United States District Court, D. New Jersey
McNULTY, United States District Judge
a patent infringement case brought by Fresenius Kabi USA, LLC
("Fresenius") against the defendants, Fera
Pharmaceuticals and Oakwood Laboratories (together,
"Fera"). Fresenius claims that Fera, if it is
allowed to sell certain generic drugs, will infringe three of
its patents: Patent Nos. 9, 006, 289 ("the '289
patent"), 9, 168, 238 ("the '238 patent"),
and the 9, 168, 239 ("the '239 patent"). All
three patents describe formulations of levothyroxine, a
hormone produced by the thyroid. I earlier construed a number
of those patents' key terms (ECF No. 327, the
"Markman Opinion"), denied Fresenius's
motion to dismiss Fera's inequitable conduct
counterclaims, and preliminarily enjoined Fera from launching
a generic version of Fresenius's levothyroxine
formulation. (ECF No. 328 (the "PI Opinion", cited
as "PI Op."), ECF No. 329 (the "PI
before the Court is Fresenius's motion to dismiss
Fera's antitrust counterclaims (ECF No. 330) and
Fresenius's motion to stay this case pending Fera's
appeal of the preliminary injunction to the Federal Circuit.
(ECF No. 386). For the reasons stated herein, I will deny the
motion to dismiss as presented. I will, however, sever and
stay Fera's antitrust counterclaims pending further order
of the Court. I will also deny Fresenius's motion to stay
the entire case pending Fera's appeal of my PI Opinion
and Order to the Federal Circuit.
with my previous Opinions and Orders in this case is assumed.
I canvass here only the facts and procedural history
pertinent to my decision on these motions.
29, 2015, Fresenius filed its original complaint alleging
infringement of the '289 patent. (ECF No. 1) Fera
answered in July 2015 and asserted counterclaims for
invalidity and non-infringement. (ECF No. 13) Fresenius
amended its complaint on September 3, 2015. Fera answered and
alleged additional inequitable conduct counterclaims later
that month. (ECF No. 43, 56, 57). Two months later, in
December 2015, Fresenius filed a second amended complaint
that added infringement claims for the '238 and '239
patents. (ECF No. 83) Fera answered, and asserted essentially
the same inequitable conduct counterclaims as to those two
patents. (ECF No. 84).
January 2016, Fresenius moved to dismiss Fera's
inequitable conduct counterclaims for failure to state a
claim. (ECF No. 89) Five months later, in May 2016, Fresenius
moved for a preliminary injunction to enjoin Fera from
launching its generic products at-risk. (ECF No. 187) A week
later, Fera moved to amend its answer to include two
antitrust counterclaims. Fresenius, Fera claimed, had delayed
Fera's entry into the "the market for levothyroxine
sodium power for injection, 100 meg/vial and 500
meg/vial" by fraudulently obtaining the patents-in-suit
and bringing sham patent litigation against it and other
competitors. (ECF No. 199-4, ¶¶ 284-521) Magistrate
Judge Hammer granted Fera's motion to amend in August 15,
2016. (ECF No. 293) Fera filed its amended answer and
counterclaims two days later. (ECF Nos. 295-96)
September 20, 2016, I denied Fresenius's motion to
dismiss Fera's inequitable conduct counterclaims but
granted Fresenius's motion for a preliminary injunction.
(ECF Nos. 328-29) I found Fera's allegation that
Fresenius had deceptively obtained the '289 patent
sufficient to meet "the relatively low threshold"
necessary to state a claim. For purposes of a preliminary
injunction, however, the paper record revealed "no
substantial evidence of misrepresentation, or intentional
withholding of material information from the patent
examiner." (PI Op. 19-23) Fresenius, moreover, had
demonstrated irreparable harm, that the balance of harms
tipped in its favor, and that an injunction was in the public
interest. (Id. 24-27) I therefore preliminary
enjoined Fera from launching a generic version of
Fresenius's levothyroxine formulation.
September 20, 2016, Fresenius moved to dismiss Fera's
antitrust counterclaims. (ECF No. 330) Shortly thereafter
Fera took an interlocutory appeal of the preliminary
injunction to the Federal Circuit. (ECF No. 361). Fresenius
then moved to stay this case pending Fera's appeal to the
Federal Circuit. (ECF No. 386).
deadline for fact discovery expired on August 31, 2016. (ECF
No. 60) Expert discovery closed in February 2017. (ECF No.
356). On the deadline for dispositive motions, March 3, 2017,
Fresenius filed a motion for summary judgment as to
infringement for certain claims. (ECF No. 404) A trial date
has not yet been set.
Motion to Dismiss Counterclaims
first moves to dismiss Counterclaim Count 10, which alleges
Walker Process fraud, and Count 11, which alleges
sham litigation, each in violation of Section 2 of the
Sherman Act, 15 U.S.C § 2, and the Clayton Act, 15
U.S.C. §§ 15, 26, for failure to state a claim.
See Fed. R. Civ. P 12(b)(6). For the purposes of a
motion to dismiss, the facts alleged in the
counterclaim-complaint are accepted as true and all
reasonable inferences are drawn in favor of the plaintiff.
New Jersey Carpenters & the Trustees Thereof v.
Tishman Const Corp. of New Jersey, 760 F.3d 297, 302 (3d
Cir. 2014). The factual allegations must be sufficient to
raise a plaintiffs right to relief above a speculative level,
such that it is "plausible on its face."
BellAtl. Corp. v. Twombly, 550 U.S. 544, 570 (2007);
see also West Run Student Housing Assocs., LLC v.
Huntington Nat. Bank, 712 F.3d 165, 169 (3d Cir. 2013).
While "[t]he plausibility standard is not akin to a
'probability requirement' ... it asks for more than a
sheer possibility." Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009).
parties agree as to the legal principles governing such
claims. A patentee "who brings an infringement suit may
be subject to antitrust liability . . . if the alleged
infringer (the antitrust plaintiff) proves (1) that the
asserted patent was obtained through knowing and willful
fraud within the meaning of Walker Process Equipment,
Inc. v. Food Machinery & Chemical Corp.,
382 U.S. 172, 177 (1965), or (2) that the infringement suit
was 'a mere sham to cover what is actually nothing more
than an attempt to interfere directly with the business
relationships of a competitor, ' Eastern R.R.
Presidents Conference v. Noerr Motor Freight, Inc., 365
U.S. 127, 144 (1961)." Nobelpharma AB v. Implant
Innovations, Inc., 141 F.3d 1059, 1069 (Fed. Cir. 1998)
(additional internal citations omitted)).
plaintiff asserting a Walker Process claim must show
(1) "that the defendant procured the relevant patent by
knowing and willful fraud on the PTO or (in the case of an
assignee) that the defendant maintained and enforced the
patent with knowledge of the fraudulent manner in which it
was obtained" and (2) "all the elements otherwise
necessary to establish a Sherman Act monopolization
charge." Ritz Camera & Image, LLC, v. Sandisk
Corp., 700 F.3d 503, 506 (Fed. Cir. 2012) (citing
Walker Process, 382 U.S. at 174, 176-77)). To prevail on
a sham litigation claim, a plaintiff must show that the
lawsuit is "objectively baseless in the sense that no
reasonable litigant could realistically expect to succeed on
the merits" and subjectively is "an attempt to
interfere directly with the business relationships
of a competitor." Prof I Real Estate Investors, Inc.
v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60-61
(1993) (emphasis in original) (internal citations omitted).
real question here is whether Fera has alleged sufficient
factual matter to elevate the underlying claims of
inequitable conduct to the level of monopoly abuse or sham
litigation. Fresenius, with some justice, points to a number
of potential deficiencies.
threshold concern with these antitrust claims is that Fera,
although it intends to compete with Fresenius, does not
factually allege that it is prepared to do so. See Indium
Corp. of Am. v. Semi-Alloys, Inc., 781 F.2d 879, 882
(Fed. Cir. 1985) (finding that plaintiff failed to show
antitrust injury because it was not prepared to enter the
relevant market); but see Bristol Meyer Squibb Co. v. Ben
Venue Labs, 90 F.Supp.2d 540, 544-46 (D.N.J. 2000)
(rejecting the same argument for cases brought under the
Hatch-Waxman Act). Nor does it factually allege that
Fresenius seeks to squelch competition from other
participants in the relevant market. See Brunswick Corp. v.
Pueblo Bowl- O-Matic, 429 U.S. 477, 488-89
(1977) ("The antitrust laws . . . were enacted for
'the protection of competition, not
competitors .... Plaintiffs must prove
antitrust injury, which is to say injury of the type
the antitrust laws were intended to prevent and that flows
from that which makes defendants' acts unlawful.")
also points to a lack of specificity about the relevant
market. Fera alleges, for example, that the relevant product
market is the market for "levothyroxine sodium power for
injection, 100mcg/vial and 500 meg/vial." There is no
factual averment, however, establishing why that might be the
case. See, e.g., Queen City Pizza v. Domino's
Pizza, 124 F.3d 430, 436 (3d Cir. 1997) ("Where the
plaintiff fails to define its proposed relevant market with
reference to the rule of reasonable interchangeability and
cross-elasticity of demand, ... the relevant market is
legally insufficient and a motion to dismiss may be
Fera's sham litigation counterclaim, there is of course
the problem of my PI Opinion. It is difficult to accept
Fera's allegation that the underlying infringement suit
is objectively baseless (or brought in subjective bad faith)