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

United States District Court, D. New Jersey

August 27, 2018

INDIVIOR INC. and INDIVIOR UK LTD., Plaintiffs,
v.
DR. REDDY'S LABORATORIES S.A., and DR. REDDY'S LABORATORIES, INC., Defendants. INDIVIOR INC. and INDIVIOR UK LTD., Plaintiffs,
v.
TEVA PHARMACEUTICALS USA, INC., Defendant. INDIVIOR INC. and INDIVIOR UK LTD., Plaintiffs,
v.
ALVOGEN PINE BROOK, INC., Defendant. .

          OPINION

          KEVIN MCNULTY UNITED STATES DISTRICT JUDGE

         Now before the Court is the Report and Recommendation ("R&R") (ECF no. 50, Civ. No. 17-7106; ECF no. 50, Civ. No. 17-7115; ECF no. 118, Civ. No. 17-7111) of Magistrate Judge Cathy L. Waldor. Judge Waldor recommends that I deny the motions of defendants, Dr. Reddy's Laboratories S.A. and Dr. Reddy's Laboratories, Inc. (collectively, "DRL"), Teva Pharmaceuticals USA, Inc. ("Teva"), and Alvogen Pine Brook, Inc. ("Alvogen") (collectively, "Defendants") to transfer venue of this case to the District of Delaware under 28 U.S.C. § 1404(a).[1] For the reasons set forth below, the R&R is adopted and affirmed as to these defendants, and their motions to transfer are denied.

         I. BACKGROUND and DISCUSSION

         As to a Magistrate Judge's order regarding a non-dispositive matter, the district court "must consider timely objections and modify or set aside any part of the order that is clearly erroneous or contrary to law." Equal Emp't Opportunity Comm'n v. City of Long Branch, 866 F.3d 93, 99 (3d Cir. 2017) (quoting Cont'l Cos. Co. v. Dominick D'Andrea, Inc., 150 F.3d 245, 250 (3d Cir. 1998); 28 U.S.C. § 636(b)(1)(A)). The district court will review findings of fact for clear error and to review matters of law de novo. Id.

         As to a dispositive matter referred to the Magistrate Judge for decision, however, the district court's review is plenary:

The product of a magistrate judge, following a referral of a dispositive matter, is often called a "report and recommendation." Parties "may serve and file specific written objections to the proposed findings and recommendations" within 14 days of being served with a copy of the magistrate judge's report and recommendation. Fed.R.Civ.P. 72(b)(2). If a party objects timely to a magistrate judge's report and recommendation, the district court must "make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." 28 U.S.C. § 636(b)(1); see also Fed. R. Civ. P. 72(b)(3).

EEOC v. City of Long Branch, 866 F.3d at 99-100.

         Some decisions in this District have treated Magistrate Judges' decisions on motions to transfer venue as non-dispositive. See Allyn 2. Lite, N. J. Fed. Prac. R. Loc. R. 72.1a, comment 3, at p. 419 (2018 ed.) (citing, e.g., Siemens Financial Services v. Open Advantage, 2008 U.S. Dist. LEXIS 15623 (D.N.J. Feb. 29, 2008) (Hayden, J.)). Others have treated them as dispositive. See Cuco v. United States, 2007 WL 2904193 (Oct. 2, 2007) (Chesler, J.) (treating motion to transfer as dispositive and reviewing R&R de novo); Oliver v. Third Wave Technologies, 2007 U.S. Dist. LEXIS 70915 (D.N.J. Sept. 24, 2007) (Linares, J.). As to this issue, there has been no definitive holding by the U.S. Court of Appeals for the Third Circuit. But cf. In re U.S. Healthcare, 159 F.3d 142, 145 (3d Cir. 1998) (Magistrate Judge order remanding case to state court is dispositive).

         This particular matter presents itself in the form of a report and recommendation, implying and signaling to the parties that it has been treated as a dispositive ruling. Therefore, in an abundance of caution, I will treat it as such, and review it de novo.

         In the end, however, the standard of review makes litde difference, because I find myself in agreement with Judge Waldor's well-reasoned R&R. Having exercised de novo review, I adopt and affirm the R&R, adding some procedural history, a summary of the R&R, and a few additional observations that address the objections made by defendants.

         The only update of note to the procedural history is my disposition of the motion of Indivior Inc., Indivior UK Limited, and Aquestive Therapeutics, Inc. (collectively, "Plaintiffs") for a preliminary injunction against DRL. On July 13, 2018, after a hearing on the issue, I granted the motion for a preliminary injunction, barring DRL from manufacturing, importing, or selling a generic version of Suboxone in the United States. (ECF nos. 122, 136, Civ. No. 17-7111.) DRL has appealed this preliminary injunction to the U.S. Court of Appeals for the Federal Circuit; that appeal is pending (Indivior Inc. v. Dr. Reddy's Laboratories, S.A., 18-2167). (ECF nos. 137, 139, Civ. No. 17-7111.)

         Plaintiffs' essential claim is that Alvogen, Teva, and DRL are manufacturing, marketing, and selling a generic product that infringes the patents at issue. They argue that the District of New Jersey is the proper venue for these patent infringement cases, Alvogen, Teva, and DRL moved to transfer venue to the District of Delaware under 28 U.S.C. § 1404(a). There is a history of litigation over plaintiffs' patents for sublingual films in front of District Judge Richard G. Andrews in the District of Delaware. In 2014, plaintiffs pursued several patent infringement actions against DRL (as well as other defendants not parties to this case) in the District of Delaware, alleging similar infringement. The patents at issue in Delaware were similar to, and one is a parent patent to, the patents at issue in this case. Judge Andrews made two rulings in favor of DRL: the first on collateral estoppel grounds and the second on the grounds that the patent was valid but that DRL did not infringe it.

         Judge Waldor recommended denying the motions to transfer venue. (R&R at 16.)

         First, she found that venue is permissible as to DRL in the District of New Jersey under the patent venue statute, 28 U.S.C. § 1404(b), which states that a "civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business." (Id. at 7.) The Supreme Court has explained that, for patent cases, a domestic corporation "resides" only in its state of incorporation and where it has a regular and established place of business, TC Heartland LLC v. Kraft Food Grp. Brands LLC,137 S.Ct. 1514, 1517 (2017). Judge Waldor ...


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