Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Endo Pharmaceuticals Inc. v. Actavis Inc.

United States District Court, D. Delaware

August 30, 2017

ENDO PHARMACEUTICALS INC. and MALLINCKRODT LLC, Plaintiffs,
v.
ACTAVIS INC., ACTAVIS SOUTH ATLANTIC LLC, ACTAVIS PHARMA, INC., ACTAVIS ELIZABETH LLC, ACTAVIS HOLDCO U.S., INC., and TEVA PHARMACEUTICALS USA, INC. Defendants.

          Jack B. Blumenfeld, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE; Derek J. Fahnestock, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE; Stephen J. Kraftschik, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE; Jonathan D. Loeb, Esq., DECHERT LLP, Mountain View, CA; Martin J. Black, Esq., DECHERT LLP, Philadelphia, PA; Sharon K. Gagliardi, Esq., DECHERT LLP, Philadelphia, PA; Julie Latsko, Esq., DECHERT LLP, Philadelphia, PA; Joseph Gribbin, Esq., DECHERT LLP, Philadelphia, PA; Robert D. Rhoad, Esq., DECHERT LLP, Princeton, NJ; Brian M. Goldberg, Esq., DECHERT LLP, Princeton, NJ. Attorneys for Plaintiff Endo Pharmaceuticals Inc.

          Jack B. Blumenfeld, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE; Derek J. Fahnestock, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE; Stephen J. Kraftschik, Esq., MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, DE; Jeffrey J. Toney, Esq., KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, Atlanta, GA; Rodney R. Miller, Esq., KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, Atlanta, GA; Paul G. Williams, Esq., KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, Atlanta, GA; Marcus A. Barber, Esq., KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, Redwood Shores, CA. Attorneys for Plaintiff Mallinckrodt LLC.

          Adam W. Poff, Esq., YOUNG CONAWAY STARGATT & TAYLOR LLP, Wilmington, DE; Robert M. Vrana, Esq., YOUNG CONAWAY STARGATT & TAYLOR LLP, Wilmington, DE; Charles A. Weiss, Esq., HOLLAND & KNIGHT LLP, New York, NY; Howard S. Suh, Esq., HOLLAND & KNIGHT LLP, New York, NY; Eric H. Yecies, Esq., HOLLAND & KNIGHT LLP, New York, NY; Nicholas P. Chiara, Esq., HOLLAND & KNIGHT LLP, New York, NY. Attorneys for Defendants Actavis Inc., Actavis South Atlantic LLC, Actavis Pharma, Inc., Actavis Elizabeth LLC, and Actavis Holdco U.S., Inc.

          Adam W. Poff, Esq., YOUNG CONAWAY STARGATT & TAYLOR LLP, Wilmington, DE; Robert M. Vrana, Esq., YOUNG CONAWAY STARGATT & TAYLOR LLP, Wilmington, DE; James F. Hurst, Esq., KIRKLAND & ELLIS LLP, Chicago, IL; Jeanna M. Wacker, Esq., KIRKLAND & ELLIS LLP, New York, NY; John C. O'Quinn, Esq., KIRKLAND & ELLIS LLP, Washington, DC. Attorneys for Defendant Teva Pharmaceuticals USA, Inc.

          TRIAL OPINION

          ANDREWS, U.S. DISTRICT JUDGE.

         Plaintiffs brought this patent infringement action against two Actavis defendants on November 7, 2014, alleging that they had infringed U.S. Patent No. 8, 871, 779 ("the '779 patent") by filing Abbreviated New Drug Application ("ANDA") No. 20-3930 seeking to enter the market with a generic version of Plaintiffs' Opana ER product, which is an extended-release oxymorphone tablet. (D.I. 1). On the same day, Plaintiffs also filed suit separately against Defendant Teva, alleging infringement of the '779 patent through Defendant Teva's filing of ANDA No. 20-4324, which also sought approval for a generic version of extended-release oxymorphone tablets. (Civ. Act. No. 14-1389, D.I. 1). The parallel case against Defendant Teva proceeded to a bench trial in July 2016 at which Defendant Teva stipulated to infringement but asserted several defenses, including invalidity on the basis of obviousness. (Civ. Act. No. 14-1389, D.I. 192 at 6). On October 7, 2016, the Court issued a trial opinion holding that Defendant Teva had not proved by clear and convincing evidence that any of the asserted claims of the '779 patent were invalid. (Id. at 30).

         On October 31, 2016, the Actavis Defendants filed an amended disclosure statement, notifying the Court that they had been acquired by Defendant Teva and that, as a result, the Actavis Defendants operate as wholly-owned subsidiaries of Defendant Teva. (D.I. 125 at 1). In light of this disclosure, Plaintiffs requested that the schedule in the instant case be extended so that they could amend their complaint to name Teva as a defendant, conduct additional discovery related to the acquisition, and pursue summary judgment on the basis of res judicata and/or collateral estoppel. (D.I. 128). On December 8, 2016, 1 issued an order denying the request to postpone the trial, but allowing Plaintiffs to file an amended complaint and granting Plaintiffs a two-month period in which to conduct fact discovery related to the acquisition. (D.I. 139).

         Plaintiffs filed an amended complaint naming five Actavis entities and Teva as defendants, which included a new Count VII seeking a declaratory judgment that all defendants were precluded from litigating the validity of the '779 patent on the basis of the Court's decision in Civ. Act. No. 14-1389. (D.I. 140). The Actavis Defendants and Defendant Teva separately moved to dismiss Count VII on the bases that Plaintiffs had not plead privity of the parties or identical causes of action and/or issues. (D.I. 147). The Court granted the motion to dismiss Count VII as to all defendants on the basis that claim and/or issue preclusion did not provide an independent basis for relief. (D.I. 172).

         This case concerns two molecules. The first is 14-hydroxydihydromorphinone, also referred to as "oxymorphone" or "oxymorphone HO."[1] The other is 14-hydroxymorphinone, also referred to as "oxymorphone ABUK." ABUK, which stands for alpha, beta-unsaturated ketones, is a term used to describe a double bond between the alpha and beta carbons in a ketone. (Trial Transcript ("Tr.") at 37:14-38:6). The difference between oxymorphone and oxymorphone ABUK, then, is that oxymorphone is saturated, meaning there is only a single bond between the alpha and beta carbons. Oxymorphone ABUK is considered a precursor of oxymorphone because it can be made into oxymorphone by adding a hydrogen, resulting in a single bond. (Tr. 76:19-79:19).

         Oxymorphone is an opioid that has been known and used as a pain reliever for over fifty years. (Tr. 34:8-14). Prior to 2002, manufacturers of oxymorphone were aware of the impurity now known as oxymorphone ABUK. (Tr. 222:12-21). During the period before 2002, manufacturers regularly sold oxymorphone HO with oxymorphone ABUK levels in the range of thousands of parts per million ("ppm"). (Tr. 329:7-14). In 2002, the FDA informed Mallinckrodt and several other manufacturers that it was concerned about the levels of ABUK in certain products. (Tr. 223:7-225:10). The FDA informed Mallinckrodt that it intended to impose limits on the levels of ABUK, and that it might require limits as low as 0.001 percent (or 10 ppm) ABUK. (Id.). In 2004, the FDA mandated that opioid manufacturers lower the levels of ABUK in opioid pharmaceuticals to less than 10 ppm. (Tr. 224:16-19). For the purposes of this opinion, oxymorphone HC1 which contains less than 10 ppm of oxymorphone ABUK-and thus complies with FDA's mandate-will be referred to as "low-ABUK oxymorphone."

         In 2005, Mallinckrodt succeeded in reaching the low ABUK levels mandated by the FDA for oxymorphone HC1. Mallinckrodt applied for a patent on its new low-ABUK oxymorphone product. The application ultimately issued as the '779 patent. The asserted claims of the '779 patent[2] are all product claims directed to low-ABUK oxymorphone.

         Independent claim 1 of the '779 patent reads:

A hydrochloride salt of oxymorphone comprising less than 0.001% of 14-hydroxymorphinone.

('779 patent, claim 1). Dependent claim 2 limits the level of 14-hydroxymorphinone to less than 0.0005%. (Id. at claim 2). Dependent claim 3 claims a pharmaceutically acceptable form of the hydrochloride salt in claim 1. (Id. at claim 3). Independent claim 4 reads:

         A hydrochloride salt of a morphinan-6-one compound corresponding to Formula (2):

         (Image Omitted)

         comprising less than 0.001% measured by HPLC of an a, P-unsaturated ketone compound corresponding to Formula (3):

         (Image Omitted)

wherein the morphinan-6-one compound is oxymorphone and wherein X is -N(Rn)-;
R1 and R2 are hydrogen;
R3 is hydroxy;
R10 is hydrogen;
R14 is hydroxy; and
R17 is methyl.

(Id. at claim 4). Dependent claim 5 limits the level of 14-hydroxymorphinone to 0.0005%. (Id. at claim 5). Dependent claim 6 claims a pharmaceutical formulation of the oxymorphone chloride in claim 4. (Id. at claim 6).

         The Court held a bench trial on February 21-23, 2017. The Actavis Defendants concede that their proposed products meet all limitations of the'779 patent. (D.I. 170-1 at 2). The Actavis Defendants argue that the '779 patent is invalid as obvious, anticipated, and lacking written description.[3]

         I. COLLATERAL ESTOPPEL

         Plaintiffs have raised, and I have rejected, a variety of preclusion arguments twice since Defendants notified the court of Teva's acquisition of Actavis. (D.I. 128, 139, 140, 171). In post-trial briefing, Plaintiffs again assert that all Defendants are collaterally estopped from challenging validity on the basis of the judgment entered against Teva in Civ. Act. No. 14-1389.

         Collateral estoppel requires a finding that "(1) the identical issue was previously adjudicated; (2) the issue was actually litigated; (3) the previous determination was necessary to the decision; and (4) the party being precluded from relitigating the issue was fully represented in the prior action." Raytech Corp. v. White, 54 F.3d 187, 190 (3d Cir. 1995).

         Plaintiffs argue that because obviousness was tried in the earlier case and obviousness is "the only remaining validity issue" in the instant case, the identical issue element of collateral estoppel is met. (D.I. 199 at 11). Plaintiffs assert that this is the only dispute as to whether collateral estoppel applies to bar Defendant Teva from challenging the validity of the '779 patent. (Id.). According to Plaintiffs, "validity is a single, overarching issue for collateral estoppel purposes." (Id. at 12).

         Defendants first respond that Defendant Teva did not contest validity at trial. (D.I. 216 at 9). Plaintiffs seize on this as a purported admission that mandates judgment as a matter of law of non-obviousness against Defendant Teva. (D.I. 220 at 6). I disagree. The ANDA at issue in this case, the filing of which represents the act of infringement providing the jurisdictional basis for this suit, was filed not by Defendant Teva, but by the Actavis Defendants. Therefore, Plaintiffs' argument that Defendant Teva is collaterally estopped from doing anything first requires a finding that Defendant Teva and the Actavis Defendants are the same party.

         I do not think Plaintiffs have demonstrated the requisite privity between Defendant Teva and the Actavis Defendants to invoke collateral estoppel to preclude any Defendant from challenging the validity of the '779 patent. The Actavis Defendants were not a party to the earlier suit, were not represented in that suit, and did not participate in that litigation. Furthermore, the ANDA that provides the jurisdictional basis for this suit is different from the ANDA being challenged in the previous suit and each of these two AND As were filed by different parties. I fail to see how I could preclude the Actavis Defendants from challenging the validity of this patent on the basis that a different party, who happened to acquire the Actavis Defendants long after this suit was filed, previously litigated the validity of the patent. This is not a case of Defendant Teva getting a second opportunity to challenge validity. Rather, it is a case of the Actavis Defendants getting their own opportunity to litigate their own suit predicated on their own ANDA. I hold that the Actavis Defendants are not collaterally estopped from litigating the validity of the '779 patent. As Defendant Teva did not present evidence at trial challenging the validity of the '779 patent, there is no reason to apply collateral estoppel as to Defendant Teva.

         II. DATE OF INVENTION

         Before I can determine whether Defendants' asserted references are prior art to the '779 patent, I must first determine the invention date of each of the claims. The provisional application which ultimately matured into the '779 patent was filed on March 2, 2006, and this is the priority date referenced on the face of the patent. At trial, Plaintiffs presented evidence they claim establishes that the invention was conceived of and reduced to practice no later than February 2, 2005. (Tr. 616:18-618:11). As part of their invalidity case, Defendants presented the Casner reference. (Tr. 119:16-121:6). Casner is a U.S. Patent Application filed on September 23, 2005. (DTX-008). Plaintiffs do not dispute that Casner qualifies as prior art unless Plaintiffs can establish conception and reduction to practice prior to September 23, 2005.

         As an initial matter, I note that Defendants incorrectly state the burden of proof for establishing conception and reduction to practice. Defendants assert that it is the Plaintiffs' burden to prove the earlier priority date. (D.I. 201 at 42). This is incorrect. Defendants rely on PowerOasis as support for the proposition that the "burden is on patentee to prove earlier priority date once prior art is identified." (Id. (citing PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299, 1305-06 (Fed. Cir. 2008))). Defendants misstate the Federal Circuit's holding in PowerOasis. The court stated that once the challenger had "established by clear and convincing evidence" that the asserted reference qualified as prior art, "the burden was on [Plaintiff] to come forward with evidence to the contrary." PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299, 1305 (Fed. Cir. 2008). As the court later clarified, PowerOasis does not mean the patentee has the burden of persuasion; rather, the patentee has only a burden of production. Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1329 (Fed. Cir. 2008). As the court explained,

once a challenger (the alleged infringer) has introduced sufficient evidence to put at issue whether there is prior art alleged to anticipate the claims being asserted, prior art that is dated earlier than the apparent effective date of the asserted patent claim, the patentee has the burden of going forward with evidence and argument to the contrary

Id. Once Plaintiffs meet their burden of production, the burden shifts back to Defendants to prove by clear and convincing evidence that Plaintiffs are not entitled to the earlier date of invention. Id. at 1327-28.

         Defendants do not contest conception, but, rather, contend only that Plaintiffs did not establish reduction to practice by February 2, 2005. (D.I. 201 at 42). Reduction to practice is a question of law "based on subsidiary factual findings." Teva Pharm. Indus, v. AstraZeneca Pharm. LP, 661 F.3d 1378, 1381 (Fed. Cir. 2011). Reduction to practice requires the inventor demonstrate that he "(1) constructed an embodiment or performed a process that met all the claim limitations and (2) determined that the invention would work for its intended purpose." Teva Pharm., 661 F.3d at 1383. "An inventor need not understand precisely why his invention works in order to achieve an actual reduction to practice." Id.

         As to the chemical composition claims, claims 1, 2, 4, and 5, Defendants argue that Plaintiffs did not have in February 2005 "a workable invention that was suitable for its intended purpose of reducing ABUK levels in oxymorphone HC1 to less than 10 or less than 5 ppm." (D.I. 201 at 43). At trial, Plaintiffs presented the results of experiments designed "to remove the oxymorphone ABUK." (Tr. 362:8-22). The analysis Plaintiffs presented was dated February 2, 2005. (Tr. 364:14-22; JTX-23 at 108). Plaintiffs' expert, Dr. Buehler, described experiments and analysis of a research sample which were recorded in dated and signed lab notebooks, the results of which showed "that the sample had less than five parts per million of the ABUK in question." (Tr. 362:23-365:1; PTX-223 at 6; JTX-23 at 106, 108).

         Dr. Buehler reached this conclusion by analyzing the results of the experiments in conjunction with his knowledge of the sensitivity of the instrument used to measure the ABUK impurities. The lab notebook Plaintiffs presented states that no ABUK was detected. (JTX-23 at 108). Plaintiffs presented evidence that the mass spectrometer instrument used to perform the analysis could detect ABUK levels at least as low as five ppm. (Tr. 477:8-14, JTX-52 at MAL-OPA0043288-290). Plaintiffs also presented additional validation studies confirming the sensitivity of the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.