Novartis AG v. HEC Pharm Co., C.A. No. 15-151-LPS

183 F.Supp.3d 560

Novartis AG, Novartis Pharmaceuticals Corporation, Mitsubishi Tanable Pharma Corporation, and Mitsui Sugar Co., Ltd., Plaintiffs,

v.HEC Pharm Co. Ltd., HEC Pharm Group, and HEC Pharm USA Inc., Defendants.

C.A. No. 15-151-LPS

United States District Court, D. Delaware.

Signed May 2, 2016

Michael P. Kelly, Benjamin A. Smyth, Daniel M. Silver, McCarter & English, LLP, Wilmington, DE, Caitlin R. Looby, Pro Hac Vice, Jane M. Love, Pro Hac Vice, Robert W. Trenchard, Pro Hac Vice, for Plaintiffs.

Jacqueline Lu, Pro Hac Vice, Stamatios Stamoulis, Stamoulis & Weinblatt LLC, Wilmington, DE, for Defendants.

MEMORANDUM ORDER

HON. LEONARD P. STARK, UNITED STATES DISTRICT COURT JUDGE

At Wilmington this 2nd day of May, 2016 :

Having heard oral argument and reviewed the parties' briefing and other materials filed in relation to Plaintiffs' motion to stay proceedings on U.S. Patent No. 8,324,283 ("the '283 patent") pending appeal of an inter partes review ("IPR") decision on that patent, IT IS HEREBY ORDERED that Plaintiffs' motion (D.I. 72) is GRANTED IN PART , for the reasons stated below.

1. Plaintiffs filed a patent infringement action asserting U.S. Patent No. 5,604,229 ("the '229 patent") against Defendant HEC in February 2015. HEC included in its May 2015 Answer a counterclaim for declaratory judgment of non-infringement and invalidity of the '283 patent —a patent which Plaintiffs did not assert. (D.I. 32 at ¶¶ 30-37) In September, the U.S. Patent Trial and Appeal Board ("PTAB") issued a final decision in an IPR challenge to the '283 patent. The PTAB found the '283 patent invalid as obvious. (D.I. 74-2 at 51) Subsequently, Plaintiffs filed a Notice of Appeal. See Novartis AG v. Torrent Pharms ., App. No. 13-1352 (Fed. Cir.) (filed Dec. 21, 2015). HEC is not involved in the IPR. In light of the appeal, Plaintiffs asked HEC to voluntarily stay proceedings on the '283 patent pending resolution of the IPR appeal. (D.I. 74-2 at 118) HEC refused to do so. (Id. at 117) Thus, on November 11, 2015, Plaintiffs filed their motion to stay. (D.I. 72) The Court heard argument on the motion on April 19, 2016. (See D.I. 158 ("Tr."))

2. Whether or not to stay litigation is a matter left to the Court's discretion. See Ethicon, Inc. v. Quigg , 849 F.2d 1422, 1426–27 (Fed.Cir.1998). In exercising this discretion, the Court must weigh the competing interests of the parties and attempt to maintain an even balance. See Landis v. N. Am. Co. , 299 U.S. 248, 255, 57 S.Ct. 163, 81 L.Ed. 153 (1936). The factors courts typically consider in deciding how to exercise this discretion include: (1) whether a stay will simplify the issues and trial of the case, (2) whether discovery is complete and a trial date has been set, and (3) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party. See, e.g., Enhanced Sec. Research, LLC v. Cisco Sys., Inc. , 2010 WL 2573925, at *3 (D.Del. June 25, 2010).

3. The Federal Circuit's decision will likely simplify this case. If the Federal Circuit upholds the PTAB's conclusion that the '229 patent is invalid, its decision will moot HEC's counterclaims, thereby allowing the parties to avoid all the costs (including discovery) that would otherwise be incurred in litigation concerning whether the '229 patent is valid and infringed. Alternatively, even if the Federal Circuit modifies the PTAB's decision, this Court will likely benefit from the Federal Circuit's guidance relating to that patent, guidance which will almost certainly include claim construction. Among the issues pending on appeal is whether the PTAB erred in denying Plaintiffs' motion to amend their claims—raising the possibility that the scope of the claims to be litigated in this case may change after conclusion of the appeal. For this and other reasons, it would be complicated and potentially wasteful for the Court to litigate the '229 patent at the same time as the Federal Circuit is reviewing its validity. This factor favors a stay.

4. The stage of the litigation, and the status of the IPR appeal, further support a stay. This litigation is at an early stage: although documents have been produced, fact discovery has not closed and expert reports are not due for another six months. Although a trial date has been set—March 2017—it is very likely that the pending appeal (which is due...