Ferring Pharmaceuticals Inc. et al v. Serenity Pharmaceuticals, LLC et al

Filing 408

OPINION AND ORDER re: 221 MOTION to Amend/Correct 18 Amended Complaint, 115 Answer to Counterclaim filed by Ferring Pharmaceuticals Inc., Ferring B.V., Ferring International Center S.A. For the reasons set forth above, Plaintiff's motion forleave to amend its complaint and its counterclaims in reply is denied. It is so ordered. (Signed by Judge Robert W. Sweet on 1/4/2019) (rro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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FERRING B . V., FERRING
INTERNATIONAL CENTERS . A., and
FERRING PHARMACEUTICALS INC .,

17 Civ . 9922
OP I NI ON and ORDER

Plaintiffs and Counter Defendants ,
- against -

SERENITY PHARMACEUTICALS , LLC,
REPRISE BIOPHARMACEUTICS , LLC ,
AVADEL SPEC I ALTY PHARMACEUTICALS , LLC

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Defendants and
Counterclaimants .

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APPEARANCES :
Attorneys for Plaintiffs
GIBBONS P . C .
One Gateway Center
Newark , NJ 07102
By : W lliam P . Deni , Jr ., Esq.
i
Jeffrey A . Palumbo , Esq .
FINNEGAN , HENDERSON , FARABOW ,
GARRETT & DUNNER , LLP
901 New York Avenue , N. W.
Washington , D. C .
20001 - 4413
By :
James B . Monroe , Esq .
Paul W. Browning , Esq .
Adri ana L . Burgy , Esq .
Charles T . Collins - Chase , Esq .
Pier D. DeRoo , Esq .

{

.

.r .Y FILED

WOMBLE CARLYLE SANDRIDGE & RIC E, LLP
Atlantic Station
271 17th St ., NW , Suite 2400
Atlanta , GA 30363
By :
John W. Cox , Ph . D.
WOMBLE CARLYLE SANDRIDGE & RICE , LLP
222 Delaware Avenue , Suite 1501
Wilmington , DE 19801
By:
Mary Bourke , Esq .
Attorneys for Defendants
JONES DAY
250 Vesey Street
New York , NY 10281-1047
By : Christopher J . Harnett , Esq .
Shehla Wynne , Esq .
Kevin V. McCarthy , Esq .

1

Sweet, D.J.

Plaintiffs Ferring B.V ., Ferring International Center
S . A ., and Fer ring Pharmaceuticals Inc .

("Fer ring," the

"Plaintiffs," o r the "Counter-Defendants") have moved f o r leave
to amend their first amended complaint of June 30 , 2017

("First

Amended Complaint" or "FAC" ) and to reply to counterclaims ,
affirmative defenses , and amended counterclaims of Defendants
Serenity Pharmaceuticals , LLC, Reprise Biopharmaceutics LLC, and
Avadel Specialty Pharmaceuticals LLC ("Serenity " or
"Defendants" ) . ECF No . 221 .

Based on the conclusions set forth below , Plaint i ff 's
motion is denied .

I.

Prior Proceedings

Familiarity with the facts of this case and the
related 2012 case , Ferring B. V. v . Allergan , Inc., No . 12 Civ .
2650

(RWS ) ,

(the " 2012 Action")

is assumed . The following

summary is provided only as necessary to resolve the pending
motions .

2

On April 28 , 2017 Ferring commenced this action in the
District of Delaware against Allergan , Inc .

(" All ergan " ) ,

Serenity , and Reprise , seeking a declaratory judgment of patent
invalidity, unenforceability, and non-infringement with respect
to United States Patent No . 7 , 405 , 203 (t he "20 3 Patent " ) , United
States Pa tent No . 7 , 579 , 321 (the " 321 Patent " ) , and United
States Patent No. 7 , 799 , 761 (" the 761 Patent " )

(together , the

"Patents in Suit"). See generally Pl. Comp l., ECF No . l.

Ferring amended its complaint on June 30 , 2017 . ECF
No . 18.

After briefing from parties o n the issue of
jurisdiction in Delaware and transferability , the case was
transferred to this Distri ct where it was designated related to
the 2012 Action . See ECF Nos . 25 - 27 , 58 . Around the same time ,
Allergan was volunta rily dismissed from the case . ECF No . 35 .

Following much dispute over whether Ferring's NOCDURNA
drug would be approved , and with Serenity ' s motion to dismiss
for lack of jurisdiction pending , Ferring received FDA approval
of its New Drug Application ("NOA" ) on June 21 , 2018 . SeeECF No .
99 .

3

On June 28 , 2018 Serenity and Reprise , together with
newly-joined patent licensee Avadel Specialty Pharmaceuticals ,
LLC ("Avadel " ) answered Ferring ' s Amended Complaint and asserted
various counterclaims , including patent infringement and willful
patent infringement by NOCDURNA over the 203 Patent and the 321
Patent . ECF No . 101 .

On July 19 , 2018 , Ferring moved to strike certain of
Serenity ' s defenses and to dismiss certain of its counterc l a i ms ,
including those alleging patent infringement under 35 U. S.C . §
271(a) . ECF No. 114 at 13 - 14 .

On July 23 , 2018 , Serenity moved for a preliminary
injuncti on to block the commerc ial release of NOCDURNA . ECF No .
117 .

On August 2 , 2018 , Serenity filed a cross - moti o n to
strike certain of Ferring ' s affirmative defenses asserted in its
July 19 motion to strike and dismiss . ECF No . 136 .

On August 14 , 2018 , Serenity filed a motion for
judgment on the pleadings . ECF No . 148 .

4

On August 20 , 2018 , Ferring withdrew its July 19 , 2018
motion to strike and dismiss certain of Serenity ' s affirmative
defenses . ECF No . 160 .

On September 10 , 2018, Ferring moved for summary
judgment on the issue of invalidity under 35 U. S . C . § 112 f or
lack of enablement

(EC F No. 178) and for n on -infringement or,

alternatively , invalidity due to lack of written description
(ECF No. 182) .

On September 21 , 2018, Serenity moved for judgment on
the pleadings on the issue of co llateral estoppel. ECF No. 206 .

On October 10, 20 18 , Plaintiffs filed the instant
motion for leave to amend/ correct the First Amended Complaint
and to reply to counterclaims and affirmative defenses. ECF No.
221 . The motion was heard and marked fully submitted on November
13 , 2018 .

5

II.

The Applicable Standard

While leave to amend should be " freely given
when justi c e s o requires , " district courts " ha[ve] broad
discretion to decide whether to grant leave to amend ."
v . Winehouse , 235 F . 3d 792 , 801

(2d Cir . 2000) .

Gurary

Leave to amend

is properly denied in cases of "undue delay , bad faith or
dilatory motive on the part of the rnovant , repeated failure to
cure deficiencies by amendments prev i ously allowed , undue
prejudice to the opposing party by v i rtue of the a l lowance of
the amendment ,

[or] fut il ity of the amendment. "

of New York , 514 F . 3d 184 , 191 (2d Cir. 2008)
Davi S

,

3 71 U . S . 178 , 18 2 ( 19 6 2 ) ) .

Ru oto l o v . City

(quoting Farnan v .

However , c o urts have

emphasized the inquiry into prejudice and bad faith over " mere
delay . "

Ru o tolo , 514 F . 3d at 191 (citing to 6 CHARLES ALLEN W G T,
RI H

ARTHUR R . MILLER & M
ARY KAY KANE , FEDERAL PRACTICE AND PROCEDURE : CIVIL 2 D, §
1487 , at 613

(1990 & 2007 Supp . )

(discussing prejudice as " the

most important factor " and "the most frequent reason for denying
leave to amend " )) ; see also State Teachers Ret . Bd . v . Fluor
Corp. ,

654 F . 2d 843 , 856 (2d Cir . 198 1 ) .

In determining what constitutes " prejudice ," courts in
this circuit consider whether the assertion of the new claim
6

would: " (i) require the opponent to expend significant
additional resources to conduct discovery and prepare for trial ;
(ii) significantly delay the resolution of the dispute; or (iii)
prevent the plaintiff from bringing a timely action in another
jurisdiction ."

Block v . First Blood Associates , 988 F.2d 344 ,

350 (2d Cir . 1993).

When the non - moving party asserts that the

movant is acting in bad faith , "there must be something more
than mere delay or inadvertence for the court to refuse to allow
amendment ," such as seeking to derive some unique tactical
advantage through their amendment .

Primetime 24 Joint Venture

v . DirecTV , Inc. , No . 99 - 3307 , 2000 WL 426396 , *5-*6 (S . D. N.Y .
Apr. 20 , 2000) .

Un less the non - moving party demonstrates

prejudice or bad faith , courts genera ll y allow a party to amend
its complaint .

City of New York v . Grp . Health Inc., 649 F.3d

151 , 157 (2d Cir . 2011)

(citing AEP En ergy Servs . Gas Holding

Co . v . Bank of Am. , N. A., 626 F . 3d 699 , 725 (2d Cir . 2010)).

The burden of establishing prejudice or bad faith
falls to the party opposing a motion to amend , as does the
burden of estab lishing futility .

See Block , 988 F. 2d at 350 ;

see also Blaskiewicz v . County of Suffolk , 29 F . Supp. 2d 134 ,
137-38

(E .D.N.Y. 1998)

(ci ting Harrison v . NBD Inc ., 990 F.

Supp . 179 , 185 (E.D . N. Y. 1998) .

A proposed amendment is futile
7

if it cannot " withstand a motion t o dismiss pursuant to Rule
12(b) (6) ."

Oneida Indian Nation of New York v . City of

Sherrill , 337 F . 3d 139 , 168 (2d Cir. 2003), rev ' d on other
grounds , 544 U. S . 197 (2005)

(citing Ricciuti v . N. Y. C . Transit

Auth ., 941 F . 2d 119 , 123 (2d Cir . 1991)) .

Therefore , " [f]or the

purposes of evaluating futility , the 12(b) (6) standard is
applied : all well pleaded allegations are accepted as true , and
all inferences are drawn in favor of the p l eader ."

E*Trade Fin .

Corp . v. Deutsche Bank AG , 420 F. Supp. 2d 273 , 282

(S . D. N.Y .

2006)

(citing Mills v. Polar Molecular Corp ., 12 F.3d 1170 , 1174

(2d Cir . 1993)) .

However , "a plaintiff ' s obligation to provide the
grounds of his entitlement to relief requires more than labels
and conclusions ."
( 2007)

Bel l Atl . Corp . v . Twombly , 550 U. S. 544 , 555

( internal quotation marks omitted) .

A complaint must

contain "sufficient factual matter , accepted as true , to ' state
a claim to relief that is plausible on its face .'"
Iqbal , 556 U. S . 662 , 663 (2009)

Ashcroft v .

(quoting Twombly , 550 U. S . at

570) .

8

III. Ferring's Motion for Leave is Denied

"[T]he district co urt plainly has discretion t o deny
l eave to amend where the motion is made after an inordinate
delay , no satisfactory explanation is made for the de l ay , and
the amendment would prejudice the defendant ." See , e . g .,
MacDraw , Inc. v . CIT Group Equipment Financing, Inc., 157 F . 3d
956 , 962

(2d Ci r . 199 8) , Foman , 37 1 U. S . at 1 82 . The party

seeking leave to amend has the burden to explain the delay See
id.

Ferring ' s late-stage amendment-with trial l oomi ng a n d
motions for summary judgment , among others , pending-relies on
facts that have been known for years . After i nitia ll y al l eging
inequ i table conduct against Seymour Fein ("Fein " ) in the Apr il
2017 Complaint (ECF No . 1) , and aga i n i n the FAC (ECF No . 18),
Ferring n ow seeks to "add additional allegations and grounds
supp o rting its unenforceability claims " over the Paten t s in
Suit . See Memo . in Supp . at 4 , ECF No. 4 .

Ferring's conduct in seeking to amend its compla i nt
constitu t es undue delay . Through the lengthy and o n go in g related
litigati o n, Ferring v. Allergan , No. 12 - cv - 2650 (RWS)
9

(S . D. N. Y) ,

which concerns the same under l ying conduct ,

Ferring has been

aware for years of Dr . Fein ' s patents and their prosecution
history. See Ferring v. Allergan,

4 F.Supp.3d 612 ,

633

(RWS)

(S . D. N. Y. 2014). Ferring alleged in that case that "Fein's
patent application did in fact disclose information confidential
and proprietary to Ferring" and "acknowledge[d] that it had
reviewed [and was aware of]

Fein ' s patent application." Id.

Ferring further demonstrated knowledge of the patents -i n - suit ,
arguing that they "contained data that emanated from Ferring,"
including "i nformation that was not in Ferring ' s UK
application ." See id . at 632 .

To explain the significant delay in asserting the
additional inequitable conduct claim , Ferring claims to have
"waited to plead the additional grounds for its inequitable
conduct claims until after it had more fully developed the

underlying facts. " Pl. ' s Memo in Supp . at 1, ECF No . 222. But
the facts underlying the inequitable conduct c l a i m have been
known for 15 years. 1 In this litigation , which commenced in April

1

The patents - in-suit and their specifications , clinical
trial data , and inventorship origins are old news . See Ferring
v . Allergan , 4 Supp.3d 612 , (S.D . N. Y. 2014) (" in a letter dated
December 9 , 2004 , Ferring's counsel raised concerns that Fein ' s
patent application might include confidential Ferring data") .
The facts required to assert an inequitable conduct claim with
respect to the patent prosecution in this case were available
10

2017 , Ferring had the facts necessary to assert the additional
claim of inequitable conduct from the start , having deposed Dr.
Fein over 3.5 years ago in connection with Ferring v. Allergan.
Its explanation is thus unsatisfactory . Cresswe ll v . Sul li van &
Cromwell,

922 F . 2d 60 , 72

(2d Cir . 1990)

(denial of motion for

leave to amend appropriate "where the motion is made after an
inordinate delay ,
the delay .

[and] no satisfactory explanation is made for

. ") .

That Ferring's motion for leave was filed before the
October 1, 2018 deadline to amend does not preclude a finding of
undue delay . Ferring had the facts necessary to bring this
additional claim at an earlier junction and chose not to.
Ferring's decision to file an eleventh -hour amendment just weeks
before trial-with a panoply of motions pending- constitutes undue
de l ay . See Zahra v . Town of Southhold , 48 F.3d 674 ,
1995)

685

(2d Cir .

("It was entirely reasonable for the district court to

deny a request to amend a complaint that was filed two and one half years after the commencement of the action, and three
months prior to trial ." ) ; see also Ansam Assoc ., Inc. v . Cola
Petroleum , Ltd., 760 F.2d 442

(2d Cir. 1985)

(affirming denial

after Fein's deposition , which concluded over 3 .5 years ago. See
Defs. ' Memo in Opp . at 2 , ECF No . 265.
11

of motion to amend filed after close of discovery and with
summary judgment motion pending) .

District Courts must also "take into account any
prejudice that might result to the party opposing the
amendment." Ansam Assoc . v . Cola , 760 F . 2d at 446 (quoting
Zenith Radio Corp. v . Hazeltine Research, In c ., 401 U. S. 321 ,
330 - 3 (1971)). Were Ferring permitted to amend its complaint for
the second time, t he Defendants would be unfairly prejudiced.
First , the motions pending in this case- and those yet to be
heard-are numerous and include summary judgment, claim
construction , sanctions, motions to strike , and a motion for
judgment on the pleadings . An amended complaint at this stage
could render moot certain of these motions , requiring renewal by
Defendants at great cost to both parties and the Court . The
amendment could l ikewise require supplemental discovery of Dr.
Fein, which would be prejudicial to Defendants .

In view of the undue delay by Ferring in seeking to
amend its complaint at this late stage-just weeks before trial
after knowing for years the facts underlying the additional
cause of action-and the potential prejudice to Defendants,
Ferring's motion is denied .

12

Conclusion

For the reasons set forth above , Plainti ff' s motion for
leave to amend its compla int and its counterc l a ims in reply is
denied .

It

is so ordered .

New York, NY
January
2019

f ,

ROBERT W. SWEET
U.S.D.J.

13