Indivior Inc. v. Dr. Reddy's Labs. S.A.

INDIVIOR INC., INDIVIOR UK LIMITED,and AQUESTIVE THERAPEUTICS, INC., Plaintiffs, v. DR. REDDY'S LABORATORIES S.A.,AND DR. REDDY'S LABORATORIES, INC., Defendants.

INDIVIOR INC., INDIVIOR UK LIMITED,and AQUESTIVE THERAPEUTICS, INC., Plaintiffs, v. ALVOGEN PINE BROOK, INC., AND ALVOGEN PINE BROOK LLC, Defendants.

Civ. No. 17-7111 (KM) (CLW)

Civ. No. 18-1775 (KM) (CLW)

Civ. No. 18-5288 (KM) (CLW)

Civ. No. 17-7106 (KM) (CLW)

Civ. No. 18-8285 (KM) (CLW)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

November 5, 2019

OPINION

KEVIN MCNULTY, U.S.D.J.:

This opinion contains the Court's construction of key patent terms following a Markman hearing. (Dkt. No. 7106 at DE 211; Dkt. No. 7111 at DE 290) The final section constitutes the Court's opinion on the motion by Alvogen Pine Brook, Inc. and Alvogen Pine Brook LLC (collectively, unless otherwise specified, "Alvogen") to recover on bonds posted in connection with my grant of a temporary restraining order in the 17-cv-7106 consolidated action. (See DE 148).

These consolidated patent infringement cases are brought by Indivior Inc., Indivior UK Limited, and Aquestive Therapeutics, Inc. (collectively, unless otherwise specified, "Indivior"), against Dr. Reddy's Laboratories S.A. and Dr. Reddy's Laboratories, Inc. (collectively, unless otherwise specified, "DRL") and Alvogen.

The patents-in-suit are Patent Nos. 9,931,305 ("the '305 Patent"), issued to Aquestive on April 3, 2018, and 9,687,454 ("the '454 Patent"), issued to Indivior on June 27, 2017. Indivior's Suboxone film is also covered by Patent No. 8,603,514 ("the '514 Patent"). The '514 Patent shares the same specification with the '305 Patent. As a result, the '305 Patent was filed with a terminal disclaimer to synchronize its expiration with that of the '514 Patent. This '514 Patent is not directly at issue here, but was at issue in a related litigation involving these same parties filed in the United States District Court for the District of Delaware ("the Delaware Litigation").

Collectively, these patents describe formulations of Suboxone film, a "rapidly dissolving film that adheres to the underside of a patient's tongue" or cheek. Indivior's Suboxone film is used to treat opioid dependency; it works to decrease a patient's need for opioids while also deterring abuse. Its two active ingredients are buprenorphine and naloxone. The films are created by mixing a pharmaceutically active ingredient with a polymer in a solvent, casting the mixture onto a planar carrier surface to form a wet film, and then controllably drying the film to produce a solid thin sheet that can be cut into individual dosages.

I. Procedural History¹

I first briefly review the relevant opinions issued both in this action and in the related Delaware Litigation.

In broad strokes, Indivior previously moved in this action to enjoin DRL from bringing its generic Suboxone film to market. In a prior decision, I granted the motion. (Dkt. No. 7111 at DE 121). DRL subsequently appealed to the Federal Circuit, which reversed and remanded. Indivior Inc. v. Dr. Reddy's Labs., S.A., 752 F. App'x 1024 (Fed. Cir. 2018) ("Indivior I"). The parties also appealed a number of decisions in the related Delaware Litigation. After the parties filed their Markman briefs here, the Federal Circuit issued its opinion concerning the Delaware Litigation appeal. Indivior Inc. v. Dr. Reddy's Labs., S.A., 930 F.3d 1325, 1339 (Fed. Cir. 2019) ("Indivior II").

A. The '514 Patent

Indivior initially entered the Suboxone market by introducing a tablet in 2002. It then began developing a film version with Aquestive. The patent for that film, the '514 Patent, was issued on December 10, 2013.² ('514 Patent at [45], [54].).

DRL and others, including Alvogen, sought to enter the film market as generic competitors and filed ANDAs with the FDA for generic versions of the Suboxone film. Indivior responded by filing suit against a number of parties, including DRL and Alvogen, in the Delaware Litigation. Ultimately, the Delaware district court held that Indivior had failed to meet its burden of showing that DRL's and Alvogen's generic versions infringed the claims of the '514 Patent for Suboxone film. Reckitt Benckiser Pharm. Inc. v. Dr. Reddy's Labs. S.A., Nos. 14-1451, 14-1573, 14-1574, 2017 WL 3837312 (D. Del. Aug. 31, 2017); Reckitt Benckiser Pharm. Inc. v. Dr. Reddy's Labs. S.A., No. CV 14-1451-RGA, 2017 WL 3782782 (D. Del. Aug. 31, 2017); Indivior Inc. v. Mylan Techs. Inc., 298 F. Supp. 3d 775 (D. Del. 2018).

With respect to DRL, District Judge Andrews had earlier construed one of the claims in the '514 Patent to mean "dried without solely employing conventional convection air drying from the top" and found that there was not enough evidence to show that DRL's procedures "amount[ed] to an unconventional process" for drying. See Reckitt Benckiser Pharm. Inc. v. Teva Pharm. USA Inc., Nos. 14-1451, 14-1573, 14-1574, 2016 WL 3621632, at *10-*11 (D. Del. June 29, 2016). He found that Indivior had disclaimed "conventional convection air drying from the top," both through express statements and repeated disavowal in the '514 Patent specification. Id. at *8, *11 (noting that the '514 Patent contained identical language from process patents that were construed earlier in the opinion and applying that same reasoning to the claims in the '514 Patent). After reviewing the evidencepresented at trial, Judge Andrews concluded that Indivior did not prove that DRL's process of drying was unconventional, and hence infringing. Judge Andrews later made similar findings with respect to Alvogen. See Mylan Techs. Inc., 298 F. Supp. 3d at 785. ("Plaintiffs' comparison between Alvogen's exhibit batch and commercial processes fails to demonstrate that Alvogen's commercial process does not 'solely' employ drying from the top. It does not change my conclusion that Plaintiffs have not demonstrated 'substantial' bottom drying.").

Indivior then appealed to the Federal Circuit. See Section I.E, infra, discussing Indivior II.

B. The '305 Patent

Aquestive responded to the Delaware ruling by applying for the '305 Patent, which was issued on April 3, 2018. The '514 Patent and the '305 Patent largely overlap, except as to the language of one claim—Claim 26 of the '305 Patent and Claim 62 of the '514 Patent. The two pertinent revisions are as follows:

First, the '514 Patent claims "(i) a cast film." The '305 Patent, however, claims "(i) a continuously cast film produced on a manufacturing line."

Second, the '514 Patent claims that

"said flowable water-soluble or water swellable film-forming matrix is capable of being dried without loss of substantial uniformity in the stationing of said particulate active therein; and wherein the uniformity subsequent to casting and drying of the matrix is measured by substantially equally sized individual unit doses which do not vary by more than 10% of said at least on active."

The '305 Patent contains similar language, except that the italicized "drying" language was dropped and references to "continuous casting" are substituted. Thus '305's Claim 26 now reads:

said flowable water-soluble or water swellable film-forming matrix is capable of being continuously cast on the manufacturing line without loss of substantial uniformity in the stationing of said particulate active therein; andwherein said uniformity of the-continuously cast film is measured by substantially equally sized individual unit doses cut from the continuously cast film which do not vary by more than 10% of a desired amount of said at least one active.

(Pl. Ex. A at 85; italicized emphasis added).

Indivior then brought these actions against DRL and Alvogen here in the District of New Jersey, now claiming infringement of the new '305 Patent. (See Dkt. No. 5288 at DE 1; Dkt. No. 5285 at DE 1). Upon learning of DRL's plans to launch the ANDA product "at risk," Indivior moved for temporary restraints and a preliminary injunction to prevent DRL from launching its generic product. (Dkt. No. 7111 at DE 70). I granted a temporary restraining order enjoining DRL from launching in order to preserve the status quo during the resolution of the motions. (Id. at DE 78). After a hearing, on July 13, 2018, I granted Indivior's motion for a preliminary injunction. (Id. at DE 121). In essence, I concluded that Indivior, in the '305 Patent, had succeeded in "claiming around" the problem with the '514 Patent that was identified in the Delaware decision.

DRL then appealed that decision to the Federal Circuit, which disagreed.

C. Indivior I

On November 20, 2018, a divided Federal Circuit vacated the preliminary injunction issued in this action and remanded. See Indivior I, 752 F. App'x 1024.

The Federal Circuit first examined the '305 Patent's specification. The court particularly noted the specification's focus on drying processes:

The specification teaches that conventional drying methods—which only apply warm air to the top of the wet film—produce films that do not have the claimed content uniformity. Id. at col. 9 ll. 13-18. The specification explains that conventional methods that apply heat only to the top of the film cause the water on the surface to evaporate. Id. at col. 3 l. 48-col. 4 l. 3 . . .

The specification discloses controlled drying techniques that avoid the "rippling" problems produced by conventional drying methods. Id. at col. 23 ll. 10-21. The specification explains that "[t]he objective of the drying process is to provide a method of drying films that avoids complications, such as the noted 'rippling' effect, that areassociated with conventional drying methods." Id. at col. 23 ll. 10-14. The invention's controlled drying techniques include applying heat to the bottom of the film, introducing controlled microwaves, controlling the air flow above and beneath the film, and employing furnace filters. Id. at col. 23 ll. 22-39, col. 54 ll. 20-21. These techniques control heat distribution during the drying process and

...