ASTRAZENECA AB et al v. DR. REDDY'S LABORATORIES INC. et al

Filing 230

OPINION Filed. Signed by Judge Joel A. Pisano on 3/27/2014. (eaj)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

____________________________________
:
ASTRAZENECA AB, et al.
:
Plaintiffs,

Civil Action No. 11-2317 (JAP)
:

v.
:

Consolidated for discovery purposes
with: Civil Action Nos. 11-4275,
11-6348, 13-0091

:
DR. REDDY’S LABORATORIES INC.
et al.

:
OPINION

Defendants.
:
____________________________________

PISANO, District Judge
In this Hatch Waxman patent infringement action Plaintiffs AstraZeneca AB,
AstraZeneca LP, KBI-E Inc., and Pozen Inc. (collectively, “Plaintiffs”) have moved for summary
judgment that the claims of U.S. Patent No. 6,926,907 (the “‘907 patent”) are not invalid.
Defendants Dr. Reddy’s Laboratories, Inc. and Dr. Reddy’s Laboratories Ltd. (collectively,
“Defendants” or “DRL”) have opposed the motion. Also pending before the Court are two
related motions: (1) DRL’s motion to strike Plaintiffs’ validity contentions; and (2) Plaintiffs’
motion to amend their responses to DRL’s invalidity contentions. For the reasons set forth
below, Plaintiffs’ motions are denied. DRL’s motion is granted.
I. BACKGROUND
There are two separate civil actions relevant to the instant motion, both Hatch Waxman
patent infringement actions relating to Plaintiffs’ product Vimovo, a drug that is a combination

of a nonsteroidal anti-inflammatory drug and a proton pump inhibitor. These two actions are as
follows:
DRL I: Civil Action No. 11-2317
On or about March 11, 2011, DRL provided notice to Plaintiffs that it filed an
Abbreviated New Drug Application (“ANDA”) relating to Plaintiffs’ drug product Vimovo
seeking approval to market a generic version of Vimovo prior to expiration of the associated
patents. Thereafter, Plaintiff filed a patent infringement lawsuit alleging, as relevant to the
instant motion, that DRL infringed claims of the ‘907 patent. See Civil Action No. 11-2317
(“DRL I”). The relief sought by Plaintiff in DRL I includes a request for a judgment declaring
that the ‘907 patent is valid and enforceable. D.I. 42 at 22; 226 at 12. DRL asserted in its
Answer an affirmative defense of invalidity and, further, counterclaimed for entry of judgment
that the ‘907 patent is invalid. Thereafter, in accordance with this district’s Local Patent Rules,
DRL served their invalidity contentions (“Invalidity Contentions”). Plaintiffs served their
response to DRL’s Invalidity Contentions (the “First Response”), but later moved to amend their
First Response. That motion was denied by Magistrate Judge Arpert. See Memorandum
Opinion and Order at D.I. 134 in Civ. Action No. 11-2317. Six months later, Plaintiffs again
filed their motion to amend their First Response, citing the filing of a second infringement action
against DRL (namely, DRL II, discussed below) as the basis for their motion. That motion is
decided herein.
DRL II: Civil Action No. 13-0091
On November 20, 2012, DRL provided notice to Plaintiffs that it filed a second ANDA
relating to the Vimovo product. As it had done with respect to the earlier ANDA, DRL provided
to the Food and Drug Administration (“FDA”) a Paragraph IV certification in which it certified

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to FDA that the ‘907 patent was “invalid, unenforceable or will not be infringed” by DRL’s
generic Vimovo product. It does not appear to be disputed that along with DRL’s notice to
Plaintiff DRL raised, among other things, the issue of invalidity of the ‘907 patent. Based on this
ANDA filing, Plaintiffs brought a second patent infringement action against DRL, see Civil
Action No. 13-0091 (“DRL II”), alleging that DRL has infringed the ‘907 patent. As in DRL I,
the relief sought by Plaintiff in DRL II includes a request for a judgment declaring that the ‘907
patent is valid and enforceable. D.I. 1 at 19; 62 at 10. Also like in DRL I, in its Answer DRL
asserted invalidity of the ‘907 patent as an affirmative defense. DRL, however, did not assert an
invalidity counterclaim. Further, when the appropriate time came under the Local Patent Rules
and/or the relevant scheduling order, DRL did not serve invalidity contentions with respect to the
‘907 patent. 1 Neverthelss, even though DRL did not propound invalidity contentions, Plaintiffs
served invalidity responses (“Second Response”) or “validity contentions.” According to
Plaintiffs, the Second Response is substantially the same as the amended First Response Plaintiff
sought (but was denied) leave to file in DRL I. DRL has now moved to strike the Second
Response.
Plaintiffs have moved in DRL II for summary judgment that the claims of the ‘907 patent
are not invalid. Plaintiffs argue that judgment should be entered declaring the patent to be not
invalid because DRL, having failed to propound invalidity contentions, can present no evidence
of invalidity. DRL opposes the motion claiming that the Court lacks subject matter jurisdiction
with respect to the issue of invalidity in DRL II. According to DRL, the court lacks such

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Rather, DRL states that it has chosen not to pursue a defense of invalidity in DRL II “because non-infringement
provides a complete defense.” D.I. 164 at 5. According to DRL, it has developed a different formulation for its
second generic Vimovo ANDA product that is designed specifically to avoid (and thus not infringe) the claims of
the ‘907 patent. Therefore, according to DRL, the issue to be litigated in DRL II relating to the ‘907 patent should
center only on non-infringement.

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jurisdiction because DRL has abandoned its invalidity defense in DRL II 2 (although it continues
to assert it in DRL I).
II. ANALYSIS
1. Plaintiffs’ Motion for Summary Judgment of Validity
Federal courts have limited subject matter jurisdiction and possess “only the power that is
authorized by Article III of the Constitution and the statutes enacted by Congress pursuant
thereto.” Bender v. Williamsport Area School Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 89
L.Ed.2d 501 (1986). Article III limits this Court's jurisdiction to actual “cases” and
“controversies.” U.S. Const. art. III, § 2. Here, DRL claims that there is no case or controversy
in DRL II with respect to the validity of the ‘907 patent because DRL has chosen not to pursue
invalidity as a defense in the case. Plaintiffs, however, contend that the case or controversy
requirement is fulfilled here because Plaintiffs themselves have sought judgment regarding the
validity of the ‘907 patent claims and, accordingly, the issue of validity is in dispute in DRL II.
In the DRL II complaint (as in the DRL I complaint), Plaintiffs requested judgment that the ‘907
patent claims are valid and enforceable. Although DRL initially asserted an affirmative defense
of invalidity, DRL has since abandoned this defense in DRL II. It is Plaintiffs’ position that
regardless of DRL’s decision to abandon its invalidity defense, Plaintiffs may still pursue their
declaratory judgment claim for a judgment of validity in DRL II.
Under the Declaratory Judgment Act, a Court “may declare the rights and other legal
relations of any interested party seeking such declaration, whether or not further relief is or could
be sought.” 28 U.S.C. § 2201(a). A justiciable declaratory judgment action occurs where “the
facts alleged, under all the circumstances, show that there is a substantial controversy, between

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DRL states that it has offered to withdraw its invalidity affirmative defense but Plaintiffs have declined the offer.
D.I. 164 at 6.

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parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance
of a declaratory judgment.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127, 127 S.Ct.
764, 771 (2007). The dispute must be “‘definite and concrete, touching the legal relations of
parties having adverse legal interests’; …’real and substantial’ and ‘admi[t] of specific relief
through a decree of a conclusive character, as distinguished from an opinion advising what the
law would be upon a hypothetical state of facts.’ Id. (quoting Aetna Life Ins. Co. v. Haworth,
300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617 (1937)).
Even when a suit satisfies the subject matter jurisdiction prerequisites, “district courts
possess discretion in determining whether and when to entertain an action under the Declaratory
Judgment Act.” Wilton v. Seven Falls Co., 515 U.S. 277, 289, 115 S.Ct. 2137, 132 L.Ed.2d 214
(1995). As the Supreme Court has stated
The Declaratory Judgment Act provides that a court “may declare the rights and
other legal relations of any interested party,” 28 U.S.C. § 2201(a) (emphasis
added), not that it must do so. This text has long been understood “to confer on
federal courts unique and substantial discretion in deciding whether to declare the
rights of litigants.” Wilton v. Seven Falls Co., 515 U.S. 277, 286, 115 S.Ct. 2137,
132 L.Ed.2d 214 (1995); see also Cardinal Chemical Co. v. Morton Int'l, Inc.,
508 U.S. 83, 95, n. 17, 113 S.Ct. 1967, 124 L.Ed.2d 1 (1993); Brillhart v. Excess
Ins. Co. of America, 316 U.S. 491, 494–496, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942).
We have found it “more consistent with the statute,” however, “to vest district
courts with discretion in the first instance, because facts bearing on the usefulness
of the declaratory judgment remedy, and the fitness of the case for resolution, are
peculiarly within their grasp.” Wilton, supra, at 289, 115 S.Ct. 2137.
MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 136, 127 S.Ct. 764, 776 (2007).
As stated earlier, to the extent that DRL’s pleading in DRL II includes an invalidity
defense, DRL plainly has abandoned that defense. As a result, Plaintiffs cite to, among other
things, DRL I as evidence that the requisite controversy exists between the parties to support a
declaratory judgment claim. However, Plaintiffs’ entire argument that the Court has subject
matter jurisdiction to decide the validity of the ‘907 patent in DRL II rests on the threshold
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premise that Plaintiff’s request for a declaratory judgment of validity is a valid cause of action.
While invalidity of a patent is an available affirmative defense in a patent infringement action,
Plaintiff cites nothing to support the notion that a patentee has an affirmative cause of action to
seek a declaration that a patent is valid. Indeed, the opposite appears to be true. See
Semiconductor Energy Laboratory Co., Ltd. v. Nagata, 706 F.3d 1365, 1370 (Fed. Cir. 2013)
(“The relief requested … is akin to seeking a declaratory judgment of patent validity, which is
not a viable cause of action.”); Brooks Mfg. Co. v. Dis-Tran Wood Products, LLC, 2012 WL
1099760, (W.D. Wash. 2012) (dismissing action seeking declaratory judgment that a patent is
valid and stating as follows: “[T]he court has reviewed cases where plaintiffs have sought a
declaration of invalidity, noninfringement, or future infringement. … [T]he court has uncovered
no case in which a patentee seeks a declaration of validity. Indeed, [the] patent is presumed
valid. … Therefore, [Plaintiff] essentially seeks a declaration as to the status quo.”). Therefore,
there is no basis upon which the Court may enter the judgment Plaintiffs seek in DRL II.
The Court recognizes that there exists an ongoing dispute between the parties as the
validity of the ‘907 patent. However, that issue is being litigated in a separate (but related and
partially consolidated 3) action in which the defense of invalidity has been asserted by DRL. The
parties have each served their contentions regarding validity in that action. Consequently, even
if subject matter jurisdiction existed in DRL II over the parties’ validity dispute, the Court would,
in its discretion under the Declaratory Judgment Act, not address the issue in DRL II and deny
Plaintiffs’ summary judgment motion. In light of DRL I, there simply is no reason to address
validity in DRL II at this time, particularly given the stage of this case and the procedural posture
in which the issue has been presented to the Court. It is plain that the parties’ positions and
actions on the issue of validity in DRL II are being driven not with an eye toward efficient
3

The cases have been consolidated for discovery purposes.

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resolution of the issue on the merits, but rather by Plaintiffs’ desire to inject into the litigation
contentions that they were denied leave to raise in DRL I, as well as by DRL’s desire to prevent
Plaintiffs from raising such contentions. As Magistrate Judge Arpert earlier advised the parties,
the issues regarding Plaintiffs’ “validity contentions” are more appropriately addressed by way
of a motion seeking leave to amend Plaintiffs’ First Response to the Invalidity Contentions,
which the Court decides below.
For all of the reasons above, Plaintiffs’ motion for summary judgment of validity of the
‘907 patent is denied.
2. Motion to Strike Validity Contentions in DRL II
DRL has moved to strike the invalidity response (Second Response) served by Plaintiffs
in DRL II. DRL argues that Local Patent Rule 3.6(i) permits a party alleging infringement to
serve only a response to an accused infringer’s invalidity contentions and DRL has not
propounded invalidity contentions in DRL II. Plaintiffs oppose the motion, stating that they put
forth their validity contentions in support of their request for a declaratory judgment of validity.
However, for the reasons stated above, not the least of which is that there does not appear to exist
a valid cause of action for a declaration of patent validity, the validity of the ‘907 patent is not at
issue in DRL II.
Furthermore, the Court is not persuaded by arguments that DRL I and DRL II are
essentially the same case and will be tried together, or that any decision regarding invalidity in
DRL I necessarily impacts DRL II. Plaintiff has already served invalidity responses in DRL I and
serving another “response” in DRL II when there have been no additional invalidity contentions
would be either superfluous or simply an attempt to raise the additional contentions that
Plaintiffs were not permitted to serve in DRL I.

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The Court, therefore, shall grant DRL’s motion and strike the validity contentions.
3. Motion to Amend Invalidity Responses in DRL I
This district’s Local Patent Rules permit contentions to be amended “by order of the
Court upon a timely application and showing of good cause.” Local Patent Rule 3.7. Pursuant to
Rule 3.7, a court may permit a party to amend its invalidity contentions provided the following
three elements are established: (1) the moving party makes a timely application to the court; (2)
there is good cause for the amendment; and (3) there is no undue prejudice to the adverse party. 4
Jazz Pharmaceuticals, Inc. v. Roxane Laboratories, Inc., No. 10–6108, 2012 WL 3133943 at *2
(D.N.J. July 30, 2012). The rule provides a “non-exhaustive” list of examples of circumstances
that may support a finding of good cause including:
(a) a claim construction by the Court different from that proposed by the party
seeking amendment; (b) recent discovery of material prior art despite earlier
diligent search; (c) recent discovery of nonpublic information about the Accused
Instrumentality which was not discovered, despite diligent efforts, before the
service of the Infringement Contention; (d) disclosure of an infringement
contention by a Hatch–Waxman Act party asserting infringement under L. Pat. R.
3.6(g) that requires response by the adverse party because it was not previously
presented or reasonably anticipated; and (e) consent by the parties in interest to
the amendment and a showing that it will not lead to an enlargement of time or
impact other scheduled deadlines.
Local Patent Rule 3.7.
The Local Patent Rules “are designed to require parties to crystallize their theories of the
case early in the litigation and to adhere to those theories once they have been disclosed.” King
Pharmaceuticals. Inc. v. Sandoz, Inc., No. 08–5974, 2010 WL 2015258, at *4 (D.N.J. May 20,
2010). However, while amendments to contentions are not granted as liberally as requests for
amendments to pleadings, the Patent Rules retain some degree of flexibility and are not intended

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The Court may only consider prejudice to the non-moving party if the moving party is able to demonstrate
diligence. See Opinion at D.I. 134 (citing Apple v. Samsung, 2012 U.S. Dist. LEXIS 83115, at *13 (N.D. Cal. Mar.
27, 2012) (collecting cases)).

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to be “a straitjacket into which litigants are locked from the moment their contentions are
served.” Id.
This is Plaintiffs’ second motion to amend their invalidity responses in DRL I. The first
was filed August 17, 2012. On March 18, 2013, Magistrate Judge Arpert denied the motion,
finding that Plaintiffs failed to establish the requisite timeliness, good cause and lack of prejudice
to permit the amendment. See D.I. 173. The Court first rejected Plaintiffs’ argument that they
had good cause to amend because, as a result of inadvertence, Plaintiffs’ original invalidity
responses neglected to address particular patent claims and, further, Plaintiffs’ had changed
counsel: “Given the sophistication and number of attorneys involved, the Court is not persuaded
that Plaintiffs were diligent in either discovering prior errors or omissions, or moving to amend
their responses until seven months after they were first submitted.” D.I. 173 at 6. The Court
further rejected Plaintiffs’ arguments regarding “inadvertent omissions,” finding: “The length
and nature of Plaintiffs’ proposed amendments, moreover, do not suggest inadvertent omission.
To the contrary, they are more in line with changes that reflect a shift in theory or position by
Plaintiffs.” Id. at 7. Additionally, the Court found that allowing Plaintiffs’ amended invalidity
contention responses would prejudice DRL because of “the additional resources DRL would
need to expend in order to defend against the new theories and defenses introduced by Plaintiffs”
and “this proceeding is no longer in its early stages.” Id. at 9. Finally, the Court also rejected
Plaintiffs’ argument that they should be allowed to “conform” their responses to DRL to
responses in a related case, with which DRL I has been consolidated for purposes of discovery.
Id. at 8.
Less than six months after Magistrate Judge Arpert issued his decision, Plaintiffs filed the
instant motion to amend. In this second motion, Plaintiffs are seeking to file substantially the

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same amended invalidity responses as they sought in the earlier motion. Plaintiffs now claim
that the filing of DRL II provides good cause for granting this motion in DRL I. According to
Plaintiffs, the “changed procedural and scheduling posture due to DRL’s second ANDA and the
effect an in validity holding in DRL I will have on DRL II” provides good cause for the requested
amendment. However, Plaintiffs never really explain exactly how the filing of DRL II is such a
change in circumstances that it would justify altering the earlier ruling. Indeed, the filing of DRL
II or a change in the litigation schedule cannot, for example, remedy the lack of diligence or the
lack of “inadvertence” found by Magistrate Judge Arpert. Here, Plaintiffs appear to simply be
attempting to take a second bite at the proverbial apple.
Consequently, the Court finds Plaintiffs’ motion to be without merit, and the motion is
denied.
III. CONCLUSION
For the reasons above, Plaintiffs’ motion for summary judgment and motion to amend it
invalidity responses are denied. DRL’s motion to strike is granted. An appropriate Order
accompanies this Opinion.

/s/ JOEL A. PISANO
United States District Judge

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