Reckitt Benckiser Pharmaceuticals, Inc. et al v. BioDelivery Sciences International, Inc.

Filing 51

ORDER GRANTING 18 Defendant's Motion to Dismiss, GRANTING 30 Motion to Seal, DENYING AS MOOT 33 Defendant's Motion to Stay, and GRANTING 42 Motion to Seal. The plaintiffs' complaint is dismissed in its entirety. Signed by US District Judge Terrence W. Boyle on 5/20/2014. (Fisher, M.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:13-CV-760-BO

RECKITT BENCKISER
PHARMACEUTICALS, INC., RB
PHARMACEUTICALS LIMITED, and
MONOSOL RX, LLC,
Plaintiffs,
v.
BIODELIVERY SCIENCES
INTERNATIONAL, INC.,
Defendant.

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ORDER

This cause comes before the Court on defendant's motions to dismiss and to stay. A
hearing was held on these matters before the undersigned on April25, 2014, at Raleigh, North
Carolina. For the reasons discussed below, defendant's motion to dismiss is granted.
BACKGROUND
PlaintiffRB Pharmaceuticals, a UK company, owns patent no. 8,475,832 (the '832
patent) which relates to sublingual and buccal film compositions and was issued on July 2, 2013.
The inventors to whom the '832 patent was originally issued assigned their rights to MonoSol,
who later assigned its rights to RB Pharmaceuticals Limited, or RBP UK. Plaintiff Reckitt
Benckiser Pharmaceuticals (RBP), a Virginia company, is the owner ofNew Drug Application
No. 22-410 with the Food and Drug Administration (FDA) for a drug used to treat opioid
dependence called Suboxone. Suboxone is administered sublingually through a film. The New
Drug Application (NDA) for Suboxone sublingual film was approved by the FDA on August 30,
2010. RBP also owns NDA No. 20-733 for Suboxone sublingual tablet, which contains the same

active ingredients as Suboxone sublingual film but is administered in tablet as opposed to film
form.
Defendant submitted an NDA to the FDA on July 31, 2013, and is seeking approval to
manufacture and sell a drug called Bunavail, which contains the same active ingredients and is
intended to treat the same medical conditions as Suboxone. Bunavail is believed to be
administered by a mucoadhesive applied orally. Plaintiffs contend that defendant's submission
of its NDA to the FDA constitutes patent infringement and that its application was specifically
drafted to circumvent the Hatch-Waxman Act, 21 U.S.C. § 355. In count one, plaintiffs seek a
declaratory judgment that defendant's Bunavail product is covered by one or more claims of the
'832 patent. Plaintiffs allege that, unless enjoined by this Court, defendant intends to engage in
the commercial manufacture, use, sale, or offer for sale within the United States ofBunavail
upon approval of its pending NDA and that such actions would infringe plaintiffs' '832 patent.
In count two, plaintiffs allege that defendant's submission of its NDA is an act of infringement
of the '832 patent under 35 U.S.C. § 271(e)(2)(A). Plaintiffs seek an order requiring that the
FDA set the effective date of approval for defendant's NDA to be not earlier than the expiration
date of the '832 patent, pursuant to 35 U.S.C. § 271(e)(4).
DISCUSSION
Defendant contends that the Court lacks subject matter jurisdiction over count one as
there is no case or controversy to be decided. Federal Rule of Civil Procedure 12(b)(l)
authorizes dismissal of a claim for lack of subject matter jurisdiction. When subject matter
jurisdiction is challenged, the plaintiff has the burden of proving jurisdiction to survive the
motion. Evans v. B.F Perkins Co., 166 F.3d 642, 647-50 (4th Cir. 1999). "In determining
whether jurisdiction exists, the district court is to regard the pleadings' allegations as mere

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evidence on the issue, and may consider evidence outside the pleadings without converting the
proceeding to one for summary judgment." Richmond, Fredericksburg & Potomac R.R Co. v.

United States, 945 F.2d 765,768 (4th Cir. 1991). To this end, "the nonmoving party must set
forth specific facts beyond the pleadings to show that a genuine issue of material fact exists." !d.
(citing Trentacosta v. Frontier Pacific Aircraft Indus., 813 F.2d 1553, 1558-59 (9th Cir. 1987)).
The movant's motion to dismiss should be granted ifthe material jurisdictional facts are not in
dispute and the movant is entitled to prevail as a matter oflaw. !d.
The Declaratory Judgment Act provides that in a case of actual controversy within its
jurisdiction, a court may declare the rights and other legal relations of any interested party
seeking such declaration. 28 U.S.C. § 2201(a). The Declaratory Judgment Act does not,
however, create an independent basis for subject matter jurisdiction. Gibraltar, P.R., Inc. v.

Otoki Grp., Inc. 104 F.3d 616, 619 (4th Cir. 1997). Plaintiffs allege that this Court has
jurisdiction over their declaratory judgment claim in light of its jurisdiction over patent disputes
and specifically under 35 U.S.C. § 271(a)-(c). In patent matters, a dispute presents an actual case
or controversy if it is one that is "definite and concrete, touching the legal relations of parties
having adverse legal interests; and [it must] be real and substantial and admit 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." Medlmmune, Inc. v. Genetech, Inc., 549 U.S.
118, 127 (2007) (internal quotations, alterations, and citations omitted). The basis of a court's
jurisdiction over a declaratory judgment action is measured at the time of the filing of the
complaint, and "a claim is not ripe for adjudication if it rests upon contingent future events that
may not occur as anticipated, or indeed may not occur at all." Texas v. United States, 523 U.S.
296, 300 (1998) (internal quotation and citation omitted).

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The complaint in this matter was filed on October 29, 2013. Defendant filed its NDA
with the FDA in July 2013, and at the time of filing ofthis order, the Court is unaware that the
FDA has acted on defendant's application. Although plaintiffs allege that defendant has
announced its intent to market Bunavail once it obtains FDA approval, any actual future alleged
infringement of plaintiffs' patent "depends on two contingent future events: FDA approval of
[defendant's] []NDA, and [defendant's] decision to market [Bunavail] pursuant to that []NDA.
At least until the []NDA is approved ... the controversy is not sufficiently immediate."
Eisai Co., Ltd. v. Mut. Pharm. Co., Inc., CIV.A. 06-3613(HAA), 2007 WL 4556958 (D.N.J. Dec.
20, 2007); see also Abbott Diabetes Care, Inc. v. DexCom, Inc., C.A.05-590 GMS, 2006 WL
2375035 (D. Del. Aug. 16, 2006) (dismissing declaratory judgment claim based on potential
future infringement and noting that "[a]t the time Abbott filed its complaint, the FDA had not
approved DexCom's product and Abbott could not predict when, or if, the FDA would approve
the product."). Any actions taken to date regarding defendant's research or development of
Bunavail appear to fall under the safe harbor provision enacted in order to encourage ongoing
research and development and cannot be used to support plaintiffs' claim for future infringement.
35 U.S.C. § 271(e)(1). Additionally, a court may consider whether an alleged future infringer
has engaged in marketing or solicited orders for an accused product when determining whether a
justiciable controversy exists, but plaintiffs have not alleged that defendant has advertised or
taken orders for its Bunavail product. See Interdigital Tech. Corp. v. OK! America, Inc., 845 F.
Supp. 276, 284 (E.D.Pa. 1994). Although plaintiffs contend that defendant has included
information about its Bunavail product in its annual report and issued press releases regarding its
Bunavail application, the Court does not find these actions to be sufficient to demonstrate any
immediacy of potential infringement.

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For these reasons, the Court finds that plaintiffs' claim for declaratory judgment based on
contingent future events is premature and that the Court therefore lacks subject matter
jurisdiction to consider it. 1
Defendant next contends that count two of plaintiffs' complaint fails to state a claim upon
which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure. When
acting on a motion to dismiss under Rule 12(b)(6), "the court should accept as true all wellpleaded allegations and should view the complaint in a light most favorable to the plaintiff."

My/an Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993). A complaint must allege enough
facts to state a claim for relief that is facially plausible, Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007), which requires that the facts pled "allow[] the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged"; mere recitals of the elements of
a cause of action supported by conclusory statements do not suffice. Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009). If the factual allegations do not nudge the plaintiff's claims "across the line
from conceivable to plausible," the "complaint must be dismissed." Twombly, 550 U.S. at 570.
Once an NDA is approved, the drug manufacturer must submit the patent number and
expiration date of any patent that claims the drug or method for inclusion in the FDA's "Orange
Book." 21 U.S.C. § 355(b)(1). An applicant submitting an NDA to the FDA may under certain
circumstances rely on the FDA's prior findings regarding safety and efficacy of an allegedly
bioequivalent listed drug product, instead of having to repeat the testing necessary for a new drug
application. See 21 U.S.C. §§ 355G) (abbreviated NDA for generic drugs); 355(b)(2) (505(b)(2)
NDA where listed drug is similar to new drug). Defendant has filed a 505(b)(2) NDA regarding
Bunavail, which means that it has relied in its application on investigations it did not conduct and
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Because the Court finds that plaintiffs' claim is not ripe, it declines to consider defendant's
argument regarding standing.
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for which it has not obtained a right of reference. Unlike an applicant for a generic drug, a
505(b)(2) applicant is permitted to choose the most appropriate listed drug for reference and is
not required to choose the most similar listed drug. 21 U.S.C. § 355(b)(2); Cmp. Ex. Eat 7 ("An
applicant choosing to rely on FDA's finding of safety and/or effectiveness for a listed drug very
similar to the proposed product ... would generally need to submit less additional data ... [but]
this suggested approach does not reflect a statutory or regulatory requirement.").
Both a generic drug applicant and a 505(b)(2) applicant must make one of four
certifications in its NDA regarding each patent that is listed in the FDA's Orange Book for the
referenced drug: "(1) that no patent information has been filed (a "Paragraph I" certification), (2)
that the patent has expired (a "Paragraph II" certification), (3) that the patent will expire on a
specific date (a "Paragraph III" certification), or (4) that the patent "is invalid or will not be
infringed by the manufacture, use, or sale of the drug for which the application is submitted" (a
"Paragraph IV" certification)." Eisai Co., 2007 WL 4556958 *1 (citing 21 U.S.C. §
355G)(2)(A)(vii)(I)-(IV)). Where an applicant files a Paragraph IV certification, the applicant
must give notice to the patent owner with the basis on which it contends that the patent is invalid
or will not be infringed. 21 U.S.C. § 355G)(2)(B). Such notice provides the patent owner with
forty-five days to file an infringement action, which if filed will trigger a thirty month stay of the
FDA's consideration ofthe NDA. 21 U.S.C. § 355G)(5)(B)(iii). In such instance, the patent
owner's infringement action is considered an "artificial" infringement action and is filed under
25 U.S.C. § 271(e)(2). Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 676, (1990) (§ 271(e)(2)
creates a "a new (and somewhat artificial) act of infringement for a very limited and technical
purpose that relates only to certain drug applications.").

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Plaintiffs' count two is a§ 271(e)(2) artificial infringement claim regarding plaintiffs'
'832 patent on sublingual and buccal film compositions. Defendant has indicated in its 505(b)(2)
NDA that plaintiffs' Suboxone sublingual tablet, not sublingual film, is its reference drug;
defendant did not file a Paragraph IV certification regarding the '832 patent, and thus plaintiffs'
'832 patent has not been implicated in defendant's 505(b)(2) application.
Absent a Paragraph IV certification referencing plaintiffs' '832 patent, plaintiffs' § 271
artificial infringement claim is beyond the scope of defendant's 505(b)(2) application and
therefore fails to state a claim upon which relief can be granted. See AstraZeneca Pharm. LP v.

Apotex Corp., 669 F.3d 1370, 1379 (Fed. Cir. 2012) ("When considering allegations that an
ANDA filing infringes a patented method, § 271 (e )(2) directs our analysis to the scope of
approval sought in the ANDA-the statute defines the infringing act as filing an ANDA for 'a
drug claimed in a patent or the use of which is claimed in a patent.'"). Although the application
at issue inAstraZeneca was a generic drug application, the Federal Circuit's holding remains
applicable in the 505(b)(2) context. As the court in AstraZeneca recognized, "the Act allows
generic manufacturers to limit the scope of regulatory approval they seek - and thereby forego
Paragraph IV certification and a § 271 (e)(2) infringement suit- by excluding patented
indications from their ANDAs." Id. The Court finds the AstraZeneca holding to be both
instructive and persuasive in this context, and that its application requires dismissal of plaintiffs'
§ 271(e)(2) claim. See also Novartis Pharm., Corp. v. Wockhardt USA LLC, 12-CV-3967, 2013
WL 5770539 (D.N.J. Oct. 23, 2013) ("According to the Federal Circuit in Warner-Lambert and

AstraZeneca, a claim for infringement under§ 271(e)(2) must involve filing an ANDA seeking
approval for a patented use."); Eisai Co., Ltd., 2007 WL 4556958 *12 ("this Court holds that to
establish an act of infringement pursuant to§ 271(e)(2), the ANDA must contain a Paragraph IV

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certification against a patent listed in the Orange Book for the drug in question."); Novo Nordisk
Inc. v. My/an Pharm Inc., Civ. Action No. 09-2445(FLW), 2010 WL 1372437 *10 (D.N.J.

March 31, 2010) (noting Eisai court's thorough analysis and adopting holding that where no
Paragraph IV certification has been filed an act of infringement under § 271 (e)(2) cannot be
established).
For these reasons, plaintiffs have failed to state a claim upon which relief can be granted
in count two of their complaint.
CONCLUSION
Accordingly, defendant's motion to dismiss [DE 18] is GRANTED and plaintiffs'
complaint is DISMISSED in its entirety. Defendant's motion to stay [DE 33] is therefore
DENIED AS MOOT. For good cause shown, the motions to seal [DE 30 & 42] are GRANTED.

SO ORDERED, this~ day of May, 2014.

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