Regeneron Pharmaceuticals, Inc. v. Merus B.V.
Filing
71
OPINION & ORDER re: 40 MOTION to Dismiss Plaintiff Regeneron's Complaint for Patent Infringement filed by Merus B.V. Merus's motion to dismiss is hereby DENIED. The Clerk of Court is directed to terminate the motion at ECF No. 40. The parties are reminded that a status conference is scheduled to occur on July 24, 2014 at 12:00 p.m. (Signed by Judge Katherine B. Forrest on 6/18/2014) (tro)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------------------------::\
REGENERON PHARMACEUTICALS,
INC.,
USDC SDNY
DOCV'.\IE'.'T
ELECTH.Ol\JCALLY FILED
DOC#:
/
DATE FILED:
f
tllJ-;.;
14-cv-1650 (KBF)
Plaintiff,
OPINION & ORDER
-v-
MERUS B.V.,
Defendant.
------------------------------------------------------------KATHERINE B. FORREST, District Judge:
)(
On March 11, 2014, plaintiff Regeneron Pharmaceuticals, Inc. ("Regeneron")
filed twin lawsuits for patent infringement - against Merus B.V. ("Merus") in Case
No. 14-cv-1650 and against Ablexis LLC ("Ablexis") in Case No. 14-cv-1651. On
May 5, 2014, Ablexis answered and asserted counterclaims. (Case No. 14-cv-1651,
ECF No. 40.) Merus has moved to dismiss. (Case No. 14-cv-1650, ECF No. 40.)
That motion became fully briefed on May 30, 2014.
For the reasons set forth below, Merus's motion to dismiss is DENIED.
I.
TWOMBLY'S APPLICABILITY IN PATENT INFRINGEMENT CASES
In order to determine whether Regeneron's pleading is sufficient to survive
Merus's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the
Court must apply Second Circuit law. See Invitrogen Corp. v. Biocrest Mfg., L.P.,
424 F.3d 1374, 1378-79 (Fed. Cir. 2005) ("The Federal Circuit applies its own law
with respect to issues of substantive patent law and certain procedural issues
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pertaining to patent law, but applies the law of the regional circuits on non-patent
.
issues. ") .
Recently, applying Ninth Circuit law, the Federal Circuit determined that
the sufficiency of a patent infringement Complaint is governed by Official Form 18
in the Appendix of Forms to the Federal Rules of Civil Procedure ("Form 18"). KTech Telecomms., Inc. v. Time Warner Cable, Inc., 714 F.3d 1277, 1283 (Fed. Cir.
2013). Citing Federal Rule of Civil Procedure 84, the Federal Circuit stated that
"proper use of a form contained in the Appendix of Forms effectively immunizes a
claimant from attack regarding the sufficiency of the pleading." Id. The year
before, the Federal Circuit applied Sixth Circuit law and came to the same
conclusion. In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681
F.3d 1323, 1333-34 (Fed. Cir. 2012); see also McZeal v. Sprint Nextel Corp., 501
F.3d 1354, 1355-56 (Fed. Cir. 2007) (Dyk, J., concurring in part and dissenting in
part) (applying Fifth Circuit law).
Merus's argument amounts to an assertion that the Federal Circuit has
essentially created a Twombly "off-ramp" for patent cases: when the principles set
forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), conflict with Form 18,
compliance with Form 18 is sufficient. See K-Tech, 714 F.3d at 1283 (determining
that "a proper use of a form contained in the Appendix of Forms effectively
immunizes a claimant from attack regarding the sufficiency of the pleading").
Neither Congress nor the Supreme Court has directly addressed this issue.
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Notably, the Federal Circuit has not addressed the proper relationship between
Form 18 and Twombly under Second Circuit law.
Although the Second Circuit is in accord with the Ninth, Sixth, and Fifth
Circuits insofar as it applies de novo review to district court determinations on Rule
12(b)(6) motions to dismiss, see, e.g., Freedom Holdings, Inc. v. Spitzer, 357 F.3d
205, 216 (2d Cir. 2004) (citation omitted), it does not necessarily follow that the
Second Circuit takes the same approach as these other circuits to Form 18. Since
the Second Circuit has not addressed the issue (and the Federal Circuit has given
no indication as to what it believes the Second Circuit would decide if faced with the
question), the Court considers the issue based on its own view of Second Circuit
precedent. 1
A recent district court in the Fourth Circuit engaged in a thorough analysis of
the relevant history and case law concerning Form 18; it ultimately rejected the
Federal Circuit line of cases and declined to exempt patent actions from Twombly.
1
While certain district courts in this Circuit have addressed the applicability of
Form 18, they have done so without consideration of Second Circuit law. Rather,
they cite to Federal Circuit cases - which, as stated, apply the law of other circuits as a guidepost. See, e.g., 3D Sys., Inc. v. Formlabs, Inc., No. 13-cv-7973, 2014 WL
1904365, at *5-6 (S.D.N.Y. May 9, 2014); Orientview Techs. LLC v. Seven For All
Mankind, LLC, No. 13-cv-0538, 2013 WL 4016302, at *5 (S.D.N.Y. Aug. 7, 2013);
Hon Hai Precision Indus. Co. v. Wi-Lan, Inc., No. 12-cv-7900, 2013 WL 2322675, at
*4 (S.D.N.Y. May 28, 2013) (acknowledging that Federal Circuit precedent is
"merely persuasive authority"); Automated Transaction LLC v. New York Cmty.
Bank, No. 12-cv-3070, 2013 WL 992423, at *3 (E.D.N.Y. Mar. 13, 2013); ArrivalStar
S.A. v. Port Auth. of N.Y. & N.J., No. ll-cv-1808, 2012 WL 1059693, at *1 (S.D.N.Y.
Mar. 29, 2012). This Court disagrees with this approach. This Court believes the
proper approach is to consider how the Second Circuit would likely analyze the
question, drawing on analogous case law and established principles.
3
Macronix Int'l Co. v. Spansion, Inc., No. 13-cv-679, 2014 WL 934505, at *4-7 (E.D.
Va. Mar. 10, 2014). The court reasoned that the Federal Circuit "took the view that
Twombly 'did not really change the pleading requirement of the Federal Rule of
Civil Procedure 8 as articulated by Conley,"' id. at *4 (quoting McZeal, 501 F.3d
1356 n.4), but that such a view is at odds with the Fourth Circuit's interpretation of
Twombly. Id. at *4-6 (holding that "it is high time that counsel in patent cases"
determine "exactly what claims should be alleged to be infringed and how they are
infringed" prior to filing a Complaint).
This Court finds that the Federal Circuit's determination that Twombly is
inapplicable to patent cases conflicts with significant Second Circuit precedent
applying the principles of Twombly at the pleading stage of civil cases.
As an initial matter, it bears noting that Form 18 is only one of many forms:
the Appendix to the Federal Rules of Civil Procedure in fact contains over 30 forms.
There are forms for, inter alia, commencing negligence actions (Form 11), copyright
infringement actions (Form 19), third-party actions (Form 16), and actions to
require specific performance of a contract to convey land (Form 17). Yet, in a wide
variety of contexts in which those types of actions are at issue, the Second Circuit
has, since 2007 when Twombly was decided, consistently required compliance with
the principles set forth in Twombly. See, e.g., Keiler v. Harlequin Enters. Ltd., F.3d - , 2014 WL 1704474, at *3 (2d Cir. May 1, 2014) (breach of contract); Peter F.
Gaito Architecture, LLC v. Simone Dev. Corp., 602 F.3d 57, 62 (2d Cir. 2010)
(copyright infringement); Bayerische Landesbank, N.Y. Brand v. Aladdin Capital
4
Mgmt. LLC, 692 F.3d 42, 64 (2d Cir. 2012) (negligence; citing Ashcroft v. Iqbal, 556
U.S. 662 (2009)).
This Court has found no basis in Second Circuit precedent to treat patent
cases differently from other cases in which forms exist and to which Twombly
applies. The principles set forth in Twombly apply to the evaluation of pleadings in
patent infringement cases in this Circuit.
Thus, the sufficiency of Regeneron's claim for patent infringement is assessed
pursuant to the basic elements set forth in Form 18 as well as the guidance
provided in Twombly.
II.
DISCUSSION
a. Legal Framework
Form 18 requires little by way of pleading: only a statement of jurisdiction,
the date that the patent issued, the ownership rights of the plaintiff in the patent, a
general statement that the defendant has infringed and is still infringing by
making, using or selling a product that embodies the patented invention, that the
plaintiff has complied with marking requirements and provided the defendant with
notice of infringement. See Fed. R. Civ. P. Form 18 (2007).
Twombly requires more. Twombly requires that a plaintiff provide the
grounds upon which its claim rests through factual allegations sufficient to raise a
right to relief above the speculative level. Twombly, 550 U.S. at 555. A Complaint
must allege "enough facts to state a claim to relief that is plausible on its face."
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Starr v. Sony BMG Music Entm't, 592 F.3d 314, 321 (2d Cir. 2010) (quoting
Twombly, 550 U.S. at 570); see also Iqbal, 556 U.S. at 677-78 (same).
"A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged." Iqbal, 556 U.S. at 678. In applying that standard, the court
accepts as true all well-plead factual allegations, but does not credit "mere
conclusory statements" or "threadbare recitals of the elements of a cause of action."
Id. If the court can infer no more than "the mere possibility of misconduct" from the
factual averments - in other words, if the well-pleaded allegations of the Complaint
have not "nudged claims across the line from conceivable to plausible," dismissal is
appropriate. Twombly, 550 U.S. at 570; Starr, 592 F.3d at 321 (quoting Iqbal, 556
U.S. at 678). The "[£]actual allegations must be enough to raise a right to relief
above the speculative level .... " Twombly, 550 U.S. at 555.
b. Analysis
Regeneron's allegations cover each of the elements in Form 18: a basis for
jurisdiction, ownership of the patent(s) upon which its claims are based, and that
Merus is making a product (a genetically modified mouse) that directly infringes on
its patent. Regeneron alleges that Merus has been aware of its infringing activity
for some time and "wilfully, wantonly and deliberately" has continued to engage in
acts of infringement. (Compl.
~
27.) This pleading satisfies any notice requirement.
Regeneron's claims are also adequate under Twombly. Regeneron asserts
that "Merus has made a genetically modified mouse that comprises, in its germline,
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at least human unrearranged heavy chain variable region gene segments inserted
at an endogenous mouse immunoglobulin locus and that produces an antibody
comprising a human variable region and a mouse constant region." (Id.
if 24.)
Regeneron specifically asserts that Merus's conduct falls within the scope of claim of
its patent
ful il 25); and that its MeMo mouse and related products and
technologies infringe (id.).
Merus asserts that the Complaint must be dismissed because it failed to
provide Merus with notice of Regeneron's claims before filing suit and that its
allegations simply restate the statutory language and are insufficiently pled under
Twombly. At base, Merus asserts that Regeneron has failed to provide it with
adequate notice (whether in the form of a pleading or otherwise) "of what it is being
accused of doing." (Merus Mem. at 2.) Neither argument is availing.
i. Notice
There is no statutory or case law requirement that a patent holder provide an
alleged infringer with notice of its claim of infringement prior to filing suit. If such
a requirement existed, one would certainly expect it to be contained Title 35 of the
United States Code §§ 101, et seq.
Merus's basis for asserting the existence of such requirement is based on a
misreading of Form 18. On its face, the language in Form 18 relating to notice is
with regard to marking and damage claims. That language does not create what
would be a substantive statutory requirement regarding ripeness. Indeed, Rule 84
of the Federal Rules of Civil Procedure states that the forms "illustrate the
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simplicity and brevity that these rules contemplate." Fed. R. Civ. P. 84. Neither
Rule 84 nor any of the prior procedural rules purport to create substantive
requirements for patent suits. Rather, Form 18, as with other Appendix forms, was
drafted against the backdrop of the substantive law.
ii. Twombly
The pleading principles set forth in Twombly do not privilege length of
allegations over substance. Here, it is true, plaintiff has alleged relatively little
about its claim. But, it has said enough. It has alleged a specific patent and a
specific product that allegedly infringes that patent by virtue of certain specific
characteristics. (See Compl.
~
24 ("Regeneron is informed and believes, and on that
basis alleges, that Merus has made a genetically modified mouse that comprises, in
its germline, at least human unrearranged heavy chain variable region gene
segments inserted at an endogenous mouse immunoglobulin locus and that
produces an antibody compromising a human variable region and a mouse constant
region.")). At this stage of the case, this allegation pleads a plausible claim for
infringement. Whether developments in the evidence will show non-infringement
or some other defense is not a matter for this Court to consider at this preliminary
stage.
Merus argues it does not have sufficient information to understand the scope
of the litigation. The scope is clear - it is as broad as the alleged infringing mouse
and the uses to which it has been put. That scope may well narrow - but it is clear
that that is what plaintiff is asserting.
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For all of these reasons, Regeneron's Complaint against Merus survives
dismissal.
III.
CONCLUSION
Merus's motion to dismiss is hereby DENIED. The Clerk of Court is directed
to terminate the motion at ECF No. 40. The parties are reminded that a status
conference is scheduled to occur on July 24, 2014 at 12:00 p.m.
SO ORDERED.
Dated:
New York, New York
June Jk, 2014
KATHERINE B. FORREST
United States District Judge
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