Shire LLC v. Abhai, LLC

• Citation: 298 F.Supp.3d 303
• Decision Date: 22 March 2018
• Docket Number: CIVIL ACTION NO. 15-13909-WGY
• Parties: SHIRE LLC and Shire US Inc., Plaintiffs, v. ABHAI, LLC, Defendant.
• Court: U.S. District Court — District of Massachusetts

298 F.Supp.3d 303

SHIRE LLC and Shire US Inc., Plaintiffs,

v.ABHAI, LLC, Defendant.

CIVIL ACTION NO. 15-13909-WGY

United States District Court, D. Massachusetts.

Filed March 22, 2018

Alaina M. Whitt, David M. Parker, Eric R. Sonnenschein, Erica N. Andersen, George F. Pappas, Jeffrey B. Elikan, Kevin B. Collins, Miles L. Galbraith, Covington & Burling LLP, Washington, DC, Jennifer L. Robbins, Covington & Burling LLP, New York, NY, Tess A. Hamilton, Covington & Burling LLP, Redwood Shores, CA, Eric J. Marandett, Margaret E. Ives, Patrick S. Boyd, Choate, Hall & Stewart LLP, Boston, MA, for Plaintiffs.

Alison C. Casey, Heather B. Repicky, Nutter, McClennen & Fish, LLP, Boston, MA, Chad A. Landmon, Thomas K. Hedemann, Axinn Veltrop & Harkrider LLP, Hartford, CT, Seth I. Heller, William C. Rose, Axinn Veltrop & Harkrider LLP, Washington, DC, for Defendant.

FINDINGS OF FACT, RULINGS OF LAW, AND ORDER FOR JUDGMENT

WILLIAM G. YOUNG, DISTRICT JUDGE

I. INTRODUCTION

On November 20, 2015, the plaintiffs Shire LLC and Shire US Inc. (collectively, "Shire"), brought this action against the defendant Abhai, LLC ("Abhai"), for patent infringement of the United States Reissued Patent No. RE42,096 (the "'096 Patent"), in violation of 35 U.S.C. § 271(e)(2)(A) (count I), and patent infringement of the United States Reissued Patent No. RE41,148 (the "'148 Patent") in violation of 35 U.S.C. § 271(e)(2)(A) (count II). Compl. ¶¶ 1, 20-33.

This is an Abbreviated New Drug Application ("ANDA") patent case. Abhai is pursuing an ANDA with the Food and Drug Administration ("FDA"). Compl. ¶ 1. Controlling statutory law encourages such applications and rewards successful, first-to-file applicants as a means toward controlling pharmaceutical prices. See generally FTC v. Actavis, Inc., 570 U.S. 136, 133 S.Ct. 2223, 186 L.Ed.2d 343 (2013). At the same time, the law protects existing patent rights and encourages prompt litigation to assay the limits of those rights. See generally In re Nexium (Esomeprazole) Antitrust Litig., 842 F.3d 34 (1st Cir. 2016). This is such litigation.

The challenge for Abhai here is to design a pharmaceutical product that falls just beyond the reach of Shire’s patents yet is sufficiently bioequivalent and therapeutically equivalent to Shire’s product to satisfy the FDA of its efficacy.

On February 3, 2016, Abhai filed an amended answer to the complaint and counterclaims requesting a declaration of non-infringement of the '096 Patent (count I), and a declaration of non-infringement of the '148 Patent (count II). Def.'s Am. Answer, Defenses, & Countercls. ("Def.'s Am. Answer") ¶¶ 18-29, ECF No. 35. On February 17, 2016, Shire filed its answer to Abhai’s counterclaims. Counterdefs.’ Answer, ECF No. 38.

On March 1, 2016, the case was referred to mediation, provided by Judge Marianne B. Bowler. Elec. Clerk’s Notes, ECF Nos. 44-46. The case returned to this session’s running trial list on January 13, 2017 after both parties failed to come to an agreement. Elec. Clerk’s Notes, ECF Nos. 93-94; Report Alternative Dispute Resolution Provider, ECF No. 96.

The bench trial began on March 27, 2017. Elec. Clerk’s Notes, ECF No. 148. On April 4, 2017, after four days of trial, Abhai filed a motion to amend its pretrial memorandum to include eight new trial exhibits. Def.'s Mot. Amend Pretrial Mem., ECF No. 153; Def.'s Mem. Supp. Mot. Amend Pretrial Mem., ECF No. 154. The exhibits purported to show that the dissolution tests reported by Abhai on its product were performed incorrectly and the data was invalid. Def.'s Mem. Supp. Mot. Amend Pretrial Mem. 1. The Court held a hearing on the motion on April 4, 2017. Elec. Clerk’s Notes, ECF No. 157. The Court, after hearing from counsel, suspended the proceedings for 90 days and entered an order requiring full discovery on the incorrect data and tests. Id. The fifth day of trial resumed on September 5, 2017. Elec. Clerk’s Notes, ECF No. 282. The ninth and final day of trial was on September 15, 2017. Elec. Clerk’s Notes, ECF No. 328. Closing arguments were held on October 18, 2017. Elec. Clerk’s Notes, ECF No. 336. The Court now makes the following findings of fact and rulings of law.

II. FINDINGS OF FACT

A. The Parties

Shire LLC is a limited liability company located in Florence, Kentucky. Am. Joint Pretrial Mem. ("Admitted Facts") ¶ 1, ECF No. 139. Shire LLC is a direct, wholly-owned subsidiary of Shire US Inc., a New Jersey corporation whose principal place of business is in Lexington, Massachusetts. Id. at ¶ 3; Compl. ¶ 3. Shire LLC is the owner and assignee of the '096 and '148 Patents. Admitted Facts ¶ 2. Shire Development LLC, an affiliate of Shire, is the holder of the New Drug Application ("NDA") No. 21-303, for delayed-release capsules containing dextroamphetamine

sulfate, dextroamphetamine saccharate, amphetamine aspartate monohydrate, and amphetamine sulfate. Id. at ¶ 15. Shire markets this drug under the name Adderall XR. Id. at ¶ 16. Adderall XR is marketed for the treatment of Attention-Deficit/Hyperactivity Disorder ("ADHD"). Id. at ¶ 17. The '096 Patent and the '148 Patent are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations for Adderall XR. Id. at ¶ 19.

Abhai is a limited liability company located in Saint Augustine, Florida. Id. at ¶ 4. Abhai seeks approval from the FDA to market its Abbreviated New Drug Application No. 207489 ("ANDA Product").

Id. at ¶ 5. Adderall XR is the Reference Listed Drug for Abhai’s ANDA Product. Id. at ¶ 7. Abhai’s ANDA Product has the same active ingredients and is bioequivalent to Adderall XR. Id. at ¶¶ 8-9.

B. The Patents

The '096 Patent, titled "Oral Pulsed Dose Drug Delivery System," was issued by the United States Patent and Trademark Office ("PTO") on February 1, 2011. Admitted Facts ¶ 20. U.S. Application No. 11/091,011, later issued as the '096 Patent, was filed with the PTO on March 24, 2005. Id. at ¶ 21. The '096 Patent is a reissue of U.S. Patent No. 6,322,819 (the "'819 Patent’ "). Id. at ¶ 22. The '819 Patent was issued by the PTO on November 27, 2001. Id. U.S. Application No. 09/176,542, issued as the '819 Patent, was filed with the PTO on October 21, 1998. Id. at ¶ 23.

The '148 Patent, also titled "Oral Pulsed Dose Drug Delivery System," was issued by the PTO on February 23, 2010. Id. at ¶ 25. U.S. Application No. 11/091 was issued as the '148 Patent. Id. at ¶ 26. The '148 Patent claims priority to PCT/US99/24554, which was filed on October 29, 1999. Id. at ¶ 27. Its PCT Publication Number is WO00/23055 and its PCT Publication Date is April 27, 2000. Id. The '148 Patent is a reissue of U.S. Patent No. 6,605,300 (the "'300 Patent"). Id. at ¶ 28. U.S. Application No. 09/807,462, which led to the '300 Patent, was filed with the PTO on July 19, 2001. Id. at ¶ 29. The '300 Patent is a continuation-in-part of the '819 Patent. Id. at ¶ 30. Beth A. Burnside, Xiaodi Guo, Kimberly Fiske, Richard A. Couch, Rong-Kun Chang, Donald J. Treacy, Charlotte M. McGuiness, and Edward M. Rudnic are listed as inventors of the '096 and '148 Patents. Id. at ¶¶ 24, 31.

C. The Asserted Claims

Shire asserts that Abhai’s ANDA Product infringes on Claim 1 of the '096 Patent. Admitted Facts at 1. Shire asserts that Abhai’s ANDA Product infringes Claims 1, 11 (as it depends from Claims 1, 2, and 7), and 13 of the '148 Patent. Id. Abhai raises one affirmative defense, asserting that Shire cannot meet its burden of proof to prove that Abhai’s ANDA product will infringe any enforceable claims of the '096 and '148 Patents. Def.'s Am. Answer at 6. Abhai advances two counterclaims: (1) Abhai’s ANDA Product did not infringe the '096 Patent and it is entitled to a declaration asserting that there is no infringement; and(2) Abhai’s ANDA Product did not infringe on the '148 Patent and it is entitled to a declaration asserting that there is no infringement. Id. at ¶¶ 18-29. Shire asserts as an affirmative defense to the counterclaims that Abhai’s counterclaims fail to state claims upon which relief can be granted. Counterdefs.’ Answer at 7.

D. Shire’s Adderall XR

The FDA approved Shire’s product, Adderall XR, on October 11, 2001, and it is indicated for the treatment of ADHD. Admitted Facts ¶ 17. Adderall XR is marketed in six dosage strengths: 5 mg, 10 mg, 15 mg, 20 mg, 25 mg, and 30 mg. Id. at ¶ 18. The drug contains a combination of amphetamine

sulfate, amphetamine aspartate monohydrate, dextroamphetamine sulfate, and dextroamphetamine saccharate. Id. at ¶ 15. Adderall XR has the same active ingredients as Abhai’s ANDA Product. Trial Tr. Day 9 at 53:19-22; Admitted Facts ¶ 8. Adderall XR contains two types of drug-containing beads designed to provide a "double-pulsed delivery of amphetamines." Trial Tr. Day 9 at 53:23-54:4; Trial Ex. 61 at 1.

The different dosage strengths of Adderall XR contain "Immediate-Release (IR) pellets" (the "IR Beads") and "Delayed-Release (DR) pellets" (the "DR Beads"). Trial Tr. Day 9 at 54:10-14; Trial Ex. 24 at 48. The IR and DR Beads in Shire’s Adderall XR start with a sugar sphere, which is then covered with a drug layer containing dextroamphetamine

sulfate, dextroamphetamine saccharate, amphetamine aspartate monohydrate, and amphetamine sulfate, mixed with hydroxypropyl methylcellulose, a binder. Admitted Facts ¶ 15; Trial Tr. Day 9 at 54:15-23; Trial Ex. 24 at 48. This drug layer is covered with a coating of Opadry Beige. Trial Tr. Day 9 at 54:22-24; Trial Ex. 24 at 48. In the DR Beads, the drug layer and Opadry Beige layer are covered with a coating containing Eudragit L30D-55, triethyl citrate, and talc. Trial Tr. Day 9 at 54:21-55:1; Trial Ex. 24 at 48-49. Shire calls this layer the "polymeric layer" or "polymeric coating." Trial Ex. 24 at 48-49, Trial Ex. 365 at 279. Abhai refers to this as the enteric coating. Trial Tr. Day 9 at 56:18-25. The DR Beads in Adderall XR contain the same ingredients as Abhai’s ANDA Product. Trial Tr. Day 9 at 55:7-19. They both contain the same enteric coating polymer. Id. The IR Beads in...