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In re Biogen '755 Patent Litigation

United States District Court, D. New Jersey

December 22, 2017

IN RE BIOGEN '755 PATENT LITIGATION

          OPINION

          HON. CLAIRE C. CECCHI UNITED STATES DISTRICT JUDGE

         Before the Court is EMD Serono, Inc. and Pfizer Inc.'s ("Serono") motion for partial summary judgment as to Biogen MA, Inc.'s ("Biogen") claim of lost profits. ECF No. 271. Bayer Healthcare Pharmaceuticals Inc. ("Bayer") filed a response to Serono's motion. ECF No. 275. Biogen opposes Serono's motion. ECF Nos. 277, 292. The parties also submitted letters to the Court pertaining to Serono's motion. ECF Nos. 297, 461, 467, 472, 739, 753. Having considered the parties' written submissions and oral presentations, for the reasons discussed below the Court denies Serono's motion.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         In this consolidated patent infringement action, Biogen MA, Inc. ("Biogen") has asserted claims from U.S. Patent No. 7, 588, 755 (the "'755 patent") against Bayer, Serono, and Novartis Pharmaceuticals Corp. ("Novartis"). The '755 patent claims a method for immunomodulation, or treating viral diseases, cancers, or tumors, by administering to a patient a recombinant polypeptide-human interferon beta ("interferon-β")-that is produced by a non-human host transformed by a recombinant DNA molecule.

         Biogen makes and sells Avonex®, a recombinant interferon-β product for the treatment of multiple sclerosis ("MS"). Serono makes and sells a competitor recombinant interferon-β product Rebif® for the treatment of MS. Rebif® has been on the market in the United States since 2002. Serono's Statement of Material Facts Not in Dispute, ECF No. 272-10 ("Serono SOF") ¶ 3.[1] By 2009, when the '755 patent issued, Rebif® was generating revenue of approximately $1 billion per year. Id.

         In October of 2000, Serono and Biogen entered into a Nonsuit and Option Agreement giving Serono certain rights, including an option to obtain a license to the patent application that later issued as the '755 patent. Serono SOF ¶ 1; ECF No. 272-1. Serono's option to obtain a license to the '755 patent was available to Serono when the '755 patent issued in September of 2009. Serono SOF ¶ 2. To date, Serono has not exercised its option, and the option remains available. Id. The Nonsuit and Option Agreement also contains a XXXXX ECF 277, at 8.

         On May 27, 2010, Bayer filed suit against Biogen seeking a declaration that Bayer does not infringe the '755 patent claims and that the '755 patent claims are invalid. ECF No. 1. On May 28, 2010, Biogen initiated a separate proceeding by filing suit against Bayer, Serono, and Novartis. C.A. No. 10-2760, ECF No. 1. Biogen's infringement claims against Bayer and Novartis are based on the sale ofinterferon-β products Betaseron® and Extavia® in the United States for the treatment of MS via immunomodulation. C.A. No. 10-2760, ECF No. 1 at ¶¶ 50-73, ECF No. 61 at ¶¶ 60-83. Biogen's infringement claims against Serono are based on the sale of Rebif® in the United States for the treatment of MS via immunomodulation. C.A. No. 10-2760, ECF No. 1 at ¶¶ 32-49, ECF No. 61 at ¶¶ 42-59. Biogen seeks relief from Serono, Bayer, and Novartis under several remedies, including lost profits. C.A. No. 10-2760, ECF No. 61 at 20.

         During the pendency of this case, Serono and Biogen arbitrated whether the Nonsuit and Option Agreement was invalid, unenforceable, terminated, and void. On February 2, 2012, the arbitral tribunal ruled that the agreement is valid and enforceable, and that Serono's option to obtain a license remains in effect. ECF No. 272-2 ¶ 56. XXXXX In September of 2012, the Court confirmed the tribunal's award. ECF No. 210.

         On October 27, 2017, the Court granted Bayer's and Serono's motions for severance. ECF No. 743. With respect to Biogen's action against Serono, a jury trial is scheduled to begin on January 18, 2018. Id.

         H. LEGAL STANDARDS

         A. Summary Judgment

         Summary judgment is appropriate if the "depositions, documents, electronically stored information, affidavits or declarations, stipulations... admissions, interrogatory answers, or other materials" demonstrate that there is no genuine issue as to any material fact, and, construing all facts and inferences in a light most favorable to the non-moving party, "the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a), (c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Pollock v. Am. Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986). The party moving for summary judgment bears the burden of demonstrating the absence of a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). A fact is "material" if a dispute about that fact "might affect the outcome of the suit under the governing [substantive] law," and a "genuine" issue exists as to that fact "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. The Court's role is to determine whether there is a genuine issue for trial, not to weigh the evidence and decide the truth of the matter. Id. at 249.

         B. Lost Profits

         A patent owner, upon a finding that a patent is infringed, is entitled to recover "damages adequate to compensate for the infringement, but in no event less than a reasonable royalty." 35 U.S.C. § 284. Having prevailed on liability, a patent owner may receive a reasonable royalty or lost profits. Asetek Danmark A/S v. CMI USA Inc.,852 F.3d 1352, 1362 (Fed. Cir. 2017). 'To recover lost profits, a patent owner must prove a causal relation between the infringement and its loss of profits." Georgetown Rail Equip. Co. v. Holland L.P., 867 F.3d 1229, 1240 (Fed. Cir. 2017) (internal quotation marks and citation omitted). In other words, the patent owner must show a reasonable probability that, "but for" the infringing activity, it would have made the additional profits enjoyed by the infringer. Micro Chemical, Inc. v. Lextron, Inc.,318 F.3d 1119, 1122 (Fed. Cir. 2003); Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1285 (Fed. Cir. 2017) ...


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