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King Pharmaceuticals, Inc. v. Sandoz Inc.

May 19, 2010

KING PHARMACEUTICALS, INC., ET AL., PLAINTIFFS,
v.
SANDOZ INC., DEFENDANT.



The opinion of the court was delivered by: Arpert, U.S.M.J.

MEMORANDUM OPINION AND ORDER

I. INTRODUCTION

This matter comes before the Court on a Motion by Defendant Sandoz Inc. ("Sandoz") for Leave to Amend its Local Patent Rule 3.7 Invalidity Contentions [dkt. entry no. 60]. Plaintiffs King Pharmaceuticals, Inc., King Pharmaceuticals Research and Development, Inc. (collectively "King") and Pharmaceutical IP Holding, Inc.'s ("Pharma IP") (with King, collectively "Plaintiffs") has opposed the Motion and Sandoz has filed a reply. The Court has reviewed the papers submitted and heard oral argument on May 10, 2010. For the reasons stated herein, Sandoz's Motion is denied.

II. BACKGROUND AND PROCEDURAL HISTORY

This is a patent infringement case wherein Plaintiffs are asserting infringement of U.S. Patent No. 7,122,566 ("the '566 patent"), entitled "Metaxalone Products, Method of Manufacture, and Method of Use", based on Sandoz's application for FDA approval to market a generic metaxalone product.

On April 27, 2009, the Court issued a Scheduling Order setting a May 22, 2009 deadline for Sandoz to serve its Invalidity Contentions. Accordingly, on May 22, 2009, Sandoz served its Invalidity Contentions, citing 30 pieces of prior art. Sandoz contends that it was not until January 2010 that it first recognized the materiality of an additional prior art reference, Bebee, A Clinical and Pharmacologic Review of Skeletal Conditions, 12 American Journal of Therapeutics, 151-171 (2005) (the "Beebe" article). On January 26, 2010, Sandoz provided Plaintiffs with a copy of the Beebe article and requested Plaintiffs' consent to amend its Invalidity Contentions to include the Beebe article. On February 3, 2010, Plaintiffs advised Sandoz that they objected to Sandoz's attempted revision of its Invalidity Contentions. As a result, on March 12, 2010 Sandoz filed the instant Motion for Leave to Amend its Invalidity Contentions to identify the Beebe article as additional prior art and add an explanation of how it applies to the claims of the '566 patent.

A. Sandoz's Arguments in Support of the Motion to Amend

Sandoz argues that it should be permitted to amend its Invalidity Contentions because (1) the Beebe article was only recently identified as material prior art and (2)there will be no undue prejudice to Plaintiffs at this stage of the litigation.

Sandoz contends that the significance of the Beebe article was not realized until late January 2010 despite the fact that the Beebe article was identified in two searches performed in 2008. The search results provided the title of the article and an abstract of its contents which did not include any reference to a cytochrome p450 isozyme. (See generally Sandoz's Br. at 4-5.) Sandoz also contends that the Beebe article was not found in Sandoz's metaxalone-related files nor identified in the file history of the '566 patent. Id. Sandoz maintains that the Beebe article is relevant and material because "[n]o prior art known to Sandoz, other than Beebe, discloses that metaxalone is a substrate of any cytochrome p450 isozyme." Id. at 6. Specifically, Sandoz explains that such disclosure is relevant and material to each claim of the '566 patent because each claim has an 'informing' step that requires informing a patient or medical care worker that metaxalone affects the activity of a cytochrome p450 isozyme, and the '566 patent makes clear that metaxalone affects the activity of cytochrome p450 when it is a substrate of that isozyme. Id. Therefore, Sandoz argues, because the Beebe article "discloses that metaxalone affects the activity of certain cytochrome p450 isozymes, Beebe is material to the claims of the '566 patent." Id.

Next, Sandoz argues that there will be no prejudice to Plaintiffs by its proposed amendment because "fact discovery is ongoing, expert discovery has not yet begun, and no depositions have been scheduled." Id. at 7. Consequently, Sandoz contends, "Plaintiffs will have a full and fair opportunity to take discovery with respect to the Beebe reference." Id. at 11. Sandoz further argues that "the Beebe reference does not add any new defense to [P]laintiffs' claim of infringement; Sandoz previously asserted that all claims of the '566 patent were invalid in view of prior art, and only seeks to add Beebe as further evidence of invalidity." Id. Ultimately, Sandoz contends that allowing its proposed amended Invalidity Contentions at this stage in the litigation will promote the fair resolution of this case without prejudicing Plaintiffs.

B. Plaintiffs' Arguments Opposing the Motion to Amend

Plaintiffs oppose Sandoz's Motion arguing generally that Sandoz's delay in amending the Invalidity Contentions is undue and that Plaintiffs will suffer significant prejudice if Sandoz is granted the relief sought. Sandoz acknowledges that the two 2008 searches identified only 80 publications by title and abstract including the Beebe article, "[b]ut Sandoz did not deem the Beebe publication to be among the 'most relevant and non-cumulative' of the references... [and, therefore,] did not even obtain a full-text copy of the Beebe publications for review." (Pls.' Opp'n Br. at 2.) Therefore, Plaintiffs argue,"Sandoz's application is untimely [because] [i]t comes ten months after the deadline for serving invalidity contentions. Leaving aside the fact that Sandoz has been aware of the Beebe publication during this entire case, Sandoz asserts that it re-discovered the Beebe publication on January 26, 2010." Id. at 4-5 (citing Sandoz's Br. at 4).

Against this backdrop, Plaintiffs argue that "[t]hese facts belie Sandoz's claim of diligence" and, furthermore, "Sandoz's failure to appreciate the alleged materiality of Beebe over the last couple of years is the result of either carelessness, inadvertence or ineptitude." Id. at 6. Plaintiffs observe that Courts have found the requisite diligence to be "lacking where the movant failed to appreciate the potential materiality of certain prior art for several months after becoming aware of that prior art." Id. (citing CBS Interactive, Inc. v. Etilize, Inc., 257 F.R.D. 195, 203 (N.D. Cal. 2009) ("denying leave to amend invalidity contentions and declining to 'speculate as to whether [the movant's] motivations for this late-stage motion are attributable to gamesmanship or mere ineptitude' since proof of diligence is lacking in either circumstance"). Therefore, Plaintiffs maintain, because Sandoz cannot establish that it was diligent with respect to its discovery of the Beebe article in the first place, it cannot carry its burden of establishing good cause for the relief it seeks. Id. at 7.

Next, Plaintiffs argue that the Beebe article is not "material" despite Sandoz's contention that it is the only prior art that discloses that metaxalone is a substrate of any cytochrome p450 isozyme. Plaintiffs assert that it is not material because "Sandoz has alleged that several references disclose that metaxalone is a cytochrome p450 substrate... [and] Beebe ...


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