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Pfizer Inc. v. Sandoz, Inc.

United States District Court, Third Circuit

November 4, 2013

PFIZER INC., Plaintiff,
SANDOZ INC., Defendant.


MARY PAT THYNGE, Magistrate Judge.


A. Procedural Background

On May 24, 2012, Pfizer, Inc., Wyeth LLC, and Wyeth Pharmaceuticals Inc. (collectively, "plaintiff") filed suit against Sandoz Inc. ("defendant") for infringement of U.S. Patent No. 8, 026, 276 ("the 276 patent").[1] Defendant answered on June 21, 2012, denying infringement of the 276 patent and asserting various defenses, including invalidity and preserving the potential for "additional defenses or counterclaims... including unenforceability."[2] A Rule 16 Scheduling Conference occurred on August 1, 2012.[3] Under that scheduling order, fact discovery was to be completed on April 26, 2013, [4] which was extended to June 25, 2013, [5] with expert discovery ending on October 18, 2013.[6] A final pretrial conference is scheduled for November 13, 2013 with trial to follow on December 2, 2013.[7] The deadline to amend pleadings to add claims of inequitable conduct was March 22, 2013.[8]

On February 4, 2013, defendant noticed depositions for the four inventors of the 276 patent.[9] Three of those depositions occurred after the March 22, 2013 deadline to amend pleadings.[10] Specifically, defendant's depositions of Ms. Gandhi and Dr. Rubino occurred on April 18, 2013 and May 22, 2013, respectively.[11] After a grant of a motion to extend expert report deadlines, [12] defendant did not serve opening expert reports until August 20, 2013.[13] Defendant first raised its theory of inequitable conduct in its opening expert reports[14] and subsequently, one month later, moved for leave to amend its answer, defenses and counterclaims on September 20, 2013.[15]

B. Factual Background

Plaintiff is the assignee of the 276 patent describing parenteral formulations of rapamycin.[16] Defendant is a generic manufacturer that is seeking approval of a generic formulation of plaintiff's product.[17] During prosecution of the 276 patent, plaintiff submitted Rule 131 and Rule 132 declarations to overcome prior art and obviousness rejections, respectively.[18] The Rule 131 declaration was made by the four named inventors of the 276 patent, while the Rule 132 declaration was made by inventor Dr. Rubino.[19]

C. Legal Standard

i. Rules 15(a) and 16(b)

Under Fed.R.Civ.P. 15(a), leave to amend pleadings is "freely give[n] when justice so requires."[20] Whether to grant leave to amend is up to the discretion of the court.[21] In weighing whether to grant leave to amend, the court should consider: (1) whether the movant has unduly delayed; (2) whether the amendment would unfairly prejudice the nonmovant; (3) whether the amendment is brought for an improper purpose; and (4) whether the amendment is futile.[22]

Generally, "[d]elay alone is not sufficient to justify denial of leave to amend."[23] The more dispositive factor is whether the nonmovant would suffer prejudice if leave to amend is granted.[24] To prove prejudice, the nonmovant "must do more than merely claim prejudice; it must show that it was unfairly disadvantaged or deprived of the opportunity to present facts or evidence which it would have offered had the amendments been timely."[25]

However, in addition to the requirements under Rule 15(a), Rule 16(b) governing scheduling orders must also be satisfied.[26] Under Rule 16(b), the movant must satisfy a more stringent standard by demonstrating "good cause" subject to the judge's consent.[27] This jurisdiction recognizes motions to amend function to alter the scheduling order and are, thus, controlled by Rule 16(b).[28] In order to satisfy the good cause requirement of Rule 16(b), the movant must demonstrate that, despite diligence, the amendment could not have been reasonably sought in a timely manner.[29] Unlike the analysis under Rule 15(a), which depends on prejudice to the nonmovant, the good cause standard hinges on the diligence of the movant.[30]

ii. Rule 9(b) and the Standard for Inequitable Conduct

Because the patent application process is ex parte, patent applicants and their counsel, or those involved in the preparation and prosecution of patent applications, owe a duty of candor, honesty and good faith to the Patent & Trademark Office ("PTO"). The duty of candor, good faith and honesty includes the obligations to submit truthful information and to disclose to the PTO information known to the patent applicants or their attorneys which is material to the examination of the patent application.[31] Information is deemed material if the PTO would not have allowed the claim otherwise-"but-for materiality."[32] An exception to the requirement of but-for materiality is the filing of an unmistakably false affidavit which renders the misconduct material.[33] To prove unenforceability by inequitable conduct, "the accused infringer must prove both elements-intent and materiality-by clear and ...

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