Wyeth v. Ranbaxy Laboratories Limited

• Decision Date: 14 August 2006
• Docket Number: Civ. No. 05-2252(GEB).
• Citation: 448 F.Supp.2d 607
• Parties: WYETH, Cardinal Health, Inc., Cardinal PTS, LLC, Cardinal Health 409, Inc., f/k/a R.P. Scherer Corp., and R.P. Scherer Technologies, Inc., Plaintiffs/Counterdefendants, v. RANBAXY LABORATORIES LIMITED, Ranbaxy, Inc., and Ranbaxy Pharmaceuticals Inc., Defendant/Counterclaimants.
• Court: U.S. District Court — District of New Jersey

448 F.Supp.2d 607

WYETH, Cardinal Health, Inc., Cardinal PTS, LLC, Cardinal Health 409, Inc., f/k/a R.P. Scherer Corp., and R.P. Scherer Technologies, Inc., Plaintiffs/Counterdefendants, v. RANBAXY LABORATORIES LIMITED, Ranbaxy, Inc., and Ranbaxy Pharmaceuticals Inc., Defendant/Counterclaimants.

Civ. No. 05-2252(GEB).

United States District Court, D. New Jersey.

August 14, 2006.

Thomas R. Curtin, Graham, Curtin & Sheridan, PC, Morristown, NJ, for Plaintiffs/Counterdefendants.

Brooks R. Bruneau, Kristine Butler— Holston, Robert G. Shepherd, Mathews, Collins, Shepherd & McCay, PA, Princeton, NJ, for Defendant/Counterclaimants.

MEMORANDUM OPINION

BROWN, Chief Judge.

This matter comes before the Court upon Defendants Ranbaxy Laboratories Limited, Ranbaxy, Inc. and Ranbaxy Pharmaceuticals Inc.'s (collectively referred to as "Ranbaxy") Motion for Judgment on the Pleadings with Respect to Plaintiff's Allegation of Willful Infringement. The Court decided the motion based on the parties' written submissions and without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons discussed herein, the Court grants-in-part and denies-in-part Ranbaxy's motion.

I. BACKGROUND

This is a patent infringement action arising under the Hatch-Waxman Act. Plaintiffs Wyeth and Cardinal Health, Inc., Cardinal Health PTS, LLC, and Cardinal Health 409, Inc. f/k/a R.P. Scherer Technologies, Inc. (collectively "Wyeth") engage in the business of developing, marketing and selling pharmaceutical products. Ranbaxy produces and markets generic versions of pharmaceutical drugs. Plaintiff R.P. Scherer Technologies, Inc., a subsidiary of Cardinal Health, Inc., is the assignee of two patents, namely U.S. Patent No. 5,071,643 (the '643 Patent") and U.S. Patent No. 5,360,615 (the "'615 Patent"). Wyeth licenses both patents and has listed the patents in the Electronic Orange Book ("the Orange Book").¹ The Orange Book indicates that the patents expire on December 10, 2008 and pediatric exclusivity expires on June 10, 2009. (Compl.¶9).

On December 23, 2004, Ranbaxy filed Abbreviated New Drug Application ("ANDA") No. 77-484 pursuant to § 505(j) of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 355(j). Ranbaxy seeks approval from the FDA to manufacture, use and sell Ibuprofen and Pseudoephedrine Hydrochloride Capsules (200mg/30mg). Ranbaxy asserted in its ANDA that these capsules are bioequivalent to Wyeth's ADVIL® COLD and SINUS LIQUI-GELS. Ranbaxy notified Wyeth of its ANDA filing by letter dated March 9, 2005. In its notice letter, Ranbaxy indicated that the ANDA contained a Paragraph IV Certification which certifies Ranbaxy's belief that the commercial manufacture, use or sale of its Ibuprofen and Pseudoephedrine Hydrochloride Capsules would not infringe the '643 and '615 Patents.²

On April 22, 2005, Wyeth filed suit in this Court against Ranbaxy alleging that the submission of its ANDA constitutes infringement of one or more claims of the '643 and '615 Patents pursuant to 35 U.S.C. § 271(e)(2). (Compl.¶ 13). Ranbaxy answered on June 30, 2005 and asserted counterclaims, seeking declaratory judgment that the patents are not infringed and are invalid. Wyeth filed its Answer to the counterclaims on July 20, 2005. On May 10, 2006, Ranbaxy filed the instant motion. Ranbaxy asserts that Wyeth's allegation of willful infringement fails as a matter of law, and must therefore be dismissed.

II. DISCUSSION

A. Standard for Motion for Judgment on the Pleadings Pursuant to Rule 12(c).

A defendant may move to dismiss a complaint or parts of a complaint before or after filing an answer. See FED.R.Civ.P. 12(b,(6) and (c). A motion made before an answer is filed is a motion to dismiss pursuant to Federal Rule Civil Procedure 12(b)(6). A motion made after an answer is filed is a motion for judgment on the pleadings pursuant to Rule 12(c).³ "A defense of failure to state a claim `upon which relief can be granted . . . may be made in ... [a] motion for judgment on the pleadings." See FED.R.Civ.P. 12(h)(2). Here, Ranbaxy's motion was filed after it filed its answer.

The standard under which the Court must analyze the plaintiffs complaint and the defendants' arguments in a Rule 12(c) motion for judgment on the pleadings is the same as the standard in a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). See FED.R.Civ.P. 12(h)(2); see also Turbe v. Gov't of the Virgin Is., 938 F.2d 427, 428 (3d Cir.1991); Inst. for Scientific Info., Inc. v. Gordon & Breach, Sci. Publishers, Inc., 931 F.2d 1002, 1006 (3d Cir.1991), cert. denied, 502 U.S. 909, 112 S.Ct. 302, 116 L.Ed.2d 245 (1991). Like Rule 12(b)(6), Rule 12(c) requires the Court to "accept the allegations in the complaint as true, and draw all reasonable factual inferences in favor of the plaintiff." Turbe, 938 F.2d at 428 (citing Unger v. Nat'l Residents Matching Program, 928 F.2d 1392, 1394-95 (3d Cir.1991)). A complaint may be dismissed for failure to state a claim where it appears beyond any doubt that no relief could be granted under any set of facts which could be proved consistent with the allegations. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984).

Legal conclusions made in the guise of factual allegations, however, are given no presumption of truthfulness. See Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986); see also Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997) ("[A] court need not credit a complaint's `bald assertions' or `legal conclusions' when deciding a motion to dismiss").

B. Willful Infringement in the Context of ANDA Litigation

Ranbaxy argues that under the Patent Act and Federal Circuit precedent, a claim for willful infringement is not actionable in ANDA cases. Citing Glaxo Group Ltd. v. Apotex, Inc., 376 F.3d 1339 (Fed.Cir.2004), Ranbaxy asserts that "the mere filing of an ANDA cannot constitute grounds for a willful infringement determination." Id. at 1349. Ranbaxy argues that the Federal Circuit characterized the filing of an ANDA as "jurisdiction-conferring," and thus infringement based solely on the filing of the ANDA is artificial. Ranbaxy further asserts that it cannot be liable for willful infringement because the generic pharmaceutical products for which they seek FDA approval have not yet entered the market, and thus no damages exist at this time. Lastly, Ranbaxy maintains that Wyeth has not made allegations that would render the case exceptional under 35 U.S.C. § 285—another means by which Wyeth could argue that willful infringement allegations are proper.

In response, Wyeth argues that Ranbaxy misconstrues the Glaxo holding as a pronouncement by the Federal Circuit that an ANDA filer can never be liable for willful infringement. Wyeth contends that this position is incorrect. According to Wyeth, Glaxo permits a finding of willful infringement based on "the act of filing an ANDA taken in combination with any of a number of other circumstances such as copying the patented invention ... ." (Pl.'s Opp'n at 2). Wyeth contends that this is the basis upon which it intends to prove its willfulness claim against Ranbaxy. In particular, Wyeth asserts that Ranbaxy already produced certain documents which indicate that "Ranbaxy actually copied the method in the '643 and'615 [P]atents in making its generic product." (Id. at 3). Wyeth argues that deliberate copying of a patented invention is a factor that should be considered in determining whether enhanced damages are warranted. Thus, Wyeth maintains that it should be entitled to further develop this evidence to prove its willfulness claim.

The Federal Circuit has addressed the issue of willful infringement in the context of ANDA litigation in two cases—Glaxo and Yamanouchi, 231 F.3d 1339 (Fed.Cir. 2000). In both cases, the Federal Circuit examined two key provisions of the Patent Act. First, the court discussed 35 U.S.C. § 271(e)(2) which provides that:

It shall be an act of infringement to submit ... an application under section 505(j) of the Federal Food, Drug, and Cosmetic Act ... for a drug claimed in a patent or the use of which is claimed in a patent ... if the purpose of such submission is to obtain approval under such Act to engage in the commercial manufacture, use, or sale of a drug . claimed in a patent or the use of which is claimed in a patent before the expiration of such patent.

35 U.S.C. § 271(e)(2). In Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 676, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990), the Supreme Court noted that the purpose of this provision is to create an "artificial[ act of infringement for a very limited and technical purpose that relates only to certain drug applications." Id. at 676, 110 S.Ct. 2683. In light of this characterization, the Federal Circuit subsequently characterized 35 U.S.C. § 271(e)(2) as a "jurisdiction-conferring" statute which allows district courts to exercise jurisdiction pursuant to 28 U.S.C. § 1338(a) in cases where an ANDA has been filed. See Glaxo, 376 F.3d at 1351; see also Allergan, Inc. v. Alcon Labs., Inc., 324 F.3d 1322, 1330 (Fed.Cir.2003).

The Federal Circuit also referenced § 271(e)(4) which defines a limited number of remedies that are available to an innovator company who asserts infringement under § 271(e)(2). Specifically, § 271(e)(4) provides:

For an act of infringement described in paragraph (2)—

(A) the court shall order the effective date of any approval of the drug .. . involved in the infringement to be a date which is not earlier than the date of the expiration of the patent which has been infringed,

(B) injunctive relief may be granted against an infringer to prevent the commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of an approved drug . . ., and

(C) damages or other monetary relief may be awarded against an infringer only if there has been commercial...