Bayer Healthcare LLC v. Norbrook Laboratories Ltd et al

Filing 116

ORDER signed by Judge Rudolph T Randa on 01/20/2010 holding in abeyance 79 Motion to Compel; denying 101 Motion for Reconsideration; granting as to the certification of this matter for interlocutory appeal and as to a stay of this matter until the resolution of those proceedings. (cc: all counsel) (Koll, J)

UNITED STATES DISTRICT COURT E A S T E R N DISTRICT OF WISCONSIN

B A Y E R HEALTHCARE, LLC, P la in tiff-C o u n t e r c l a i m Defendant, v. C a s e No. 08-C-0953 ( C o n s o l id a t e d With C a s e No. 09-C-0108)

NORBROOK LABORATORIES, LTD., a n d NORBROOK, INC. USA, Defendants-Counterclaimants.

D E C I S I O N AND ORDER

T h is matter is before the Court on the motion of Defendants Norbrook L a b o ra to rie s, Ltd. and Norbrook, Inc. U.S.A. (collectively referred to as "Norbrook") for re c o n sid e ra tio n pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, or in the a lte rn a tiv e , for certification of an interlocutory appeal pursuant to 28 U.S.C. § 1292(b) and a stay of the proceedings during that appeal. Norbrook's motion addresses this Court's

S e p te m b e r 23, 2009, Decision and Order denying Norbrook's motion for judgment on the p le a d in g s , pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, seeking dismissal o f the Complaint for failure to state a claim and for lack of subject matter jurisdiction. Also p e n d in g is Bayer's motion to compel discovery. The action relates to United States Patent Number 5,756,506 (the "`506 patent") a n d arises out of Norbrook's filing of an Abbreviated New Animal Drug Application

(" A N A D A " ) with the United States Food and Drug Administration ("FDA") seeking a p p ro v a l to manufacture and sell in the United States a generic version of the injectable a n im a l drug product BAYTRILŪ 100, prior to the expiration of the `506 patent. Reconsideration In addressing Norbrook's motion for reconsideration, the Court will not re i t e r a t e the rather complex relevant statutory and factual background of the case. (See S e p te m b e r 23, 2009, Decision and Order, 5-12). Instead familiarity is assumed. With respect to Bayer's claim under § 271(e)(2)(B) of Title 35 of the United S ta te s Code, the Court concluded that Norbrook had not established that, as a matter of law, B a ye r failed to state a cause of action under § 271(e)(2)(B). The Court noted that the parties disputed the validity of Norbrook's purported withdrawal of its Paragraph IV certification and w h e th e r it was appropriate for Norbrook to file a Section I statement. Viewing the facts and c o n stru in g all inferences from those facts in favor of Bayer, this Court could not find that N o rb ro o k had established that the FDA will approve the amendment and, therefore, conclude th a t the alleged infringing use is different. In addition, the Court determined that, even a c ce p tin g that the December 1, 2008, amendment was effective, Norbrook had not established that to state a cause of action under § 271(e)(2) an ANADA must "contain" a Paragraph IV c e rt if ic a tio n . The Court also rejected Norbrook's contention that, as a matter of law, Bayer c o u ld not establish an infringing "use" under § 271(e)(2). In making that determination, the C o u rt analyzed Purepac Pharmaceutical Co. v. Thompson, 354 F.3d 877, 880 (D.C. Cir.

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2 0 0 4 ), relied upon by Norbrook, and rejected Norbrook's contention that factual similarities b e tw e e n Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348 (Fed. Cir. 2003), and the in s ta n t action demonstrated that Bayer's § 271(e)(2) claim could not succeed. The Court also re je c te d Norbrook's contention that Bayer's § 271(b) and § 271(c) claims could not succeed, re lyin g on its determination that Norbrook had not established that Bayer failed to state a § 271(e)(2) claim. The Court also determined that Takeda Pharmaceuticals Co. v. Sandoz, I n c ., No. 07 Civ. 3844, 2007 WL 2936208, *3-4 (S.D.N.Y. Oct. 9, 2007), supported its c o n c lu s io n that Bayer's claims of contributory and induced infringement should not be d is m is s e d on the pleadings. Additionally, the Court concluded that Bayer had satisfied its burden of e sta b lis h in g that the Court has subject matter jurisdiction over the action pursuant to 28 U.S.C. § 1338(a), relying on its determination that Bayer had stated a § 271(e)(2) i n f rin g e m e n t claim. Although Norbrook contended that it only sought approval for the m u ltip le -d a y low-dose treatment, the Court concluded that Norbrook had not established that it could accomplish that goal without a Paragraph IV certification. With respect to Bayer's declaratory judgment claim, the Court concluded that N o rb ro o k 's purported withdrawal of its Paragraph IV certification was not dispositive of B a ye r's declaratory judgment claim and that the circumstances of the action are sufficiently a n a lo g o u s to those of Teva Pharmaceuticals and established the existence of an Article III " c o n tro v e rs y." (Court's September 23, 2009, Decision and Order at 27-28 (citing Teva P h a r m . USA, Inc. v. Novartis Pharm. Corp., 482 F.3d 1330, 1340 (Fed. Cir. 2007)).

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Norbrook seeks reconsideration, pursuant to the second sentence of Rule 54(b), w h ic h states that "any order or other decision, however designated, that adjudicates fewer th a n all the claims or the rights and liabilities of fewer than all the parties does not end the a c tio n as to any of the claims or parties and may be revised at any time before the entry of a ju d g m e n t adjudicating all the claims and all the parties' rights and liabilities." A district court will grant a motion for reconsideration when: (1) the court has p a te n tly misunderstood a party; (2) the court has made a decision outside the adversarial is s u e s presented to the court by the parties; (3) the court has made an error not of reasoning b u t of apprehension; (4) there has been a controlling or significant change in the law since th e submission of the issue to the court; or (5) there has been a controlling or significant c h a n g e in the facts since the submission of the issue to the court. Bank of Waunakee v. R o c h e ste r Cheese Sales Inc., 906 F.2d 1185, 1191 (7th Cir. 1990). Motions for

re c o n sid e ra tio n serve a limited function: to correct manifest errors of law or fact or to present n e w ly discovered evidence. Caisse Nationale de Credit Agricole v. CBI Indus., Inc., 90 F.3d 1 2 6 4 , 1269 (7th Cir. 1996). "Reconsideration is not an appropriate forum for rehashing p re v io u s ly rejected arguments or arguing matters that could have been heard during the p e n d e n cy of the previous motion." Id. By its motion for reconsideration, Norbrook argues that the Court's decision is incorrect. Norbrook highlights the scope of the `506 patent, the purported "amendment" o f its ANADA with a Section I statement, and that the Court could take judicial notice of m a tte rs in the public record without converting Norbrook's motion for judgment on the

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p le a d in g s . Norbrook also argues that the Court's decision overlooks or misapprehended FDA re g u la tio n s governing amendments to ANADAs and offered a statutory interpretation of the p h ra se "the use of which is claimed in a patent" in 35 U.S.C. § 271(e)(2) that conflicts with the statute's language and the purpose of creating an artificial act of infringement. In a d d itio n , Norbrook contends that the decision overlooked the application of the plausibility s ta n d a rd of Ashcroft v. Iqbal, 556 U.S. , 129 S.Ct. 1937, 1940-50 (2009) to the

in d u c e m e n t to infringe and contributory infringement claims, and misapprehended whether th e re is a case or controversy between the parties. Bayer asserts that Norbrook's attempt to obtain summary judgment through its m o tio n for judgment on the pleadings should again be denied, and that the Court's analysis o f § 271(e)(2), Bayer's §§ 271(b) and (c) claims, and its declaratory judgment claims was c o rre c t. A threshold issue raised by Norbrook's motion for reconsideration is the C o u rt's decision to exclude from its consideration matters outside the pleadings. Both Bayer a n d Norbrook submitted materials outside the pleadings in conjunction with the motion for ju d g m e n t on the pleadings. 1 However, neither party addressed the impact of those materials
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In opposition to Norbrook's motion for judgment on the pleadings, Bayer filed the Declaration of Jamie S im p s o n ("Simpson Decl.') proffering the following evidentiary material outside the pleadings: Ex. C (Defs.' Resp. P l . ' s First Set Interrogs.); Ex. D (Portions of the Defs.' Rule 30(b)(6) W illia m G. Zollers, Jr. April 10, 2009, Dep. ( " R u le 30(b)(6) Zollers Dep."); Ex. E-G (E-mails from the FDA to Defs. dated Feb. 24, 2009, Nov. 25, 2008, & Dec. 1 5 , 2006, respectively); Ex. H (Defs.' Internal E-mail dated July 2, 2008); and, Ex. I (E-mail from Norbrook to the F D A dated Sept. 18, 2008.) W ith Norbrook's reply memorandum in support of its motion for judgment on the pleadings, Norbrook filed th e following evidentiary material outside the pleadings with the Declaration of Eric Lobenfeld ("Lobenfeld Decl."): E x . A (FDA Citizen Pet. Resp., Docket No. FDA-2003-P-0321/CPI dated April 6, 2004); Ex. B (Bayer Citizen Pet. s u b m itte d to the FDA dated June 13, 2006); Ex. C (Portions of Rule 30(b)(6) Zollers Dep.); Ex. I (Defs.' S u p p le m e n ta l Resps. Pl.'s First Set Interrogs. Nos. 3 & 5 served on April 9, 2009); and, Ex. J (Defs.' Resps. Pl.'s First S e t Interrogs. served March 17, 2009).

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o n the motion in conjunction with Rule 12(d) of the Federal Rules of Civil Procedure. In the e x e rc is e of its discretion, the Court decided to exclude the extraneous material "[b]ecause the m o tio n for judgment on the pleadings was filed early in the proceedings and the parties have o n ly engaged in limited discovery, and the issues involved in this litigation are complex." (C o u rt' s September 23, 2009, Decision and Order 3.) Norbrook's argument that a court may take judicial notice of matters in the p u b lic record is made belatedly. The role of the Court is not to make arguments for the p a rtie s. In the exercise of its discretion, the Court decided to exclude all materials outside the p l e a d in g s from consideration on Norbrook's motion for judgment on the pleadings. N o rb ro o k does not contend that the Court made a manifest error of law in exercising its d isc re tio n as to how to manage the parties' submissions of materials outside the pleadings in c o n ju n c tio n with the motion for judgment on the pleadings. Norbrook has not established a b a s is for a reconsideration on that ground. The substantive legal issues raised by Norbrook revisit the Court's analysis. In part, Norbrook rehashes its prior arguments and, in part, Norbrook seeks a new decision b a s e d upon the materials that the Court excluded from consideration. The Court's rulings rest o n its deliberation of the pleadings, the relevant statute and regulations, and the applicable c a se law. While Norbrook's contentions are not devoid of support, its motion is, in essence, a request that the Court reverse each of its prior determinations by accepting the arguments p rev iou sly advanced by Norbrook. Since Norbrook has not established that the Court

c o m m itte d a manifest error of law, its motion for reconsideration is denied.

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I n t e r lo c u to r y Appeal N e x t, the Court considers Norbrook's alternative request, for certification for in te rlo c u to ry appeal. Bayer asserts that the request for the interlocutory appeal should be d e n ie d because the Federal Circuit has passed on the issue that Norbrook seeks to contest and, th a t, regardless of the appeals court's ruling on the issue, the appeal would not speed up the litig a tio n or dispose of the case since it would only control Bayer's § 271(e)(2) claim. Interlocutory appeal is afforded by Section 1292(b) of Title 28 of the United S ta te s Code, which provides: W h e n a district judge, in making in a civil action an order not o th e rw is e appealable under this section, shall be of the opinion th a t such order involves a controlling question of law as to which th e re is substantial ground for difference of opinion and that an i m m e d i ate appeal from the order may materially advance the u ltim a te termination of the litigation, he shall so state in writing in such order. Section 1292(b) "must be used sparingly lest interlocutory review increase the time and e x p e n se required for litigation." Asher v. Baxter Int'l. Inc., 505 F.3d 736, 741 (7th Cir. 2 0 0 7 ). Question of Law T h e first statutory criterion under § 1292(b) is that there must be a question of law . The question of the proper interpretation of § 271(e) and whether Bayer may maintain its patent infringement action against Norbrook based on the pleadings in this action is a pure q u e s tio n of law. Thus, Norbrook's request meets the first statutory criterion.

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C o n tr o llin g The second statutory criterion under § 1292(b) is that the question of law must b e controlling. The cases do not interpret the term literally. Sokaogon Gaming Enter. Corp. v . Tushie-Montgomery Assocs., Inc., 86 F.3d 656, 659 (7th Cir. 1996). "A question of law m a y be deemed `controlling' if its resolution is quite likely to affect the further course of the litig a tio n , even if not certain to do so." Id. (citing Johnson v. Burken, 930 F.2d 1202, 1 2 0 5 -0 6 (7th Cir. 1991); 16 Charles Alan Wright et al., Federal Practice and Procedure § 3930 at 159-60 & n.12 (1977)). If Norbrook prevailed on appeal, that ruling would be quite lik e ly to affect the future course of this litigation. Thus, the issue would be controlling. Contestable T h e third statutory criterion under § 1292(b) is that the question of law must b e contestable; i.e., that "substantial grounds for a difference of opinion on the issue exist." T h e issues presented by Norbrook's motion for judgment on the pleadings have not p re v io u s ly been addressed by the Federal Circuit. As Norbrook states: "Given that both sides a n d the Court were analogizing to Hatch-Waxman cases involving, at best, somewhat a n a lo g o u s circumstances, at the very least, there is substantial ground for difference of o p inion on this issue." (Norbrook's Mem. Supp. Mot. Recons. or Certification Interlocutory A p p ea l 18.) While the Court believes that its analysis of the issues is correct, Norbrook's a rg u m e n ts are plausible and, given the fact that similar circumstances have not been a d d re ss e d by the Federal Circuit, "substantial grounds for a difference of opinion on the issue

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e x is t." See 28 U.S.C. § 1292(b). Therefore, Norbrook's request for an interlocutory appeal s a tis f ie s the third statutory criterion. Materially Advance Litigation The fourth statutory criterion under § 1292 is whether the appeal would m a te ria lly advance the litigation; that is, "its resolution must promise to speed up the litig a tio n ." 28 U.S.C. § 1292(b). If Norbrook prevails on appeal, the issues in this case will b e substantially narrowed. Thus, an interlocutory appeal would materially advance this litig a tio n . The proposed appeal fulfills all the requisite criteria for an interlocutory appeal u n d e r § 1292. Therefore, this Court grants Norbrook's petition for an interlocutory appeal, a n d will stay this matter until the Court of Appeals for the Federal Circuit resolves such a p p e al, including exercising its own discretion in deciding whether it will grant permission to appeal the interlocutory order certified by this Court. See In re Convertible Rowing E x e rc is e r Patent Litig., 903 F.2d 822 (Fed. Cir. 1990); 28 U.S.C. § 1292(b). Motion to Compel Also pending is Bayer's motion to compel discovery that was filed before the C o u rt issued its decision on Norbrook's motion for judgment on the pleadings. The subject d is c o v e ry disputes relate to the issues raised by the judgment on the pleadings. If the the a p p e a ls court accepts the matter for interlocutory appeal, its decision on those issues are likely to affect the disposition of the discovery issues and, perhaps, the entire action. Therefore, in

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the interest of judicial economy and to save unnecessary expense for the parties, the Court w ill hold in abeyance Bayer's motion to compel until resolution of the interlocutory appeal. NOW, THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY O R D E R E D THAT: Norbrook's motion for reconsideration pursuant to Rule 54(b) or in the a lte r n a tiv e for certification of an interlocutory appeal (Docket No.101) is DENIED as to re c o n sid e ra tio n and GRANTED as to the certification of this matter for interlocutory appeal a n d as to a stay of this matter until the resolution of those proceedings. Bayer's motion to compel (Docket No. 79) is held in ABEYANCE pending re s o lu tio n of the interlocutory appeal. Dated at Milwaukee, Wisconsin this 20th day of January, 2010. BY THE COURT

s / Rudolph T. Randa Hon. Rudolph T. Randa U .S . District Judge

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