Otsuka Pharm. Co. v. Apotex Corp.

143 F.Supp.3d 188

OTSUKA PHARMACEUTICAL CO., LTD., Plaintiff,

v.APOTEX CORP., Apotex Inc. and Hetero Labs Ltd., Defendants.

Civil Action No. 14–8074 (JBS/KMW).

United States District Court, D. New Jersey.

Signed Aug. 11, 2015.

Brian Ronald Zurich, Christopher P. Soper, Melissa Anne Chuderewicz, Pepper Hamilton LLP, Princeton, NJ, for Plaintiff.

Michael S. Weinstein, Cole Schotz P.C., Hackensack, NJ, for Defendants.

MEMORANDUM OPINION

SIMANDLE, Chief Judge:

This patent infringement action, one of twenty-six related actions under the Hatch–Waxman Act, 35 U.S.C. §§ 271, 281, generally concerns Plaintiff Otsuka Pharmaceutical Co, Ltd.'s (hereinafter, "Otsuka") position that Apotex Corp.'s and Apotex Inc.'s (collectively, "Apotex") proposed generic aripiprazole product infringes one or more claims of four of the various patents covering Otsuka's Ability aripiprazole product, U.S. Patent Nos. 8,017,615 ("the '615 patent"), 8,580,796 ("the '796 patent"), 8,642,760 ("the '760 patent"), and 8,759,350 ("the '350 patent" and collectively, the "Patents–in–Suit").

Otsuka now moves to dismiss Apotex's Ninth and Tenth Counterclaims for "Unlawful Monopolization" and for "Patent Misuse" (hereinafter, the "Counterclaims") pursuant to Federal Rule of Civil Procedure 12(b)(6) or, in the alternative, to bifurcate and stay Apotex's Counterclaims pending resolution of the primary patent infringement issues pursuant to Federal Rule of Civil Procedure 42(b). [Docket Item 102.] The Court recently addressed the viability of substantively identical, but slightly less developed, counterclaims in Otsuka Pharmaceutical Co., Ltd. v. Torrent Pharm. Ltd., Inc., 118 F.Supp.3d 646, No. 14–1078, 2015 WL 3869677 (D.N.J. June 22, 2015), and reaches substantially the same result in connection with the pending motion.¹ For the reasons that follow, Otsuka's motion will be granted in part and denied in part. The Court finds as follows:

1. As this Court has summarized on numerous occasions, Otsuka holds New Drug Application (hereinafter, "NDA") No. 21–436, approved by the Food and Drug Administration (hereinafter, the "FDA"), for aripiprazole tablets, which Otsuka markets under the trade name Ability®. (See Am. Compl. at ¶¶ 1, 18, 20.) In connection with Ability®'s listing in the Orange Book, the FDA's book of drug products approved under the Food, Drug, and Cosmetic Act (hereinafter, the "Orange Book"), 21 U.S.C. § 355(j), Otsuka identifies the Patents–in–Suit, and discloses Ability®'s active ingredient as "aripiprazole," the dosage form as a "tablet" or "oral," and the strengths as 2 mg, 5 mg, 10 mg, 15 mg, 20 mg, and 30 mg. (Countercl. at ¶¶ 32–34.)

2. In late 2014, Apotex filed Abbreviated New Drug Application (hereinafter, "ANDA") No. 78–583 with the FDA, seeking approval to market generic 2 mg, 5 mg, 10 mg, 15 mg, 20 mg, and 30 mg aripiprazole tablets in the United States, prior to expiration of the Patents–in–Suit. (See Countercl. at ¶¶ 35–37.) Apotex's ANDA filing included a "paragraph IV certification" pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(IV), in which Torrent set forth its assertion that the Abilify ® patents would not be infringed by the commercial manufacture, use, or sale of Apotex's generic aripiprazole product. (See id. )

3. On November 12, 2014, Apotex then mailed notice of its ANDA certification to Otsuka, and provided a detailed explanation of the bases for Apotex's position that its generic aripiprazole tablets would not infringe any valid or enforceable claim of the Orange Book-listed Patents–in–Suit. (Id. at ¶ 38.) In order to substantiate its non-infringement and/or invalidity positions, Apotex's notice "included an Offer of Confidential Access" to its ANDA and supporting materials. (Id. )

4. Despite Apotex's assertions, Otsuka filed an initial and Amended Complaint in this District, alleging that Apotex's proposed generic product "will, if approved and marketed," infringe at least one claim of the Patents–in–Suit. (Am. Compl. at ¶¶ 24, 34, 44, 54.) On March 23, 2015, Apotex responded to Otsuka's Amended Complaint and, as relevant here, asserted Counterclaims for "Unlawful Monopolization in Violation of the Sherman Act:

Sham Litigation" and for a "Declaratory Judgment of Unenforceability" of the Patents–in–Suit for "Patent Misuse." (Countercl. at ¶¶ 55 72–118.)

5. Apotex's "Unlawful Monopolization" Counterclaim alleges, in particular, that Otsuka "has the power to control prices and/or exclude competition in, or prevent entry into" the aripiprazole market, and claims that Otsuka has wielded that power "to monopolize" the market. (Id. at ¶¶ 80–81.) Indeed, Apotex claims that Otsuka has "engaged" in a "predatory scheme to monopolize" the aripiprazole market through its institution of "objectively baseless and sham judicial proceedings designed to continue its monopoly of aripiprazole tablets" and to prevent Apotex, among other generic companies, from competing in the aripiprazole market. (Id. at ¶¶ 55 86–88, 106–108.) Apotex therefore alleges that this infringement litigation amounts to "sham" and "bad faith" litigation, in violation of the Sherman and Clayton Acts, 15 U.S.C. §§ 2, 15, and 26. (Id. at ¶¶ 72–110.)

6. Apotex's patent misuse Counterclaim largely reiterates the allegations of its antitrust Counterclaim, and specifically alleges that Otsuka filed this action without "any good faith factual or legal basis" to support its infringement positions, and for purposes of delaying Apotex's entry into the marketplace for aripiprazole tablets. (Id. at ¶¶ 111–14.) Apotex further alleges that Otsuka has, in filing and prosecuting this "baseless" action, "impermissibly broadened the physical or temporal scope" of the Patents–in–Suit and asserted the patents in order "to obtain a market benefit beyond that which inheres in the statutory patent right." (Id. at ¶¶ 115–16.)

7. In moving to dismiss, Otsuka argues, as it did in connection with substantially similar counterclaims in Torrent, 118 F.Supp.3d 646, 2015 WL 3869677, that Apotex's antitrust and patent misuse Counterclaims must be dismissed, because Apotex has not alleged the "anticompetitive" or "antitrust injury" required for antitrust standing, because Apotex's "cursory conclusions" fail to plausibly overcome Otsuka's Noerr–Pennington immunity, and because Apotex's patent misuse counterclaim fails as a matter of law to state a cognizable claim for patent misuse. (See Otsuka's Br. at 5–11; Otsuka's Reply at 1–5.) In the alternative, Otsuka requests that the Court follow the " ‘standard practice’ " of bifurcating for trial the patent issues raised in this litigation from the antitrust and/or patent misuse issues. (Otsuka's Br. at 12 (citations omitted); Otsuka's Reply at 6.)

8. Under Federal Rule of Civil Procedure 12(b)(6), the court must generally accept as true the factual allegations of the defendant's counterclaims, and construe all "reasonable inferences" in the light most favorable to the defendant. Revell v. Port Auth. of N.Y., N.J., 598 F.3d 128, 134 (3d Cir.2010) ; see also Fleisher v. Standard Ins. Co., 679 F.3d 116, 120 (3d Cir.2012) (same). However, "[a] pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action" fails to suffice. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Rather, the "well-pled factual allegations" must be sufficient to demonstrate a plausible "entitlement to relief." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ); see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir.2008).

9. As stated above, Otsuka moves to dismiss Apotex's antitrust Counterclaim for lack of standing and on immunity grounds, and moves to dismiss Apotex's patent misuse Counterclaim for failure to state a plausible claim for relief. For substantially the reasons stated in Torrent, the Court will deny Otsuka's motion to the extent it seeks the dismissal of Apotex's Counterclaims. Nevertheless, the Court will briefly address each issue in turn.

10. A party suing under federal antitrust laws, as here, must meet the prudential requirement of " ‘antitrust standing.’ "² Ethypharm S.A. France v. Abbott Labs., 707 F.3d 223, 232 (2d Cir.2013) (citation omitted). In Ethypharm S.A. France, the Court of Appeals for the Third Circuit outlined a five-factor test, with the second, "antitrust injury," constituting the essential precondition for antitrust standing. Id. (citation omitted). In other words, in the absence of a plausible allegation of antitrust injury, the only factor presently challenged by Otsuka, the Court need not reach the remaining factors.

11. As stated by this Court in Torrent,

In order to plead an antitrust injury, the party must allege facts showing (1) that it suffered an injury of the type the antitrust laws seek to prevent, e.g., anticompetitive behavior, and (2) that the injury resulted from the adversary's unlawful or anticompetitive acts. See In re Niaspan Antitrust Litig., 42 F.Supp.3d 735, 753 (E.D.Pa.2014) (quoting In re K–Dur Antitrust Litig., 338 F.Supp.2d 517, 534 (D.N.J.2004) ). The federal antitrust laws, however, foster " ‘the protection of competition not competitors.’ " Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57, 76–77 (3d Cir.2010) ; see also Brunswick Corp. v. Pueblo Bowl–O–Mat, Inc., 429 U.S. 477, 488, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977) (citation omitted) (noting that Congress enacted the antitrust laws "for ‘the protection of competition, not competitors' "). As a result, the pleaded facts must show "that ‘the challenged action has had an actual adverse effect on competition as a whole in the relevant market,’ " rather than just an adverse effect on the particular competitor. Irish v. Ferguson, 970 F.Supp.2d 317, 365 (M.D.Pa.2013) (citations omitted); see also Eichorn v. AT & T Corp., 248 F.3d 131, 140 (3d Cir.2001) (noting that an antitrust injury does not lie

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