DEPOMED, INC. v. PURDUE PHARMA L.P. et al
Filing
303
MEMORANDUM OPINION filed. Signed by Judge Mary L. Cooper on 6/28/2017. (km)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
DEPOMED, INC.,
:
:
Plaintiff,
:
:
v.
:
:
PURDUE PHARMA L.P., THE P.F.
:
LABORATORIES, INC., AND PURDUE :
PHARMACEUTICALS L.P.,
:
:
Defendants.
:
:
Civil Action No. 13-571 (MLC)
MEMORANDUM OPINION
COOPER, District Judge
This matter comes before the Court upon Plaintiff Depomed, Inc.’s (“Depomed”)
motion to dismiss Defendants Purdue Pharma L.P, The P.F. Laboratories, Inc., and
Purdue Pharmaceuticals L.P.’s (collectively, “Purdue”) third counterclaim (inequitable
conduct) under Fed. R. Civ. P. 12(b)(6) and motion to strike Purdue’s sixth (inequitable
conduct), seventh (unclean hands), and eight (patent misuse) affirmative defenses under
Fed. R. Civ. P. 12(f). (Dkt. 262.)1 Purdue opposes the motions. The Court has
considered the parties’ submissions, (dkt. 262, dkt. 263, dkt. 265, dkt. 270), and decides
the motions without oral argument pursuant to Local Civil Rule 78.1. For the reasons
discussed below, Depomed’s motions are granted in part and denied in part.
1
The Court will cite to the documents filed on the Electronic Case Filing System
(“ECF”) by referring to the docket entry numbers by the designation of “dkt.” Pincites reference
ECF pagination.
1
I.
BACKGROUND
On February 1, 2017, Depomed filed a Second Amended Complaint (“SAC”)
alleging that Purdue’s “commercial manufacture, use, offer to sell, and/or sale of
OxyContin®” willfully and deliberately infringes U.S. Patent Nos. 6,340,475 (“the ‘475
Patent”) and 6,635,280 (“the ‘280 Patent”) (together, “the patents-in-suit”). (Dkt. 259.)
In response, Purdue filed an Answer and Counterclaims. (Dkt. 260) Therein, Purdue
included allegations of inequitable conduct.2
Purdue’s allegations of inequitable conduct are based on several different alleged
misrepresentations and omissions made by an inventor of the patents-in-suit, Jenny Louie
Helm (“Inventor Helm”), and Depomed’s counsel during related inter partes review
(“IPR”) proceedings of the patents-in-suit.3 Purdue alleges that Inventor Helm and
Depomed’s counsel made misrepresentations and omissions that violated (1) their duty of
candor and good faith in dealing with the U.S. Patent and Trademark Office (“USPTO”)
2
Prior to filing its Answer and Counterclaims to the SAC, Purdue moved to amend its
earlier answer to add allegations of inequitable conduct and unclean hands. (Dkt. 224.)
Depomed opposed that motion. (Dkt. 240.) The Court concluded that Purdue was at liberty to
add its allegations in response to the SAC. (Dkt. 282.) Accordingly, Purdue’s motion to amend
was dismissed as moot. (Id.)
3
The related IPR proceedings are IPR2014-00377, IPR2014-00378, and IPR201400379. Purdue filed three petitions for IPR challenging the ‘475 and ‘280 Patents. The PTAB
instituted IPR review in all three proceedings on grounds of anticipation and/or obviousness.
Depomed submitted Patent Owner Responses (“PORs”) in each of the instituted proceedings.
Each POR included the supporting declaration of Inventor Helm (“the Helm Declaration”).
2
Patent Trial and Appeal Board (“PTAB”), and (2) their duty to disclose prior inconsistent
statements during the IPR proceeding.4 (Id. at 11-12.)
Purdue advances three theories in support of its inequitable conduct defense: (1)
Inventor Helm and Depomed’s counsel misrepresented material information with the
specific intent to deceive the PTO; (2) Inventor Helm and Depomed’s counsel omitted
material information with the specific intent to deceive the PTO; and (3) Inventor Helm
and Depomed’s counsel failed to produce prior inconsistent interrogatory responses and a
sworn verification during the IPR proceedings. We summarize those theories below.
A.
Material Misrepresentations
Purdue alleges that Inventor Helm and Depomed “intentionally misrepresented
that it took [Inventor Helm] at least three years of research to develop an embodiment of
the claimed invention,” when in fact at least one embodiment of the claimed invention
was conceived and reduced to practice no later than June 1993 on Inventor Helm’s first
4
37 C.F.R. § 42.11 provides that “parties and individuals” involved in proceedings
before the PTAB “have a duty of candor and good faith to the Office during the course of a
proceeding.”
37 C.F.R. § 42.51(b)(1)(iii) provides that
Unless previously served, a party must serve relevant information
that is inconsistent with a position advanced by the party during the
proceeding concurrent with the filing of the documents or things that
contains the inconsistency. This requirement does not make
discoverable anything otherwise protected by legally recognized
privileges such as attorney-client or attorney work product. This
requirement extends to inventors, corporate officers, and persons
involved in the preparation or filing of the documents or things.
3
attempt to formulate a controlled release dosage form. (Id. at 13.)5 Purdue alleges that
these misrepresentations “were intended to mislead the PTAB into concluding that the
alleged invention would not have been obvious in view of the art at the time the patent
application was filed in March 1997.” (Id. at 13.) Purdue alleges that these
misrepresentations “are highly material insofar as the PTAB specifically relied on those
statements in its Final Written Decisions” and but for these misrepresentations, the PTAB
would not have upheld the validity of the patents-in-suit. (Id. at 14.)
Purdue identifies numerous paragraphs in the Helm Declaration that it alleges
misrepresent the time and research necessary to arrive at an embodiment falling within
the scope of the claims. (See id. at 14-20.) For example, Purdue identifies paragraph 24
of the Helm Declaration, which states, in part:
The inventions in the ‘475 and ‘280 Patents was [sic] the result
of several years of research, manipulation of different
formulation variables in the laboratory, numerous dissolution
experiments, and repeated testing to achieve a system that
accomplished slow release of drug by diffusion over a
particular length of time while keeping the polymeric matrix
substantially intact.
(Id. at 63.) Purdue also identifies Inventor Helm’s statements disagreeing with Purdue’s
expert’s deposition testimony pertaining to the issue of obviousness:
I have been informed that Purdue’s expert testified at his
deposition that the inventions of the ’475 and ‘280 Patents
5
Specifically, Purdue alleges that at least one Captopril formulation that was an
embodiment of the claims of the ‘475 and ‘280 Patents was reduced to practice no later than June
16, 1993. (Dkt. 260 at 16.) Captopril is a drug of high solubility to which [the inventions of the
patents-in-suit are] applicable. See, e.g., ‘475 Pat., col. 7, ll. 24-33; col. 13, ll. 9-63. Purdue
alleges that experiments on formulations containing Captopril were performed by Inventor Helm
on June 17, 1993, as is evidenced by her laboratory notebook. (Dkt. 260 at 16.)
4
could have been created within “a week” in 1997. I completely
disagree. There was very little information regarding swelling
polymers that were designed to remain substantially intact as
of the mid-1990’s. It took me three years testing various
polymers with guidance of Dr. Shell to achieve the Captopril
formulation that contained the aspects of the claims of the ‘475
and ‘280 Patents.
(Id. at 62.) Purdue further identifies similar statements and arguments that Depomed’s
counsel made to the PTAB in its PORs and during oral argument. (See id. at 20-22.)
Purdue alleges that Inventor Helm and Depomed’s counsel knew the statements
they made to the PTAB were false because of the contrary information in their
possession, such as Inventor Helm’s laboratory notebook. (See id. at 22-23, 26-27.)
Purdue alleges that this demonstrates their specific intent to deceive the PTAB. (Id. at
25.)
B.
Material Omissions
Purdue’s second basis for inequitable conduct is similar to its first. Purdue alleges
that in addition to misrepresenting the time it took Inventor Helm to reduce to practice an
embodiment of the invention, the independent act of Depomed in withholding the fact
that Inventor Helm reduced to practice an embodiment of the invention in June 1993
constitutes inequitable conduct. Specifically, Purdue alleges that Inventor Helm and
Depomed’s counsel “[omitted] the fact that [she] had conceived of and reduced to
practice an embodiment of the claimed invention by 1993 – on the first try and within
months of starting work at Depomed, and with no prior experience formulating solid
dosage forms.” (Id. at 19.) Purdue alleges that Inventor Helm and Depomed’s counsel
5
“had ample time and opportunity for a comprehensive disclosure of the facts regarding
the conception and reduction to practice of the embodiments of the claims, but
deliberately chose not to disclose those facts, such as that a Captopril formulation within
the scope of the asserted claims was reduced to practice by 1993.” (Id. at 28.)
C.
Production of Prior Inconsistent Statements During the IPR
Proceedings
Purdue’s third theory is that Inventor Helm and Depomed’s counsel failed to
produce a prior inconsistent interrogatory response and a sworn verification “for use
during the IPR proceedings.” (Id. at 27.) The interrogatory response and sworn
verification are from a prior litigation, Depomed, Inc. v. Ivax Corp., No. 06-0100 (N.D.
Cal.) (“the Ivax Case”). The interrogatory response indicates that claims 1, 2, 3, 8, 9, 13,
and 14 of the ‘475 Patent and claims 1, 2, 3, 8, 9, 13, 14, 45, and 46 of the ‘280 Patent
were conceived and reduced to practice “no later than June 16, 1993.” (Id. at 120-121.)6
Purdue alleges that the response is inconsistent with the statements Depomed and
Inventor Helm made to the PTAB concerning the time necessary to arrive at an
embodiment falling within the scope of the claims. (Id. at 27-28.)
Purdue explains that the response and verification were already in its possession,
as these documents were “produced to Purdue prior to the stay in this case, at the time
Depomed informs us that the interrogatory responses referenced by Purdue were
amended in the Ivax case to indicate that “[t]he inventions of the following claims were
conceived by John W. Shell and Jennie Louie-Helm no later than April 12, 1996: Claims 1, 2, 3,
4, 8, 9, 13, 14, 45, 46, 61, 62, 63, 64, 65, 68, 69, 70, 71, 72, 73, 74, 75, 79, 80, 81, 82, 83, 84, 85,
and 86 of the ‘475 patent; claims 1, 2, 3, 4, 8, 9, 13, 14, 45, 46, 47, 48, 49, 50, 51 52, and 53 of
the ’280 patent.” (See dkt. 263 at 20-21; see also dkt. 262-3.)
6
6
[Depomed] was involved in preparing the Helm Declaration and the PORs for submission
in the IPRs,” but contends Depomed violated its duty under 37 C.F.R. § 42.51(b)(1)(iii)
because these documents were not produced during the IPR proceedings. (Id. at 27.)
II.
DISCUSSION
A.
Legal Standards
1.
Motion to Dismiss Under Rule 12(b)(6)
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a
counterclaim if the counterclaimant “fail[s] to state a claim upon which relief can be
granted[.]” Fed. R. Civ. P. 12(b)(6). When deciding a motion to dismiss pursuant to Fed.
R. Civ. P. 12(b)(6), a district court is required to “accept all factual allegations as true,
construe the [counterclaim] in the light most favorable to the [counterclaimant], and
determine whether, under any reasonable reading of the [counterclaim], the
[counterclaimant] may be entitled to relief.” Phillips v. Cnty of Allegheny, 515 F.3d 224,
233 (3d Cir. 2008) (internal citation and quotations omitted). Stated differently, “a
[counterclaim] must contain sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The inquiry is not whether
[a counterclaimant] will ultimately prevail in a trial on the merits, but whether [he or she]
should be afforded an opportunity to offer evidence in support of [his or her] claims.” In
re Rockefeller Ctr. Props., Inc., 311 F.3d 198,215 (3d Cir. 2002).
A claim of patent unenforceability premised upon inequitable conduct is a claim
sounding in fraud. Under Rule 9(b), fraud is a clear exception to the otherwise broad
7
notice-pleading standards. A party alleging inequitable conduct, therefore, must plead
with particularity those facts which support the claim that the patent holder acted
fraudulently before the PTO. Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312,
1326 (Fed. Cir. 2009).
2.
Pleading Inequitable Conduct
To plead inequitable conduct with the requisite “particularity” under Rule 9(b),
“the pleading must identify the specific who, what, when, where, and how of the material
misrepresentation or omission committed before the PTO.” Exergen, 575 F.3d at 1328;
see also Fresenius Kabi USA, LLC v. Fera Pharm., LLC, No. 15-3654, 2016 WL
5348866, at *10 (D.N.J. Sept. 23, 2016). “A pleading that simply avers the substantive
elements of inequitable conduct, without setting forth the particularized factual bases for
the allegation, does not satisfy Rule 9(b).” Exergen, 575 F.3d at 1326-27.
At the pleading stage, the proponent of the inequitable conduct theory need only
plead facts supporting a reasonable inference that a specific individual “(1) knew of the
withheld material information or of the falsity of the material misrepresentation, and (2)
withheld or misrepresented this information with a specific intent to deceive the PTO.”
Id. at 1328-29. The standards for pleading a claim of inequitable conduct are more
lenient than the standards for obtaining relief. At the pleadings stage, deceptive intent
must be a reasonable inference; prevailing on an inequitable conduct claim requires a
showing that deceptive intent is the single most reasonable inference. Id. at 1329 n.5. “A
reasonable inference is one that is plausible and that flows logically from the facts alleged
. . . .” Id.
8
3.
Motion to Strike Under Rule 12(f)
Federal Rule of Civil Procedure 12(f) provides in pertinent part that “[t]he court
may strike from a pleading an insufficient defense or any redundant, immaterial,
impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). The district court’s decision
whether to grant a motion to strike under Rule 12(f) is discretionary. FTC v. Hope Now
Modifications, LLC, No. 09-1204, 2011 WL 883202 at *2 (D.N.J. Mar. 10, 2011) (citing
Tonka Corp. v. Rose Art Indus., Inc., 836 F. Supp. 200, 217 (D.N.J. 1993)).
“[M]otions to strike ‘serve a useful purpose by eliminating insufficient defenses
and saving the time and expense which would otherwise be spent litigating issues which
would not affect the outcome of the case.’” United States v. Kramer, 757 F. Supp. 397,
410 (D.N.J. 1991) (citation omitted). However, the Third Circuit has instructed district
courts to deny a motion to strike a defense “unless the insufficiency of the defense is
clearly apparent.” Cipollone v. Liggett Grp, Inc., 789 F.2d 181, 188 (3d Cir. 1986).
“[O]n the basis of the pleadings alone, ‘an affirmative defense can be stricken only if the
defense asserted could not possibly prevent recovery under any pleaded or inferable set
of facts.’” Hope Now Modifications, 2011 WL 883202 at *2 (quoting Tonka, 836 F.
Supp. at 218).
B.
Analysis
1.
Purdue’s First and Second Inequitable Conduct Theories:
Material Misrepresentations and Omissions
Depomed argues that Purdue’s inequitable conduct counterclaim should be
dismissed under Rule 12(b)(6) because Purdue fails to satisfy the heightened pleading
9
requirements of Rule 9(b). Specifically, Depomed argues that Purdue fails to set forth
any factual basis for its allegation that a misrepresentation or omission was made to the
PTAB, let alone a factual basis that an alleged misrepresentation or omission was made
with the requisite specific intent to deceive the PTAB. (Dkt. 263 at 6, 17.)
Depomed takes the position that Purdue failed to plead that a knowing
misrepresentation or omission occurred. (See id. at 17-18.) Depomed admits that one
example within the claimed range of drug-to-polymer ratios of the patents-in-suit was
achieved in 1993, but disputes that Inventor Helm’s testimony that the “claimed
invention” was not conceived for another three years was a misrepresentation. (Id. at 18.)
Depomed’s position is that the “claimed invention” includes “the full range of drug-topolymer ratios,” not the single embodiment achieved in 1993. (Id. at 18-19.) Depomed
argues that no legal conception of the invention occurred in 1993, because all of the
limitations of the invention, i.e., the full range of the ratios of drug-to-polymer, were not
yet conceived. (Id. at 19.) Thus, according to Depomed, Inventor Helm and counsel’s
statements regarding the length of time it took to conceive the “claimed invention” were
not misrepresentations and have been consistent.
Depomed also argues that because Purdue’s pleadings lack the necessary facts that
would allow a Court to reasonably infer that a misrepresentation occurred in the first
instance, Purdue’s pleadings cannot support an allegation of a knowing misrepresentation
or omission. (Id. at 22.) Additionally, Depomed argues that these facts cannot support a
reasonable inference that there was intent to deceive the PTAB. (See id. at 23-24.)
10
Purdue argues that Depomed is conflating the issues of “when the full scope of the
patent claims, as opposed to an embodiment of the alleged invention, was conceived and
reduced to practice.” (Dkt. 265 at 26 (emphasis in original).) Purdue asserts that its
inequitable conduct counterclaim does not rest on the theory that the date of conception
of the full scope of the claims was not April 12, 1996. (Id.) Purdue argues that “the issue
of ‘obviousness’ focuses on whether any single embodiment of the challenged claims—
not necessarily their full scope—would have been obvious to a person of ordinary skill.”
(Id. (emphasis in original).) Thus, Purdue argues that “Depomed and its counsel
knowingly withheld from the PTAB and misrepresented that an embodiment of the
claimed invention was reduced to practice as early as 1993 in an effort to avoid an
obvious determination.” (Id.)
Purdue also argues that Depomed’s argument—that Inventor Helm has
consistently testified in this case, before the PTAB, and in prior interrogatories, that
reduction to practice of the full scope of the invention occurred in April 1996—is a red
herring. (Id. at 27.) Purdue argues that reduction to practice of the full scope of the
invention was not at issue in the PTAB proceedings and that Inventor Helm’s declaration
“solely concerned ‘obviousness.’” (Id. at 27-29.)7 Purdue argues that the wording used
by Depomed and Inventor Helm (i.e., “aspects of the claims”) was meant to mislead the
PTAB about whether an embodiment within the invention was conceived and reduced to
practice. (Id. at 27.)
7
Purdue notes that the Helm Declaration does not include the words “full scope,”
“conception,” or “reduction to practice.” (Id.)
11
Depomed, however, argues that any contention that they should have informed the
PTAB that Inventor Helm experimented on a formulation that purportedly falls within the
scope of the claims is legally flawed. (Dkt. 270 at 13.) Depomed argues that an
inventor’s work on early formulations that are “later discovered to fall within the scope of
the claimed invention” are not prior art against the invention. (Id.) Depomed argues that
Inventor Helm’s early formulations were not publically disclosed, and therefore not
relevant to the PTAB’s obviousness inquiry. (Id.)
With respect to Purdue’s sixth and seventh affirmative defenses of inequitable
conduct and unclean hands, Depomed argues that these affirmative defenses rise and fall
with Purdue’s counterclaim because they incorporate the same factual allegations. (See
dkt. 263 at 25.) Accordingly, Depomed asks us to strike these affirmative defenses as
futile under Rule 12(f). Purdue argues that they are sufficiently plead because they
incorporate the same factual allegations as the inequitable conduct counterclaim. (Dkt.
265 at 30.)
After reviewing Purdue’s Answer and Counterclaims, including the accompanying
exhibits, we find that Purdue has provided sufficient factual details to meet the
particularity requirements of Rule 9(b). With respect to Purdue’s first basis for
inequitable conduct—that Depomed and Inventor Helm made material misrepresentations
to the PTAB during the related IPR proceedings—we are persuaded that Purdue’s
pleadings disclose the specific “who, what, when, where, and how” as required by
Exergen.
12
Purdue has pleaded that (1) Depomed’s counsel and Inventor Helm “intentionally
misrepresented that it took [Inventor Helm] at least three years of research to develop an
embodiment of the claimed invention,” (dkt. 260 at 13 (emphasis added)); (2) Depomed
and Inventor Helm knew the statements they made to the PTAB were false because of the
contrary information in their possession, such as Inventor Helm’s laboratory notebook,
that reveals the conception and reduction to practice of an embodiment of the claimed
invention in 1993, (id. at 17-22, 27); (3) Depomed and Inventor Helm misrepresented this
information “to mislead the PTAB into concluding that the alleged invention would not
have been obvious in view of the art at the time the patent application was filed in March
1997,” (id. at 13, 23-24); and (4) that but for Depomed’s misrepresentations, the PTAB
would not have upheld the patentability of the patents, (id. at 14, 23-24). At the pleading
stage, we find that Purdue has done what is required to survive a motion to dismiss.
Purdue has pleaded facts supporting a reasonable inference that a specific individual “(1)
knew of the withheld material information or of the falsity of the material
misrepresentation, and (2) withheld or misrepresented this information with a specific
intent to deceive the PTO.” Exergen, 575 F.3d at 1328-29.
We are unpersuaded by Depomed’s arguments to the contrary. Depomed’s first
argument—that a material misrepresentation or omission did not occur—is a factual
disagreement as to whether counsel’s statements and the statements in the Helm
Declaration were material misrepresentations or omissions. A factual disagreement
cannot support dismissal of Purdue’s counterclaim at the pleading stage. See Bayer
CropScience AG v. Dow Agrosciences LLC, No. 10-1045, 2012 U.S. Dist. LEXIS 51913
13
at *10-11 (D. Del. Apr. 12, 2012) (noting that the Court may not weigh the facts and
address the merits of the averments at the motion to dismiss stage). Moreover, while the
statements in an affidavit may be literally true, this alone does not immunize a party from
a finding of inequitable conduct. See B.F. Goodrich Co. v. Aircraft Braking Sys. Corp.,
72 F.3d 1577, 1585 (Fed. Cir. 1996) (“Truthful statements can be crafted in a misleading
manner through intentional omission of particular relevant facts.”).
We also reject Depomed’s second argument that Purdue has failed to allege a
factual basis that an alleged misrepresentation or omission was made with the requisite
specific intent to deceive the PTAB. In a pleading of inequitable conduct, the facts must
support a “reasonable inference” of intent. Exergen, 575 F.3d 1312 at 1328. “A
reasonable inference is one that is plausible and that flows logically from the facts
alleged, including any objective indications of candor and good faith.” Id. at n.5. Here,
Purdue has alleged that the Helm declaration was offered for the purpose of refuting
claims of obviousness, and more particularly, that there was no motivation to combine
the references cited against the patents-in-suit (which together allegedly taught all of the
elements of claim 1) with a reasonable expectation of success. The Helm declaration
directly refuted Purdue’s expert’s claim that it would take him “a week” to come up with
the claimed invention, by asserting that it took her nearly three years “to achieve the
Captopril formulation that contained the aspects of the claims of the ‘475 and ‘280
Patents,” without disclosing that an embodiment of the invention was reduced to practice
in a relatively short period of time. Based on these allegations, it is reasonable to infer
that Inventor Helm and Depomed intended to paint an incomplete or misleading picture
14
for the PTAB. While Purdue faces a difficult task of proving inequitable conduct, it has
provided a recitation of facts that could give rise to a reasonable inference that Depomed
misrepresented and/or omitted material information with the intent to deceive the PTAB.
Depomed’s argument that an inventor’s early formulations are not prior art against
the invention misses the mark. Purdue’s allegation is not that Inventor Helm’s early
embodiment constitutes prior art against the patents-in-suit. Rather, Purdue’s argument is
that Depomed misrepresented this material information which is relevant to the question
of whether there is a reasonable expectation of success in combining prior art references.
With respect to Purdue’s second basis for inequitable conduct—Depomed’s
alleged withholding of the fact that Inventor Helm reduced to practice an embodiment of
the invention in June 1993—we find that Purdue’s pleadings disclose the specific “who,
what, when, where, and how” as required by Exergen. Our reasoning is the same as
discussed above in relation to Purdue’s first theory.
Therefore, we conclude that Purdue’s allegations, with respect to its first and
second theories for inequitable conduct, satisfy the heightened pleading requirements of
Rule 9(b). We also conclude that Purdue’s sixth and seventh affirmative defenses are
sufficiently pleaded because they incorporate the same factual allegations as Purdue’s
first and second theories in its inequitable conduct counterclaim. Accordingly, we will
deny Depomed’s motion to dismiss Purdue’s inequitable conduct counterclaim as it
pertains to Purdue’s first and second theories and deny Depomed’s motion to strike
Purdue’s sixth and seventh affirmative defenses to the extent they pertain to Purdue’s
first and second inequitable conduct theories.
15
2.
Purdue’s Third Inequitable Conduct Theory: Production of
Prior Inconsistent Statements During the IPR Proceedings
With respect to Purdue’s allegations that Depomed withheld the interrogatory
response during the IPR proceedings, Depomed argues that the initial response was not
material because it was not the response “actually relied on in the Ivax litigation.” (See
Dkt. 263 at 22-23.) Depomed notes that this response was amended and was no longer
the operative response in that case. (Id. at 20; see also n.6, supra.) Depomed also argues
that the representations made to the PTAB were consistent with the amended
interrogatory response. (Id. at 20-22.) Thus, Depomed asserts that Purdue fails to allege
facts that allow a reasonable inference that knowing misrepresentations or omissions
were made or that there was any specific intent to deceive the PTAB. (See id. at 23-24.)
Purdue contends that Depomed’s argument regarding the undisclosed
interrogatory response being inoperative is irrelevant. (Dkt. 265 at 29.) Purdue argues
that Inventor Helm confirmed at her deposition that she verified the initial interrogatory
by checking her notebooks, and confirmed that she reduced to practice an embodiment by
June of 1993. (Id.) Purdue argues that the initial responses, although not operative in the
Ivax litigation, serve as evidence that an embodiment was conceived and reduced to
practice in 1993. (Id.) Thus, the hallmark of Purdue’s argument related to nondisclosure
is that Depomed failed to notify the PTAB that a single embodiment was reduced to
practice in 1993. This argument, however, supports Purdue’s second theory of a material
omission, not Purdue’s theory that Depomed failed to produce inconsistent statements to
Purdue during the IPR proceedings.
16
With respect to Purdue’s third theory of inequitable conduct— that Inventor Helm
and Depomed’s counsel failed to produce a prior inconsistent interrogatory response and
a sworn verification for use during the IPR proceedings—we find that Purdue fails to
state a claim. Without reaching Depomed’s argument pertaining to whether an
inoperative discovery response is material or not, we find that Purdue cannot show that
the interrogatory response and sworn verification were withheld with a specific intent to
deceive the USPTO.
The rule that Purdue relies on for this theory of inequitable conduct provides that:
Unless previously served, a party must serve relevant
information that is inconsistent with a position advanced by the
party during the proceeding concurrent with the filing of the
documents or things that contains the inconsistency. This
requirement does not make discoverable anything otherwise
protected by legally recognized privileges such as attorneyclient or attorney work product. This requirement extends to
inventors, corporate officers, and persons involved in the
preparation or filing of the documents or things.
37 C.F.R. § 42.51(b)(1)(iii) (emphasis added). Purdue admits that Depomed “produced
[the interrogatory response and sworn verification at issue] to Purdue prior to the stay in
this case, at the time it was involved in preparing the Helm Declaration and the PORs for
submission in the IPRs.” (Dkt. 260 at 27.) Stated differently, Purdue alleges that
Depomed previously served the relevant information that is allegedly inconsistent with
the positions advanced in the Helm Declaration and PORs prior to the filing of those
documents with the PTAB. Depomed’s alleged compliance with 37 C.F.R. §
42.51(b)(1)(iii) cannot serve as the basis for a claim of inequitable conduct. Because
17
Purdue cannot show that the interrogatory response and verification were withheld, we
will grant Depomed’s motion with respect to this theory.
3.
Purdue’s Patent Misuse Defense
Depomed also moves to strike Purdue’s patent misuse affirmative defense under
Fed. R. Civ. P. 12(f). Patent misuse is an equitable doctrine that prevents a patentee from
wrongly exploiting a patent to “acquire a monopoly not embraced in the patent.” Princo
Corp. v. Int’l Trade Comm’n, 616 F.3d 1318, 1327 (Fed. Cir. 2010) (quoting
Transparent-Wrap Mach. Corp. v. Stokes & Smith Co., 329 U.S. 637, 643 (1947)). An
alleged infringer can successfully raise patent misuse as an affirmative defense by
showing “that the patentee has impermissibly broadened the ‘physical or temporal scope’
of the patent grant with anticompetitive effect.” Windsurfing Int’l Inc. v. AMF, Inc., 782
F.2d 995, 1001 (Fed. Cir. 1986) (quoting Blonder-Tongue Lab., Inc. v. Univ. of Ill.
Found., 402 U.S. 313, 343 (1971)). The Federal Circuit has cautioned that the “bringing
of a lawsuit to enforce legal rights does not of itself constitute . . . patent misuse.”
Glaverbel Societe Anonyme v. Northlake Mktg. & Supply, Inc., 45 F.3d 1550, 1558
(Fed. Cir. 1995). However, bringing a lawsuit can be considered patent misuse if the suit
was brought in bad faith or for some “improper purpose.” Id.
Purdue’s eighth affirmative defense for patent misuse alleges, in its entirety, that:
The claims of the ‘475 patent and ‘280 patent are
unenforceable because Depomed, by alleging infringement and
seeking a permanent injunction after the expiration of the
patents as set forth in paragraphs 25, 30-31, 33, 39-40 of the
Second Amended Complaint, attempts to impermissibly
broaden the temporal scope of the patent grant with
anticompetitive effect.
18
(Dkt. 260 at 7.)8
Depomed argues that we should dismiss Purdue’s patent misuse defense because
Purdue failed to set forth factually supported allegations that Depomed “expanded the
legal scope of exclusion under the patent grant, and actual anticompetitive effect
resulted.” (Dkt. 263 at 25-26.) Purdue stands by its pleadings and explains that an
“anticompetitive effect will occur if Depomed succeeds in obtaining a permanent
injunction against Purdue on patents that have expired, which would temporally expand
the legal scope of exclusion under the patent grant.” (See dkt. 265 at 30.)
The theories that Purdue puts forward are insufficient. First, Depomed is not
seeking a permanent injunction after the expiration of the patents-in-suit. The temporal
scope of the injunction sought in Depomed’s SAC is limited to the life of the patents:
A permanent injunction enjoining Purdue Pharma, P.F. Labs,
and Purdue Pharmaceuticals, their officers, agents, servants,
employees, and those persons acting in active concert or
participation with all or any of them from manufacturing,
using, offering to sell, or selling OxyContin® within the
United States, or importing OxyContin® into the United
States, prior to the expiration of the ‘475 and ‘280 Patents,
including any extension.
(Dkt. 260 at 7 (emphasis added).)
In addition, the owners of expired patents are given six years after the expiration
date of a patent to pursue infringement claims. See 35 U.S.C. § 286. The assertion of a
8
The patents-in-suit expired during the pendency of the litigation in September 2016.
(See dkt. 263 at 14.)
19
patent right provided by statute cannot serve as the basis for a claim that a patentee
attempted to expand the scope of its patent in an anticompetitive manner.
Purdue does not present any additional facts or theories that could plausibly
support an affirmative defense of patent misuse. Here, we conclude that the defense
asserted could not possibly prevent recovery under any pleaded or inferable set of facts.
Hope Now Modifications, 2011 WL 883202 at *2. Accordingly, we will strike Purdue’s
patent misuse defense.
20
III.
CONCLUSION
For the reasons stated above, the Court will grant in part and deny in part
Depomed’s motion to dismiss Purdue’s third counterclaim under Fed. R. Civ. P. 12(b)(6).
Depomed’s motion to dismiss is granted such that Purdue’s theory of inequitable conduct
pertaining to Inventor Helm and Depomed’s counsel’s failure to produce prior
inconsistent interrogatory responses and a sworn verification during the IPR proceedings
is stricken. Depomed’s motion to dismiss is denied with respect to Purdue’s first and
second theories (material misrepresentations and omissions).
The Court will grant in part and deny in part Depomed’s motion to strike Purdue’s
sixth, seventh, and eighth affirmative defenses under Fed. R. Civ. P. 12(f). Depomed’s
motion to strike is granted such that Purdue’s eighth affirmative defense for patent
misuse is stricken. Depomed’s motion to strike is denied with respect to Purdue’s sixth
and seventh affirmative defenses to the extent they pertain to Purdue’s first and second
inequitable conduct theories.
The Court will issue an appropriate order.
s/ Mary L. Cooper
.
MARY L. COOPER
United States District Judge
Dated: June 28, 2017
21
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