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Indivior Inc. v. Laboratories

United States District Court, D. New Jersey

November 5, 2019

INDIVIOR INC., INDIVIOR UK LIMITED, and AQUESTIVE THERAPEUTICS, INC., Plaintiffs,
v.
DR. REDDY'S LABORATORIES S.A., AND DR. REDDY'S LABORATORIES, INC., Defendants. INDIVIOR INC., INDIVIOR UK LIMITED, and AQUESTIVE THERAPEUTICS, INC., Plaintiffs,
v.
ALVOGEN PINE BROOK, INC., AND ALVOGEN PINE BROOK LLC, Defendants.

          OPINION

          Kevin McNulty United States District Judge.

         This opinion contains the Court's construction of key patent terms following a Markman hearing. (Dkt. No. 7106 at ¶ 211; Dkt. No. 7111 at ¶ 290) The final section constitutes the Court's opinion on the motion by Alvogen Pine Brook, Inc. and Alvogen Pine Brook LLC (collectively, unless otherwise specified, "Alvogen") to recover on bonds posted in connection with my grant of a temporary restraining order in the 17-cv-7106 consolidated action. (See DE 148).

         These consolidated patent infringement cases are brought by Indivior Inc., Indivior UK Limited, and Aquestive Therapeutics, Inc. (collectively, unless otherwise specified, "Indivior"), against Dr. Reddy's Laboratories S.A. and Dr. Reddy's Laboratories, Inc. (collectively, unless otherwise specified, "DRL") and Alvogen.

         The patents-in-suit are Patent Nos. 9, 931, 305 ("the '305 Patent"), issued to Aquestive on April 3, 2018, and 9, 687, 454 ("the '454 Patent"), issued to Indivior on June 27, 2017. Indivior's Suboxone film is also covered by Patent No. 8, 603, 514 ("the '514 Patent"). The '514 Patent shares the same specification with the '305 Patent. As a result, the '305 Patent was filed with a terminal disclaimer to synchronize its expiration with that of the '514 Patent. This '514 Patent is not directly at issue here, but was at issue in a related litigation involving these same parties filed in the United States District Court for the District of Delaware ("the Delaware Litigation").

         Collectively, these patents describe formulations of Suboxone film, a "rapidly dissolving film that adheres to the underside of a patient's tongue" or cheek. Indivior's Suboxone film is used to treat opioid dependency; it works to decrease a patient's need for opioids while also deterring abuse. Its two active ingredients are buprenorphine and naloxone. The films are created by mixing a pharmaceutically active ingredient with a polymer in a solvent, casting the mixture onto a planar carrier surface to form a wet film, and then controllably drying the film to produce a solid thin sheet that can be cut into individual dosages.

         I. Procedural History[1]

         I first briefly review the relevant opinions issued both in this action and in the related Delaware Litigation.

         In broad strokes, Indivior previously moved in this action to enjoin DRL from bringing its generic Suboxone film to market. In a prior decision, I granted the motion. (Dkt. No. 7111 at ¶ 121). DRL subsequently appealed to the Federal Circuit, which reversed and remanded. Indivior Inc. v. Dr. Reddy's Labs., S.A., 752 Fed.Appx. 1024 (Fed. Cir. 2018) ("Indivior F). The parties also appealed a number of decisions in the related Delaware Litigation. After the parties filed their Markman briefs here, the Federal Circuit issued its opinion concerning the Delaware Litigation appeal. Indivior Inc. v. Dr. Reddy's Labs., S.A., 930 F.3d 1325, 1339 (Fed. Cir. 2019) ("Indivior II").

         A. The '514 Patent

         Indivior initially entered the Suboxone market by introducing a tablet in 2002. It then began developing a film version with Aquestive. The patent for that film, the '514 Patent, was issued on December 10, 2013.[2] ('514 Patent at [45], [54].).

         DRL and others, including Alvogen, sought to enter the film market as generic competitors and filed ANDAs with the FDA for generic versions of the Suboxone film. Indivior responded by filing suit against a number of parties, including DRL and Alvogen, in the Delaware Litigation. Ultimately, the Delaware district court held that Indivior had failed to meet its burden of showing that DRL's and Alvogen's generic versions infringed the claims of the 514 Patent for Suboxone film. Reckitt Benckiser Pharm. Inc. v. Dr. Reddy's Labs. S.A., Nos. 14-1451, 14-1573, 14-1574, 2017 WL 3837312 (D. Del. Aug. 31, 2017); Reckitt Benckiser Pharm. Inc. v. Dr. Reddy's Labs. S.A., No. CV 14-1451-RGA, 2017 WL 3782782 (D. Del. Aug. 31, 2017); Indivior Inc. v. Mylan Techs. Inc., 298 F.Supp.3d 775 (D. Del. 2018).

         With respect to DRL, District Judge Andrews had earlier construed 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 Reckitt Benckiser Pharm. Inc. v. Teva Pharm. USA Inc., Nos. 14-1451, 14-1573, 14-1574, 2016 WL 3621632, at*10-*11 (D. Del. June 29, 2016). He found that Indivior had disclaimed "conventional convection air drying from the top," both through express statements and repeated disavowal in the '514 Patent specification. 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. Judge Andrews later made similar findings with respect to Alvogen. See Mylan Techs. Inc., 298 F.Supp.3d at 785. ("Plaintiffs' comparison between Alvogen's exhibit batch and commercial processes fails to demonstrate that Alvogen's commercial process does not 'solely' employ drying from the top. It does not change my conclusion that Plaintiffs have not demonstrated 'substantial' bottom drying.").

         Indivior then appealed to the Federal Circuit. See Section I.E, infra, discussing Indivior U.

         B. The '305 Patent

         Aquestive responded to the Delaware ruling by applying for the '305 Patent, which was issued on April 3, 2018. The '514 Patent and the '305 Patent largely overlap, except as to the language of one claim-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." The '305 Patent, however, claims "(i) a continuously cast film produced on a manufacturing line."

Second, the '514 Patent 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 similar language, except that the italicized "drying" language was dropped and references to "continuous casting" are substituted. Thus '3O5's Claim 26 now reads:

said flowable water-soluble or water swellable film-forming matrix is capable of being continuously cast on the manufacturing line without loss of substantial uniformity in the stationing of said particulate active therein; and wherein said uniformity of the-continuously cast film is measured by substantially equally sized individual unit doses cut from the continuously cast film which do not vary by more than 10% of a desired amount of said at least one active.

(PI. Ex. A at 85; italicized emphasis added).

         Indivior then brought these actions against DRL and Alvogen here in the District of New Jersey, now claiming infringement of the new '305 Patent. (See Dkt. No. 5288 at ¶ 1; Dkt. No. 5285 at ¶ 1). 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. (Dkt. No. 7111 at ¶ 70). I granted a temporary restraining order enjoining DRL from launching in order to preserve the status quo during the resolution of the motions. (Id. at DE 78). After a hearing, on July 13, 2018, I granted Indivior's motion for a preliminary injunction. (Id. at DE 121). In essence, I concluded that Indivior, in the '305 Patent, had succeeded in "claiming around" the problem with the '514 Patent that was identified in the Delaware decision.

         DRL then appealed that decision to the Federal Circuit, which disagreed.

         C. Indivior I

         On November 20, 2018, a divided Federal Circuit vacated the preliminary injunction issued in this action and remanded. See Indivior I, 752 Fed.Appx. 1024.

         The Federal Circuit first examined the '305 Patent's specification. The court particularly noted the specification's focus on drying processes:

The specification teaches that conventional drying methods-which only apply warm air to the top of the wet film-produce films that do not have the claimed content uniformity. Id. at col. 9 11. 13-18. The specification explains that conventional methods that apply heat only to the top of the film cause the water on the surface to evaporate. Id. at col. 3 1. 48-col. 4 1. 3 . . .
The specification discloses controlled drying techniques that avoid the "rippling" problems produced by conventional drying methods. Id. at col. 23 11. 10-21. The specification explains that "[t]he objective of the drying process is to provide a method of drying films that avoids complications, such as the noted 'rippling' effect, that are associated with conventional drying methods." Id. at col. 23 11. 10-14. The invention's controlled drying techniques include applying heat to the bottom of the film, introducing controlled microwaves, controlling the air flow above and beneath the film, and employing furnace filters. Id. at col. 23 11. 22-39, col. 54 11. 20-21. These techniques control heat distribution during the drying process and produce content-uniform films. Id.

Id. at 1026.

         In light of that discussion, the Federal Circuit considered whether Indivior was likely to succeed on the merits of its infringement claims, ultimately answering that question in the negative. In the '305 specification, the court found, Indivior expressly disclaimed "solely using conventional top air drying to produce films with the claimed content uniformity. The patent distinguishes these conventional methods from the present invention and disparages their use, stating that these methods result in films that do not have content uniformity-a key feature of the invention. Under our case law on specification disclaimer, such statements exclude from the scope of the '305 claims films formed using these drying methods." Id. at 1029. The Federal Circuit relied heavily on SciMed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337, 1343-44 (Fed. Cir. 2001) and Openwave Sys., Inc. v. Apple Inc., 808 F.3d 509, 513 (Fed. Cir. 2015), which instruct that disavowal of a feature in the specification results in the exclusion of that feature from the claim scope:

"Disavowal requires that 'the specification make[ ] clear that the invention does not include a particular feature."' Openwave Sys., Inc. v. Apple Inc., 808 F.3d 509, 513 (Fed. Cir. 2015) (quoting SciMed, 242 F.3d at 1341). "To find disavowal of claim scope through disparagement of a particular feature, we ask whether 'the specification goes well beyond expressing the patentee's preference ... [such that] its repeated derogatory statements about [a particular embodiment] reasonably may be viewed as a disavowal."' Id. at (quoting Chicago Bd. Options Exch., Inc. v. Int'l Sec. Exch., LLC, 677 F.3d 1361, 1372 (Fed. Cir. 2012)).

         In SciMed, we instructed that

[w]here the specification makes clear that the invention does not include a particular feature, that feature is deemed to be outside the reach of the claims of the patent, even though the language of the claims, read without reference to the specification, might be considered broad enough to encompass the feature in question.
SciMed, 242 F.3d at 1341. There, we determined that the patent claims covered balloon dilation catheters with coaxial lumens and excluded catheters with dual lumens, even though no language in the claims expressly provided for such an exclusion. Id. at 1340. The specification cited the disadvantages of prior art dual lumens and pointed out the advantages of the co-axial *1030 lumens that were the subject of the SciMed patents. Id. at 1342-43. The patent's characterization of the "present invention" also included several references to an annular, i.e. coaxial lumen. Id. at 1343. Further, the specification disclosed that an annular sleeve structure "is the basic sleeve structure for all embodiments of the present invention contemplated and disclosed herein." Id. We held that the specification language "defines SciMed's invention in a way that excludes the dual, or side-by-side, lumen arrangement." Id.
In Openwave, we affirmed the district court's construction of "mobile device" to exclude devices containing computer modules. 808 F.3d at 517. The patent specification was "rife with remarks that disparage and, therefore, disclaim mobile devices that incorporate computer modules." Id. at 514. The patent detailed the many problems of incorporating a computer module into a mobile device, and distinguished the present invention from prior art devices that did just that. Id. at 515-16. We concluded that "it is difficult to envisage how, in light of the repeated disparagement of mobile devices with 'computer modules' discussed above, one could read the claims of the patents-in-suit to cover such devices." Id. at 517.

Indiviorl, 752 Fed.Appx. at 1029-30.

         Thus, based on SciMed and Openwave, the Federal Circuit found a textual basis for continuing to impute a drying limitation to the '305 Patent's claims: "[T]he '305 patent is 'rife with remarks that disparage, and therefore, disclaim' solely using conventional top air drying to form films. The specification instructs that using such methods produces films without content uniformity-a claim limitation and a key feature of the invention." Id. at 1030. The Court was persuaded that "continuously cast film" has an inherent drying limitation because the film, which starts as a liquid, has to be dried to ultimately become a solid film. Id. at 1031-32. Moreover, "[t]he specification makes clear that a film produced using only conventional top air drying cannot satisfy the claim limitations ... As such, the express disclaimer of conventional top air drying in the specification disavows not just a process step from process claims, but also films produced by these drying methods from the scope of the '305 composition claims." Id. at 1032.

         In sum, the Federal Circuit found that Indivior was unlikely to succeed on the merits of infringement because the disavowals in the specification placed DRL's conventional, top air drying films outside the scope of the '305 Patent. Id. at 1031-34.

         The Federal Circuit also examined the cases litigated between Indivior's predecessor (Reckitt Benckiser) and DRL in the Delaware Litigation. There, "The Delaware Court determined that the patentee disavowed solely using conventional air drying from the top to produce the claimed films" in the '514 Patent. Id. at 1027. In reviewing the '305 Patent and the '514 Patent, the Federal Circuit found that the only difference between the two patents was that the "'305 claims contain the term 'continuously cast' in place of 'dried' and 'drying.' There is no dispute that there are no other material differences between the claims . . . While the language of the claim terms changed, the scope of the claims did not materially change." Id. at 1034-35 (citations omitted). Thus, the Federal Circuit also held that claim preclusion likely barred Indivior's suit as the '305 Patent was patentably indistinct from the '514 Patent. Id. at 1035.

         Judge Newman issued a dissenting opinion in which she first criticized the majority for failing to credit the district court's "equitable discretion, and instead mak[ing] appellate findings of the merits of infringement, although there has been no trial of infringement." Id. at 1036-37 (Newman, J., dissenting). Judge Newman also disagreed with the majority's efforts to read a drying limitation into the '305 Patent claims when that process limitation, present in the '514 Patent, had been dropped for purposes of the '305 Patent. Id. at 1037-38. Thus, in her view, it was improper for the majority "to rewrite a product claim to contain a process limitation from the specification - here contained in a preferred but not sole embodiment- for it confounds the roles of the specification and the claims." Id. at 1037. The majority committed further error, wrote Judge Newman, because it treated the Delaware court's decisions on a different patent, the '514 Patent, as barring suit in this action on the '305 Patent. Id. at 1040.

         Indivior then filed a petition for en banc rehearing, essentially espousing the position of the dissent.

         D. Alvogen

         Meanwhile, on January 22, 2019, Indivior moved in this Court for temporary restraints and a preliminary injunction to prevent Alvogen from launching its generic product prior to the Federal Circuit's issuance of its mandate in Indivior I. (Dkt. No. 7106 at ¶ 83). I granted a temporary restraining order ("TRO") enjoining Alvogen from launching in order to preserve the status quo pending the issuance of the mandate. (Id. at DE 88). I also granted Alvogen the opportunity to apply by telephone for the posting of a reasonable bond should it receive FDA approval for its Suboxone film. (Id.). After a hearing on the preliminary injunction application, on January 24, 2019, I entered an amended order to show cause that temporarily restrained and enjoined Alvogen and ordered Indivior to post a bond or other security in the amount of $18 million. (Id. at DE 102). On February 1, 2019, the parties agreed and stipulated, and I so ordered, that Alvogen would be enjoined from "engaging in the use, offer to sell, or sale within the United States, or importing into the United States its generic buprenorphine-and naloxone-containing transmucosal film products." (Id. at DE 105). The temporary restraints were dependent on the final outcome of the Indivior I appeal. (Id.). Indivior later agreed to post a second bond that increased the total value of the bonds posted to $36 million. (Id.).

         On February 4, 2019, the Federal Circuit denied rehearing. On February 19, 2019, the Federal Circuit issued its mandate vacating the DRL preliminary injunction. The same day, I vacated the injunctive restraints. (Id. at DE 119). Alvogen then proceeded to bring to market its Suboxone film.

         Alvogen now moves for an order granting it an immediate recovery on the bonds. (Dkt. No. 7106 at ¶ 148, 149, 171). ...


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