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Depomed, Inc. v. Purdue Pharma L.P.

United States District Court, D. New Jersey

June 28, 2017

DEPOMED, INC., Plaintiff,
v.
PURDUE PHARMA L.P., THE P.F. LABORATORIES, INC., AND PURDUE PHARMACEUTICALS L.P., Defendants.

          MEMORANDUM OPINION

          MARY L. COOPER United States District Judge

         This matter comes before the Court upon Plaintiff Depomed, Inc.'s (“Depomed”) motion to dismiss Defendants Purdue Pharma L.P, The P.F. Laboratories, Inc., and Purdue Pharmaceuticals L.P.'s (collectively, “Purdue”) third counterclaim (inequitable conduct) under Fed.R.Civ.P. 12(b)(6) and motion to strike Purdue's sixth (inequitable conduct), seventh (unclean hands), and eight (patent misuse) affirmative defenses under Fed.R.Civ.P. 12(f). (Dkt. 262.)[1] Purdue opposes the motions. The Court has considered the parties' submissions, (dkt. 262, dkt. 263, dkt. 265, dkt. 270), and decides the motions without oral argument pursuant to Local Civil Rule 78.1. For the reasons discussed below, Depomed's motions are granted in part and denied in part.

         I. BACKGROUND

         On February 1, 2017, Depomed filed a Second Amended Complaint (“SAC”) alleging that Purdue's “commercial manufacture, use, offer to sell, and/or sale of OxyContin®” willfully and deliberately infringes U.S. Patent Nos. 6, 340, 475 (“the ‘475 Patent”) and 6, 635, 280 (“the ‘280 Patent”) (together, “the patents-in-suit”). (Dkt. 259.) In response, Purdue filed an Answer and Counterclaims. (Dkt. 260) Therein, Purdue included allegations of inequitable conduct.[2]

         Purdue's allegations of inequitable conduct are based on several different alleged misrepresentations and omissions made by an inventor of the patents-in-suit, Jenny Louie Helm (“Inventor Helm”), and Depomed's counsel during related inter partes review (“IPR”) proceedings of the patents-in-suit.[3] Purdue alleges that Inventor Helm and Depomed's counsel made misrepresentations and omissions that violated (1) their duty of candor and good faith in dealing with the U.S. Patent and Trademark Office (“USPTO”)

         Patent Trial and Appeal Board (“PTAB”), and (2) their duty to disclose prior inconsistent statements during the IPR proceeding.[4] (Id. at 11-12.)

         Purdue advances three theories in support of its inequitable conduct defense: (1) Inventor Helm and Depomed's counsel misrepresented material information with the specific intent to deceive the PTO; (2) Inventor Helm and Depomed's counsel omitted material information with the specific intent to deceive the PTO; and (3) Inventor Helm and Depomed's counsel failed to produce prior inconsistent interrogatory responses and a sworn verification during the IPR proceedings. We summarize those theories below.

         A. Material Misrepresentations

         Purdue alleges that Inventor Helm and Depomed “intentionally misrepresented that it took [Inventor Helm] at least three years of research to develop an embodiment of the claimed invention, ” when in fact at least one embodiment of the claimed invention was conceived and reduced to practice no later than June 1993 on Inventor Helm's first attempt to formulate a controlled release dosage form. (Id. at 13.)[5] Purdue alleges that these misrepresentations “were intended to mislead the PTAB into concluding that the alleged invention would not have been obvious in view of the art at the time the patent application was filed in March 1997.” (Id. at 13.) Purdue alleges that these misrepresentations “are highly material insofar as the PTAB specifically relied on those statements in its Final Written Decisions” and but for these misrepresentations, the PTAB would not have upheld the validity of the patents-in-suit. (Id. at 14.)

         Purdue identifies numerous paragraphs in the Helm Declaration that it alleges misrepresent the time and research necessary to arrive at an embodiment falling within the scope of the claims. (See id. at 14-20.) For example, Purdue identifies paragraph 24 of the Helm Declaration, which states, in part:

The inventions in the ‘475 and ‘280 Patents was [sic] the result of several years of research, manipulation of different formulation variables in the laboratory, numerous dissolution experiments, and repeated testing to achieve a system that accomplished slow release of drug by diffusion over a particular length of time while keeping the polymeric matrix substantially intact.

(Id. at 63.) Purdue also identifies Inventor Helm's statements disagreeing with Purdue's expert's deposition testimony pertaining to the issue of obviousness:

I have been informed that Purdue's expert testified at his deposition that the inventions of the '475 and ‘280 Patents could have been created within “a week” in 1997. I completely disagree. There was very little information regarding swelling polymers that were designed to remain substantially intact as of the mid-1990's. It took me three years testing various polymers with guidance of Dr. Shell to achieve the Captopril formulation that contained the aspects of the claims of the ‘475 and ‘280 Patents.

(Id. at 62.) Purdue further identifies similar statements and arguments that Depomed's counsel made to the PTAB in its PORs and during oral argument. (See id. at 20-22.)

         Purdue alleges that Inventor Helm and Depomed's counsel knew the statements they made to the PTAB were false because of the contrary information in their possession, such as Inventor Helm's laboratory notebook. (See id. at 22-23, 26-27.) Purdue alleges that this demonstrates their specific intent to deceive the PTAB. (Id. at 25.)

         B. Material Omissions

         Purdue's second basis for inequitable conduct is similar to its first. Purdue alleges that in addition to misrepresenting the time it took Inventor Helm to reduce to practice an embodiment of the invention, the independent act of Depomed in withholding the fact that Inventor Helm reduced to practice an embodiment of the invention in June 1993 constitutes inequitable conduct. Specifically, Purdue alleges that Inventor Helm and Depomed's counsel “[omitted] the fact that [she] had conceived of and reduced to practice an embodiment of the claimed invention by 1993 - on the first try and within months of starting work at Depomed, and with no prior experience formulating solid dosage forms.” (Id. at 19.) Purdue alleges that Inventor Helm and Depomed's counsel “had ample time and opportunity for a comprehensive disclosure of the facts regarding the conception and reduction to practice of the embodiments of the claims, but deliberately chose not to disclose those facts, such as that a Captopril formulation within the scope of the asserted claims was reduced to practice by 1993.” (Id. at 28.)

         C. Production of Prior Inconsistent Statements During the IPR Proceedings

         Purdue's third theory is that Inventor Helm and Depomed's counsel failed to produce a prior inconsistent interrogatory response and a sworn verification “for use during the IPR proceedings.” (Id. at 27.) The interrogatory response and sworn verification are from a prior litigation, Depomed, Inc. v. Ivax Corp., No. 06-0100 (N.D. Cal.) (“the Ivax Case”). The interrogatory response indicates that claims 1, 2, 3, 8, 9, 13, and 14 of the ‘475 Patent and claims 1, 2, 3, 8, 9, 13, 14, 45, and 46 of the ‘280 Patent were conceived and reduced to practice “no later than June 16, 1993.” (Id. at 120-121.)[6]Purdue alleges that the response is inconsistent with the statements Depomed and Inventor Helm made to the PTAB concerning the time necessary to arrive at an embodiment falling within the scope of the claims. (Id. at 27-28.)

         Purdue explains that the response and verification were already in its possession, as these documents were “produced to Purdue prior to the stay in this case, at the time [Depomed] was involved in preparing the Helm Declaration and the PORs for submission in the IPRs, ” but contends Depomed violated its duty under 37 C.F.R. § 42.51(b)(1)(iii) because these documents were not produced during the IPR proceedings. (Id. at 27.)

         II. DISCUSSION A. Legal Standards

         1. Motion to Dismiss Under Rule 12(b)(6)

         Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a counterclaim if the counterclaimant “fail[s] to state a claim upon which relief can be granted[.]” Fed.R.Civ.P. 12(b)(6). When deciding a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), a district court is required to “accept all factual allegations as true, construe the [counterclaim] in the light most favorable to the [counterclaimant], and determine whether, under any reasonable reading of the [counterclaim], the [counterclaimant] may be entitled to relief.” Phillips v. Cnty of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (internal citation and quotations omitted). Stated differently, “a [counterclaim] must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The inquiry is not whether [a counterclaimant] will ultimately prevail in a trial on the merits, but whether [he or she] should be afforded an opportunity to offer evidence in support of [his or her] claims.” In re Rockefeller Ctr. Props., Inc., 311 F.3d 198, 215 (3d Cir. 2002).

         A claim of patent unenforceability premised upon inequitable conduct is a claim sounding in fraud. Under Rule 9(b), fraud is a clear exception to the otherwise broad notice-pleading standards. A party alleging inequitable conduct, therefore, must plead with particularity those facts which support the claim that the patent holder acted fraudulently ...


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