Otsuka Pharm. Co. v. Apotex Corp., Civil Action No. 14-8074 (JBS/KMW)
| Decision Date | 25 August 2016 |
| Docket Number | Civil Action No. 14-8074 (JBS/KMW) |
| Parties | OTSUKA PHARMACEUTICAL CO., LTD., Plaintiff, v. APOTEX CORP., APOTEX INC. and HETERO LABS LTD., Defendants. |
| Court | U.S. District Court — District of New Jersey |
HONORABLE JEROME B. SIMANDLE
This patent infringement action, one of twenty-six related actions under the Hatch-Waxman Act, 35 U.S.C. §§ 271, 281, generally concerns Plaintiff Otsuka Pharmaceutical Co, Ltd.'s (hereinafter, "Otsuka") position that Apotex Corp.'s and Apotex Inc.'s (collectively, "Apotex") proposed generic aripiprazole product infringes one or more claims of four of the various patents covering Otsuka's Abilify® aripiprazole product, U.S. Patent Nos. 8,017,615 ("the '615 patent"), 8,580,796 ("the '796 patent"), 8,642,760 ("the '760 patent"), and 8,759,350 ("the '350 patent" and collectively, the "Patents-in-Suit").
Otsuka now moves to dismiss Apotex's Ninth and Tenth Counterclaims for "Unlawful Monopolization" and "Patent Misuse" (hereinafter, the "Counterclaims") pursuant to Federal Rule of Civil Procedure 12(b)(6) or, in the alternative, to bifurcate and stay discovery on Apotex's Counterclaims pending resolution of the primary patent infringement issues pursuant to Federal Rule of Civil Procedure 42(b). [Docket Item 298.] The Court recently addressed the viability of substantively identical counterclaims in Otsuka Pharm. Co., Ltd. v. Apotex Corp., 143 F. Supp. 3d 188 (D.N.J. Aug. 11, 2015) ("Apotex I"), and reaches substantially the same result in connection with the pending motion. For the reasons that follow, Otsuka's motion will be granted in part and denied in part. The Court finds as follows:
1. For the purposes of the pending motion, the Court need not retrace the lengthy factual and procedural predicate for this action. Rather, it suffices to note that, in its amended Counterclaims for Unlawful Monopolization and Patent Misuse, Apotex alleges that Otsuka has engaged in a pattern of anticompetitive behavior that has caused a wide impact on the entire aripiprazole market.
2. Notably, in Apotex I, this Court denied Otsuka's motion to dismiss two of Apotex's counterclaims, but granted Otsuka's request to bifurcate and stay Apotex's antitrust and patent misuse Counterclaims. See 143 F. Supp. 3d at 197-98. The Court found that Apotex's allegations, accepted as true, sufficiently stated an antitrust injury, set forth plausible facts sufficient to overcome Otsuka's presumptive antitrust immunity under the Noerr-Pennington doctrine, and sufficiently stated a claim of patent misuse. Id. at 194, 196-97.
3. Because the briefing in Apotex I preceded the July 2015 approval of Apotex's ANDA and the commercial launch of its generic aripiprazole tablet products, Otsuka has renewed its motion to dismiss Apotex's two Counterclaims. (Otsuka's Br. at 2-3.)
4. Specifically, Apotex's "Unlawful Monopolization" Counterclaim alleges, in particular, that Otsuka "has the power to control prices and/or exclude competition in, or prevent entry into" the aripiprazole market, and claims that Otsuka has "exercised monopoly power in the relevant market." (See Countercl. at ¶¶ 90-91.) Indeed, Apotex claims that Otsuka has "engaged" in an "overall predatory scheme to monopolize" the aripiprazole market through its institution of "objectively baseless and sham judicial proceedings designed to continue its monopoly of aripiprazole tablets" and to prevent Apotex, among other generic companies, from competing in the aripiprazole market. (Id. at ¶¶ 98-101.) Apotex therefore alleges that this infringement litigation amounts to "sham" and "bad faith" litigation, in violation of the Sherman and Clayton Acts, 15 U.S.C. §§ 2, 15, and 26. (Id. at ¶¶ 82-123.)
5. Apotex's "Patent Misuse" Counterclaim largely reiterates the allegations of its "Unlawful Monopolization" Counterclaim, and specifically alleges that Otsuka "intentionally engaged in the exclusionary conduct" in an effect to achieve and maintain monopoly power in the market of aripiprazole tablets, and that Otsuka's "anticompetitive activities are a direct, proximate, and reasonably foreseeable cause" of Apotex's delayed entry into the market. (Id. at ¶¶ 115, 117.) Apotex further alleges that Otsuka's infringement claims against Apotex are "objectively and subjectively baseless" and that Otsuka has acted "solely to exclude potential competition from an alternative source" in the aripiprazole market (Id. at ¶¶ 111, 120.)
6. In moving to dismiss Apotex's Ninth and Tenth Counterclaims, Otsuka argues, as it did in connection with substantially similar counterclaims in Apotex I, that Apotex's antitrust and patent misuse Counterclaims must be dismissed, because (1) Apotex has not alleged the "antitrust" or "anticompetitive" injury" required for antitrust standing; (2) Apotex cannot "plausibly support a nexus between its delay in receiving approval of its ANDA and any actions by Otsuka;" and (3) Apotex's patent misuse counterclaim fails as a matter of law to state a cognizable claim for patent misuse. (See Otsuka's Br. at 5, 7-8.) In the alternative, Otsuka requests that the Court bifurcate for trial the patent issues raised in this litigation from the antitrust and/or patent misuse issues. (Otsuka's Br. At 9).
7. Under Federal Rule of Civil Procedure 12(b)(6), the court must generally accept as true the factual allegations of the defendant's counterclaims, and construe all "reasonable inferences" in the light most favorable to the defendant. Revell v. Port Auth. Of N.Y., N.J., 598 F.3d 128, 134 (3d Cir. 2010); see also Fleisher v. Standard Ins. Co., 679 F.3d 116, 120 (3d Cir. 2012) (same). However, "[a] pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action" fails to suffice. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Rather, the "well-pled factual allegations" must be sufficient to demonstrate a plausible "entitlement to relief." Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008).
8. As stated above, Otsuka moves to dismiss Apotex's "Unlawful Monopolization" Counterclaim for lack of standing, and moves to dismiss Apotex's patent misuse Counterclaim for failure to state a plausible claim for relief. For substantially the same reasons stated in Apotex I, the Court will deny Otsuka's motion to the extent it seeks the dismissal of Apotex's Counterclaims. The Court will briefly address each issue in turn.
9. A party suing under federal antitrust laws, as here, must meet the prudential requirement of "antitrust standing." Ethypharm S.A. France, 707 F.3d 223, 232 (3d Cir. 2013). In Ethypharm S.A. France, the Court of Appeals for the Third Circuit outlined a five-factor test, with the second, "antitrust injury," constituting the essential precondition for antitrust standing. Id. (citation omitted.) In other words, in the absence of a plausible allegation of antitrust injury, the only factor presently challenged by Otsuka, the Court need not reach the remaining factors.
Torrent I, 118 F. Supp. 3d 646, 652 (footnote omitted).
11. The Court will next address whether Apotex's allegations prove otherwise sufficiently plausible on the issue of antitrust injury.
12. The "hallmark" for evaluating the plausibility of an allegation of antitrust injury is whether "the actions alleged to be anticompetitive when viewed 'as a whole' bear consequence for the overall market, rather than only for an individual competitor." Torrent I, 118 F. Supp. 3d at 653 (quoting TransWeb, LLC v. 3M Innovative Props. Co., No. 10-4413, 2011 WL 2181189, at *18 (D.N.J. June 1, 2011)). Here, Apotex's antitrust Counterclaim alleges, in essence, that Otsuka has initiated meritless infringement actions and subsequently pursued preliminary injunctions against ANDA filers, in order "to prevent any and all competitors from competing in the marketplace" and to maintain its exclusive monopoly over the aripiprazole market. (Countercl. at ¶ 99.) Apotex further alleges that Otsuka's "exclusionary, anticompetitive and unlawful activities" have excluded "alternative source[s]" of aripiprazole tablets and have, in particular, forestalled and frustrated Apotex's ability to compete in the aripiprazole market. (Id. at ¶¶ 120-123.)
13. For largely the reasons stated in Apotex I, Apotex's Counterclaim plausibly alleges the elements of an antitrust injury, namely, "an injury of the type...
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