0 8 ); Merck & Co., Inc. v. Apotex, Inc., 287 Fed. Appx. 884 (Fed. Cir. 2008). Mylan's brief c o rre c tly restates the holdings of the cases of the Federal Circuit, but Mylan puts forward no p r i n c ip le d reason for distinguishing a partial covenant and a covenant covering an entire p a te n t. See Genentech, Inc., 535 F. Supp. 2d at 1008 ("The Federal Circuit has not suggested

Unhelpfully, Roche's brief argues that "[a] covenant not to sue does not need to c o v e r potentially infringing activities in the future as long as it covers past and present a c tiv itie s that constitute actual controversies between the parties." Opening Brief 7. But see T e r a d y n e , Civil Action No. 91-0344, 1994 WL 317560, at *3. A covenant need not extend to hypothetical or speculative future contingencies, but it must cover "planned [future] a c tiv itie s " in addition to past and present activities otherwise subject to an infringement c la im . Revolution Eyewear, 556 F.3d at 1297. 15

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that a different rule should apply where partial covenants are involved."). But cf. id. at 1005 n .1 ("Though Benitec and other Federal Circuit cases do not make the distinction, a partial c o v e n a n t not to sue may limit the scope of an invalidity counterclaim [in regard to particular c la im s ] but not the scope of an unenforceability counterclaim [relating to the patent in its e n t i r e t y] . " ) . Second, Mylan argues that the covenant uses "vague, ambiguous, and [uses] unusual la n g u a g e ," and that Roche's several filings confusingly change terms, sometimes referring to the "drug capecitabine," and other times referring to the "product capecitabine." O p p o s itio n Brief 8. Even if this were so, Roche's counsel stated in its brief: [T]he covenant is not limited to any specific causes of action (i.e., sections 2 7 1 (a ), (b), (c) or (e)(2)), but, instead, reflects Roche's `unconditional and irre v o c a b le ' agreement `not to sue assert [sic] any claim of infringement of, o r otherwise enforce or attempt to enforce Claims 1 through 5 of the `949 p a te n t ...' as it relates Mylan's ANDA No. 90-493. No exceptions or lim ita tio n s exist. Thus the covenant covers all causes of action related to the s u b je c t matter of this litigation ­ Mylan's ANDA No. 90-493. R e p ly Brief 3 (citation omitted) (emphasis in the original). Because Roche's counsel has ta k e n the position that the covenant is without "exceptions or limitations," counsel's position h e re and the underlying covenant disposes of Mylan's argument grounded in alleged a m b ig u ity. Opposition Brief 8. It also would appear to dispose of several other arguments m a d e by Mylan, including: (1) the covenant was not fully effective because it was c o n d itio n e d on Mylan's "defenses and [the] ANDA remaining static," Opposition Brief 9; a n d (2) the covenant does not include all causes of action in the complaint, id.

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C.

T h e Teva Litigation.

M yla n notes that Roche has brought suit in this Court against Teva for infringement o f the `949 patent and Mylan believes that Roche may move to consolidate the two actions. M yla n argues that this is some reason for the Court to retain jurisdiction over the unasserted c la im s . Opposition Brief 13. Mylan's speculative position as to Roche's future filings, much le s s what this Court may order in response thereto, is not a substantial basis for this Court to e x e rc ise or retain jurisdiction over Mylan's counterclaims ­ even assuming its predictions c o m e to pass. Moreover, the Court is aware of no policy interest that is furthered by its e x e rc isin g jurisdiction on the basis of future consolidation. And Mylan puts forward no law o n this point. D. O th e r Relief Sought By Mylan

M yla n seeks a variety of other relief in its opposition brief. Some of the relief sought re la te s to discovery. Roche argues that there is no concrete discovery dispute before the C o u rt and so Mylan's request for relief is premature. The Court agrees. Mylan also argues that if the Court dismisses its counterclaims, it should be without p re ju d ic e . As explained, the Court will dismiss Mylan's counterclaims arising exclusively u n d e r claims 1 through 5 for lack of jurisdiction. Dismissal based on lack of jurisdiction m e a n s that the Court has not reached the merits of those claims. As the Third Circuit has e x p la in e d : "If a court then determines that it lacks subject matter jurisdiction, it cannot decide th e case on the merits. It has no authority to do so. A federal court can only exercise that

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power granted to it by Article III of the Constitution and by the statutes enacted pursuant to A rtic le III.... The disposition of such a case will, however, be without prejudice." In re O r th o p e d ic "Bone Screw" Products Liability Litigation, 132 F.3d 152, 155 (3d Cir. 1997). It would seem that the same rule would apply to discrete claims: if the Court is without p o w e r to hear them, i.e., dismisses for lack of subject matter jurisdiction, its dismissal is w ith o u t prejudice. Cf. Winslow v. Walters, 815 F.2d 1114, 1116 (7th Cir.1987) (holding that " a ruling granting a motion to dismiss for lack of subject matter jurisdiction is not on the m e rits ; its res judicata effect is limited to the question of jurisdiction"). F in a lly, Mylan argues that Roche's infringement claims connected to the unasserted c la im s should be dismissed with prejudice. Mylan's argument comes absent case law or any o th e r supporting authority. Opposition Brief 16. Mylan's protection against future suit from R o c h e is coextensive with Roche's covenant, Roche's Infringement Contentions, and the re p re se n ta tio n of Roche's counsel ­ under various doctrines, including law of the case, ju d ic ia l estoppel,1 1 and once this case goes to final judgment, claim and issue preclusion.1 2 If these doctrines are insufficient protection against meritless suit, Mylan has failed to e x p la in why.

See Teradyne, Civil Action No. 91-0344, 1994 WL 317560, at *3 ("[I]t seems likely th a t HP would be estopped from asserting these claims in the future, now that it has limited its challenge to claims 3, 9 and 10.").
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S e e Webb, 742 F.2d at 1399. 18

V.

C O N C L U S IO N F o r the reasons elaborated above, the Court holds that no subject matter jurisdiction

e x is ts for claims 1, 2, 3, 4, and 5 of the `949 patent; and orders that all claims, counterclaims, a n d defenses arising exclusively under claims 1, 2, 3, 4, and 5 of the `949 patent are d is m is s e d from this action for lack of subject matter jurisdiction; and, the Court, therefore, G R A N T S the Motion. A n appropriate order accompanies this memorandum opinion. Although the Court's o rd e r constructively amends Roche's pleadings, Roche is ORDERED to serve amended p le a d in g s consistent with this opinion, such amended pleadings shall be served within 20 d a ys of the entry of the order filed contemporaneously with this opinion.

s / William J. Martini William J. Martini, U.S.D.J. D A T E : December 9, 2009, 2009

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