Aquestive Therapeutics, Inc. v. BioDelivery Scis. Int'l, Inc.

AQUESTIVE THERAPEUTICS, INC., Plaintiff, v. BIODELIVERY SCIENCES INTERNATIONAL, INC., Defendant.

No. 5:19-CV-505-D

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION

March 16, 2021

ORDER

On May 7, 2020, Aquestive Therapeutics, Inc. ("Aquestive" or "plaintiff") moved to dismiss Biodelivery Sciences International, Inc.'s ("BDSI" or "defendant") Third Counterclaim and to strike BDSI's Fourth and Sixth Affirmative Defenses [D.E. 29], and filed a memorandum in support [D.E. 30]. On May 28, 2020 BDSI amended its answer [D.E. 31], and responded in opposition [D.E. 32]. On June 11, 2020, Aquestive replied [D.E. 34].¹ On June 25, 2020, Aquestive moved to dismiss BDSI's Amended Third Counterclaim and renewed its motion to strike BDSI's Fourth and Sixth Affirmative Defenses [D.E. 35], and filed a memorandum in support [D.E. 36]. On July 16, 2020, BDSI responded in opposition [D.E. 38]. On July 30, 2020, Aquestive replied [D.E. 39]. As explained below, the court dismisses as moot Aquestive's motion to dismiss BDSI's ThirdCounterclaim, grants in part and denies in part Aquestive's motion to dismiss BDSI's Amended Third Counterclaim, and denies Aquestive's motion to strike.

I.

BDSI is a pharmaceutical company with its principal place of business in North Carolina that engages in research and development "geared towards bringing new pharmaceutical products to market in the United States and the rest of the world, including products for the treatment of severe pain." [D.E. 31] 14. BDSI's products include pharmaceutical films, products designed to deliver drugs orally through strips that dissolve on contact with the buccal cavity. See id. at 15. Aquestive also develops, markets, and sells pharmaceutical products, including pharmaceutical films. See id. at 14. Aquestive is a Delaware corporation with its principal place of business in Warren, New Jersey. See id. Pharmaceutical films have numerous advantages over other drug delivery mechanisms, such as tablets and pills. See id. at 5; Compl. [D.E. 1] ¶ 13.

Over the past decade, BDSI and Aquestive have sparred in multiple patent infringement cases. See [D.E. 31] 15. BDSI and Aquestive's most recent legal battle centers on alleged infringement of United States Patent No. 8,765,167 (the "'167 patent"). See Compl. [D.E. 1]. The '167 patent is assigned to Aquestive and relates to "water-soluble films incorporating anti-tacking agents and methods of their preparation." [D.E. 31] 5; see Compl. [D.E. 1] ¶ 13. Garry Myers ("Myers") is the first named inventor of the '167 patent and was an Aquestive employee from 2002 to 2015. See [D.E. 31] 26. Daniel Scola, Jr. ("Scola") and Michael Chakansky ("Chakansky") are attorneys with Hoffman & Barron, LLP ("Hoffman"), and prosecuted the '167 patent, its parent patent, and other patents of the same family on behalf of Aquestive. See id. Myers, Scola, and Chakansky were involved in the prosecution and inter partes reviews of the '167 patent. See id. Inparticular, Aquestive "directed that all correspondence in the '167 patent application be directed to Mr. Scola." Id.

While prosecuting the '167 patent at the United States Patent and Trademark Office (the "Patent Office"), Aquestive had issues with prior art. Specifically, the Patent Office initially rejected the '167 patent over a prior art reference called Staab. See id. at 28. After this initial rejection, Scola spoke with patent examiners and proposed amending the '167 patent to add new limitations to overcome the Staab prior art reference. See id. On August 10, 2010, attorneys at Hoffman amended the '167 patent application, adding language to the effect that the '167 patent's "active component is substantially uniformly distributed, whereby said substantially uniform distribution is measured by substantially equally sized individual unit doses which do not vary by more than 10% of said desired amount of said active component." Id. at 27-28 (emphasis omitted). The inventors did not include this language in the '167 patent claims as originally filed. See id. at 28. Nevertheless, the Patent Office rejected the '167 patent as obvious in light of Staab, which teaches that "the agent material is evenly distributed throughout the film." Id. at 29.

On May 2, 2012, Aquestive and Hoffman again amended the '167 patent, including language in claim 1 reciting "a substantially uniform distribution of an active component [wherein] said substantially uniform distribution is measured by substantially equally sized individual unit doses which do not vary by . . . more than 10%." Id. at 30 (emphasis omitted). Aquestive argued that this language distinguished the '167 patent from Staab because "Staab fails to disclose or suggest that the visco-elastic film must be formed having no more than 10% variance." Id. Myers and Scola reinforced the importance of the 10% limitation, alleging that "[c]urrently, as required by various world regulatory authorities, dosage forms may not vary more than 10% in the amount of active present." Id. at 31.

Myers and Scola's allegation regarding regulatory requirements conflicted with Myers and Aquestive's other statements to the Patent Office. See id. For example, while prosecuting United States Patent No. 8,663,687 (the "'687 patent"), Myers stated that "[c]urrently, as generally required by various world regulatory authorities, dosage forms may not vary more than 10-15% in the amount of active present." Id. Additionally, six days after Myers's representations to the Patent Office regarding the 10% limitation, another Aquestive expert, Dr. Robert Langer ("Dr. Langer"), testified in a separate case involving a patent claiming the same priority as the '167 patent. See id. at 32 n.1. In that case, Dr. Langer testified that "the FDA has a variation of 15 percent, not 10 percent." Id.

Following the May 2, 2012 amendment, the Patent Office, apparently unaware of these inconsistencies, allowed several of the '167 patent's claims based on the 10% limitation stating that the examiner "notes the term 'substantially uniform' for the distribution of active also has to meet the less than 10% variance in the matrix limitation, and therefore is not indefinite." Id. at 30 (emphasis omitted). On July 1, 2014, the Patent Office issued the '167 patent. See id. at 31; [D.E. 1] ¶ 12.

In late 2014, BDSI challenged the validity of the '167 patent through the Patent Office's inter partes review process. See [D.E. 31] 16. During inter partes review, Myers, Scola, and Chakansky continued to make representations regarding the alleged 10% regulatory requirement See id. at 32. For example, Scola stated that "individual unit doses . . . vary no more than +/- 10% from the labeled dosage amount . . . and thus comply with the FDA uniformity requirements." [D.E. 31-1] 3. Additionally, in response to BDSI's challenges during the inter partes review, Scola and Chakansky filed a patent owner response that included expert declarations from Dr. Joseph Wyse ("Dr. Wyse") and Dr. Nicholas Peppas ("Dr. Peppas"). See [D.E. 31] at 33. This patent owner response stated that "using microscopy, Dr. Wyse examined Chen Example 8 films of Estradiol individual unit dosesprepared in accordance with Chen. His examination of photomicrographs taken of the films visually confirmed the lack of uniformity in the distribution of Chen's Example 8 film components, including Estradiol, and the presence of agglomerated/aggregated particles." Id. (emphasis omitted). Scola and Chakansky also told the Patent Office that "Dr. Peppas was provided by Hoffman & Baron with several photomicrographs that Dr. Wyse took of films he made of Example 8 of Chen," and Dr. Peppas used these photomicrographs in producing his declaration in favor of patentability. Id. at 34. Aquestive and Hoffman used Dr. Wyse and Dr. Peppas's declarations to advance their patentability arguments, claiming that the '167 patent overcame problems with agglomerations/aggregations which caused films produced in accordance with prior art to be "insufficiently uniform." Id. at 38. On cross examination, Dr. Wyse admitted that he had failed to take photomicrographs of films produced in accordance with prior art and that the nonuniformity resulted from "improper casting" techniques. See id. at 35-38. Accordingly, BDSI moved, inter alia, to exclude Dr. Wyse and Dr. Peppas's declarations. See [D.E. 37-1] 29. Despite BDSI's challenges, the Patent Office's Final Written Decision found that the '167 patent's claims "have not been shown by a preponderance of the evidence to be unpatentable." Id. at 31. Moreover, the Patent Office denied as moot BDSI's motion to exclude Dr. Wyse's and Dr. Peppas's declarations, stating that its final decision "does not rely on those declarations." Id. at 29-30.

After the Patent Office approved the '167 patent, BDSI submitted a New Drug Application under 21 U.S.C. § 355(b)(2) to the Food and Drug Administration ("FDA") seeking approval to market a new pharmaceutical product: individual unit doses of buprenorphine buccal film under the trademark BELBUCA. See Compl. [D.E. 1] ¶ 3; [D.E. 31] 15. On October 25, 2015, the FDA approved BDSI's application. See [D.E. 31] 15. Thereafter, BDSI began marketing and selling BELBUCA as a product for the management of severe pain that would ordinarily require "daily,around-the-clock, long-term opioid treatment" and for which "alternative treatment options are inadequate." Id.

On November 11, 2019, Aquestive filed this action against BDSI alleging infringement of the '167 patent. See Compl. [D.E. 1]. Aquestive alleges, inter alia, that although BDSI knew of the '167 patent, BDSI nonetheless sought FDA approval of and marketed BELBUCA, a product that infringes on the '167 patent. See id. ¶¶ 3-5. On April 16, 2020, BDSI answered by denying Aquestive's infringement allegations and asserting three counterclaims and eleven affirmative defenses. See [D.E. 27].

II.

In patent cases, the application of ...