Pfizer Inc. et al v. Teva Pharmaceuticals USA, Inc. et al
Filing
497
MEMORANDUM OPINION that the court hereby GRANTS Pfizer' s Motion for Attorney Fees Pursuant to 35 U.S.C. § 285, and AWARDS attorney fees in the amount of $378,285. Signed by District Judge Rebecca Beach Smith and filed on 10/17/2011. (rsim)
UNITED
STATES DISTRICT
EASTERN DISTRICT
COURT
OF VIRGINIA
Norfolk Division
PFIZER INC.
and PFIZER LTD.,
Plaintiffs
and
Counterclaim Defendants,
Civil No.
v.
TEVA PHARMACEUTICALS
USA,
2:10cvl28
INC.,
Defendant and
Counterclaim Plaintiff.
MEMORANDUM OPINION
This matter comes before the court on the plaintiffs',
Pfizer
Inc. and Pfizer Limited (collectively "Pfizer") , Motion for Attorney
Fees
Pursuant
to
35
U.S.C.
§
285
("Motion").
On August
this court entered its Opinion and Final Order
in pertinent part,
Inc.
("Teva"),
Answer
and
Counterclaim,
and
found
that
See Pfizer,
Inc.,
2:10cvl28,
Dist.
fees
of
12,
2011) .
2011 U.S.
Federal
did
LEXIS
not
commit
Patent No.
Inc. v. Teva Pharms. USA,
90021,
at
*70-*71
(E.D.
Pfizer now moves this court to award "attorney
relating to Teva's
the
Pfizer
in the prosecution of United States
("the *012 patent") .
Aug.
which,
Motion for Leave to File its Proposed Second Amended
6,469,012
Va.
("Opinion"),
2011,
denied the defendant's, Teva Pharmaceuticals USA,
inequitable conduct
No.
12,
inequitable
Circuit's
decision
conduct
in
defense
Therasense,
from the date
Inc.
v.
Becton,
Dickinson and Co., 2011 WL 2028255 (Fed. Cir. May 25, 2011) ."
Mot.
for Attorney Fees 1,
Docket # 476.
to deny Pfizer's Motion or,
sought
by
Pfizer
to
authorized by the court.
attorney
fees
to reduce the award
related
to
discovery
Def.' s Opp'n to Pis .' Mot. 2, Docket #481.
For the reasons stated herein,
Attorney
Teva in turn asks the court
in the alternative,
exclude
Pis.'
the court GRANTS Pfizer's Motion for
Fees.
I.
Procedural History
On March 24, 2010, Pfizer1 filed suit in this court against Teva2
alleging imminent infringement of Pfizer's United States Patent No.
6,469,012
the
("the
Treatment
'012 patent"),
of
(filed May 13,
entitled "Pyrazolopyrimidinones for
Impotence."
1994)
United
(issued Oct.
22,
States
2002).
Patent
The
No.
6,469,012
"012 patent claims
the use of certain chemical compounds as a method of treating erectile
dysfunction.
Leave
to
On November 12,
2010,
Teva filed its first Motion for
File an Amended Answer and Counterclaim
("First Motion to
1 Upon Motion by Pfizer, and over Teva's objection, this court added
Pfizer
Ireland
plaintiff
on
Pharmaceuticals
June
Amended Complaint
by
agreement
2
#
Pfizer
on
of
Pharmaceuticals
Docket
30,
2011,
the
same
the
4,
day.
from
#
See
Liability
406,
Docket
#
dismissed
this
suit
on
Co.
and Pfizer
407.
The
Pfizer
July
14,
as
a
filed an
court,
Ireland
2011.
See
434.
initially
complaint
dismissed
May
Unlimited
Docket
parties,
Partnership
brought
Pharmaceutical Industries,
The
see
against
without
2010.
See
suit
Ltd.,
Teva
Pharmaceutical
prejudice
Docket
#
against
26.
two
defendants:
and Teva Pharmaceuticals USA,
upon
Industries,
agreement
of
the
Teva
Inc.
Ltd.
parties
was
on
Amend").
See Docket #55.
In particular, Teva sought to amend its
Answer and Counterclaim to add the allegation that the
'012 patent
was invalid because Pfizer engaged in inequitable conduct during the
patent's
prosecution
and
reexamination.
The
Memorandum Order allowing the amendment on
court
January 18,
issued
2011.
a
See
Pfizer, Inc. v. Teva Pharms. USA, Inc., No. 2:10cvl28, 2011 U.S. Dist.
LEXIS 90762 (E.D. Va. Jan. 18, 2011).
that,
"[t] hough it
[pleading]
9(b)."
[was]
a close question,
requirements
Id.
at
*11.
Specifically, the court found
of
.
.
.
[Federal]
the
Thus,
Rule
directed
court
[of
Teva ha[d] met the
Civil
Teva
Procedure]
to
file
its
Answer
and
regarding
the
Amended Answer and Counterclaim.
On
June
Counterclaim,
17,
2011,
Teva
seeking
to
change
inequitable conduct claim.
attorneys
Watson
McMunn
again
moved
its
to
amend
its
allegations
Teva first alleged that "Pfizer in-house
and
Dr.
Peter
Richardson,
and
Pfizer's
outside counsel Daniel DiNapoli of the Kaye Scholer law firm, engaged
in inequitable conduct during the prosecution of the application for
the
*012 patent," by failing to disclose that a Pfizer competitor,
Bayer Aktiengesellschaft
and Bayer,
("the Bayer Statement of Claim") .
Inc.,
Mem.
filed a claim in Canada
of Law in Supp. of Mot.
Leave to File Proposed Second Am. Ans.
& Countercl.,
Second Am.
347.
Countercl.
f
15,
Docket
#
The
Ex. A,
Bayer
for
Proposed
Statement
of
Claim argued that the claims of the Canadian patent directed to the
treatment of non-human animals were
According to Teva, Mr. McMunn,
invalid for overbreadth.
Dr. Richardson,
Id.
and Mr. DiNapoli knew
about this allegedly material information and should have disclosed
the Bayer Claim to the PTO,
the
information
possible.
so
Id^ at
that
15
but instead they intentionally withheld
the
'012
patent
would
issue
as
soon
as
17-18.
Teva also alleged that Mr. O'Rourke, who was named in the First
Amended Answer and Counterclaim,
the
time at
the
law
firm of
and Rudolph Hutz,
Connolly Bove
Lodge
&
both partners at
Hutz
("Connolly
Bove") , 3 learned that the patent examiner was going to allow the
claims
of
the
x012
patent,
disclosures
to the
PTO.
inequitable
conduct
and
Id.
because
therefore
at
SI
Mr.
19.
no
Teva
O'Rourke
longer
submitted
stated that
instituted
a
any
this was
system
of
"willful blindness," the object of which was to avoid awareness of
any information that would normally be disclosed to the PTO to prevent
delaying the
The
Second
issuance of
the
'012
patent.
Id^ at
1
20.
court denied Teva's Motion for Leave to File
Amended
Answer
and
prejudice and futility.4
Counterclaim
Pfizer,
Inc.
v.
on
the
its
grounds
Teva Pharms.
Proposed
of
USA,
both
Inc.,
3 Connolly Bove was hired by Pfizer during the prosecution of the '012
patent
to
submit
documents
to
the
PTO
pursuant
to
the
duty
of
disclosure.
4 For a full discussion of Teva's motion,
see
Pfizer,
Inc.
v.
Teva
Pharms.
USA,
and the court's holding,
Inc.,
2011
U.S.
Dist.
LEXIS
2011
U.S.
Dist.
LEXIS
90021,
at
*70-*71.
amendment at such a late juncture,
The
court
held
that
indeed three days into the trial,
"would severely prejudice both Pfizer and the individuals named in
the Proposed Second Amended Answer and Counterclaim."
Additionally,
showing that
the
court
stated
Teva
"failed
to
Id.
make
a
at
*66.
plausible
[Mr. McMunn and Mr. DiNapoli] had any duty of disclosure
to the PTO such
that they could have had any intent to deceive the
PTO," while also failing "to make any plausible showing of but-for
materiality of
*67-*68.
against
the
This
Mr.
information not
ruling
O'Rourke
left
only
alleged
in
disclosed to the
the
inequitable
the
First
Counterclaim to proceed on the merits
at
PTO."
Id.
conduct
Amended
at
claim
Answer
and
trial.
This court issued its Opinion on August 12,
2011,
finding that
Pfizer did not commit inequitable conduct in the prosecution of the
x012
patent.
contentions
See
as
id.
at
*139.
The
court
summarized
Teva's
follows:
Teva argue [d]
that Mr. O'Rourke's failure to turn over the
Bayer Statement of Claim constituted inequitable conduct
because the reference proved the invalidity of the animal
claims in the patent, and it was withheld with the specific
intent to deceive the PTO and to speed the issuance of the
x012
case
patent.
of
Further,
affirmative
Teva
maintain[ed]
egregious
O'Rourke was engaged in a
misconduct
90021,
at
to
be
turned
*44-*71.
over
to
this
because
is
a
Mr.
scheme of willful blindness to
prevent his discovery of material
need
that
the
information that would
PTO.
Id.
at
*131-*32.
However,
the court
found "there
evidence as to either of these elements," id.
Federal
Circuit's
Dickinson & Co.,
2011)
opinion
in
at *132,
Therasense,
649 F.3d 1276, 2011 W.L. 2028255
citing the
Inc.
v.
Becton,
(Fed. Cir. May 25,
(en bane).5
On August
§
recent
is utterly no
285,
Teva's
30,
2011,
requesting that
Pfizer
filed this Motion under 35 U.S.C.
the court award attorney
inequitable conduct defense.
Teva
fees
relating to
filed its Opposition to
Pfizer's Motion on September 15, 2011, arguing that the court should
deny Pfizer's request,
either on the merits or because the ruling
is premature in light of Teva's pending appeal of the underlying
decision.
Def.'s Opp'n to Pis.'
Mot.
2,
Docket # 481.
argued that if the court did award attorney fees,
Teva also
it should reduce
the fee award sought by Pfizer to exclude attorney fees related to
discovery authorized
its
Reply
Memorandum in Further Support of its Motion on September 22,
2011.
The Motion is
now ripe
II.
First,
premature.
by
Teva
the
court.
Ld^
Pfizer
filed
for decision.
Timing of Consideration
argues
that
Pfizer's
Motion
of Motion
should be
denied as
Teva filed its Notice of Appeal of the court's decision
on September 9,
2011.
Teva is correct in its assertion that if the
Federal Circuit finds the '012 patent invalid or unenforceable, Teva
5 See discussion infra Section
III.B.
6
would be the prevailing party in the suit;
therefore,
not be entitled to attorney fees under 35 U.S.C.
inequitable
conduct
Berkline Corp.,
ruling
134 F.3d 1473
is not persuaded that
After an appeal
a
claim for
is
fees,
it
upheld.
See
(Fed. Cir.
Pfizer would
§ 285,
Gentry
1998).
is taken,
defer the
ruling,
or dismiss
Amendments).
court
will
In
many
fees
cases
the
issues
immediately
judgment on the merits
of the case.
affords
an
See Fed.
R.
The
Civ.
P.
Advisory
state:
nonjury
attorneys'
Notes
resolved.
the motion without
(1993
Committee
also
the court
the court has the option to rule on
54 (d)
Notes
v.
should delay ruling on Pfizer's Motion.
is
Committee
Gallery
However,
prejudice until after the appeal
Advisory
even if the
opportunity
for
the
want
after
.
.
.
court
to
consider
rendering
Prompt
to
its
filing
resolve
fee
disputes shortly after trial, while the services performed
are
freshly
appropriate
in
mind.
It
circumstances
also
to
enables
make
its
the
ruling
court
on
a
in
fee
request in time for any appellate review of a dispute over
fees to proceed at the same time as review on the merits
of
Id.
in
the
case.
The court
finds this reasoning persuasive,
and will not delay
ruling on the Motion.
III.
Under
"Exceptional"
35
U.S.C.
award reasonable
§
Case Pursuant
285,
attorney
"[t]he
fees
court
to
in
35 U.S.C.
§
285
exceptional
cases may
to the prevailing party."
A determination whether to award attorney fees under § 285
involves a two-step process.
First,
a district court must
determine whether the prevailing party has proved by clear
and
convincing
evidence
that
the
case
is
exceptional.
.
.
.
Second,
if
exceptional,
award
of
the
the
attorney
appropriate,
district
court
the
court
must
fees
is
amount
of
then
finds
appropriate
the
the
determine
and,
to
be
whether
case
an
if
fees
are
award.
Eon-Net LP v. Flagstar Bancorp, 2011 U.S. App. LEXIS 15650, at *19-*20
(Fed.
is
Cir.
July 29,
exceptional
conduct
"when
related
infringement,
2011).
to
A district
there
the
has
matter
that
violates
Brooks Furniture Mfq.,
1381
(Fed.
Cir.
"[Absent
imposed .
bad
.
and
inappropriate
such
as
willful
vexatious or unjustified litigation,
R.
Inc. v.
Civ.
P.
11,
or
Dutailier Int'l,
like
infractions."
Inc.,
393 F.3d 1378,
during
litigation,]
sanctions
(2)
the
litigation
is
objectively
may
Inc. v. Cornell Corp.,
baseless."
635 F. 3d 539,
543-44
(quoting Brooks Furniture, 393 F. 3d at 1381) .
foundation,
the
and the
Google,
be
knew
was baseless."
"[a]
or,
[accused party's]
on
631
F.3d
1372,
Haynes Int'l
Inc.
1377
investigation,
v.
(Fed.
case must have no objective
(Fed.
frivolous infringement suit
reasonable
Old
"Under this
[accused party] must actually know this."
Inc.,
Correspondingly,
patentee
Fed.
misconduct
exacting standard,
v.
litigation,
case
2005).
Reliable Wholesale,
LLC
material
a
. only if both (1) the litigation is brought in subjective
faith,
Cir. 2011)
in
some
find that
fraud or inequitable conduct in procuring the patent,
misconduct during litigation,
conduct
been
court may
Cir.
iLOR,
2011).
is one which the
should
Jessop Steel Co.,
have
8
known,
F.3d 1573,
1579
544
be
(Fed. Cir.
1993);
(finding that
succeed"
that
(quoting
no
reasonable
iLOR,
litigation," without more,
Aug.
No.
3:09cv86,
16,
631
litigant
F.3d
at
it must
could believe
1377)).
it
"Hard-fought
will not result in a level of misconduct
permitting an award of fees.
Inc.,
635 F.3d at
for a claim to be objectively baseless,
"so unreasonable
would
see also Old Reliable Wholesale,
See Humanscale Corp.
2010 U.S.
Dist.
LEXIS
83876,
v.
Compx Intern,
at
*22
(E.D.
Va.
2010).
A.
Pfizer argues that Teva's conduct in pursuing its inequitable
conduct
counterclaim
after
the
Federal
Circuit's
decision
in
Therasense makes this case exceptional, because Teva knew its claim
was unjustified and "objectively baseless," such that "no reasonable
litigant could believe
Mot. 17, Docket # 47 9.
it would succeed."
Pis.'
Mem.
in Supp.
of
To assess Pfizer' s characterization of Teva' s
claim, the court first must again review the requirements for a valid
inequitable conduct claim laid out in Therasense,6 in which "[t]he
Federal
Circuit
significantly narrowed the number
which a court may find inequitable conduct."
Pharms.
USA,
Inc.,
2011 U.S.
Dist.
of
Pfizer,
LEXIS 90021,
instances
Inc.
at *124.
v.
in
Teva
At a base
6 The history of the inequitable conduct defense in patent cases, as
well as
the
opinion,
Inc.
v.
factual background and reasoning behind the Therasense
are covered in depth in the court's Opinion.
Teva
*124-*31.
Pharms.
USA,
Inc.,
2011
U.S.
Dist.
See Pfizer,
LEXIS
90021,
at
level,
"[Unequitable
infringement
Therasense,
that,
2011
conduct
if
W.L.
In Therasense,
is
proved,
2028255,
an
equitable
bars
at
defense
enforcement
of
to
a
patent
patent."
M.
the Federal Circuit tightened the standards for
demonstrating the two requisite elements of inequitable conduct, the
materiality of the patentee's conduct and its intent to deceive the
United States Patent and Trademark Office
("PTO") .
Id. at *9.
Both
of these elements must be proven separately by clear and convincing
evidence.
Id.
at
*10-*ll.
In
addressing
materiality,
the
court
held that "the materiality required to establish inequitable conduct
is but-for materiality."
Id.
at *11
(emphasis added).
Therefore,
the court must assess "whether the PTO would have allowed the claim
if it had been aware of the undisclosed reference."
Circuit
did
carve
out
an
exception
to
Id.
"but-for"
The Federal
materiality,
"affirmative acts of egregious misconduct" by the patentee,
originates
from the
"unclean
hands"
doctrine.
Id.
at
*12.
for
which
If
a
court finds such behavior,
for example the willful filing of a false
affidavit,
assumed.
prior
art
materiality
references
to
references
in
affirmative
egregious
omissions
an
require
is
the
PTO
[or]
affidavit,"
"[M]ere
failure
however,
misconduct.
proof
Id.
Id.
of
to mention prior art
does
Claims
of but-for materiality."
10
nondisclosure
not
constitute
"based
Id.
on
such
As for the intent element, the Federal Circuit held that courts
may infer intent from direct and circumstantial evidence,
such intent must be
"the single most reasonable
be drawn from the evidence."
and
internal
quotation
Id^_ at *10
marks
omitted).
inference able to
(emphasis added)
This
but that
prong
(citation
will
not
be
satisfied if "multiple reasonable inferences may be drawn" from the
evidence
presented.
Id.
B.
Turning
now
to
the
evidence
presented
at
trial,
Teva's
inequitable conduct claim was objectively baseless after the Federal
Circuit's ruling in Therasense,
believed that
its
claim would
and Teva could not have reasonably
succeed.
As
this
court previously
found when looking at Teva's arguments for materiality and intent,
and recounts below,
these elements."7
Dist.
that
LEXIS
its
"there
is utterly no evidence as to either of
Pfizer, Inc. v. Teva Pharms. USA, Inc., 2011 U.S.
90021,
at
inequitable
*132.
conduct
In other words,
claim,
far
Teva must
from being
have
even
known
remotely
7 It is worth noting at the outset of this discussion that the court
does not consider Teva's frequent quotations from the June 3,
2011,
hearing on Teva's motion
front
for
sanctions
and a
continuance
in
of Magistrate Judge Stillman relevant to this determination.
Stillman,
Judge
as he himself indicated, was focused on discovery rulings,
and "not ruling on any sort of inequitable conduct motion."
Proceedings,
6/3/11
Hr'g
on
Mots.
34:21-24,
Docket
#
322.
Tr.
of
Judge
Stillman also expressly did not take into account Therasense in his
considerations.
See
id.
at
9:4-5.
11
supported
by
clear
and
convincing
evidence,
was
objectively
baseless.
1.
Teva's
O'Rourke8
initial
pleading
failure to
alleged
disclose
the
Bayer
Def.'s Revised First Amended Countercl.
the court found,
Statement
of
Claim
Dist.
LEXIS
Teva argues,
blindness"
on
Statement
M 44-46,
based
on
of Claim.
Docket # 80.
Mr.
See
As
and Teva does not contest,9 by itself, "the Bayer
hardly
required by Therasense." 10
2011 U.S.
materiality
the
part
of
the
but-for
materiality
Pfizer, Inc. v. Teva Pharms. USA, Inc.,
90021,
however,
approaches
at
*132.
that its allegation at trial of "willful
Mr.
O'Rourke
constitutes
affirmative
8 The Counterclaim also named Dr. Ellis and Messrs. Benson and Jones,
who were later dropped from the litigation by Teva at the beginning
of
trial.
9 Teva states that Pfizer' s argument that the Bayer Statement of Claim
cannot support an inequitable conduct claim "misstates Teva's trial
contention."
Def.'s Opp'n to Pis.' Mot. 14, Docket # 481.
Teva
argues that its contention at trial was instead that the alleged
"willful blindness" scheme of Mr. O'Rourke alleviated the need for
but-for materiality showing.
Id. at 14-15. Similarly, Teva
any
points to this scheme, and not the Bayer Statement of Claim, as
providing the basis of its assertion of Mr. O'Rourke's intent.
Id.
at
16.
10 Because Teva no longer contends,
and the court agrees,
that the
Bayer Statement of Claim could or did provide an objective basis for
demonstrating materiality for an inequitable conduct claim, the
court
does
not
need
to
spend
significant time supplementing its
See Pfizer, Inc. v. Teva Pharms.
LEXIS 90021, at *132-*34; supra note 9.
previous discussion of the matter.
USA,
Inc.,
2011 U.S.
Dist.
12
egregious misconduct
"but-for"
#
481.
under Therasense,
materiality.
Teva
notes
Def.'s
that
egregious misconduct,
Opp'n
bypassing
to
Therasense,
Pis.'
in
the
Mot.
need to
14-15,
discussing
show
Docket
affirmative
stated that the doctrine is "flexible enough
to capture varying manifestations of egregious and abusive conduct."
Id.
at
17.
inequitable
contention
The
of
This
conduct,
court
court
any
need
finding that Mr.
argument
the
O'Rourke
"does
posits,
objectively baseless."
affirmative
provides
court's
does
not
agree
egregious
underlying
not
decide
the
misconduct,
the
commit
render Teva's
Id.
that
support
not
did not
to
flexibility of the
as
discussed
Teva's
theoretical
in
Therasense,
contention
question
as
concept
to
here.
The
whether
a
"deliberately planned and carefully executed scheme to defraud the
PTO, "
to quote
methods
from Therasense,
utilized
could provide
could be hypothesized in which the
a
basis
for an
inequitable
conduct
claim while also being properly termed "willful blindness."
Teva's
repeated invocation of the label "willful blindness" itself provides
no objective basis
for a
finding of materiality - the inquiry must
focus on the actual underlying factual circumstances of this case.
And when
examining
those
facts,
rather
than
Teva's
"smokescreen,"
it is clear that no evidence exists that would allow any reasonable
13
litigant,
including
Teva,
to
think
that
Mr.
O'Rourke
engaged
in
affirmative egregious misconduct.11
Most
importantly,
the
Federal
Circuit
distinguished
in
Therasense that "neither mere nondisclosure of prior art references
to the PTO nor failure to mention prior art references in an affidavit
constitutes affirmative egregious misconduct, claims of inequitable
conduct that are based on such omissions
require proof of but-for
materiality."
2028255,
Therasense,
2011
W.L.
at
*12.
Mr.
O'Rourke's actions here are most akin to acts of nondisclosure,
Teva has made absolutely no showing of "but-for" materiality.
and
While
Teva attempts to recharacterize Mr. O'Rourke's inaction with foreign
litigation material as a scheme of affirmative action, the court does
not find such an interpretation reasonable,
the record in this case.
schemed to deceive
the
especially in light of
The evidence, far from showing Mr. O'Rourke
PTO,
shows
that
his
system was a
reaction,
albeit a sloppy one,12 to a general directive from the PTO itself.
See
Pfizer,
90021,
at
In
Inc.
See
contrast,
infra
at
the
false
note
12 See Pfizer,
90021,
Teva
Pharms.
USA,
Inc.,
2011
U.S.
Dist.
LEXIS
*133.
unmistakenly
ii
v.
12
Federal
affidavit,"
and
Circuit
cited
"the
or
cases
under
past
accompanying
n.106.
14
the
of
an
"unclean
text.
Inc. v. Teva Pharms. USA,
*137-*38,
filing
Inc., 2011 U.S. Dist. LEXIS
hands" doctrine involving perjury,
evidence,
and
Therasense,
bribery,
2011 W.L.
as
manufacture and suppression of
examples
2028255,
at
of
*13.
affirmative
misconduct.
Further,
the Federal
as
Circuit noted in justifying the exception to materiality, "a patentee
is unlikely to go to great lengths to deceive the PTO with a falsehood
unless it believes that the falsehood will affect issuance of the
patent."
Id.
at
directly
from
*12.
the
Here,
statement
Mr.
O'Rourke's
the
patent
by
behavior
officer
that
stemmed
further
foreign litigation material was not needed, and thus would not affect
the
issuance
O'Rourke's
of
lack
the
of
patent.
action
as
To
a
attempt
to
"carefully
characterize
executed
Mr.
scheme[]
to
defraud the PTO," id. , would strain Therasense' s distinction between
affirmative acts and nondisclosures to the point of breaking.
all,
After
the court's clear intent in Therasense to heighten the bar of
materiality for nondisclosures by requiring "but-for" materiality
would be largely subverted if Teva's argument was found to have an
objective basis.
Thus,
to
show
See id.13
as previously indicated by this court,
any materiality
of
the
nondisclosed
"Teva has failed
reference material."
13 Therasense' s attempt to reign in the pursuit of inequitable conduct
claims would be greatly frustrated by such a
discussed
apply
to
heightened
standard
non-disclosures
of
"but-for"
unexamined
by
the
reading,
as the much
materiality
patentee.
would
not
Moreover,
a
distinction would emerge between different types of non-material
non-disclosures, some of which would, by Teva' s reading, still permit
inequitable
conduct
claims.
15
Pfizer,
Inc. v. Teva Pharms. USA,
at *133-*34.
Inc.,
2011 U.S.
Dist. LEXIS 90021,
This lack of evidence obviously falls far short of the
necessary clear and convincing standard requisite
conduct,
and
calls
into
question
the
objective
for inequitable
basis
for
Teva's
claim.
2.
Turning now to the intent element of inequitable conduct,
court similarly found "that Teva has
the
failed to bring any evidence
to the court's attention which shows that Mr.
the specific intent to deceive the PTO."
O'Rourke acted with
Id. at *137.
Even assuming
that Teva had made some showing of materiality, intent must be proven
separately by clear and convincing evidence,
may be
used
element's
Indeed,
to
compensate
strength.
even
one
element's
Therasense,
"[p]roving
that
the
2011
weakness
W.L.
applicant
should have known of its materiality,
and no sliding scale
with
2028255,
knew
of
a
the
other
at
*10.
reference,
and decided not to submit it
to the PTO does not prove specific intent to deceive."
Id.
Once again, the court has already found that the Bayer Statement
of Claim provides no basis to support an intent allegation.14
See
14 Teva no longer argues that the Bayer Statement of Claim alone
provides any objective basis for an inequitable conduct claim.
See
supra notes 9 and 10.
The court, therefore, only briefly restates
its examination of the Bayer Statement of Claim, laid out in full
in its Opinion.
See Pfizer, Inc. v. Teva Pharms. USA, Inc., 2011 U.S.
Dist.
LEXIS
90021,
at
*135-*37.
16
Pfizer,
Inc. v. Teva Pharms. USA,
at *135, *137.
Mr.
Inc.,
2011 U.S. Dist. LEXIS 90021,
The court found that due to the timing of its receipt,
O'Rourke had no duty to disclose the claim in the first place.
Additionally, an intent to deceive "is hardly the single most likely
inference
from
instruction
his
that
actions,"
which
such
intent must be
contradicts
"the
single most
inference able to be drawn from the evidence. "
Teva
again
blindness"
support,
alleges
scheme,
this
time
as
instead
argued
for
that
at
intent,
to
Id.
reasonable
{emphasis added) .
O'Rourke's
provides
prevent
determined to be objectively baseless.
16, Docket # 481.
Mr.
trial,
Therasense's
its
the
claim
"willful
requisite
from
Def.'s Opp'n to Pis.'
being
Mot.
In fact, Teva goes as far as to suggest that "[t]he
single most reasonable
inference to be drawn
from the evidence is
that Mr. O'Rourke devised and implemented his system with the intent
to deceive the USPTO by ensuring that no such material reference would
be provided to the USPTO."
Id.
Although Teva admits it provided
no direct evidence of specific intent to deceive,
it contends "[i]t
was not illogical" for Teva to conclude from Mr. O'Rourke's failure
to review documents that the "single most reasonable inference" was
he
acted "to deceive
The court,
the USPTO."
Id.
quite to the contrary,
is precisely "illogical."
finds that Teva's position
As the court previously stated: "The only
inference the court can draw from the evidence presented at trial
17
was
that
Mr.
0'Rourke
was
a
busy
young
law
partner
who
devised
a
somewhat "sloppy" system for sorting foreign litigation material."
Pfizer,
at
Inc. v. Teva Pharms. USA,
*137
(emphasis
added).
Inc.,
After
2011 U.S.
all,
Dist. LEXIS 90021,
"the
patent
examiner
specifically requested not to receive any other foreign references
similar to those already submitted," a statement that instigated the
change
to
Further,
Mr.
0'Rourke's
much of
the
review
information
as the Bayer Statement of Claim,
issue fee,
to
the
at a time when Mr.
PTO.
"The
Id^ at
court
sees
of
documents.
that Mr.
0'Rourke
Id.
at
received,
*133.
such
came in after payment of Pfizer's
O'Rourke could not have submitted it
*136-*37.
through
this
smokescreen
and
finds
that
Teva
has failed to bring any evidence to the court's attention which shows
that Mr. 0'Rourke acted with the specific intent to deceive the PTO."
Id.
at
*137.
The
record is
so
far
from "requir[ing]
a
finding
of
deceitful intent in the light of all the circumstances,"15 that the
court simply cannot find Teva's stated inference to be reasonable,
or to provide any objective basis to allege that Mr.
an
improper
0'Rourke had
intent.
C.
Other courts,
claims,
when faced with the pursuit of similar baseless
have found the cases to be "exceptional" within the meaning
15 See Therasense, 2011 W.L. 2028255, at *10.
18
of 35 U.S.C.
Inc.,
§ 285.
In Phonometrics,
65 Fed. App'x 284,
concluded
that
[the]
285
case
Inc.
(Fed. Cir.
[was]
v.
2003),
Choice Hotels Int'l,
"[t]he district court
exceptional
because
Phonometrics
continued to litigate the case even after it knew that it could not
prevail on the merits."
During litigation in that
the Federal Circuit issued an opinion,
of certain patent claims,
Phonometrics
"took
litigation;" therefore,
no
284-85.
and
concerning the construction
Id.
Despite the intervening
affirmative
steps
to
end
th[e]
the Federal Circuit affirmed the district
court's finding that Phonometrics'
"vexatious
as here,
which was controlling for the underlying
issues in front of the trial court.
ruling,
case,
deserving of
maintenance of its lawsuit was
exceptional
case
status."
id.
at
Teva's actions here in continuing to pursue its inequitable
conduct claim after Therasense,
and indeed attempting to expand its
allegations during trial, demonstrate the same sort of "exceptional"
baseless
claim.
Correspondingly,
No.
in AstraZeneca AB v.
07cv6790, 2010 U.S. Dist. LEXIS 32883
Dr. Reddy's Labs., Ltd.,
(S.D.N.Y. March 30, 2010),
the district court awarded attorney fees after finding "there was
no
evidence
infringement.
whatsoever"
to
support
AstraZeneca's
Id. at *14 (emphasis in original).
contention
of
"When a plaintiff
is notified of the defects of its case yet continues to assert its
claims
in
light
of
overwhelming
19
evidence
to
the
contrary,
and
proceeds with arguments
baseless,
consistent
that a
reasonable attorney would know are
it litigates in bad faith."
findings.
See,
e.g.,
Id.
Other cases have made
Multi-Tech,
Inc., 708 F. Supp. 615, 620 (D.D.C. 1989)
Inc.
v.
Components,
(finding a case exceptional
after finding "this litigation was unjustified and that this was a
frivolous lawsuit which intelligent people should have known would
have no chance at success").
Given this court's finding that Teva
presented no evidence of either the materiality or intent elements
of a successful inequitable conduct
termed
"frivolous"
and
claim,
this case
is properly
"exceptional."
D.
In sum, the court FINDS that Pfizer has demonstrated, by clear
and convincing evidence,
that
Teva's
continued litigation of
its
claim for inequitable conduct after the Federal Circuit's decision
in
Therasense
meaning
of
35
was
frivolous,
U.S.C.
§
285.
and
thus
Teva's
"exceptional,"
counterclaim
under
was
the
rendered
objectively baseless by the Federal Circuit's opinion in Therasense,
such that no reasonable litigant could have expected it to succeed.
Moreover, given the clear directive in Therasense, and Teva' s failure
to present any evidence supporting its claim of inequitable conduct
as
discussed
above,
Teva's
unabated
"exceptional."
20
pursuit
of
the
claim
was
IV.
Appropriateness
of Attorney Fees
"If the district court finds the case to be exceptional,
then determine whether
Forest
Labs,
2003).
Inc.
Abbott Labs.,
339
In making its determination,
and tangible
the
v.
an award of attorney
factors:
closeness
of
the
the
degree of
question,
fees
is
F.3d 1324,
it must
appropriate."
1328
(Fed.
Cir.
a court may weigh "intangible
culpability of the
litigation behavior,
infringer,
and any other
factors whereby fee shifting may serve as an instrument of justice."
Superior Fireplace Co.
(Fed.
Cir.
under
35
2001).
U.S.C.
First,
Here,
§
the
substantial
v.
Majestic Prods.
Co.,
270
F.3d 1358,
several factors weigh in favor of an award
285.
Federal
Circuit's
encouragement
Federal Circuit lamented,
to
an
opinion
award
of
in
Therasense
attorney
adjudication
settlement,
backlog,
2028255,
cost
and
the
reduced
quality."16
among them,
likelihood
of
increased PTO
Therasense,
2011 W.L.
To achieve the court's stated purpose in Therasense
of "redirect [ing]
of the public,"
complexity,
strained PTO resources,
impaired patent
at *9.
As
"low standards for intent and materiality
burdened courts,
and
provides
fees.
have inadvertently led to many unintended consequences,
increased
1378
a doctrine that has been overused to the detriment
id.,
courts must be willing to impose
consequences
16 See also Pfizer, Inc. v. Teva Pharms. USA, Inc., 2011 U.S. Dist.
LEXIS
90021,
at
*124-*31.
21
for
parties
who
continue
to
overreach
in
the
aftermath
of
its
issuance.
Furthermore,
of
the
action
tightening
Pharms.
of
USA,
in this case,
"this court
the
Federal
the
standards
Inc.,
finds that this case is the archetype
Circuit
2011 U.S.
in
was
aiming
Therasense."
to
curtail
Pfizer,
Dist. LEXIS 90021,
Inc.
at *139.
with
v.
the
Teva
The record
in addition to being devoid of evidence of inequitable
conduct as discussed above,
is also filled with examples of related
wasted
not
resources.
inequitable
amend
the
allegations
Teva
conduct
claim
and
only
persisted
claim through trial,
three
new
days
into
individual
but
trial,
it
defendants.
The
new
allegations
Most incredibly,
against
one
of
its
baseless
also attempted to
proposing
Teva "unnecessarily" delayed filing its motion,
prejudicial and futile.
in
new
court
factual
found
that
which was denied as
Teva attempted to include
Pfizer's
trial
counsel
for
the
duration of this suit, Mr. DiNapoli, a concern expressed specifically
by the Federal Circuit in Therasense.17
This conduct demonstrates
that the interests of justice necessitate an award of attorney fees
to
Pfizer.
17 "Most prominently,
inequitable conduct has become a significant
litigation
A
strategy.
charge
of
inequitable
conduct
conveniently
expands discovery into corporate practices before patent filing and
disqualifies the prosecuting attorney from the patentee's litigation
team."
Therasense,
2011
W.L.
2028255,
22
at
*9.
The cases cited supra in Section III.C,
for
similar
finding.
See,
Inc.,
65
FINDS
that
Fed.
pursuing
§
frivolous
e.g.,
and baseless
claims,
Phonometrics,
Inc.
App'x 284
awarding
this
awarding attorney fees
(Fed.
Pfizer
Cir.
case
v.
2003).
attorney
"exceptional"
further
Choice
Hotels
Accordingly,
fees
is
support
for
Teva's
appropriate
such
Int'l,
the court
conduct
under
a
35
in
U.S.C.
285.
V.
Amount of Attorney Fees
Pfizer requests an award of $378,285
in attorney fees
related
to defending Teva's motion for inequitable conduct.18
Teva does not
contest
submitted
either
Pfizer.
argue,
the
hourly
rate
Def.'s Opp'n to Pis.'
however,
that
if
the
or
the
Mot.
court
time
27-30,
awards
entries
Docket # 481.
attorney
by
Teva does
fees,
it
should
18 The Federal Circuit has suggested that a hybrid lodestar approach
may
be
employed
attorney fees.
568
(Fed.
Cir.
by
a
court
to
determine
an
appropriate
See Maxwell v. Angel-Etts of Cal.,
award
of
53 Fed. App'x 561,
2002).
Under this approach, the court first determines a lodestar
figure by multiplying the number of hours reasonably spent
on
the
litigation
by
a
reasonable
hourly
rate.
This
lodestar figure may then be increased or decreased based
on a variety of factors,
such as skill and time required,
novelty of the questions involved,
basis,
results
attorney and
Id.
(internal
based
on
requested
with
one
this
is
obtained,
fixed or contingent fee
and/or
relationship
between
client.
citations
omitted).
approach.
reasonable,
exception,
The
a
Pfizer's
court
conclusion that
discussed
infra
23
calculated
determines
in
is
text
not
at
that
total
the
is
amount
opposed by Teva,
23-25.
not award fees related to Pfizer's opposition of Teva's Motion for
Sanctions and a Continuance of the June 15,
2011,
Trial Date,
nor
for preparing for and defending the depositions of Robert MacFarlane,
Esq.,
and Dr.
Peter Richardson.
court
granted-in-part
its
Id.
continue,
and granted Teva's
request to take the two additional depositions,
it cannot now award
Pfizer attorney fees.
The
court
sees
motion to
Teva argues that because the
Id.
no
reason
to
relation to those proceedings.
decrease
Pfizer's
fee
award
in
Although Teva protests that Pfizer
has not cited any authority for awarding fees for court sanctioned
proceedings,
Teva
itself
has
not
cited
any
authority
that
such
proceedings must be excluded from an award under 35 U.S.C. § 285.19
The court finds above that Teva's pursuit of its inequitable conduct
claim
was
meritless
Therasense.
conserved
Thus,
the
after
the
prompt
litigants',
Federal
dismissal
and
the
Circuit's
of
its
court's,
claim
time
including those expended at the hearing on June 3,
resulting depositions,
Therasense
19
Cf.
740
opinion
Talon,
Inc.
(9th Cir. 1959)
and
v.
issuance
would
of
have
and
resources,
2011,
and at the
all of which occurred after the date of the
after
Union
trial
Slide
of
this
case
Fastener,
had
Inc.,
begun.
266
F.2d
See
731,
("A proper construction of Title 35, Section 285,
does not require a district judge in awarding attorney's fees to a
prevailing defendant to separately evaluate the services rendered
under each separate defense contained in the defendant's answer and
then to reduce or increase such award depending upon whether a
particular defense
failed or
is
sustained.").
24
Mueller Brass Co.
v.
(E.D.
aff'd,
Pa.
1972),
purpose of
Reading Indus.,
[35 U.S.C.
§ 285]
monies which he had to
but
for
the
losing
487
F.2d
Inc.,
1395
352
F.
(3d Cir.
1357,
1973)
1381
("The major
is to compensate a prevailing party for
spend which he would not
party's
Supp.
misconduct.").
have
Teva
has
had to
not
spend
provided
suitable explanation for why the hearing and the depositions had any
additional
Therefore,
attorney
merit
the
fees
not
court
is
reflected
FINDS
that
in
its
Pfizer's
arguments
request
for
at
trial. 20
$378,285
in
reasonable.
VI.
For the reasons
set out
Conclusion
in this Memorandum Opinion,
the court
hereby GRANTS Pfizer' s Motion for Attorney Fees Pursuant to 35 U.S.C.
§ 285, and AWARDS attorney fees in the amount of $378,285.
The Clerk
is DIRECTED to send a copy of this Memorandum Opinion to all counsel
in
this
case.
IT IS SO ORDERED.
/s/
Rebecca Beach Smith
United States District Judge
Rebecca
United
Norfolk,
October
States
Smith
District
Judge
Virginia
if} ,
2011
20 See also supra note 7.
deposition
conduct
Beach
testimony at
claim,
an
Teva, as previously discussed, used this
trial
attempt
to
this
attempt
court
to
found
amend
to
its
inequitable
create
unnecessary
delay, as well as being both unnecessarily prejudicial and completely
futile
on
the merits.
See
supra
note
25
4
and
accompanying
text.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?