DUKE UNIVERSITY et al v. APOTEX, INC. et al

Filing 31

MEMORANDUM OPINION AND ORDER signed by MAG/JUDGE L. PATRICK AULD on 05/19/2015, that Plaintiffs' Motion for Leave to File a Second Amended Complaint (Docket Entry 13 ) is GRANTED, and that, on or before May 22, 2015, Plaintiff Allergan shall file the proposed Second Amended Complaint (Docket Entry 13 at 9-20). Plaintiff Allergan's filing of a Second Amended Complaint will render moot Defendants' Motion to Dismiss (Docket Entry 14 ) and Plaintiffs' Motion to Dismiss Defendants' Counterclaims (Docket Entry 23 ).(Taylor, Abby)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

DUKE UNIVERSITY and
ALLERGAN, INC.,
Plaintiffs,
v.
APOTEX, INC. and APOTEX CORP.,
Defendants.

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1:14CV1028

MEMORANDUM OPINION AND ORDER
This case comes before the Court on Plaintiffs’ Motion for
Leave to File a Second Amended Complaint.

(Docket Entry 13.)

For

the reasons that follow, the Court will grant the instant Motion.1
BACKGROUND
Plaintiffs

commenced

this

action

by

filing

a

Complaint

alleging infringement by Defendants of United States Patent No.
8,906,962 (“the ‘962 patent”), held by Plaintiff Duke University.
(Docket Entry 1 at 1, 3.)

1

One month later, Plaintiffs amended

For reasons stated in Deberry v. Davis, No. 1:08CV582, 2010
WL 1610430, at *7 n.8 (M.D.N.C. Apr. 19, 2010) (unpublished), the
undersigned Magistrate Judge will enter an order, rather than a
recommendation. See also Everett v. Prison Health Servs., 412 F.
App’x 604, 605 & n.2 (4th Cir. 2011) (“[The plaintiff] moved for
leave to amend her complaint . . . to add . . . a defendant
. . . and to add a state-law claim of medical malpractice against
[that new defendant]. After a hearing, the magistrate judge denied
[that] motion. [The plaintiff] timely objected, thereby preserving
the issue for review by the district court. . . . [T]he district
court could not modify or set aside any portion of the magistrate
judge’s order unless the magistrate judge’s decision was ‘clearly
erroneous or contrary to law.’ Fed. R. Civ. P. 72(a); 28 U.S.C.A.
§ 636(b)(1)(A) (2006 & Supp. 2010).”).

their Complaint as of right to further allege infringement by
Defendants of United States Patent No. 8,926,953 (the ‘953 patent),
held by Plaintiff Allergan.

(Docket Entry 11 at 1, 4.)

Both

patents concern Latisse, a product which promotes eyelash growth
and/or eyelash darkening.

(Id. at 4.)

Plaintiffs now seek to file a Second Amended Complaint that
removes all allegations of infringement of the ‘962 patent (thus
also removing Plaintiff Duke University as a Party) and narrows the
scope of Plaintiffs’ allegations of infringement as to the ‘953
patent.

(See Docket Entry 13 at 1-2; see also id. at 9-20

(proposed Second Amended Complaint).)

Defendants oppose amendment

as to the removal of the claims concerning the ‘962 patent unless
the Court declares such claims dismissed with prejudice.
Entry 20 at 4.)

(Docket

Defendants also oppose amendment as to the

narrowing of claims concerning the ‘953 patent on grounds of
futility, because Defendants contend that issue preclusion bars any
assertion

of

Plaintiffs’

Plaintiffs replied.

rights

as

to

that

patent.

(Id.)

(Docket Entry 28.)

Since the filing of Plaintiffs’ instant Motion, Defendants
moved

to

Defendants

dismiss

the

answered

Amended
the

Complaint

Amended

(Docket

Complaint

Entry

and

14),

asserted

counterclaims (Docket Entry 19), and Plaintiffs moved to dismiss
those counterclaims (Docket Entry 23).

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DISCUSSION
Given Defendants’ refusal of consent, Plaintiffs “may amend
[their] pleading only with . . . the [C]ourt’s leave.
should freely give leave when justice so requires.”
P. 15(a)(2).

The [C]ourt
Fed. R. Civ.

Under this standard, the Court has discretion, “but

outright refusal to grant the leave without any justifying reason
appearing for the denial is not an exercise of discretion.”
v. Davis, 371 U.S. 178, 182 (1962).

Foman

Accordingly, “the federal

rules strongly favor granting leave to amend.”

Medigan of Ky.,

Inc. v. Pub. Serv. Comm’n, 985 F.2d 164, 167-68 (4th Cir. 1993).
Furthermore, as the Fourth Circuit has noted, “[t]he law is well
settled ‘that leave to amend a pleading should be denied only when
the amendment would be prejudicial to the opposing party, there has
been bad faith on the part of the moving party, or the amendment
would be futile.’”

Edwards v. City of Goldsboro, 178 F.3d 231, 242

(4th Cir. 1999) (quoting Johnson v. Oroweat Foods Co., 785 F.2d
503, 509 (4th Cir. 1986)) (emphasis in original).
Plaintiffs’
allegations

of

instant

Motion

infringement

as

first
to

the

seeks
‘962

to

remove

patent

(held

all
by

Plaintiff Duke University) and to remove Plaintiff Duke University
as a Party.

(Docket Entry 13 at 1.)

Defendants do not appear to

oppose such amendment outright (Docket Entry 20 at 6, 8-9), but
they contend that, should the Court allow Plaintiffs to drop their
claim concerning the ‘962 patent, “leave should be conditioned on

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considering Plaintiffs’ ‘962 patent infringement claims to be
dismissed

with

prejudice.”

(Id.

at

4.)2

In

that

regard,

Defendants contend:
Here, Plaintiffs have asserted numerous patents against
[Defendants] under multiple case numbers spanning nearly
five years. Perhaps in an attempt to preserve the
validity of the ‘962 patent, Plaintiffs appear to seek to
withdraw that patent.
Because Plaintiffs are able to
reassert the ‘962 patent at their option, the
“substantial interest of finality in litigation” is not
served here without conditioning Plaintiffs’ leave to
file their Second Amended Complaint on considering claims
[relating to the ‘962 patent] to be dismissed with
prejudice.
(Id. at 8.)

In other words, Defendants appear to assert that

allowing Plaintiffs to remove the ‘962 patent from their Complaint
would prejudice Defendants by prolonging the prospect of litigation
over the ‘962 patent.

(See id.)

Although the Court has the discretion to impose conditions on
a grant of leave to amend (such as deeming eliminated claims
dismissed with prejudice) the general approach considers an amended
complaint which removes previously asserted claims as akin to a
voluntary

dismissal

without

prejudice.

2

See

Martin

v.

MCAP

Although Defendants state generally that “the Court should
deny Plaintiffs’ Motion for Leave [to Amend]” (Docket Entry 20 at
4), Defendants do not make any arguments to support denial of the
instant Motion as it relates to the ‘962 patent (see id. at 4-9).
Furthermore, Defendants’ pending Motion to Dismiss does not mention
the ‘962 patent and seeks dismissal only of claims concerning the
‘953 patent. (See Docket Entry 16 at 2-18.) Instead, in opposing
the instant Motion, Defendants emphasize that leave to amend must
be styled as a dismissal with prejudice. (See Docket Entry 20 at
8-9.)
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Christiansburg, LLC, No. 7:14cv464, 2015 WL 540183, at *2-3 (W.D.
Va. Feb. 10, 2015) (unpublished).

In seeking to avoid application

of that general rule, Defendants cite to a recent Fourth Circuit
case in which the court upheld a denial of leave to amend, in part,
on

the

basis

that

granting such

leave

“‘would

undermine the

substantial interest of finality in litigation.’” (Docket Entry 20
at 8 (quoting United States ex rel. Nathan v. Takeda Pharm. N. Am.,
Inc., 707 F.3d 451, 461 (4th Cir. 2013)).)
However, in that case, two years had passed since the relator
filed the action, the relator had previously amended his complaint
three times, and the district court had already dismissed the third
amended complaint under Federal Rule of Civil Procedure 12(b)(6).
See United States ex rel. Nathan, 707 F.3d at 461.

Moreover, the

relator sought to add rather than remove allegations from his
complaint, see id. at 461, and the Fourth Circuit explained that
permitting the filing of a fifth complaint would “unduly subject
[the defendant] to the continued time and expense occasioned by
[the plaintiff’s] pleading failures,” id.

In contrast, given the

early stage of this litigation and the fact that Plaintiffs seek to
file an abridged version of their amended complaint, which asserts
no new claims or legal theories, Defendants do not face the kind of
prejudice that would support denial of amendment.
Finally, as Plaintiffs have noted, the Fourth Circuit has
observed

(in the context of voluntary dismissal) that “‘prejudice

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to the defendant does not result from the prospect of a second
lawsuit’ and ‘the possibility that the plaintiff will gain tactical
advantage over the defendant in future litigation.’” (Docket Entry
28 at 6 (quoting Davis v. USX Corp., 819 F.2d 1270, 1274-75 (4th
Cir. 1987)).)

Thus, the fact that Plaintiffs may have made a

strategic decision to seek voluntary dismissal of the ‘962 patent
claims and may reassert those claims later does not alone prejudice
Defendants.

Under these circumstances, the Court will not impose

any conditions in granting Plaintiffs’ instant Motion as to their
request to eliminate claims for infringement of the ‘962 patent and
will deem such claims dismissed without prejudice.
Plaintiffs’ instant Motion also seeks to narrow the scope of
the claimed infringement as to the ‘953 patent.
at 1.)

(Docket Entry 13

Whereas Plaintiffs’ Amended Complaint alleges infringement

of the ‘953 patent generally (see Docket Entry 11 at 11-16), the
proposed

Second

Amended

Complaint

limits

the

allegations

of

infringement to claims 8, 23, and 26 of that patent (see Docket
Entry 13 at 14-18).

Defendants oppose such amendment as futile on

grounds that issue preclusion bars any assertion of the ‘953 patent
against Defendants.

(Docket Entry 20 at 6-7.)

“An amendment would be futile if the amended claim would fail
to survive a motion to dismiss for failure to state a claim
pursuant to Federal Rule of Civil Procedure 12(b)(6).”

Syngenta

Crop Prod., Inc. v. EPA, 222 F.R.D. 271, 278 (M.D.N.C. 2004)

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(Tilley, C.J.).

A plaintiff fails to state a claim when the

complaint does not “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) (internal citations
omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)).
ground

of

“Leave to amend, however, should only be denied on the
futility

when

the

proposed

insufficient or frivolous on its face.”

amendment

is

clearly

Johnson, 785 F.2d at 510

(citing Davis v. Piper Aircraft Corp., 615 F.2d 606, 613 (4th Cir.
1980)).
Here,

Defendants

assert

that

the

‘953

patent’s

claims

demonstrate substantial similarity to previously litigated patents
invalidated by either the Federal Circuit or this Court.
Entry 20 at 7.)
Motion

to

(Docket

However, in responding to Defendants’ pending

Dismiss,

Plaintiffs

have

made

at

least

plausible

arguments against the applicability of issue preclusion in this
case.

(See Docket Entry 25 at 15-22.)

For instance, Plaintiffs

assert that the ‘953 patent claims “methods . . . to increase
eyelash darkness,” whereas the previously litigated patents claimed
only methods to stimulate eyelash growth.

(Id. at 15-16.)

Moreover, Plaintiffs raise legitimate concerns as to the
appropriateness of resolving an affirmative defense such as issue
preclusion at the Rule 12(b)(6) stage. (Docket Entry 25 at 22-23.)
In that regard, the Fourth Circuit, in the context of denying a

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motion

to

dismiss

on

grounds

of

issue

preclusion

and

claim

preclusion, stated:
A motion under Rule 12(b)(6) is intended to test the
legal adequacy of the complaint, and not to address the
merits of any affirmative defenses.
In the limited
circumstances where the allegations of the complaint give
rise to an affirmative defense, the defense may be raised
under Rule 12(b)(6), but only if it clearly appears on
the face of the complaint.
Richmond, Fredericksburg & Potomac R.R. Co. v. Forst, 4 F.3d 244,
250 (4th Cir. 1993).

Without addressing the substance of that

contention as it applies to this case, the Court does find that
such considerations counsel against effectively ruling on issue
preclusion in the context of deciding a motion to amend.

In sum,

Plaintiffs’ proposed amendment as to the ‘953 patent does not
qualify

as

“clearly

insufficient

or

frivolous

on

its

face,”

Johnson, 785 F.2d at 510.
CONCLUSION
Plaintiffs have shown a basis to permit their proposed further
amendment of their Amended Complaint.
IT IS THEREFORE ORDERED that Plaintiffs’ Motion for Leave to
File a Second Amended Complaint (Docket Entry 13) is GRANTED.
IT IS FURTHER ORDERED that, on or before May 22, 2015,
Plaintiff Allergan shall file the proposed Second Amended Complaint
(Docket Entry 13 at 9-20). Plaintiff Allergan’s filing of a Second
Amended Complaint will render moot Defendants’ Motion to Dismiss

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(Docket Entry 14) and Plaintiffs’ Motion to Dismiss Defendants’
Counterclaims (Docket Entry 23).
/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge
May 19, 2015

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