Ferring B.V. v. Serenity Pharm., LLC

• Decision Date: 12 June 2019
• Docket Number: No. 17 Civ. 9922 (CM),17 Civ. 9922 (CM)
• Citation: 391 F.Supp.3d 265
• Parties: FERRING B.V., Ferring International Center S.A., and Ferring Pharmaceuticals Inc., Plaintiffs and Counter-Defendants, v. SERENITY PHARMACEUTICALS, LLC, Reprise Biopharmaceutics, LLC, Avadel Specialty Pharmaceuticals, LLC, Defendants and Counterclaimants.
• Court: U.S. District Court — Southern District of New York

391 F.Supp.3d 265

FERRING B.V., Ferring International Center S.A., and Ferring Pharmaceuticals Inc., Plaintiffs and Counter-Defendants,

v.SERENITY PHARMACEUTICALS, LLC, Reprise Biopharmaceutics, LLC, Avadel Specialty Pharmaceuticals, LLC, Defendants and Counterclaimants.

No. 17 Civ. 9922 (CM)

United States District Court, S.D. New York.

Signed June 12, 2019

Mary Webb Bourke, Pro Hac Vice, Dana K. Severance, Daniel Marcus Attaway, Kristen Healey Cramer, Nicholas Verna, Pro Hac Vice, Womble Bond Dickinson (US) LLP, Wilmington, DE, William Paul Deni, Jr., Jeffrey Alan Palumbo, Gibbons P.C., Newark, NJ, James David Weinberger, Jason Douglas Jones, Jessica Vosgerchian, Fross Zelnick Lehrman & Zissu, P.C., Jonathon Brugh Lower, Gibbons P.C., New York, NY, John Benedict Bourke, Ken Mueller, Pro Hac Vice, Womble Bond Dickinson (US) LLP, Boston, MA, John W. Cox, Pro Hac Vice, Joshua A. Davis, Pro Hac Vice, Keats A. Quinalty, Pro Hac Vice, John W. Cox, for Plaintiffs and Counter-Defendants

Christopher J. Harnett, for Counter-Defendant Avadel Specialy Pharmaceuticals, LLC.

Gasper Joseph LaRosa, James Sottile, IV, Kelsey I. Nix, Kevin V. McCarthy, Lisamarie LoGiudice, Pablo Daniel Hendler, Shehla Wynne, Stuart Wesley Yothers, Jones Day, New York, NY, John G. Froemming, Jones Day, Washington, DC, Christopher J. Harnett, Pro Hac Vice, for Defendants and Counterclaimants Serenity Pharmaceuticals, LLC, Reprise Biopharmaceutics, LLC.

MEMORANDUM DECISION AND ORDER GRANTING DEFENDANTS' MOTIONS FOR JUDGMENT ON THE PLEADINGS AND SETTING A TRIAL SCHEDULE

McMahon, C.J.:

These motions arise in the context of a 17-year-old battle between the parties over the development of competing drugs to treat nocturia due to nocturnal polyuria, a disease of the kidneys that causes excessive nighttime urination.

In 2012, Ferring Pharmaceuticals Inc., Ferring B.V. and Ferring International Center S.A. ("collectively", "Ferring")—the same three plaintiffs in the present lawsuit—sued Dr. Seymour Fein, a former Ferring consultant, along with two entities he formed, Serenity Pharmaceuticals, LLC ("Serenity") and Reprise Biopharmaceutics LLC ("Reprise"). See Ferring B.V. et al. v. Allergan, Inc. et al., No. 12 Civ. 2650 (S.D.N.Y.) (hereinafter referred to as the "2012 Action"). Among other things, Ferring alleged that Dr. Fein "did not invent any subject matter" covered by two patents for which he applied and obtained patent protection— U.S. Patent No. 7,405,203 (the "'203 Patent") and U.S. Patent No. 7,579,321 (the "'321 Patent") —and therefore sought to "correct the inventorship" of those two patents, pursuant to 35 U.S.C. § 256, to replace Dr. Fein with Ferring scientists. (12 Civ. 2650 Dkt. No. 73 ¶¶ 112, 127.) On August 31, 2015, the Hon. Robert W. Sweet granted summary judgment dismissing Ferring's correction of inventorship claims. He concluded that Ferring was equitably estopped from challenging Dr. Fein's status as the inventor of the '203 and '321 Patents, because it unduly "delayed advancing [its] claims in this litigation in order to impose the risks and costs of drug development on [Dr. Fein and his co-defendants] and then to obtain patent correction in [its] favor[.]" (12. Civ. 2650, Dkt. No. 190 at 2 (hereinafter referred to as the "Equitable Estoppel Opinion" or "Opinion").)¹ The 2012 Action, which includes claims directed at other patents that Dr. Fein obtained, is ongoing.

In 2017, Ferring brought this action against Defendants Serenity, Reprise, and—later—Avadel Specialty Pharmaceuticals, LLC ("Avadel"), which is the exclusive sublicensee of the '203 and '321 Patents.² Among other things, Ferring seeks two declarations; first, that the '203 and '321 Patents suits are unenforceable, because Dr. Fein engaged in "inequitable conduct" before the United States Patent and Trademark Office ("PTO") by representing himself as the sole inventor of those patents (see Ferring's First Amended Compl. ("Am. Compl."), dated June 30, 2017, ¶¶ 138–48, Dkt. No. 18); and second, that the '203 and '321 Patents are invalid, pursuant to 35 U.S.C. § 102, in part because Dr. Fein "did not himself invent the subject matter claimed" in those patents (id. ¶ 116).

Defendants now bring two motions for judgment on the pleadings, pursuant to Fed. R. Civ. P. 12(c), in which they ask the Court to dismiss Ferring's inequitable conduct claim (Count V) as well as Ferring's allegation, offered in support of its patent invalidity claim (Count I), that Dr. Fein did not invent the '203 and '321 Patents.

The question presented by Defendants' motion is whether Ferring is foreclosed from asserting those claims in light of the findings of fact and conclusions of law that are contained in the Equitable Estoppel Opinion.

The answer to this question is yes. Defendants' motions are granted.

I. Factual Background and Prior Proceedings

a. Patents in Suit

This action—unlike the 2012 Action—solely concerns the '203 and '321 Patents.³

On July 29, 2008, the PTO issued the '203 Patent, which is titled "Pharmaceutical Compositions Including Low Dosages of Desmopressin." (Am. Compl. Ex. C.) It lists Dr. Seymour Fein as the sole inventor. (Id. ) Reprise is the lawful owner of all right, title, and interest in the '203 Patent. (Id. ¶ 15.) Serenity is an exclusive licensee of the '203 Patent, with the right to enforce it. (Id. ¶ 16.) Avadel is an exclusive sublicensee of the '203 Patent, with the right to enforce it. (Ferring's Answer and Countercl. ("Ferring's Counter."), dated July 19, 2018, ¶ 8, Dkt. No. 115.)

On August 25, 2009, the PTO issued the '321 patent, which also is titled "Pharmaceuticals Compositions Including Low Dosages of Desmoproessin." (Am. Compl. Ex. D.) Again, Dr. Fein is the sole inventor. (Id. ) The same ownership arrangement that applies to the '203 Patent applies to the '321 Patent as well: Reprise is the lawful owner of all right, title, and interest in the '321 Patent. (Id. ¶ 8.) Serenity is an exclusive licensee of the '321 Patent, with the right to enforce it. (Id. ¶ 16.) And Avadel is an exclusive sublicensee of the '321 patent, with the right to enforce it. (Ferring's Countercl. ¶ 8.)

b. The Parties

Desmopressin is a synthetic hormone that is used to treat a variety of disorders related to excessive urine production, including nocturia. (Am. Compl. ¶ 75.) While effective, it also poses a risk of having reduced sodium levels in the blood, a condition also known as hyponatremia. (Id. ¶ 76.)

Ferring is an innovator in the field of desmopressin. (Id. ¶¶ 4, 75.) In 1972, Ferring developed the world's first industrial scale pharmaceutical desmopressin products by launching desmopressin as a treatment for central diabetes insipidus. (Id. ¶ 80.) It continues to conduct research and development on desmopressin to this day. (Id. )

Dr. Fein, a board-certified internist and medical oncologist, is—as noted—the named inventor of the '203 and '321 Patents. (Id. ¶ 14; Countercl. ¶ 26.) Dr. Fein and his other business partners formed Serenity, Reprise, and Avadel to commercialize his alleged inventions. (Am. Compl. ¶ 14.)

c. Dr. Fein's Consulting Work for Ferring

In the late 1990s, Ferring sought to develop an "orodispersible" (meaning orally disintegrating) desmopressin tablet. (Id. ¶ 83.)

During that period, Dr. Fein worked as a consultant for Ferring. (See generally Equitable Estoppel Opinion ¶¶ 30–51.) Among other things, he was responsible for assisting in the research and development of desmopressin-related products. (Id. )

Dr. Fein alleges that he discovered that desmopressin could be effective in much lower doses than previously known, which would also reduce the risk of hyponatremia. (Countercl. ¶¶ 26–27.) He purportedly communicated this discovery to Ferring to help it design clinical studies to test his ideas. (Id. ) He further alleges that he "suggested" to Ferring that desmopressin could be delivered "sublingually," i.e. , absorbed under the tongue by way of a dissolvable tablet, and that this particular method would improve "bioavailability and allow for a greater percentage of desmopressin in the formulation to reach the bloodstream." (Id. ¶ 27.)

On May 7, 2002, Ferring filed a patent application in Great Britain, Patent Application No. 0210397.6 ("GB '397"), for an orodispersible desmopressin formulation. (Am. Compl. ¶ 57.) GB '397 disclosed a dosage form of desmopressin adapted for sublingual absorption. (Equitable Estoppel Opinion ¶¶ 1–2). There was no requirement that this early priority document identify or name any inventors, and so none was listed. (Id. ¶ 3; accord Am. Compl. ¶ 57.).

On September 20, 2002, Ferring filed a Patent Cooperation Treaty ("PCT") application, PCT/1B02/04036 ("PCT '036"), claiming priority to GB '397. (Am. Compl. ¶ 58.) PCT '036 listed Dr. Fein among the inventors of the patent. (Equitable Estoppel Opinion ¶¶ 4–5.)

d. Dr. Fein's Termination and Efforts to Secure Intellectual Property Protection

On November 7, 2002, Ferring formally terminated Dr. Fein's consulting agreement after he declined to retroactively assign his inventions to Ferring. (Id. ¶ 29.) Dr. Fein then proceeded to take certain steps to assert his purported intellectual property rights in the subject matter claimed by Ferring's patent applications. Specifically, over the ensuing six months, Fein's attorney, William Speranza, engaged in a back-and-forth correspondence with Ferring through its counsel, Patricia Barclay. (See generally Equitable Estoppel Opinion; see also Dkt. No. 143 Ex. B (Speranza-Barclay correspondence).) That correspondence, which served as the factual basis for Judge Sweet's Equitable Estoppel Opinion, is detailed below.⁴

On November 21, 2002, Speranza sent a letter to Ferring on Dr. Fein's behalf, stating that Dr. Fein considered himself the inventor of a " ‘sublingual, transmucosal route of delivery which affords a number of advantages ... including enabling the effective use of formulations having reduced concentrations of desmopressin.’ " (Id. ¶¶ 30–31.) Speranza...