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Indivior Inc. v. Dr. Reddy's Laboratories S.A.

United States District Court, D. New Jersey

July 13, 2018

INDIVIOR INC., INDIVIOR UK LIMITED, and AQUESTIVE THERAPEUTICS, INC., Plaintiffs,
v.
DR. REDDY'S LABORATORIES S.A., AND DR. REDDY'S LABORATORIES, INC., Defendant.

          OPINION

          Kevin McNulty, United States District Judge

         In this patent infringement suit, the plaintiffs, Indivior Inc., Indivior UK Limited, and Aquestive Therapeutics, Inc. (collectively, unless otherwise specified, "Indivior"), seek a preliminary injunction against defendants, Dr. Reddy's Laboratories S.A. and Dr. Reddy's Laboratories, Inc. (collectively, unless otherwise specified, "DRL"). Indivior holds and practices a patent on Suboxone film, a "rapidly dissolving film that adheres to the underside of a patient's tongue or the inside of a patient's cheek." The film contains and is a means of administering buprenorphine and naloxone, drugs used in the treatment of opioid addiction. DRL recently received approval from the Food and Drug Administration ("FDA") for an Abbreviated New Drug Application ("ANDA") for a generic version of Suboxone and plans to launch this generic "at risk." Indivior claims that this generic will infringe a continuation patent (known as the '305 patent") granted to Aquestive by the Patent Office in April 2018, and seeks to enjoin DRL's launch of the generic. For the reasons explained below, I will grant the preliminary injunction.

         ESSENTIAL FINDINGS OF FACT

         1. The '514 "parent" patent contained a "dried/drying" limitation and was found not to claim a device that solely used "conventional" drying methods, i.e., drying by convection from the top.

         2. The '305 continuation patent now before the Court does not expressly or impliedly contain the "dried/drying" language of the '514 patent.

         3. The claims and issues in the prior action and in this action are not identical.

         4. The '305 patent claims the invention, and states embodiments thereof, without respect to drying methods used to manufacture it.

         5. The '305 patent provides an adequate written description to a person skilled in the art of a device without respect to drying methods.

         6. The record at present does not overcome the presumption of non-obviousness or validity.

         7. The record adequately establishes infringement, particularly of Claim 26 of the '305 patent.

         8. Entry of a generic would cause Indivior to lose market share and the suboxone film's advantageous formulary status, and would impair research and development.

         9. DRL knowingly invested "at risk" and has not shown that the balance of harms/equities weighs in its favor. (See redacted portion of opinion.)

         10. Although the suboxone film is an efficacious means of administering buprenorphine, it is not the only means, and the disadvantages of having no generic alternative does not outweigh the public benefit of maintaining Indivior's rights as a patent holder while this action is pending.

         ESSENTIAL CONCLUSIONS OF LAW

         1. Indivior has demonstrated a likelihood of success on the merits.

         2. Indivior has demonstrated irreparable harm

         3. The balance of the equities is at best neutral

         4. The public interest does not weigh against entry of a preliminary injunction.

         The remainder of the discussion in this Opinion expands upon and supports the foregoing findings of fact and conclusions of law.

         I. FACTS[1]

         The following facts were developed at a one-day hearing on June 28, 2018. Both sides declined to present live testimony. They presented their cases by means of oral argument, supplemented by PowerPoint presentations citing to the filed affidavits and exhibits. Many of the underlying historical facts were not in dispute.

         Indivior, along with Aquestive, developed Suboxone film, a type of buprenorphine-containing transmucosal product for opioid dependence ("BTOD"). (Simkin ¶ 7.) It is essentially a rapidly dissolving film that adheres to the underside of a patient's tongue or the inside of a patient's cheek and combines two active pharmaceutical ingredients: (1) buprenorphine, a partial opioid agonist that decreases a patient's need for opioids, and (2) naloxone, an opioid antagonist that deters abuse. (Id.) Suboxone competes with several other drugs in the BTOD market, including tablets and buccal films. It maintains its position in that market partly because its generic competitors are not AB-rated-that is, pharmacies cannot substitute generics at the point of sale when a patient is prescribed Suboxone. (Id. ¶ 9.)

         Indivior initially participated in the tablet market, having received approval from the FDA to market Suboxone in tablet form in 2002. (Hoffman Decl. ¶ 45.) It had "orphan drug exclusivity" for the drug in tablet form until October 2009. (Id.)

         During this time, Indivior developed the film version of Suboxone with Aquestive. On December, 10, 2013, the Patent Office issued Patent No. 8, 603, 514 ("'514 Patent") for "Uniform Films for Rapid Dissolve Dosage Form Incorporating Taste-Making Compositions" to Aquestive.[2] ('514 Patent at [45], [54].) Once it received approval from the FDA, Indivior marketed the new drug with the objective of switching patients over from tablets to film. (See Id. ¶¶ 46-53.) By the time of the launch of the first generic tablet version of Suboxone, Indivior had successfully migrated 85% of patients on the drug to the film version. (Id. ¶ 53.)[3]

         DRL (as well as several other pharmaceutical companies, including Watson Laboratories, Par Pharmaceutical, Inc., Alvogen Pine Brook, Inc., Teva Pharmaceutical, Inc., Sandoz Inc. and Mylan Technologies, Inc.), sought to enter the film market as a generic competitor. They submitted ANDAs to the FDA for generic versions of the Suboxone film. (Hoffman Decl. ¶ 14.) In 2015, Indivior responded by filing actions against these companies under the Hatch-Waxman Act in the United States District Court for the District of Delaware. [Id.) In August 2017, Judge Richard Andrews held that Indivior failed to meet its burden of showing that DRL's generic version infringed the claims of the '514 Patent for Suboxone film. See infra. Judge Andrews had earlier construed the one of the claims in the '514 Patent to mean "dried without solely employing conventional convection air drying from the top" and found that there was not enough evidence to show that DRL's procedures "amount[ed] to an unconventional process" for drying. See infra.

         Indivior responded to that decision by returning to the Patent Office. On April 3, 2018, the Patent Office issued Patent No. 9, 931, 305 ("'305 Patent") to Aquestive. (Patent '305 at [45].) According to the '305 patent:

The present invention relates to rapid dissolve thin film drug delivery compositions for the oral administration of active components. The active components are provided as taste-masked or controlled-release particles uniformly distributed throughout the film composition. The composition may be formed by wet casting methods, where the film is cast and controllably dried, or alternatively by an extrusion method. (Id. at [57] (Abstract).)

         This '305 continuation patent is a "child" of the '514 patent, the one that was the subject of the previous Delaware litigation between DRL and Indivior. The two largely overlap, except as to the language of Claim 26 of the '305 Patent and Claim 62 of the '514 Patent. The two pertinent revisions are as follows. First, the '514 Patent claims "(i) a cast film," but the '305 Patent claims "(i) a continuously cast film produced on a manufacturing line." Second, the '514 Patent makes claims that "said flowable water-soluble or water swellable film-forming matrix is capable of being dried without loss of substantial uniformity in the stationing of said particulate active therein; and wherein the uniformity subsequent to casting and drying of the matrix is measured by substantially equally sized individual unit doses which do not vary by more than 10% of said at least on active." The '305 patent contains the same language, except that the italicized language became "continuously cast on the manufacturing line" and "continuously cast film," respectively.[4]

         In the District of Delaware, Plaintiffs and DRL had earlier litigated the validity and potential infringement of the '514 Patent (as well as similar patents held by plaintiffs) by DRL's ANDA product. See Reckitt Benckiser Pharm. Inc. v. TevaPharm. USA Inc., ("Reckitt /') Nos. 14-1451, 14-1573, 14-1574, 2016 WL 3621632 (D. Del. June 29, 2016) (construing the claims of multiple terms of several patents, including the '514 patent pursuant to Markman v. Westview Instruments, Inc., 52 F.3d 967 (1996)); Reckitt Benckiser Pharm. Inc. v. Dr. Reddy's Labs. S.A., ("Reckitt IF) Nos. 14-1451, 14-1573, 14-1574, 2017 WL 3837312 (D. Del. Aug. 31, 2017), appeal docketed, No. 18-1115 (Fed. Cir. Oct. 27, 2017) (addressing the allegations of infringement and invalidity with respect to the '514 Patent after a four-day bench trial).

         In Reckitt II, Judge Richard Andrews, after a four-day bench trial, found that the defendants had failed to demonstrate by clear and convincing evidence that the asserted claims in the '514 patents were invalid as obvious. He also found, however, that Indivior failed to meet its burden to show that DRL's product infringed certain claims of the '514 patent. 2017 WL 3837312, at *20. In an earlier opinion, Judge Andrews had construed the claim in the '514 patent, "dried," to mean "dried without solely employing conventional 7 wherein the particulate active has a wherein the paniculate active has a particle size of 200 microns or less and particle size of 200 microns or less and 8 said flowable water-soluble or water said flowable water-soluble or water swellable film-forming matrix is swellable film-forming matrix is capable of being continuously cast on capable of being dried without loss of the manufacturing line without loss of substantial uniformity in the stationing substantial uniformity in the stationing of said particulate active therein; and of said particulate active therein; and wherein the uniformity subsequent to wherein said uniformity of the casting and drying of the matrix is continuously cast film is measured by measured by substantially equally substantially equally sized individual sized individual unit doses which do unit doses cut from the continuously not vary by more than 10% of said cast film which do not vary by more desired amount of said at least one than 10% of a desired amount of said at active. I least one active.| convection air drying from the top."[5] Reckitt I, 2016 WL 3621632, at *10-*11. He found that Indivior had disclaimed "conventional convection air drying from the top," both through express statements and repeated disavowal in the '514 Patent specifications. Id. at *8, *11 (noting that the '514 patent contained identical language from process patents that were construed earlier in the opinion and applying that same reasoning to the claims in the '514 patent). After reviewing the evidence presented at trial, Judge Andrews concluded that Indivior did not prove that DRL's process of drying was unconventional, and hence infringing. He was not persuaded "that evidence of a controlled process that [did] not result in rippling and that achieve[d] drug content uniformity automatically amount[ed] to an unconventional process." Reckitt II, 2017 WL 3837312, at *6. Indivior initially appealed those decisions by Judge Andrews but later dismissed the appeal. Indivior Inc. v. Watson Laboratories Inc., 2018 WL 3139436 (Fed. Cir. June 8, 2018).

         Instead, Indivior obtained the continuation '305 patent, in which it sought to claim around the "drying" problem. The "dried/drying language" was dropped from the continuation patent, which was intended to have a broader scope in that it would no longer disclaim "conventional" drying methods. Indivior then brought this action against DRL here in the District of New Jersey, this time claiming infringement of the new '305 patent. (See ECF no. 1 ("Complaint for Patent Infringement").) Upon learning of DRL's plans to launch the ANDA product "at risk," Indivior moved for temporary restraints and a preliminary injunction to prevent DRL from launching its generic product. (ECF no. 70.) (This application was made on an emergent basis, because the 30-month stay granted by Hatch-Waxman had already been exhausted.)

         I granted a temporary restraining order enjoining DRL from launching in order to preserve the status quo during the resolution of this motion. (ECF No.78.) On June 28, 2018, I conducted a hearing on the preliminary injunction application.[6]

         II. Discussion

         a. Standard of Review

         A preliminary injunction has been called "a drastic and extraordinary remedy." Bayer CropScience AG v. Dow AgroSciences LLC, 851 F.3d 1302, 1308 (Fed. Cir. 2017) (quoting Nat'l Steel Car, Ltd. v. Canadian Pacific Railway, 357 F.3d 1319, 1324-25 (Fed. Cir. 2004)) "A plaintiff seeking a preliminary injunction must establish (1) that he is likely to succeed on the merits, (2) that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in his favor, and (4) that an injunction is in the public interest." Winter v. Natural Res. Def. Council, Inc., 55 U.S. 7, 20 (2008) (numbering added); accord Am. Express Travel Related Servs. v. Sidamon-Eristoff, 669 F.3d 359, 366 (3d Cir. 2012); Kos Pharm., Inc. v. Andrx. Corp., 369 F.3d 700, 708 (3d Cir. 2004); see Adams v. Freedom Forge Corp., 204 F.3d 475, 486 (3d Cir. 2000) (movant bears the burden of establishing these elements).

         A patentee need not address invalidity, an affirmative defense, as an initial matter in filing for a preliminary injunction. Gaymar Industries, Inc. v. Cincinnati Sub-Zero Products, Inc., 790 F.3d 1369, 1375 n.7 (Fed. Cir. 2015). However, when the alleged infringer "raise[s] substantive issues respecting the validity and enforceability of the [patent-in-suit]," then the patentee carries the burden of showing likelihood of success on the merits with respect to the patent's validity, enforceability, and infringement. Id. (quoting and distinguishing Nutrition 21 v. United States, 930 F.2d 867, 869 (Fed. Cir. 1991)).

         b. Likelihood of ...


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