Allergan, Inc. v. Sandoz Inc

Filing 308

MEMORANDUM OPINION AND ORDER. Signed by Judge Rodney Gilstrap on 12/2/2013. (ch, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
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ALLERGAN, INC.,
Plaintiff,
v.
SANDOZ INC.
ALCON LABORATORIES, INC., ET AL.
APOTEX, INC., ET AL.
WATSON LABORATORIES, INC.

CASE NO. 2:09-CV-97
CASE NO. 2:09-CV-348 
CASE NO. 2:09-CV-200 
CASE NO. 2:09-CV-344 

MEMORANDUM OPINION AND ORDER
I.

Introduction

Before the Court is the Amended Motion to Modify the Injunction filed by Defendants
Sandoz Inc., Alcon Laboratories, Inc., Alcon Research, Ltd., Alcon, Inc., and Falcon
Pharmaceuticals, Ltd. (collectively, “Sandoz”). (Dkt. No. 258.) Defendants Apotex Inc. and
Apotex Corp. join in the first and second arguments of Sandoz’s Motion. (Dkt. No. 289.) After
considering the parties’ written submissions, the Court DENIES Defendants’ Motion.
II.

Facts

This Hatch-Waxman case began in April 2009 when Allergan filed suit against Sandoz
after receiving a notice from Sandoz that Sandoz had filed an Abbreviated New Drug Application
(ANDA) with the FDA seeking approval of a generic version of Combigan®. Allergan asserted
infringement of four of its Orange Book-listed patents for Combigan®: U.S. Patent Nos. 7,320,976
(“the ’796 patent”); 7,030,149 (“the ’149 patent”); 7,323,463 (“the ’463 patent”); and 7,642,258
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(“the ’258 patent”). The ’258, ’976, and ’149 patents expire on April 19, 2022 and the ’463 patent
expires on January 19, 2023.
Shortly before trial, Sandoz, along with the other defendants, filed a stipulation of
infringement that the products described in their respective ANDAs “meet[] all of the limitations
of claim 4 of U.S. Patent No. 7,030,149, claim 1 of U.S. Patent No. 7,320,976, claims 1-6 of U.S.
Patent No. 7,323,463, and claims 1-9 of U.S. Patent No. 7,642,258 pursuant to 35 U.S.C.
271(e)(2)(A),” and therefore the products and their use would infringe. (Dkt. No. 234.) This Court
conducted a four day bench trial in August of 2011, presided over by Judge T. John Ward, and
concluded that Defendants’ proposed generic version of Combigan® infringed all four
patents-in-suit, based on the stipulations, and that the patents had not been shown to be invalid.
(Dkt. No. 259 at 101.) As required by 35 U.S.C. 271(e)(2)(A), this Court then entered judgment
prohibiting approval of Defendants’ ANDAs until the latest of the expiration dates of the ’149,
’976, ’463, and ’258 patents and enjoining Defendants from making, using, offering to sell, or
selling the products described in their respective ANDAs for the same period. (Dkt. No. 260.)
Defendants appealed and the Federal Circuit issued its opinion on May 1, 2013, affirming
in part and reversing in part. The Federal Circuit found claim 4 of the ’149 patent valid, found
claims 1-6 of the ’463 patent invalid as obvious, and declined to rule on the validity of the ’976 and
’258 patents, explaining that “[t]he ’258, ’976, and ’149 patents each expire on April 19, 2022.
Because we conclude that claim 4 of the ’149 patent is not invalid, the Appellants will be unable to
enter the market until that date. Accordingly, we find it unnecessary to address the claims of the
’258 and ’976 patents.” Allergan, Inc. v. Sandoz Inc., 726 F.3d 1286, 1294 n.2 (Fed. Cir. 2013). In
a motion for rehearing en banc, the Defendants challenged the panel’s conclusion that it need not

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rule on the validity of the ’976 and ’258 patents. Rehearing was subsequently denied. The Federal
Circuit issued its final opinion and mandate on September 16, 2013.
Sandoz files the present motion, pursuant to Rule 60, asking this Court to (1) modify the
permanent injunction to reflect the Federal Circuit holding that claims 1-6 of the ’463 patent are
invalid, (2) extend the invalidity finding of the ’463 patent to the ’258 and ’976 patents, and (3)
make a determination that Sandoz’s amended ANDA does not infringe claim 4 of the ’149 patent.
Allergan opposes this request, contending that this is not the type of situation for relief from
judgment contemplated by Rule 60; instead, this is an attempt to re-litigate the case. After
considering the written submissions from both sides, the Court finds that Allergan has the better
argument, and Sandoz’s motion should be denied.
III.

Applicable Law

Sandoz moves for a modification of judgment under Rule 60(b)(5) and (6). Rule 60(b)(5)
provides that a court may relieve a party from a final judgment when “applying it prospectively is
no longer equitable.” Therefore, a party seeking modification “bears the burden of establishing
that a significant change in circumstances warrants revision of the [injunction].” Rufo v. Inmates of
Suffolk County Jail, 502 U.S. 367, 383, 112 S.Ct. 748 (1992); ICEE Distributors, Inc. v. J&J Snack
Foods Corp., 445 F.3d 841, 850 (5th Cir. 2006) (“Modification of an injunction is appropriate
when the legal or factual circumstances justifying the injunction have changed.”) (citations
omitted).
Although such a significant change in circumstances does not have to be entirely
unforeseen or unforeseeable, a modification is not appropriate where a party relies upon events
that were anticipated at the time that injunction was entered. Rufo, at 385. Instead, relief is more
properly available in the instance where a change in circumstance is beyond the defendants’
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control. Frew v. Hawkins, 401 F. Supp. 2d. 619, 629 (E.D. Tex. 2005). Once the movant has
satisfied its burden to establish a change in circumstances sufficient to warrant modification, the
district court should determine whether the proposed modification is suitably tailored to address
the change. Rufo, at 391.
IV.

Analysis

Before taking up modification of the injunction, the Court first considers the requests to (a)
extend the invalidity finding of the ’463 patent to the ’258 and ’976 patents, and (b) make a
determination that Sandoz’s amended ANDA does not infringe claim 4 of the ’149 patent.
a.

Validity of the ’258 and ’976 patents

As the premise in its motion, Sandoz asserts that the Federal Circuit’s decision and the
denial of Sandoz’s petition for rehearing leaves an open issue on the validity of the ’258 and ’976
patents which is appropriate for this Court to resolve. This premise is rooted in the flawed
proposition that the case has been remanded to this Court for further proceedings. In contrast to
this assertion, the Federal Circuit’s decision was clear. Judgment was affirmed-in-part and
denied-in-part, and no further action is required. The Federal Circuit did not remand this case to
the District Court, and without such direction, this Court has no continuing jurisdiction to take the
action Sandoz requests.
Nevertheless, Sandoz moves this Court to take the appellate court’s determination of
invalidity as to the ’463 patent and extend it to the claims of two other patents. This is something
the Federal Circuit specifically declined to reach. It should also be noted that Sandoz advanced the
same argument in its petition for rehearing en banc and such rehearing was denied. Consequently,
without a specific remand from the court of appeals on this issue, the district court’s validity
judgment on the ’258 and ’976 patents remains undisturbed. This Court is not free to alter or
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extend the judgment of the circuit court unless and only to the extent the circuit court so directs in
its opinion.
Additionally, reconsideration of the Court’s prior validity judgment is not appropriate
under a Rule 60 analysis. Whether the obviousness holding constitutes a significant change of
circumstances or not, the obviousness holding by the circuit court does not automatically give this
Court cause to reconsider other patents previously adjudicated as valid and not reached by the
Federal Circuit. As each claim is independent of the other, distinct patents do not rise or fall
together, and Sandoz has provided no authority to the contrary. As a result, the obviousness
holding of the Federal Circuit is limited, as it clearly set forth, to the ’463 patent. Such a ruling is
not the type of changed circumstance sufficiently significant to warrant a modification to the
validity of the’258 and ’976 patents.
b.

Sandoz’s amended ANDA

As another basis for relief, Sandoz petitions the Court for a ruling that its amended ANDA,
which was submitted after the Federal Circuit’s ruling, does not infringe claim 4 of the ’149 patent.
The amendment purports to carve out an infringing element in an attempt to escape the judgment
imposed by Judge Ward which was affirmed on appeal. Sandoz argues that the amended label has
been indicated as acceptable by the FDA. 1 Therefore, it asserts, the Court should deem this
design-around to not infringe the ’149 patent and the present injunction should be modified to
permit Sandoz to launch this new version of its product. (Dkt. No. 300.)
A party seeking modification of a judgment under Rule 60 “bears the burden of
establishing that a significant change in circumstances warrants revision of the [judgment].” Rufo,

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Much of Sandoz’s briefing is dedicated to explaining how its amended ANDA proposes a formula that is only
directed to ocular hypertension patents, which stops short of satisfying a step in the asserted claim. However, this
Court offers no opinion on the merits of Sandoz’s non-infringement argument at this time.

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502 U.S. at 383; ICEE, 445 F.3d at 850. Sandoz has not alleged a single change in its
circumstances that was brought about by new or unforeseen conditions. The only changed
circumstance that is relevant to Sandoz’s non-infringement argument is the ANDA that it
voluntarily amended after the Federal Circuit affirmed validity of the ’149 patent. This was an
intentional act that cannot be fairly characterized as unforeseen or unexpected. Sandoz’s argument
that there were forty possible validity-infringement outcomes in this case is unpersuasive. Every
patent case involving disputes as to infringement and validity can inherently result in numerous
combinations of infringement/validity that are each entirely foreseeable by the parties involved.
The numerosity of the claims alone does not render one outcome from forty possibilities
exceptional or unanticipated. Moreover, the changed ANDA occurred entirely through the actions
of Sandoz and, by definition, is not beyond the defendant’s control. Consequently, this is “not the
kind of unforeseen change in circumstances that merits relief from a judgment” under Rule
60(b)(5). Valentine Sugars, Inc. v. Sudan, 34 F.3d 320, 321-322 (5th Cir. 1994) (“Appellant not
only foresaw the changed conditions, it created them. The district court correctly denied relief
from the judgment.”).
In addition, the request for a ruling of non-infringement based on the changed ANDA is
tantamount to seeking summary judgment premised on new allegations that only came to exist
after the final judgment was rendered and affirmed. This Court finds no basis in the law for such
relief. Here, Sandoz stipulated to infringement, tried the case on invalidity and lost, and is now
trying to change positions to obtain another chance at non-infringement via the modified ANDA.
“It is well established that a party ‘may not use a Rule 60(b) motion as an occasion to relitigate its
case.’” United States v. Davison, 509 F. App’x 330, 332 (5th Cir. 2013) (quoting Gen. Universal
Sys. V. Lee, 379 F.3d 131, 157 (5th Cir. 2004)). In its motion, Sandoz alleged no facts indicating
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that the carve-out was “not open to litigation in the former action or that [it] was denied a fair
opportunity to make [its] claim or defense in that action.” Addington v. Farmer’s Elevator Mut.
Ins. Co., 650 F.2d 663, 668 (5th Cir. 1981). Instead, the facts reveal that Sandoz fully litigated the
merits of its invalidity case before this Court, “and then, displeased with the outcome, [now seeks]
to escape the consequences of this choice by shifting to a different course after the fact.” Paul
Revere Variable Annuity Ins. Co. v. Zang, 248 F.3d 1, 8 (1st Cir. 2001). Sandoz must live with the
consequences of the choices it freely made, and the calculated decisions it strategically reached in
the course of prior litigation. Id. Such facts are far removed from the type of inequity that warrants
relief under Rule 60(b)(5).
c.

Modification of the permanent injunction

In light of the Federal Circuit’s reversal-in-part, Sandoz moves the Court to shorten the
injunction period to the expiration date of the ’149, ’976, and ’258 patents—April 19, 2022.
Allergan responds that the injunction is clear on its face; defendants are enjoined until “after the
latest of the expiration dates of the ’149, ’976, ’463, and ’258 patents, plus any exclusivities
afforded under the statute.” (Dkt. No. 260.) This Court agrees. The Federal Circuit’s obviousness
finding of claims 1-6 of the ’463 patent invalidates those claims, the effect of which is
retrospective. Claims 1-6 of the ’463 are treated as if they never existed, and by extension, they
have no expiration date. Accordingly, based on a plain reading of the language in the injunction,
no modification is necessary or proper.
V.

Conclusion

For the foregoing reasons, the Court finds that Sandoz has failed to meet its burden to
establish a significant change in circumstances which warrants relief under Rule 60(b)(5). It is also
apparent to the Court that Sandoz does not meaningfully move to modify the injunction under Rule
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60(b)(6) as a separate ground for relief. Sandoz’s Amended Motion to Modify the Injunction (Dkt.
No. 258) is hereby DENIED in all respects.

So Ordered and Signed on this

Dec 2, 2013

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