TIBOTEC INC. et al v. LUPIN LIMITED et al

Filing 373

OPINION. Signed by Judge William H. Walls on 6/18/13. (DD, )

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

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JANSSEN PRODUCTS, L.P., et al.,
Plaintiffs,
v.
LUPIN LIMITED , et al.,
Defendants.

OPINION
Civ. No. 10-5954 (WHW)

Walls, Senior District Judge
Defendants Teva Pharmaceutical USA, Inc. and Teva Pharmaceutical Industries, Ltd.
(collectively, “Teva”) appeal the Magistrate Judge’s May 9, 2013 Opinion and Order denying
Teva’s motion for leave to amend its non-infringement contentions as to U.S. Patent No.
5,843,946 (“the ‘946 patent”) and U.S. Patent No. 7,470,506 (“the ‘506 patent”). Plaintiffs the
United States and the Board of Trustees of the University of Illinois (collectively, the
“Government”) and Plaintiffs Janssen Products, L.P., Janssen R&D Ireland, and G.D. Searle,
LLC (collectively, “Janssen”) oppose Teva’s appeal. The Court decides this appeal without oral
argument under Federal Rule of Civil Procedure 78, and affirms the Magistrate Judge’s May 9,
2013 Order.
FACTUAL AND PROCEDURAL BACKGROUND
As the Magistrate Judge detailed the relevant facts in his Opinion (ECF No. 334), the
Court will only provide more recent background.

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On May 23, 2013, Defendant Teva appealed the Magistrate Judge’s Opinion and Order
denying its motion to amend its non-infringement contentions, alleging that (1) the Magistrate
Judge erred in finding that Teva was not diligent in seeking to amend its contentions; (2) there
would be no prejudice to Plaintiffs should Teva be allowed to amend; and (3) the interests of
justice favor amendment. Teva’s Brief in Support of its Rule 72 Appeal (“Def. Br.”) at 1-2.
In opposition, the Janssen Plaintiffs, although they neither opposed nor consented to
Teva’s motion for leave to amend its non-infringement contentions, argue that the Magistrate
Judge’s Order is neither clearly erroneous nor contrary to law. 1 Janssen Plaintiffs’ Brief in
Opposition to Teva’s Rule 72 Appeal (“Janssen Pls. Br.”) at 3. More specifically, they argue that
Teva offers no explanation for its failure to realize the basis for its proposed amendment with
respect to the ‘946 patent prior to August 7, 2012. Id. at 8-9. Instead, Janssen argues, Teva
fixates on what it alleges was the Magistrate Judge’s error in finding that “Teva, by its own
admission, first recognized its darunavir hydrate argument in early April of 2012, nearly six
months before filing the instant motion.” Id. at 9-10; May 9, 2013 Order at 9. Further, Janssen
highlights that Teva is attempting to draw a “fallacious distinction” between the bases for its
proposed defenses to the ‘946 and ‘506 patents. Janssen Pls. Br. at 10-11. Finally, Janssen
concludes that the Order was in line with the recent rulings in Jazz Pharms., Inc. v. Roxane
Labs., Inc., Civ. No. 10-6108, 2013 WL 785067 (D.N.J. Feb. 28, 2013), and O2 Micro Int’l Ltd.
v. Monolithic Power Sys., Inc., 467 F.3d 1355 (Fed. Cir. 2006). Janssen Pls. Br. at 11-12.

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This Court notes that there is no requirement that a party opposing a Rule 72 appeal must have
also opposed the original motion before the magistrate judge. Local Civil Rule 72.1(c)(1) permits
“[a]ny party opposing the appeal” to file a responsive brief. As the Janssen Plaintiffs argue, this
appeal also seeks different relief from the underlying motion. Janssen Pls. Br. at 16. Previously,
Teva sought leave to amend its non-infringement contentions, but now seeks the reversal of the
Magistrate Judge’s Order. Id. It follows that this Court will read and consider Janssen’s
opposition to Teva’s appeal.
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The Government Plaintiffs contend that Teva fails to substantiate its objections as to the
‘506 patent, and simply attempt to sweep them into the ’946 patent. Government Plaintiffs’ Brief
in Opposition to Teva’s Rule 72 Appeal (“Gov. Pls. Br.”) at 1. The Government adds Teva had
ample opportunity to set forth its non-infringement arguments since January 2011, and had full
knowledge of the nature of its own active ingredient. Id. at 2.
STANDARD OF REVIEW
A magistrate judge may hear and determine any non-dispositive pretrial matter pending
before the district court pursuant to 28 U.S.C. § 636(b)(1)(A). The district court will only reverse
a magistrate judge’s decision on these matters if it is “clearly erroneous or contrary to law.” 2 28
U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a); L. Civ. R. 72. 1(c)(1)(A). “This Court will review a
magistrate judge’s findings of fact for clear error.” Lithuanian Commerce Corp. v. Sara Lee
Hosiery, 177 F.R.D. 205, 213 (D.N.J. 1997) (citing Lo Bosco v. Kure Eng’g Ltd., 891 F. Supp.
1035, 1037 (D.N.J. 1995)). See also Jazz Pharms., Inc., 2013 WL 785067, at *1.
A finding is considered “clearly erroneous” when, “although there is evidence to support
it, the reviewing court on the entire evidence is left with the definite and firm conviction that a
mistake has been committed.” United States v. United States Gypsum Co., 333 U.S. 364, 395
(1948). A decision is considered contrary to the law if the magistrate judge has “misinterpreted
or misapplied applicable law.” Doe v. Hartford Life Acc. Ins. Co., 237 F.R.D. 545, 548 (D.N.J.
2006).

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The Court rejects Teva’s argument that the Magistrate Judge’s decision should be reviewed de
novo. This is not a dispositive matter such as a motion for summary judgment or a motion to
dismiss, but a discovery dispute. Courts within this District have treated motions to amend noninfringement contentions as non-dispositive matters to be reviewed under a “clearly erroneous or
contrary to law standard.” See, e.g., Jazz Pharms., Inc., 2013 WL 785067, at *1. See also Gov.
Pls. Br. at 7-8 (arguing that the Magistrate Judge’s Opinion and Order in no way eliminates all of
Teva’s defenses to the ‘506 patent infringement claim).
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The district court will not reverse the magistrate judge’s determination, even in
circumstances where the court might have decided the matter differently. Bowen v. Parking Auth.
of City of Camden, Civ. No. 00-5765, 2002 WL 1754493, at *3 (D.N.J. July 30, 2002). “A
district judge’s simple disagreement with the magistrate judge’s findings is insufficient to meet
the clearly erroneous standard of review.” Andrews v. Goodyear Tire & Rubber Co., 191 F.R.D.
59, 68 (D.N.J. 2000).
“Decisions enforcing local rules in patent cases will be affirmed unless clearly
unreasonable, arbitrary, or fanciful; based on erroneous conclusions of law; clearly erroneous; or
unsupported by any evidence.” O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d
1355, 1366-67 (Fed. Cir. 2006) (citing Genentech, Inc. v. Amgen, Inc., 289 F.3d 761, 774 (Fed.
Cir. 2002)).
DISCUSSION
Under Local Patent Rule 3.7, leave to amend infringement contentions may be granted
“by order of the Court upon a timely application and showing of good cause.” Unlike the liberal
standard for amending pleadings, “the philosophy behind amending claim charts is decidedly
conservative, and designed to prevent the ‘shifting sands’ approach to claim construction.” King
Pharms., Inc. v. Sandoz, Inc., Civ. No. 08-5974, 2010 WL 2015258, at *4 (D.N.J. May 20, 2010)
(citing Atmel Corp. v. Info. Storage Devices, Inc., Civ. No. 95-1987, 1998 WL 775115, at *2
(N.D. Cal. Nov. 5, 1998)). Because this action arises under the Hatch-Waxman Act, it is even
more imperative that the parties establish their contentions early. See Jazz Pharms., Inc., 2013
WL 785067, at *4 (“This District requires ‘ultra early disclosure of infringement and invalidity
contentions for patent cases arising under the Hatch-Waxman Act.’”) (quoting Sanofi-Aventis v.
Barr Labs., Inc., 598 F. Supp. 2d 632, 637 (D.N.J. 2009)) (emphasis in original).

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With regard to the “good cause” requirement, the Federal Circuit has stated that parties
must “proceed with diligence in amending when new information comes to light in the course of
discovery.” O2 Micro, 467 F.3d at 1366-67. The moving party has the burden of demonstrating
its diligence, id. at 1366, and must show that it was both diligent throughout discovery and in
“discovering the basis for the proposed amendment.” West v. Jewelry Innovations, Inc., Civ. No.
07-1812, 2008 WL 4532558, at *2 (N.D. Cal. Oct. 8, 2008).
Defendant Teva argues that the Magistrate Judge incorrectly calculated the time between
Teva’s discovery of its non-infringement defense for the ‘946 patent and the filing of its motion
to amend, and it was diligent in seeking to amend its contentions. Def. Br. at 2-3. Teva argues
that it became aware of its defense in August 2012 when drafting its non-infringement
contentions for the related U.S. Patent No. RE42,889. Id. at 2. Two months later, Teva sought
Janssen’s consent to amend its contentions. Id.
This Court affirms the Magistrate Judge’s finding that Teva did not act with the requisite
diligence. The party “seeking to amend its contentions bears the burden of establishing
diligence.” West, 2008 WL 4532558, at *1; see also Jazz Pharms., Inc., 2013 WL 785067, at *3.
The Magistrate Judge found that Teva failed to meet this burden, and this Court finds no error in
the Magistrate Judge’s determination that Teva first recognized its darunavir hydrate argument in
April 2012, if not earlier.
As the Janssen Plaintiffs point out, the evidence supporting the Magistrate Judge’s
determination that Teva acknowledged that it first recognized its darunavir hydrate argument in
April 2012 comes from Teva’s original moving papers. Teva’s Mot. for Leave to Amend NonInfringement Contentions (“Teva Mot. Br.”) at 4-5 (describing Teva’s recognition during the
exchange of claim construction disclosures that “administration of Teva USA’s ANDA products

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would not infringe the asserted claims of the ‘506 patent because Teva USA’s ANDA products
do not contain darunavir, but rather they contain a solvate [darunavir hydrate] that is
substantially different from darunavir.”); see also Janssen Pls. Br. at 10-11. The parties
exchanged lists of claim terms to be construed on or about April 3, 2012, and exchanged
preliminary claim constructions on or about April 24, 2012. ECF No. 144 (Magistrate Judge
Arleo’s Discovery Stipulation and Order).
Teva argues that the Magistrate Judge conflated, without explanation, the timing on the
discovery of the defenses of the ‘506 and ‘946 patents. Def. Br. at 7. This Court finds that the
Magistrate Judge did not err in his treatment of the two patents’ defenses. Teva admits in its
original motion to amend that both its proposed amendments share the same premise – that
Teva’s products do not contain darunavir but a solvate (darunavir hydrate) that is allegedly
substantially different from darunavir. Compare Teva Mot. Br. at 3 (proposed defense to the
‘946 patent is that Teva’s “ANDA products do not contain darunavir, but rather that they contain
a solvate that is substantially different from darunavir”) with Teva Mot. Br. at 5 (proposed
defense to the ‘506 patent is that Teva’s “ANDA products do not contain darunavir, but rather
they contain a solvate that is substantially different from darunavir”). See also Janssen Pls. Br. at
10-11. It follows, logically, that if Teva was aware of the defense to one patent, it was on notice
that the defense might apply to others. Even if Teva did not grasp, as it claims, that it might
assert this non-infringement position with respect to the ‘946 patent before August 7, 2012, Teva
does not explain its failure to discover the basis for such a position sooner. Janssen Pls. Br. at 9.
Moreover, as the Government Plaintiffs note, Teva has had numerous opportunities to
amend since as early as January 2011 to set forth its non-infringement contentions with regard to
the ‘506 patent. Gov. Pls. Br. at 10-13. As example, the Paragraph IV Certification Notice that

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Teva served in January 2011 described its product as “Darunavir Hydrate Tablets.” Id. at 13;
May 9, 2013 Order at 12. In his Opinion, the Magistrate Judge reiterated the Government’s
observation that “it is apparent that Teva recognized that its products contained darunavir
hydrate at the time it served its Paragraph IV certification on January 31, 201[1].”3 May 9, 2013
Order at 12. This Court adds that an independent review of the record reveals the Magistrate
Judge even gave Teva the benefit of the doubt by dating the discovery to April 2012, and not
earlier.
This Court also finds that the Magistrate Judge’s decision is not contrary to law. Simply
because Teva is able to cite a few decisions granting leave to amend contentions in the face of
comparable delays by the parties seeking amendment does not render the Magistrate Judge’s
Order clearly erroneous. See Jazz Pharms., Inc., 2013 WL 785067, at *4 (“In short, mere
disagreement with the judicial finding of a Magistrate Judge does not meet the ‘clear error’
standard required for reversal.”); Andrews v. Goodyear Tire & Rubber Co., 191 F.R.D. 59, 68
(D.N.J. 2000); Walzer v. Muriel Siebert & Co., Inc., Civ. No. 04-5672, 2010 WL 4366197, at *9
(D.N.J. Oct. 28, 2010); Toth v. Alice Pearl, Inc., 158 F.R.D. 47, 50 (D.N.J. 1994).
Finally, the Court need not reach the issue of prejudice since it does not find that the
Magistrate Judge clearly erred in finding that Teva was not diligent. See Jazz Pharms., Inc., 2013
WL 785067, at *5 (citing CBS Interactive, Inc. v. Etilize, Inc., 257 F.R.D. 195, 201 (N.D. Cal.
2009)). Similarly, the interests of justice would not be served by granting the motion to amend
and prejudicing the non-moving parties. Fact discovery is closed, and expert reports are due. See
CBS Interactive, Inc., 257 F.R.D. at 203. See also Abbott Diabetes Care Inc. v. Roche
Diagnostics Corp., Civ. No. 05-3117, 2007 WL 2221029, at *2 (N.D. Cal. July 30, 2007).
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The Magistrate Judge’s Opinion states January 31, 2012, not 2011, which is a typographical
error.
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CONCLUSION
This Court concludes that the Magistrate Judge’s Order is not clearly erroneous,
unsupported by any evidence, or contrary to law. The May 9, 2013 Order is affirmed.

June 18, 2013

/s/ William H. Walls
United States Senior District Judge

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