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Novel Drug Solutions, LLC v. Imprimis Pharmaceuticals, Inc.

United States District Court, D. Delaware

September 26, 2018

NOVEL DRUG SOLUTIONS, LLC and EYE CARE NORTHWEST, PA, Plaintiffs,
v.
IMPRIMIS PHARMACEUTICALS, INC., Defendant.

          Pilar G. Kraman, Esquire: Young Conaway, Stargatt & Taylor, LLP, Wilmington, DE; Charles X. Gormally, Esquire, Paul M. Bishop, Esquire: Brach EiCHLER LLC, Roseland, N.J. -attorneys for Plaintiffs Novel Drug Solutions, LLC and Eye Care Northwest, PA

          Michael P. Kelly, Esquire, Daniel M. Silver, Esquire, Dawn Kurtz Crompton, Esquire: McCarter & English, LLP, Wilmington, DE - attorneys for Defendant Imprimis Pharmaceuticals, Inc.

          MEMORANDUM OPINION

          NOREIKA, U.S. DISTRICT JUDGE

         I. INTRODUCTION

         On April 11, 2018, Novel Drug Solutions, LLC and Eye Care Northwest (jointly "Plaintiffs") commenced this action alleging that, pursuant to the Asset Purchase Agreement ("APA") entered by the parties, Imprimis Pharmaceuticals, Inc. ("Defendant" or "Imprimis") owes Plaintiffs royalty payments for, and financial information pertaining to, an injectable compounded pharmaceutical formulation called DropLess, as well as topical formulation called LessDrops." (D.I. 1; D.I. 23 at 1). On June 29, 2018, Imprimis, moved to dismiss Counts One and Three of the Complaint. (D.I. 9). Count One sought declaratory judgment that Imprimis owes royalties on the sales of LessDrops under the APA and Count Three alleged breach of the APA for failure to pay required royalties. (Id.).

         On July 11, 2018, Plaintiffs filed their First Amended Complaint (D.I. 12) (the "Amended Complaint") adding "Factual Allegations" in support of the claims as well as Count Six for fraudulent inducement. The parties agreed that the filing of the Amended Complaint mooted the original motion to dismiss. (D.I. 15).

         Before the Court is Defendant's motion to dismiss Counts One and Three of the Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (D.I. 17).

         II. BACKGROUND

         Imprimis entered the APA, dated August 8, 2013, with Plaintiffs. (D.I. 12 at ¶ 13; D.I. 18 at 3). Plaintiffs allege that Imprimis drafted the APA. (D.I. 12 at ¶ 13). By its terms, the APA is governed by Delaware law. (D.I. 18, Ex. A at § 9.5).[1]Pursuant to the APA, Imprimis acquired certain assets, including technology and intellectual property, pertaining to a poloxamer technology. (D.I. 12 at ¶ 13). The acquired assets ("Assets") included, inter alia, the injectable DropLess formulation, as well as "all formulae, data, information, results of experimentation and testing, and other know-how," as well as "all intellectual property rights" relating thereto. (D.I. 18, Ex. A at § 1.2; D.I. 18 at 3). The APA also requires that Imprimis pay a royalty on any "Product". (D.I. 12 at ¶ 14, 15; D.I. 18, Ex. A at § 5.1). "Product" is defined as:

any product, in any form or formulation, of an injectable ophthalmological pharmaceutical composition, the composition comprising at least one therapeutically effective quantity of an anti-bacterial agent, at least one therapeutically effective quantity of an anti-inflammatory agent, at least one pharmaceutical, acceptable excipient and at least one pharmaceutical, acceptable carrier appropriate for intraocular or intravitreal injection, in each case for use in the prevention or treatment of any ophthalmic disease ....

(D.I. 12 at ¶ 15; D.I. 18, Ex. A at § 1.16) (emphasis added). No. definition or description of "an injectable ophthalmological pharmaceutical composition" is provided in the APA other than the language specifying that such a composition must comprise at least the above-referenced agents, excipient and carrier.

         After execution of the APA, Imprimis began commercializing the DropLess formulation, which all parties agree is an injectable compounded eye medication. (D.I. 18 at 4; D.I. 12 at ¶ 18). Imprimis also produced a product line called "LessDrops," a "topical eye drop" (D.I. 12 at ¶ 19) which is "sold for non-injectable, topical use." (D.I. 12 at ¶24). Plaintiffs allege that "[b]oth DropLess and LessDrops are derived from Plaintiffs' invention" (D.I. 12 at ¶23), and that Plaintiffs have not received royalty payments for LessDrops "despite the fact that the LessDrops products are identical formulations to the DropLess products." (D.I. 12 at ¶ 25).

         Plaintiffs also allege that LessDrops, while sold for topical use, "has been injected by doctors into patients" and "found to be curative and successful in improving medial difficulty." (D.I. 12 at ¶ 24). Plaintiffs further add that "[u]pon information and belief, numerous surgeons have inadvertently injected LessDrops into eye tissue without consequence and have been assured by Imprimis that the formulations are identical to DropLess." (Id.).[2] Thus, according to Plaintiffs, LessDrops is "appropriate for intraocular or intravitreal injection" and falls within the definition of Product in the APA.

         III. LE ...


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