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Avanir Pharmaceuticals, Inc. v. Actavis South Atlantic LLC

United States District Court, D. Delaware

October 25, 2013

AVANIR PHARMACEUTICALS, INC., AVANIR HOLDING COMPANY, AND CENTER FOR NEUROLOGIC STUDY, Plaintiffs,
v.
ACTAVIS SOUTH ATLANTIC LLC, ACTAVIS, INC., PAR PHARMACEUTICAL, INC., PAR PHARMACEUTICAL COMPANIES, INC., IMPAX LABORATORIES, INC., WOCKHARDT, LTD., WOCKHARDT USA, LLC, WATSON PHARMACEUTICALS, INC., WATSON LABORATORIES, INC., AND WATSON PHARMA, INC., Defendants

Page 505

Jack B. Blumenfeld, Maryellen Noreika, MORRIS, NICHOLS, ARSHT & TUNNELL, LLP, Wilmington, DE; F. Dominic Cerrito, Eric Stops, Daniel Wiesner, QUINN EMANUEL URQUHART & SULLIVAN, LLP, New York, NY, Attorneys for Plaintiffs.

Steven J. Fineman, Jaclyn C. Levy, RICHARDS, LAYTON & FINGER P.A., Wilmington, DE; Richard J. Berman, Janine A. Carlan, Aziz Burgy, Amy E.L. Schoenhard, Timothy W. Bucknell, Taniel E. Anderson, ARENT FOX LLP, Washington, D.C., Attorneys for Defendants Par Pharmaceutical, Inc. and Par Pharmaceutical Companies, Inc.

John C. Phillips, Jr., Megan C. Haney, PHILLIPS, GOLDMAN & SPENCE, P.A., Wilmington, DE; Eric H. Weisblatt, Mark A. Pacella, Robert J. Scheffel, WILEY REIN LLP, Washington, D.C., Attorneys for Defendant Impax Laboratories, Inc.

OPINION

Page 506

MEMORANDUM OPINION

STARK, U.S. District Judge.

Pending before the Court is Defendants' Rule 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction Based on the Expiration of Asserted U.S. Patent No. RE38,115. (D.I. 371) For the reasons discussed below, the Court will deny the motion.

I. PROCEDURAL BACKGROUND

Avanir Pharmaceuticals, Inc., Avanir Holding Company, and Center for Neurologic Study (collectively, " Avanir" or " Plaintiffs" ) filed this patent infringement action against Actavis South Atlantic LLC, Actavis, Inc., Par Pharmaceutical, Inc., Par Pharmaceutical Companies, Inc., Impax Laboratories, Inc., Wockhardt, Ltd., Wockhardt USA, LLC, Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., and Watson Pharma, Inc. (collectively, " Defendants" ) on August 10, 2011. [1] (D.I. 1) There are three patents-in-suit. United States Patent No. RE38,115 (the " '115 patent" ) relates to formulations containing dextromethorphan (" DM" ) and quinidine (" Q" ), the active ingredients of Avanir's Nuedexta® product. United States Patent Nos. 7,659,282 (the " 282 patent" ) and 8,227,484 (the '" 484 patent" ) relate to the use of DM and Q for the treatment of a neurological disorder.

On August 5, 2013, Defendants filed a motion to dismiss Plaintiffs' claims arising under the '115 patent. (D.I. 371) After full briefing, the Court heard argument on this motion during the pretrial conference on September 3, 2013. A bench trial was then conducted from September 9 to September 13, with an additional day on October 15, 2013. During the September phase of the trial, both sides presented evidence relating to the motion to dismiss, particularly with respect to the prosecution history of the '115 patent. After hearing that evidence, the Court ordered the parties to provide supplemental briefing relating to the motion to dismiss, briefing which the parties completed on September 30, 2013. ( See D.I. 419 ¶ 6; D.I. 420-26)

II. PROSECUTION HISTORY

The prosecution history related to the '115 patent involves three interrelated lines of filings, consisting of (1) a series of original filings, (2) a series of Patent Cooperation Treaty (" PCT" ) filings, and (3) a reissuance proceeding.

On June 9, 1992, Dr. Richard Smith filed U.S. Patent Application Serial No. 07/896,053 (the '" 053 application" ). (DTX 32 at AVAN-0403490) An examiner with the United States Patent and Trademark Office

Page 507

(" PTO" ) issued a final office action for the '053 application on April 28, 1993, which required a response within three months, by July 28, 2013. (DTX 32 at AVAN-0403617-18) On August 30, 1993, the applicant mailed a petition for a retroactive one-month extension for the '053 application. (DTX 32 at AVAN-0403620) On that same date, the applicant also mailed a conditional express abandonment [2] of the '053 application (DTX 32 at AVAN-0403619) as well as a continuation-in-part application (" C-I-P" ) of the '053 application ( see id. ), which became known as U.S. Patent Application Serial No. 08/114,845 (the " '845 application" ) (DTX 127 at AVAN-0316787). The PTO granted the one-month extension for the '053 application up to August 30, 1993. (DTX 32 at AVAN-0403678) No further extensions were either sought or received. On December 8, 1993, the examiner issued a notice of abandonment of the '053 application. (DTX 32 at AVAN-0403621) In the meantime, on September 3, 1993, the '845 application was filed. (DTX 127 at AVAN-0316787)

On September 22, 1994, Drs. Richard Smith and Jonathan Licht filed PCT International Application No. PCT/US94/10771 (the " '771 application" ). (DTX 638 at AVAN-0207672-710) Subsequently, on September 19, 1996, Drs. Smith and Licht filed a U.S. national stage application of the '771 application, known as U.S. Patent Application Serial No. 08/464,792 (the " '792 application" ). (DTX 179 at AVAN-0207665) Neither the '771 application ( see DTX 638) nor the national stage '792 application ( see DTX 179 at AVAN-0207667) included priority claims to either the '053 or '845 applications.

On March 10, 1997, during prosecution of the '792 application, the examiner rejected claims 1-4 as obvious under 35 U.S.C. § 103(a) over the Zhang 1992 reference. [3] ( Id. at AVAN-0207773) In response, the applicants did not address the teachings of the Zhang 1992 reference, but instead attempted to claim priority back to the '053 application, whose filing date pre-dated the Zhang 1992 reference. ( See id. at AVAN-0207864) Specifically, the applicants contended that the '792 application enjoyed a continuous line of co-pendency back to the '053 application through (i) the '845 application and (ii) the '771 application. ( Id. ) On December 19, 1997, the examiner mailed a notice of allowability of the '792 application; no reason for the allowance was provided. ( See id. at AVAN-0207874-77) On October 7, 1998, the examiner issued an examiner's amendment removing the '053 and '845 applications from the list of cross-referenced patent applications in the first paragraph of the specification of the '792 application and replacing them with reference to the '771 application. ( Id. at AVAN-0207883-84) The '792 application issued as U.S. Patent No. 5,863,927 (the '" 927 patent" ) on January 26, 1999, without any priority claim to the '053 or '845 applications. (DTX 20)

On January 18, 2002, the applicants filed U.S. Patent Application Serial No. 10/052,698 (the " '698 application" ) for reissuance of the '927 patent. (DTX 180 at AVAN-0209475-77) The applicants sought to claim

Page 508

priority to the '053 and '845 applications. ( Id. ) The examiner issued the '698 application as the '115 patent without a reference to the '053 and '845 applications on the face of the patent; however, the '053 and '845 applications were listed in the first paragraph of the '115 patent specification. (DTX 18)

During the present litigation, on March 26, 2013, Plaintiffs filed an ePetition to revive the '053 application and correct what Defendants allege was a lack of co-pendency with the '845 application. (D.I. 371 Ex. B; see also D.I. 397 at 3) Plaintiffs did not file a terminal disclaimer with the ePetition. ( See D.I. 371 Ex. B) The ePetition was granted on the same date it was filed, March 26, 2013. ( Id. at 4)

III. LEGAL STANDARDS

Federal Rule of Civil Procedure 12(b)(1) authorizes dismissal of a complaint for lack of jurisdiction over the subject matter. As the question of subject matter jurisdiction under Rule 12(b)(1) is not unique to patent law, it is governed by the law of the regional Circuit, here the Third Circuit. See Toxgon Corp. v. BNFL, Inc., 312 F.3d 1379, 1380 (Fed. Cir. 2002) (" We review a dismissal for lack of subject matter jurisdiction according to regional circuit law, since it is a procedural question not unique to patent law." ).

Motions brought under Rule 12(b)(1) may present either a facial or factual challenge to the Court's subject matter jurisdiction. See Gould Elecs., Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000). In reviewing a factual challenge to the Court's subject matter jurisdiction, the Court is not confined to the allegations of the complaint, and the presumption of truthfulness does not attach to those allegations. See Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). Instead, the Court may consider evidence outside the pleadings, including affidavits, depositions, and testimony, to resolve any factual issues bearing on jurisdiction. See Gotha v. United States, 115 F.3d 176, 179, 36 ...


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