United States District Court, D. Delaware
UCB, INC., UCB BIOPHARMA SPRL, RESEARCH CORPORATION TECHNOLOGIES, INC. and HARRIS FRC CORPORATION, Plaintiffs,
HETERO USA INC. and HETERO LABS LIMITED, Defendants.
HONORABLE LEONARD P. STARK UNITED STATES DISTRICT JUDGE
Wilmington this 28th day of September, 2017,
having considered the parties' submissions related to (i)
Plaintiffs UCB, Inc., UCB BioPharma SPRL, Research
Corporation Technologies, Inc., and Harris FRC
Corporation's (collectively, “Plaintiffs” or
“UCB”) motion for judgment on the pleadings (D.I.
11); and (ii) Defendants Hetero USA Inc. and Hetero Labs
Limited's (collectively, “Defendants” or
“Hetero”) cross-motion to stay proceedings
pending the conclusion of the appeal (“Accord
Appeal”) to the Federal Circuit in UCB, Inc. v.
Accord Healthcare, Inc., C.A. No. 13-1206-LPS
(“UCB v. Accord”) or ex parte
reexamination Control No. 90/013, 709 (“reexam”),
whichever, if either, is first to find the asserted claims of
the patent-at-issue in this case, U.S. Reissue Patent No. 38,
551 (“the '551 patent”), invalid (D.I. 14),
HEREBY ORDERED that: (i) Plaintiffs' motion for judgment
on the pleadings (D.I. 11) is DENIED WITHOUT PREJUDICE; and
(ii) Defendants' motion for a stay (D.I. 14) is GRANTED
IN PART and DENIED IN PART, as explained further below.
Plaintiffs first filed a patent infringement action asserting
the '551 patent against Defendants based on
Defendants' filing of ANDA No. 204787 in July 2013. (D.I.
1 ¶ 34) Hetero, a defendant in the consolidated action
UCB v. Accord in this Court, served discovery
requests, helped develop invalidity contentions, participated
in claim construction, and conducted fact and expert
discovery as part of a defense team. (D.I. 12 at 4) Six weeks
before trial, Hetero amended its ANDA application to convert
its certification from Paragraph IV to Paragraph III (meaning
it was no longer seeking FDA approval to market its generic
drug product before expiration of the '551 patent), and
was dismissed from the suit upon stipulation of the parties.
(D.I. 12 at 4)
remaining parties to UCB v. Accord proceeded to
trial without Hetero. After post-trial briefing had
concluded, Hetero notified Plaintiffs that it had once again
amended its certification - this time, back to Paragraph IV -
and once again was asserting that the '551 patent is
invalid. (D.I. 18 at 1) It was also, once again, seeking to
market its ANDA product before expiration of the '551
patent. (See D.I. 18 at 1) On June 17, 2016,
Plaintiffs filed the instant patent infringement action
against Defendants, asserting again that Defendants' ANDA
infringed the '551 patent. (D.I. 1) The parties
stipulated to a stay of all proceedings pending this
Court's decision in UCB v. Accord. (D.I. 7)
September 2, 2016, this Court issued a final opinion in
UCB v. Accord, finding the asserted claims of the
'551 patent infringed and not invalid. (See C.A.
No. 13-1206-LPS D.I. 313, 323) The judgment entered in that
case is currently on appeal to the Federal Circuit, which
heard oral argument on August 8, 2017. (See UCB, Inc. v.
Accord Healthcare, Inc., No. 16-2610 (Fed. Cir.)) Also
pending is the reexam of the '551 patent, which was
accepted for filing on April 29, 2016. (D.I. 18 at
this Court's opinion issued in UCB v. Accord,
the parties' stipulated stay lifted and Defendants filed
their Answer, admitting infringement but asserting
counterclaims for a judgment of invalidity based on the same
anticipation, obviousness, and obviousness-type double
patenting theories that had been litigated in UCB v.
Accord. (See D.I. 8) On September 13, 2016,
Plaintiffs filed their motion for judgment on the pleadings.
(D.I. 11) In their motion, Plaintiffs contend that Defendants
have admitted their proposed generic product infringes claims
9, 10, and 13 of the '551 patent, and further that they
“had a full and fair opportunity to litigate the
validity of the '551 patent in [UCB v. Accord],
which was decided in Plaintiffs' favor. [Defendants]
should not be allowed to try again.” (D.I. 12 at 2)
October 5, 2016, Defendants responded to Plaintiffs'
motion by opposing judgment on the pleadings and cross-moving
for a stay. (See D.I. 14, 15) Defendants seek a stay
of proceedings in this case pending a decision by the Federal
Circuit in the Accord Appeal or completion of the
reexam, whichever, if either, is first to find the asserted
claims invalid. (See D.I. 14)
Whether or not to stay litigation is a matter left to the
Court's discretion. See Dentsply Int'l Inc. v.
Kerr Mfg. Co., 734 F.Supp. 656, 658 (D. Del. 1990). In
exercising this discretion, the Court must weigh the
competing interests of the parties and attempt to maintain an
even balance. See Landis v. N. Am. Co., 299 U.S.
248, 254-55 (1936). Courts typically rely on three factors in
determining whether a stay is appropriate: (1) whether a stay
will simplify the issues for trial, (2) whether discovery is
complete and a trial date has been set, and (3) whether a
stay would unduly prejudice or present a clear tactical
disadvantage to the non-moving party. See Id.
Sometimes courts also consider whether the moving party would
face hardship or inequity in going forward with the
litigation. See Enhanced Sec. Research, LLC v. Cisco
Sys., Inc., 2010 WL 2573925, at *3 (D. Del. June 25,
potential for simplification of the issues in this case is
significant. If the Federal Circuit finds some or all of the
asserted claims of the '551 patent invalid, its decision
would moot some or all of Plaintiffs' claims. The same is
true of the PTO's decision in the reexam. If the reexam
results in any claim being invalidated, and that decision is
upheld on appeal (or is not appealed), the consequence would
be the elimination from the instant lawsuit of all
infringement and invalidity issues based on that claim. Thus,
it would be potentially wasteful to litigate the '551
patent at the same time that the Federal Circuit and the PTO
are reviewing its validity. Alternatively, if the
Accord Appeal results in a finding that any claim of
the '551 patent has not been proven invalid, it is quite
likely that the validity of such a claim would not have to be
relitigated in the instant action - or, if it should need to
be evaluated again, the litigation of that issue is certain
to be far narrower, and less complex, than
otherwise. Additionally, if the asserted claims were
to be amended during the reexam, the scope of the claims to
be litigated may change. The simplification factor, then,
supports a stay.
second factor, whether discovery is complete and a trial date
has been set, further supports a stay. While this case is
likely to be able to be completed expeditiously and with
relatively little (if any) discovery, given the parties'
experience litigating similar, if not identical, issues in
UCB v. Accord (a case in which Defendants remained
parties until almost literally the “eve of
trial”), it is nonetheless true that this particular
case is in its infancy. Discovery is not necessarily
“complete” and no trial date has been set -
indeed, a scheduling order has not yet been entered.
Court is not persuaded that a stay of an appropriate length
will unduly prejudice or present a clear tactical
disadvantage to Plaintiffs. Though Plaintiffs have a valid
interest in the prompt resolution of pending litigation, it
is almost certain that the Accord Appeal will be
resolved well before this case goes to trial, and thus a stay
until a decision is issued in that appeal has the potential
to conserve the time and resources of the Court and the
parties - including Plaintiffs. Additionally, the 30-month
stay of FDA approval does not expire until (at the earliest)
November 5, 2018 (see D.I. 3; see also D.I.
20 at 2 n.2), meaning - given the unusual circumstances
here - that expedited resolution of this case on the merits
may be possible before expiration of the stay, once the
Accord Appeal is completed.
timing for the completion of the reexam is less predictable,
although it is nearly certain to take longer to conclude than
will the Accord Appeal (especially if an appeal is
taken from the reexam). Given the “average length it
takes to complete a reexamination (including appeals), it
follows that the stay, if granted, would almost certainly
last many years.” Cooper Notification, Inc. v.
Twitter, Inc., 2010 WL 5149351, at *4 (D. Del. Dec. 13,
2010). Such a delay “may result in some inherent
prejudice to the plaintiff.” Nestle Oil OYJ v.
Dynamic Fuels, LLC, 2013 WL 3353984, at *2 (D. Del. July
Weighing the pertinent factors, and exercising discretion to
formulate a proper case-specific resolution, the Court
concludes that it is appropriate to stay this action until
the earlier of (i) the issuance of a decision by the Federal
Circuit in the Accord Appeal, or (ii) January 31,
2018. In this way, the Court maximizes the likelihood that it
will have the benefit of any holding or views the Federal
Circuit issues with respect to issues that are overlapping
with the issues presented in the instant litigation. However,
as the stay will expire in approximately four months - at
which point more than nine months will be left on the