United States District Court, D. New Jersey, Camden Vicinage
Shire Development LLC, Shire Pharmaceutical Development Inc., Cosmo Technologies Limited, and Nogra Pharma Limited. Plaintiffs,
Amneal Pharmaceuticals LLC, Amneal Pharmaceuticals of New York, LLC, Amneal Pharmaceuticals Co. (1) PVT. LTD., and Amneal Life Sciences PVT. LTD. Defendants.
B. KUGLER, UNITED STATES DISTRICT JUDGE
matter comes before the Court on the motion [ECF Doc. 373] by
defendants' (collectively “Amneal” or
“defendants”), seeking a declaration this case is
“exceptional” under 35 U.S.C. §
and an award of defendant's attorneys' fees after 31
August 2017, the date plaintiffs (collectively
“Shire” or “plaintiffs”) served their
reasons discussed below, defendants' motion is
DENIED. An order accompanies.
Relevant Facts and Procedural History
April 2015, plaintiff Shire filed a patent infringement suit
against defendants Amneal (“the Amneal ANDA suit”
or “this suit”) after Amneal sought approval in
the form of an Abbreviated New Drug Application
(“ANDA”) from the Food and Drug Administration
[“FDA”] for a generic form of the drug
Lialda®, covered by U.S. Patent Number 6, 773, 720
(“ ‘720 patent”). Claim 1 of the ‘720
patent recites a controlled-release oral pharmaceutical
composition comprising the active ingredient
5-amino-salicylic acid and having an inner lipophilic matrix
and an outer hydrophilic matrix wherein the active ingredient
is dispersed in both the lipophilic matrix and hydrophilic
matrix. The lipophilic matrix consists of substances derived
from fatty acids or cholesterol; the hydrophilic matrix
consists of water soluble substances.
2012 through November 2015, in response to other ANDA
applications before the FDA, Shire filed similar patent
infringement cases against these ANDA applicants: Zydus,
Osmotica, Watson (now Teva), Mylan, and Lupin (ECF Doc. No.
380-3) [“the other ANDA cases”].
plaintiff, neither this nor any other ANDA case involving the
'720 patent can be categorized as an unqualified prevail.
In particular: the Osmotica ANDA case has been dismissed. The
Lupin ANDA case has been stayed pending Lupin's
resubmission to the FDA. In the Zydus ANDA case, the District
Court of Delaware found non-infringement, affirmed by the
Federal Circuit. The Watson ANDA case had two separate
appeals to the Federal Circuit, each on the meaning of a
different claim term, and both of which were finally
determined as non-infringement. In the Mylan ANDA case, the
Federal Circuit affirmed the District Court's finding of
only have plaintiffs' lawsuits meant all six ANDA
applicants have had to navigate infringement challenges but
also that all applicants, including defendants Amneal, have
had difficulty gaining approval from the FDA for their
proposed Lialda® generics. Only Zydus and Watson have
gotten FDA approval and launched generic products, and these
only within the last year. Defendants's own regulatory
struggles include receipt, on 16 September 2016, of an FDA
rejection for genotoxic impurities in the active
pharmaceutical ingredient of its generic product, and
continued failure to obtain FDA approval to date. Summarizing
these ANDA cases, it can be seen that plaintiffs' suits
for Lialda® infringement are more Sisyphean, while
defendants' efforts to get approved generics more
response to the complaint, defendants sought a declaratory
judgment of non-infringement of its ANDA product as well as a
determination of invalidity of the ‘720 patent claims.
During a discovery period marked by at least 8 amended
scheduling orders and scheduling conferences in the 16 months
between September 2016 and January 2018 and several discovery
disputes, plaintiffs served opening expert reports on 31
August 2017, with expert depositions taking place over the
fall of 2017. On 19 January 2018, this Court held the
background to this suit's procedure, in the spring of
2017, the Zydus generic product, previously adjudicated
non-infringing, entered the market, whereas by spring of
2018, the Watson generic products, also adjudicated
non-infringing, entered as well. Further, in April 2018, the
Federal Circuit affirmed a finding of non-infringement for
Mylan's proposed generic. Between spring 2017 and April
2018, plaintiffs faced both Federal Circuit judgments of
non-infringement of its ‘720 patent and entry of
generic products in competition to Lialda®, which may
have eroded its expectations of relying on the ‘720
patent for marketplace exclusivity.
May 2018, at Shire's initiative, the parties settled this
ANDA suit by voluntarily dismissing both the infringement
claims and invalidity counterclaims with prejudice. On 7 Jun
2018, Amneal filed this motion seeking a declaration this
case is exceptional and $83, 994 in attorneys' fees from
31 August 2017 to the date of dismissal.
Defendants' core contention is, even though the Federal
Circuit has rejected Shire's infringement theory on five
separate occasions in three of the other ANDA cases,
plaintiffs continued to advance that very theory in this case
when it served its expert reports on 31 August 2017.
Defendants further asserts that plaintiffs' infringement
theory is the distribution of an excipient in its claimed
pharmaceutical composition and titles this the
“excipient distribution theory”. (ECF
Doc.373:3-4). Defendants state the ‘720 patent claims
do not recite an excipient distributed throughout the
composition, as plaintiffs advance, but rather a composition
having two macroscopically separate elements: an inner
lipophilic matrix and an outer hydrophilic matrix. Defendants
assert the Federal Circuit made clear that an accused,
generic composition can infringe the ‘720 claims only
if it has both recited structures and that infringement
cannot occur if the accused composition lacks these.
further contend plaintiffs knew their infringement theory was
untenable when, on 31 August 2017, plaintiffs filed in this
case its expert reports that advanced the excipient
distribution theory (ECF Doc.373:1), but nonetheless pressed
forward with an infringement argument it knew it couldn't
win. (ECF Doc. 373-9-10). Defendants argue such action is
unconscionable in that it unnecessarily delayed adjudication
of a meritless case and needlessly racheted up its
attorneys' fees, thereby abusing the Hatch- Waxman
litigation regime and justifying a declaration of
“exceptional” here. (ECF Doc.373: 16-19).
contend defendant can prevail on this motion only if it shows
plaintiff's infringement position was meritless as of 31
August 2017, the date when plaintiffs filed expert reports.
Plaintiffs also contend defendant's labelling of
plaintiffs' infringement position as the “excipient
distribution theory” is incorrect, and that such
mislabeling grounds a serious misrepresentation of the
Federal Circuit's decisions in the other ANDA cases.
Further, defendants are also incorrect in their
interpretation of these Federal Circuit decisions because
none opined on an “excipient distribution”
addition, both parties accuse each other of unwarranted
litigation-delaying tactics (ECF Doc. 373:11-13; ECF Doc.
380:5-6), which could ground a finding of ...