Allele Biotechnology & Pharm., Inc. v. Pfizer, Inc.

• Decision Date: 04 May 2021
• Docket Number: Case No.: 20-cv-01958-H-AGS
• Court: U.S. District Court — Southern District of California
• Parties: ALLELE BIOTECHNOLOGY AND PHARMACEUTICALS, INC., a California corporation, Plaintiff, v. PFIZER, INC., a Delaware corporation; BIONTECH SE, a German company; BIONTECH US, INC., a Delaware corporation; and DOES 1-30, Defendants.

ALLELE BIOTECHNOLOGY AND PHARMACEUTICALS, INC.,a California corporation, Plaintiff, v. PFIZER, INC., a Delaware corporation; BIONTECH SE, a German company; BIONTECH US, INC.,a Delaware corporation; and DOES 1-30, Defendants.

Case No.: 20-cv-01958-H-AGS

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

May 4, 2021

ORDER DENYING DEFENDANTS' MOTION TO DISMISS

[Doc. No. 37.]

On March 26, 2021, Defendants Pfizer, Inc., BioNTech SE, and BioNTech US, Inc. filed a motion to dismiss Plaintiff Allele Biotechnology and Pharmaceuticals, Inc.'s first amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (Doc. No. 37.) On April 16, 2021, Plaintiff filed a response in opposition to Defendants' motion to dismiss. (Doc. No. 38.) On April 23, 2021, Defendants filed their reply. (Doc. No. 39.)

The Court held a hearing on the matter on May 3, 2021. Ben L. Wagner and Robert Schaffer appeared for Plaintiff Allele. Charles L. McCloud, Thomas H.L. Selby, and David J. Noonan appeared for Defendant Pfizer. Bruce M. Wexler, Elizabeth L. Brann, and Merri C. Moken appeared for Defendant BioNTech. For the reasons below, the Court denies Defendants' motion to dismiss.

Background

On October 5, 2020, Plaintiff Allele filed a complaint for patent infringement against Defendants Pfizer and BioNTech, alleging infringement of U.S. Patent No. 10,221,221. (Doc. No. 1, Compl.) Specifically, Plaintiff alleges that: "The claims of the '221 Patent encompass Allele's mNeonGreen product, which is a fluorescent protein used as a biological tag in genetic engineering work." (Doc. No. 29, FAC ¶ 29.) Plaintiff further alleges that Defendants have used and continue to use mNeonGreen to research, develop, and test their SARS-CoV-2 vaccine candidates. (Id. ¶¶ 2-3, 6, 23, 37-39, 41-44, 49, 51-57.) Plaintiff further alleges that Defendants' use of mNeonGreen directly infringes the '221 patent. (Id. ¶¶ 29-31, 58-61, 69-71.)

On February 8, 2021, Defendants filed a motion pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss Plaintiff's complaint for failure to state a claim. (Doc. No. 24.) On February 25, 2021, in lieu of filing an op position to the motion to dismiss, Plaintiff filed a first amended complaint against Defendants. (Doc. No. 29, FAC.) On February 27, 2021, in light of the filing of the amended complaint, the Court denied Defendants' motion to dismiss the original complaint as moot. (Doc. No. 30 (citing Ramirez v. Cty. of San Bernardino, 806 F.3d 1002, 1008 (9th Cir. 2015)).) By the present motion, Defendants move pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss Plaintiff's first amended complaint for failure to state a claim. (Doc. No. 37-1 at 1-2, 21.)

Discussion

I. Legal Standards for a Rule 12(b)(6) Motion to Dismiss

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the pleadings and allows a court to dismiss a complaint if the plaintiff has failed to state a claim upon which relief can be granted. See Conservation Force v. Salazar, 646 F.3d 1240, 1241 (9th Cir. 2011). Federal Rule of Civil Procedure 8(a)(2) requires that a pleading stating a claim for relief contain "a short and plain statement of the claimshowing that the pleader is entitled to relief." The function of this pleading requirement is to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

A complaint will survive a Rule 12(b)(6) motion to dismiss if it contains "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Id. (quoting Twombly, 550 U.S. at 555). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (quoting Twombly, 550 U.S. at 557). Accordingly, dismissal for failure to state a claim is proper where the claim "lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory." Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008).

In reviewing a Rule 12(b)(6) motion to dismiss, a district court must accept as true all facts alleged in the complaint, and draw all reasonable inferences in favor of the claimant. See Retail Prop. Trust v. United Bhd. of Carpenters & Joiners of Am., 768 F.3d 938, 945 (9th Cir. 2014). But, a court need not accept "legal conclusions" as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Further, it is improper for a court to assume the claimant "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

In addition, a court may consider documents incorporated into the complaint by reference and items that are proper subjects of judicial notice. See Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010). If the court dismisses a complaint for failure to state a claim, it must then determine whether to grant leave to amend. See Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995); see Telesaurus, 623 F.3d at 1003 (9th Cir. 2010).

II. Defendants' Motion to Dismiss

Defendants argue that Plaintiff's first amended complaint should be dismissed for failure to state a claim because Plaintiff's infringement allegations are barred by the safe harbor provision set forth in 35 U.S.C. § 271(e)(1). (Doc. No. 37-1 at 1, 8-21.) In response, Plaintiff argues that Defendants' motion should be denied because: (1) the safe harbor provision does not apply here as a matter of law; and (2) even if it could apply, the determination of whether the infringement at issue is covered by the safe harbor provision is fact-sensitive inquiry inappropriate for resolution at the motion to dismiss stage. (Doc. No. 38 at 7-9.)

A. Section 271(e)(1) Legal Standards

Section 271(e)(1) of the Patent Act provides:

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.

35 U.S.C. § 271(e)(1).

The purpose of this safe harbor provision set forth in section 271(e)(1) is "to facilitate market entry upon patent expiration." Classen Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057, 1072 (Fed. Cir. 2011) (citing Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1358 (Fed. Cir. 2003); Proveris Sci. Corp. v. Innovasystems, Inc., 536 F.3d 1256, 1265 (Fed. Cir. 2008)). In Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 669-70 (1990), the Supreme Court explained that the section 271(e)(1) safe harbor provision was specifically designed to respond to the following unintended distortion:

In 1984, the Court of Appeals for the Federal Circuit decided that the manufacture, use, or sale of a patented invention during the term of the patent constituted an act of infringement, see § 271(a), even if it was for the sole purpose of conducting tests and developing information necessary to apply for regulatory approval. SeeRoche Products, Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858, cert. denied, 469 U.S. 856, 105 S. Ct. 183, 83 L.Ed.2d 117 (1984). Since that activity could not be commenced by those who planned to compete with the patentee until expiration of the entire patent term, thepatentee's de facto monopoly would continue for an often substantial period until regulatory approval was obtained. In other words, the combined effect of the patent law and the premarket regulatory approval requirement was to create an effective extension of the patent term.

Id. at 670 (footnote omitted); see also Proveris, 536 F.3d at 1261 ("Prior to the Hatch-Waxman Act, competitors' activities involving a patented invention during the patent term constituted an act of infringement, even if undertaken for the sole purpose of obtaining FDA regulatory approval. Because such activities could not begin until patent expiration, patent owners enjoyed a de facto patent term extension while competitors spent time following patent expiration obtaining FDA premarket approval necessary for market entry." (citations omitted)). Section 271(e)(1) sought to eliminate this de facto patent term extension by "allow[ing] competitors to begin the regulatory approval process while the patent was still in force, followed by market entry immediately upon patent expiration." Proveris, 536 F.3d at 1262; see Eli Lilly, 496 U.S. at 671 (Section 271(e)(1) "allows competitors, prior to the expiration of a patent, to engage in otherwise infringing activities necessary to obtain regulatory approval.").

Section 271(e)(1) accomplishes this purpose by "provid[ing] a wide berth for the use of patented drugs in activities related to the federal regulatory process." Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 202 (2005). Section 271(e)(1) "exempt[s] from infringement all uses of patented compounds 'reasonably related' to the process of developing information for submission under any federal law regulating the manufacture, use, or distribution of drugs." Id. at 206 (citing Eli Lilly, 496 U.S. at 674); see also id. at 202 ("[W]e think it apparent from the statutory text that § 271(e)(1)'s exemption from infringement extends to all uses of patented inventions that are reasonably related to the development and submission of any information under the...