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Juno Therapeutics, Inc. v. Kite Pharma, Inc.

United States District Court, D. Delaware

June 13, 2017

JUNO THERAPEUTICS, INC., MEMORIAL SLOAN KETTERING CANCER CENTER, and SLOAN KETTERING INSTITUTE FOR CANCER RESEARCH, Plaintiffs;
v.
KITE PHARMA, INC., Defendant.

          Jack B. Blumenfeld, Esq., MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, DE; Morgan Chu, Esq., IRELL & MANELLA LLP, Los Angeles, CA; Andrei Iancu, Esq., IRELL & MANELLA LLP, Los Angeles, CA; Alan J. Heinrich, Esq., IRELL & MANELLA LLP, Los Angeles, CA; Elizabeth C. Tuan, Esq., IRELL & MANELLA LLP, Los Angeles, CA.

          Attorneys for Plaintiff Kelly E. Farnan, Esq., RICHARDS LAYTON & FINGER, P.A., Wilmington, DE; Leora Ben-Ami, Esq., KIRKLAND & ELLIS LLP, New York, NY; Patricia A. Carson, Esq., KIRKLAND & ELLIS LLP, New York, NY; Mira Mulvaney, Esq., KIRKLAND & ELLIS LLP, New York, NY; Christopher J. Citro, Esq., KIRKLAND & ELLIS LLP, New York, NY. Attorneys for Defendant

          MEMORANDUM OPINION

          ANDREWS, U.S. DISTRICT JUDGE

         Presently before the Court is Defendant's Motion to Dismiss (D.I. 8) and related briefing (D.I. 9, 16, 19). For the reasons that follow, Defendant's motion is granted.

         I. Background

         Plaintiffs in this action are the assignee and exclusive licensee of U.S. Patent No. 7, 446, 190 ("the '190 patent"). (D.I. 16 at 7). Plaintiffs have not yet successfully developed an FDA approved therapy based on the invention disclosed in the '190 patent. (D.I. 9 at 10). Defendant, on the other hand, has initiated submission of a Biologies License Application ("BLA") to the FDA for a therapy Plaintiffs contend infringes or will infringe the '190 patent.[1](D.I. 16 at 6). Defendant filed a petition for Inter Partes Review ("IPR") with the Patent & Trademark Office in 2015 seeking cancellation of all claims of the '190 patent. (D.I. 1, ¶19). The petition was granted, but on December 16, 2016, the Patent Trial and Appeal Board ("PTAB") issued a final decision finding Petitioner (Defendant in the instant action) had not proven that any of the claims were invalid. (D.I. 16 at 9). Plaintiffs brought this action on December 19, 2016, seeking a declaratory judgment that Defendant infringes or will infringe the '190 patent.

         II. Legal Standard

         The purpose of the Declaratory Judgment Act is "to prevent avoidable damages from being incurred by a person uncertain of his rights and threatened with damage by delayed adjudication." Minnesota Min. & Mfg. Co. v. Norton Co., 929 F.2d 670, 673 (Fed. Cir. 1991).

         For a court properly to exercise declaratory judgment jurisdiction, there must exist "a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941). Determining whether immediacy and reality are present is fact specific and must be determined on a case-by-case basis by considering the totality of the circumstances. Medlmmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007). "The burden is on the party claiming declaratory judgment jurisdiction to establish that such jurisdiction existed at the time the claim for declaratory relief was filed and that it has continued since." Benitec Australia, Ltd. v. Nucleonics, Inc., 495 F.3d 1340, 1344 (Fed. Cir. 2007).

         In order to meet the immediacy prong, "there must be a showing of 'meaningful preparation' for making or using that product." Cat Tech LLC v. TubeMaster, Inc., 528 F.3d 871, 881 (Fed. Cir. 2008) (quoting Arrowhead Indus. Water, Inc. v. Ecolochem, Inc., 846 F.2d 731, 736 (Fed. Cir. 1988)). Timing is important for a showing of immediacy. The longer the time between when suit is initiated and when potential infringement may occur, "the more likely the case lacks the requisite immediacy." Sierra Applied Scis., Inc. v. Advanced Energy Indus., Inc., 363 F.3d 1361, 1379 (Fed. Cir. 2004). For example, immediacy was not found where an accused infringer's product "would not be finished until at least 9 months after the complaint was filed" and the accused infringer had not engaged in any marketing activities. Lang v. Pac. Marine & Supply Co., 895 F.2d 761, 764 (Fed. Cir. 1990). The Federal Circuit also found immediacy lacking where a potentially infringing product was not "built and operational until about a year after the complaint was filed-a period longer than the nine months determined to be too long in Lang." Sierra Applied Scis., Inc., 363 F.3d at 1379.

         III. Discussion

         Defendant seeks dismissal of this declaratory judgment action, arguing the Court lacks subject matter jurisdiction. (D.I. 9 at 11). Defendant contends its activities to date fall within the Safe Harbor Provision of the Patent Act and are, therefore, non-infringing activities. (Id.). Defendant further argues the alleged future infringement is speculative, as it is unclear when, or even whether, Defendant's BLA will be approved. (Id. at 18).

         As an initial matter, I reject Plaintiffs' argument that Defendant's filing of a petition for IPR and its subsequent appeal of the PTAB's final decision means that Defendant "acknowledges its belief that Article III jurisdiction exists over the parties' dispute regarding the '190 Patent." (D.I. 16 at 12). Because the right to appeal an IPR decision is provided by statute, "certain requirements of standing-namely immediacy and redressability, as well as prudential aspects that are not part of Article III-may be relaxed." Consumer Watchdog v. Wisconsin Alumni Research Found., 753 F.3d 1258, 1261 (Fed. Cir. 2014). In other words, Defendant's IPR appeal is not subject to the same requirement of immediacy as Plaintiffs' declaratory judgment action.

         Plaintiffs argue that there is no "bright-line rule" that the § 271(e)(1) safe harbor protects an alleged infringer from a declaratory judgment action. (D.I. 15). The Safe Harbor Provision of the Patent Act provides protection for potentially infringing activities if those activities are "solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products." 35 U.S.C. § 271(e)(1). Defendant argues that all of its activities to date related to the accused product fall within this provision. (D.I. 9 at 12). Specifically, Defendant contends that it has only manufactured the accused product in connection with "clinical development studies, " designed to ...


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