Pfizer Inc. v. Elan Pharmaceutical Research Corp.

• Citation: 812 F. Supp. 1352
• Decision Date: 04 February 1993
• Docket Number: Civ. A. No. 92-402 LON.
• Parties: PFIZER INC., Plaintiff, v. ELAN PHARMACEUTICAL RESEARCH CORP. and Elan Corporation, PLC, Defendants.
• Court: U.S. District Court — District of Delaware

812 F. Supp. 1352

PFIZER INC., Plaintiff, v. ELAN PHARMACEUTICAL RESEARCH CORP. and Elan Corporation, PLC, Defendants.

Civ. A. No. 92-402 LON.

United States District Court, D. Delaware.

February 4, 1993.

COPYRIGHT MATERIAL OMITTED

William J. Wade, of Richards, Layton & Finger, Wilmington, DE, Joseph A. Tate (argued), Stephen D. Brown, Judy L. Leone, and Christine C. Levine, of Dechert Price & Rhoads, Philadelphia, PA, William W. Vodra, Robert N. Weiner, and Donald O. Beers, of Arnold & Porter, Washington, DC, for plaintiff.

Jack B. Blumenfeld (argued) and Julia Heaney, of Morris, Nichols, Arsht & Tunnell, Wilmington, DE, Morgan Chu, Kenneth A. Liebman, Gary N. Frischling (argued) and Jeremy J.F. Gray, of Irell & Manella, Los Angeles, CA, for defendant Elan Pharmaceutical Research Corp.

OPINION

LONGOBARDI, Chief Judge.

I. NATURE AND STAGE OF THE PROCEEDINGS

This is an action for patent infringement. Presently before the Court is the question of whether the Plaintiff, Pfizer Inc. ("Pfizer"), has standing to bring an infringement action against Defendants Elan Pharmaceutical Research Corporation ("EPRC") and its parent, Elan Corporation, PLC ("Elan").

A. BACKGROUND

On July 9, 1992, Pfizer filed an action for patent infringement against the Defendants. Docket Item ("D.I.") 1. The complaint contains two infringement counts. In Count I, Pfizer alleges that EPRC has infringed and is infringing United States Letters Patent No. 4,412,986 ("the '986 patent") by filing a New Drug Application ("NDA") under § 505(b)(2) of the Federal Food, Drug, and Cosmetic Act. Id. at ¶ 29. Pfizer alleges in Count II that EPRC and Elan conducted clinical studies which are not protected activity under 35 U.S.C. § 271(e)(1), thereby infringing the '986 patent. Id. at ¶ 33. Pfizer seeks injunctive relief, damages, attorney's fees and costs.

Defendant EPRC filed a motion to dismiss the complaint, D.I. 13, pursuant to Rules 12(b)(6), 12(b)(7) and 19 of the Federal Rules of Civil Procedure on the ground that Pfizer lacks standing to assert a claim for infringement of the '986 patent and that Bayer AG ("Bayer"), the owner of the '986 patent, is not a party.¹

Subsequent to briefing, but prior to the Court's rendering a decision on Defendant EPRC's motion to dismiss, Pfizer filed motions for a temporary restraining order and expedited relief pursuant to Fed.R.Civ.P. 65. Pfizer sought a temporary restraining order staying the FDA's effective approval date of EPRC's NDA pending a hearing on Pfizer's motion for expedited relief, D.I. 90, and also relief pursuant to 35 U.S.C. § 271(e)(4)(A) staying the effective approval date of EPRC's NDA pending a full trial on the merits of this action, D.I. 89.²

Pfizer and EPRC briefed the motion for expedited relief,³ D.I. 92-93 and 113-118, and on December 23, 1992, the Court heard oral argument. To the extent that arguments on EPRC's motion to dismiss for lack of standing were incorporated by the parties into arguments related to Pfizer's motion for expedited relief, the Court considered both motions to be before the Court at oral argument.⁴

B. TREATMENT OF STANDING ISSUE

Although the ultimate issue before the Court is somewhat narrow, the parties have made it procedurally complex. By a motion to dismiss, Defendant EPRC challenges Pfizer's showing of standing in its complaint. Further, EPRC argues that Pfizer is not entitled to expedited relief in part because it lacks standing. EPRC's argument is that to obtain such preliminary relief, a party must show, inter alia, that it has a reasonable likelihood of success on the merits of the action at trial. See, e.g., New England Braiding Co. v. A.W. Chesterton Co., 970 F.2d 878, 882 (Fed.Cir. 1992); E.I. duPont de Nemours & Co. v. Polaroid Graphics Imaging, Inc., 706 F.Supp. 1135, 1140 (D.Del.), aff'd without opinion, 887 F.2d 1095 (Fed.Cir.1989). Manifestly, if Pfizer lacks standing to sue for patent infringement, it cannot establish a reasonable likelihood of success on the merits.

Federal courts are under an independent obligation to examine their own jurisdiction, and standing "is perhaps the most important of the jurisdictional doctrines." FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231, 110 S.Ct. 596, 607, 107 L.Ed.2d 603 (1990) (quoting Allen v. Wright, 468 U.S. 737, 750, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556 (1984)). Standing is a "threshold question in every federal case, determining the power of the court to entertain the suit." United States v. AVX Corp., 962 F.2d 108, 113 (1st Cir.1992) (quoting Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975)).

It is well settled that standing cannot be "inferred argumentatively from averments in the pleadings," Grace v. American Cent. Ins. Co., 109 U.S. 278, 284, 3 S.Ct. 207, 210, 27 L.Ed. 932 (1883), but rather "must affirmatively appear in the record," Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 511, 28 L.Ed. 462 (1884). FW/PBS, 493 U.S. at 231, 110 S.Ct. at 608. Additionally, the party who seeks the exercise of jurisdiction in his favor has the burden of clearly alleging facts demonstrating that he is a proper party to invoke judicial resolution of the dispute. Id. (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936); Warth, 422 U.S. at 518, 95 S.Ct. at 2215).

Thus, the task facing the Court is to determine whether Pfizer's standing to sue for infringement of the '986 patent "affirmatively appears in the record." See FW/PBS, 493 U.S. at 231, 110 S.Ct. at 608. Standing to sue for infringement generally rests with the legal title holder to the patent. See Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d 1574, 1579 (Fed.Cir.1991) (a party who does not hold legal title to a patent during the time of infringement as a general rule is not permitted to recover damages at law for patent infringement).⁵ Moreover, a mere licensee does not have standing to sue for patent infringement in its own name. See Waterman v. Mackenzie, 138 U.S. 252, 255, 11 S.Ct. 334, 335, 34 L.Ed. 923 (1891).

Pfizer alleges that Bayer was assigned "the entire right, title and interest in and to the invention contained in the ... '986 patent," and that Bayer and Pfizer entered into a license agreement (the "Bayer/Pfizer Agreement" or the "Agreement") which "gave Pfizer an exclusive license in the United States to make, use and sell Bayer's patented products or processes related to the compound nifedipine." D.I. 1 at ¶¶ 8-10. Pfizer also alleges that "among the Bayer patents covered by Pfizer's exclusive license is the `Nifedipine Containing Solid Preparation Composition,' patented in the '986 patent." Id. at ¶ 11. While referring to the Bayer/Pfizer Agreement as granting Pfizer certain rights related to the '986 patent, Pfizer failed to incorporate the Agreement as an exhibit to the complaint.

Pfizer has not alleged that it is the owner of the patent. In fact, Pfizer alleges that Bayer owns the entire right, title and interest in and to the invention contained in the '986 patent. D.I. 1 at ¶ 8. Clearly, Pfizer must allege that its standing to sue for infringement arises from a source other than legal title to the patent. According to the complaint, Pfizer apparently finds that source in the Bayer/Pfizer Agreement.

EPRC initially asserts that the Agreement demonstrates that Pfizer lacks standing to sue for infringement of the '986 patent. Second, EPRC contends that Pfizer is a mere licensee under the terms of the Agreement and thus lacks standing to sue for infringement as a matter of law. Third, EPRC argues that Bayer is a necessary party under Fed.R.Civ.P. 19(a) and an indispensable party under Fed.R.Civ.P. 19(b), requiring the dismissal of the action unless and until Bayer joins as a plaintiff. See D.I. 14.

The Court notes that Defendant EPRC moved to dismiss pursuant to Fed.R.Civ.P. 12(b)(6).⁶ For the present analysis, the Court will consider the standing issue in the context of Rule 12(b)(6). In support of its motion, EPRC filed a declaration from outside counsel which contained attachments including a redacted copy of the Bayer/Pfizer Agreement. See Declaration in Support of EPRC's Motion to Dismiss, D.I. 15, Exhibit ("Ex.") A. When matters outside the pleading are presented to and not excluded by the court, the Rule 12(b)(6) motion is normally treated as one for summary judgment under Rule 56. See Fed. R.Civ.P. 12(b); Rose v. Bartle, 871 F.2d 331, 340 (3d Cir.1989); JM Mechanical Corp. v. United States, 716 F.2d 190, 197 (3d Cir.1983). Here, the Court must consider the Bayer/Pfizer Agreement to determine the standing issue.

When deciding a Rule 12(b)(6) motion, the Court may consider the terms of an agreement referenced in the complaint. See Brill v. Burlington Northern, Inc., 590 F.Supp. 893, 895 n. 2 (D.Del.1984) (holding that court properly considered "those documents which were referred to in the plaintiff's amended complaint"); see also 5 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1327, at 762-63 (1990); Bechtel Corp. v. Local 215, Laborers' Int'l Union of N. Am., 405 F.Supp. 370, 374 n. 1 (M.D.Pa.1975) (in considering an agreement referred to in the complaint on a Rule 12(b)(6) motion, the Court observed that the "better practice would have been for plaintiffs to set forth the entire contract or to attach that document to the complaint in the first place"), aff'd in relevant part, 544 F.2d 1207 (3d Cir.1976). Cf. Warth v. Seldin, 422 U.S. 490, 501-02, 95 S.Ct. 2197, 2206-07, 45 L.Ed.2d 343 (1975) (explaining that it is within the trial court's power to allow or require a plaintiff to supply, by amendment to the complaint or by affidavits, further particularized allegations of fact deemed supportive of plaintiff's standing; if after this opportunity, the plaintiff's standing does not adequately appear from all materials of record, the complaint must be dismissed)....