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Orexo AB v. Actavis Elizabeth LLC

United States District Court, D. Delaware

December 11, 2019

OREXO AB and OREXO US, INC., Plaintiffs,
v.
ACTAVIS ELIZABETH LLC, ACTAVIS PHARMA, INC., TEVA PHARMACEUTICALS USA, INC., and TEVA PHARMACEUTICAL INDUSTRIES, LTD., Defendants.

          Jack B. Blumenfeld, Derek J. Fahnestock, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware; Errol B. Taylor, Fredrick M. Zullow, Anna Brook, Jordan P. Markham, Kyanna Lewis, Nathaniel T. Browand, Venus Allahyarzadeh, MILBANK, TWEED, HADLEY & MCCLOY LLP, New York, New York Counsel for Plaintiffs

          John C. Phillips, Jr., David A. Bilson, PHILLIPS, GOLDMAN, MCLAUGHLIN, & HALL, P.A., Wilmington, Delaware; George C. Lombardi, Michael K. Nutter, Ivan M. Poullaos, John R. McNair, WINSTON & STRAWN LLP, Chicago, Illinois; Nimalka R. Wickramasekera, WINSTON & STRAWN LLP, Los Angeles, California Counsel for Defendants

          MEMORANDUM OPINION

          COLM F. CONNOLLY UNITED STATES DISTRICT JUDGE.

         Plaintiffs Orexo AB and Orexo US, Inc. (collectively, "Orexo") filed this Hatch-Waxman patent suit against Defendants Actavis Elizabeth LLC, Actavis Pharma, Inc., Teva Pharmaceuticals USA, Inc., and Teva Pharmaceutical Industries, Ltd. (collectively, "Actavis"). Orexo alleged in its complaint that Actavis's generic versions of the anti-opioid-addiction drugs Suboxone® and Subutex® directly and indirectly infringed claim 2 of U.S. Patent No. 8, 454, 996 (the "#996 patent"). D.I. 1. The Court held a five-day trial, after which the jury found that Actavis did not induce or contribute to infringement.[1] D.I. 274. Consistent with the jury's verdict, this Court entered judgment for Actavis. D.I. 279.

         Orexo has moved pursuant to Federal Rule of Civil Procedure 59(a) for a new trial "on the issues of infringement, willfulness, and damages." D.I. 283. Orexo argues a new trial is warranted because (1)1 erroneously precluded it from presenting at trial the fact that Judge Sue L. Robinson had ruled in a previous patent case (the "Zubsolv® case") that the #996 patent was not invalid and was infringed by a generic version of another anti-opioid-addiction drug, Zubsolv®, D.I. 284 at 3-10;[2] and (2) I erroneously "excluded the introduction of Orexo's patents and published patent applications (other than the [#]996 patent)," id. at 10, and "other publications," id. at 14.

         I. BACKGROUND

         A. Zubsolv®, Suboxone®, and Subutex®

         It is undisputed that Zubsolv® is an embodiment of the #996 patent. It is also undisputed that Zubsolv®, Suboxone®, and Subutex® are sublingual (i.e., applied under the tongue) drugs used to treat opioid addiction, that all three drugs have the same active ingredient (buprenorphine), and that all three drugs have a material that acts as a disintegrant.

         The parties also agree that Zubsolv® differs from Suboxone® and Subutex® in certain respects. It is undisputed, for example, that Zubsolv® contains croscarmellose sodium but Suboxone® and Subutex® do not; and that Suboxone® and Subutex® contain crospovidone, but Zubsolv® does not.

         It is similarly undisputed that Zubsolv® has a different amount of buprenorphine and a different particle size distribution than do Suboxone® and Subutex®. Actavis attempted at trial to prove Suboxone® and Subutex®'s non- infringement of the #996 patent in part by adducing testimony about these differences. Orexo objected to that testimony. In the words of Orexo's counsel:

This testimony is irrelevant and it's misleading. Comparisons between the commercial embodiment and the accused product is generally disfavored and it's not the appropriate analysis to do patent infringement[I]t has to be the accused product and a claim. ... [T]o be comparing the particle size of Zubsolv with the... accused product is going to lead the jury to think that is a relevant comparison and it's not.
For infringement, it's not [relevant]. And it also goes to the other issue that [Actavis's counsel] has been arguing. There's a difference in the amount of active ingredient in the [accused] product... [and in] Zubsolv....

Tr. at 488:21-491:22. I sustained Orexo's objection. See Tr. at 494:5-22.

         B. Actavis's Motion in Limine Regarding The Zubsolv® Case

         Five days before the pretrial conference, the parties filed a 1, 173-page proposed pretrial order (PTO). D.I. 254; D.I. 255; D.I. 256. Each side represented in the PTO that both the validity and infringement of the #996 patent would be litigated at trial. And each side included in the PTO three motions in limine.

         Actavis's first in limine motion bears on Orexo's pending motion for a new trial. Actavis sought in its in limine motion to preclude Orexo "from presenting [at trial] evidence or argument concerning the parties' prior litigation over the [#]996 patent and Judge Robinson's order [in the Zubsolv® case] holding the patent valid and infringed." D.I. 256, Ex. 16, Defendant's Motion In Limine No. 1, at 1. Actavis argued that the Zubsolv® case was irrelevant to both invalidity and infringement. And it emphasized in its motion that any "reference [to] the Zubsolv® litigation would be highly confusing to the jury, which will be charged with determining whether the products at issue in this case infringe, and extremely and unfairly prejudicial to Actavis." Id. (emphasis in the original). Actavis also noted in its motion two undisputed facts: (1) Actavis knew about the #996 patent by 2013-three years before Judge Robinson's 2016 ruling in the Zubsolv® case, see Id. at 2-3; and (2) Actavis launched its generic Suboxone® and Subutex® in 2013 and 2015, respectively-again, before Judge Robinson issued her ruling in the Zubsolv® case, see Id. at 2.

         In its response to Actavis's motion, Orexo argued that "[t]he Zubsolv decision, finding the [#]996 patent valid and infringed is highly relevant in this case (same defendant, same patent, similar buprenorphine product, and same issues)" and that "[t]he decision is probative of willful infringement and intent, and should not be excluded." D.I. 256, Ex. 16, Orexo's Response to Defendant's Motion In Limine No. 1, at 1. Orexo contended that Actavis's Zubsolv® was "based on their generic Suboxone" and that Actavis "knew that their generic Zubsolv had a material [i.e., croscarmellose sodium] that was a disintegrant and bioadhesive, and that their generic Suboxone and Subutex products had a material [i.e., crospovidone] identified in the [#]996 patent as a disintegrate and bioadhesive." Id. Thus, Orexo argued, "[t]he jury should consider whether [Actavis] should have recognized the risk of infringing a patent that survived a validity and infringement challenge by the same defendant[ ] based on a similar product (based on the accused product)." Id.

         Having reviewed carefully the parties' briefing on Actavis's motion in limine, and mindful of the five other in limine motions, eight Daubert motions, jury instructions, and other issues that needed to be addressed before trial, I stated at the pretrial conference that "I'm not going to hear argument on [the motion]" and proceeded to announce my decision. Tr. of Mar. 11, 2019 Hr'g at 74:4. I then explained:

I've made the determination under [Federal] Rule [of Evidence] 403 that I think the admission of evidence related to [the] Zubsolv litigation would confuse the jury. I think it would unfairly prejudice the defendants. It was a bench trial and not a jury trial. There were different theories of invalidity. There was an appeal, there were litigation decisions made during the course of that [case] for strategic reasons that may be irrelevant. It involved a different drug.
So there was prior art not presented in that case that apparently will be in this case, [3] and I think that therefore the degree of unfair prejudice is so significant that it would substantially outweigh the probative value that the [Zubsolv® case] evidence would have, especially since, as I understand it, there's no debate even that the patent was known to the defendants prior to the Zubsolv litigation....[S]o I am going to grant the motion.

Id. at 74:6-25 (emphasis added).

         Orexo's counsel immediately asked if he might "be heard on the issue of mostly clarification." Id. at 75:2-3. He then proceeded to argue the merits of the motion, essentially repeating the argument Orexo had put forward in its papers- namely that Judge Robinson's rulings in the Zubsolv® case were probative of willfulness and intent. See Id. at 75:6-76:6. The following exchange then occurred:

THE COURT: I don't deny there's probative value that the Zubsolv litigation has with respect to that question. I've got to conduct a balancing under Rule 403, and I think the probability is significant that references to the Zubsolv litigation will confuse the jury, will unfairly prejudice the defendants], will mislead the jury, and I think that that danger of unfair prejudice substantially outweighs the probative value it would have towards willfulness....
[OREXO'S COUNSEL]: Your Honor, does that ruling apply for example, if defendants themselves put that case and things that happened in that case in issue?
THE COURT: Well, if they put the litigation in issue, that would open the door. I can't imagine [they would]. Now, if you mean by that can they bring in evidence that was adduced in th[e] [Zubsolv®] litigation here, I mean, I would have to see, but my ruling doesn't prevent you from bringing in evidence from th[at] litigation. It's just [that] we're not going to refer to Judge Robinson's rulings, and I mean, that's what I understood [the motion in limine covered].

Mat 76:7-77:16.

         Counsel then proceeded to argue again the merits of the motion, see Id. at 77:19-83:14, after which I stated:

Look, I will say it again. I'm not saying that the Zubsolv litigation result is not probative of willfulness, knowledge, intent. I'm just doing a [Rule] 403 balanc[ing]. I've got to do it. I've got to weigh probative [value] versus potential unfair prejudice, and I don't think it's a close call. I think that the prejudicial value, the unfair prejudicial value, the potential for misleading the jury, confusing the jury and unfairly prejudicing the defendant substantially outweighs the probative value. That's my discretionary call and that's where we are.

Id. at 83:15-24. When I finished explaining my ruling, counsel stated:

Thank you, Your Honor. And I appreciate your statement that, you know, should it come up at trial where I believe that defendants opened the door on this issue ... you will hear [from] me again.

Mat 84:18-21.

         On the Monday morning that trial began, I learned that the parties had filed over the weekend a stipulation that removed the issue of the #996 patent's invalidity from the case. See Tr. at 3:8-5:6. In light of the stipulation, I asked the parties if I should reduce the amount of time I had originally set aside for the trial. See Id. at 5:3-13. Orexo's counsel responded: "[W]e believe that our affirmative case [i.e., for infringement] will be essentially the same even though validity is out of the case." Id. at 5:19-21. Counsel did not argue or suggest in any way that Actavis's decision not to pursue an invalidity defense warranted reconsideration of my decision to preclude Orexo from presenting argument or evidence about the Zubsolv® case.

         At the end of the first day of trial, the following exchanged occurred:

[OREXO'S COUNSEL]: I was reminded there's one other issue, and this is following up on Your Honor's order . . . precluding us . . . [from] referring to the . . . [Zubsolv®] litigation.
THE COURT: Yes.
[OREXO'S COUNSEL]: Even today there have been issues that in our view have touched on that litigation and things that we might have wanted to respond to by referring to the litigation. For example, things that allude to why we didn't sue other generic companies or the timing of this lawsuit.
THE COURT: Well, wait. I don't think in fairness, Mr. Taylor [Orexo's counsel], I don't recall any testimony about the timing of this lawsuit....
[OREXO'S COUNSEL]: I don't want to argue that. But I was just going to mention, Your Honor, that we'd like leave to submit to Your Honor an offer of proof on evidence that we ...

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