Otsuka Pharm. Co. v. Torrent Pharm. Ltd.

118 F.Supp.3d 646

OTSUKA PHARMACEUTICAL CO., LTD., Plaintiff,

v.TORRENT PHARMACEUTICALS LIMITED, INC., Torrent Pharma Inc., and Hetero Labs Limited, Defendants.

Civil Action No. 14–1078 (JBS/KMW).

United States District Court, D. New Jersey.

Signed June 22, 2015.

Melissa A. Chuderewicz, Esq., Christopher P. Soper, Esq., Brian R. Zurich, Esq., Pepper Hamilton LLP, Princeton, NJ, Paul W. Browning, Esq., James B. Monroe, Esq., Denise Main, Esq., Jeffrey A. Freeman, Esq., Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Washington, DC, for Plaintiff.

James E. Cecchi, Esq., Michael Cross, Esq., Carella, Byrne, Cecchi, Olstein, Brody & Agnello, PC, Roseland, NJ, Claire J. Evans, Esq., James H. Wallace, Esq., A. Neal Seth, Esq., Lawrence M. Sung, Esq., Matthew J. Dowd, Esq., Wiley Rein LLP, Washington, DC, for Defendants.

OPINION

SIMANDLE, Chief Judge:

I. INTRODUCTION

This patent infringement action, one of twenty-five 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 Torrent Pharmaceuticals Limited, Inc.'s, Torrent Pharma Inc.'s, and Hetero Labs Limited's (hereinafter, "Torrent") proposed generic aripiprazole product infringes one or more claims of two of the various patents covering Otsuka's Abilify ® aripiprazole product, U.S. Patent Nos. 8,017,615 ("the '615 patent") and 8,580,796 ("the '796 patent").

Otsuka now moves to dismiss Torrent's Fifth and Sixth Counterclaims for "Unlawful Monopolization" and for "Patent Misuse" (hereinafter, the "Counterclaims") pursuant to Federal Rule of Civil Procedure 12(b)(6) and, in the alternative, to bifurcate and stay Torrent's Counterclaims pending resolution of the primary patent infringement issues pursuant to Federal Rule of Civil Procedure 42(b). [Docket Item 43.]

Otsuka argues, in particular, that Torrent's antitrust Counterclaim must be dismissed, because Torrent has not alleged, nor will Torrent ever suffer, the "anticompetitive injury" required for antitrust standing, and because Torrent's "cursory conclusions" fail to plausibly overcome Otsuka's Noerr–Pennington immunity. (Otsuka's Reply at 2–5; Otsuka's Br. at 5–11.) Ostuka similarly asserts that Torrent's patent misuse Counterclaim must be dismissed, because its allegation of baseless infringement fails as a matter of law to state a cognizable claim for patent misuse. (See Otsuka's Reply at 5–6; Otsuka's Br. at 11–12.) 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 13 (citations omitted).)

Torrent, however, submits that its antitrust Counterclaim demonstrates the "real and immediate" risk of injury required for purposes of antitrust standing, because absent "this bad faith litigation," Torrent would have an "unencumbered path to launch its ANDA product." (Torrent's Opp'n at 4–5.) With regard to Otsuka's claim of Noerr–Pennington immunity, Torrent similarly asserts that its antitrust Counterclaim sets forth sufficient factual matter to demonstrate that this litigation constitutes a sham, because Otsuka initiated suit despite Torrent's detailed non-infringement statement and despite the fact that Torrent's abbreviated new drug application (hereinafter, "ANDA") is non-infringing on its face. (Id. at 3–7.) Finally, Torrent submits that dismissal of its Counterclaims would, at this early stage of discovery, be inappropriate to the extent undeveloped factual issues remain concerning whether Otsuka's conduct constitutes patent misuse and/or an antitrust violation. (Id. at 8–9.)

The principal issues before the Court are whether the allegations of Torrent's Counterclaims suffice to confer antitrust standing, to overcome Otsuka's Noerr–Pennington immunity, and to state a plausible claim for patent misuse.

For the reasons that follow, Otsuka's motion will be granted in part and denied in part.

II. BACKGROUND

A. Factual and Procedural Background¹

Otsuka, a pharmaceutical company primarily organized and existing under the laws of Japan, 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 Abilify ®. (Am. Compl. at ¶¶ 1, 17–18, 25–30.)

In connection with Abilify'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 '615 patent and the '796 patent, both of which Otsuka owns by virtue of assignment. (Id. at 14, ¶¶ 17, 26, 29.) The listing, in particular, discloses Abilify®' 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. (Counterclaim at ¶ 13 (quotation marks omitted).)

In late 2013, Torrent filed ANDA No. 20–1519 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 the expiration of the '615 and the ' 796 patents. (See Countercl. at ¶ 14.) Torrent'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 Torrent's generic product. (See id. )

On January 4, 2014, Torrent mailed notice of its ANDA certification to Otsuka, and provided "a detailed statement of the factual and legal bases of Torrent's ANDA certifications for the '615 and '796 patents," i.e., a detailed explanation of the bases for Torrent's position that its generic aripiprazole tablets would "not infringe any valid or enforceable claim of the Orange Book-listed '615 and '796 patents." (Id. at ¶ 15.) In order to substantiate its non-infringement position, Torrent then provided the relevant portions of its ANDA on February 20, 2014. (Id. at ¶ 16.)

Otsuka filed an initial and Amended Complaint in this District, alleging that Torrent's proposed generic product "will, if approved and marketed," infringe at least one claim of the '615 and '796 patents. (Am. Compl. at ¶¶ 22–23, 33–34.) On October 22, 2014, Torrent filed an Answer to Otsuka's Amended Complaint and, as a relevant here, asserted Counterclaims for "Unlawful Monopolization in Violation of the Sherman Act: Sham Litigation" and for a "Declaratory Judgment of Unenforceability of the '615 and '796 Patents for Patent Misuse." (Countercl. at ¶¶ 34–62.)

Torrent'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 ¶¶ 42–45.) Indeed, Torrent alleges that Otsuka "has engaged in an overall predatory scheme to monopolize the [aripiprazole market] through, but not limited to, initiating objectively baseless and sham judicial proceedings designed" to "entrench and enhance [Otsuka's] monopolistic position in the [aripiprazole] market and to stifle and eliminate competition and competitors with no economic, market or competitive benefit." (Id. at ¶¶ 45, 47.) Torrent, accordingly, alleges that Otsuka initiated this "sham" and "bad faith" litigation against it not upon a genuine belief that Torrent's ANDA products would infringe the '615 and '796 Patents, but "for an improper purpose, and as a means of directly interfering with and harming Torrent's business and in order to forestall, frustrate and prevent competition by Torrent," in violation of the Sherman and Clayton Acts, 15 U.S.C. §§ 2, 15, and 26.² (Id. at ¶¶ 48–51.) Moreover, as a result of this "exclusionary" and "anticompetitive" conduct, Torrent has purportedly "suffered, and will continue to suffer," significant injury, "including lost profits and business opportunities." (Id. at ¶¶ 57–58.)

Torrent'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 basis" to support its infringement positions against Torrent, and "for the purpose of delay[ing] Torrent's entry" into the aripiprazole market by "burden[ing] Torrent with litigation costs and making baseless accusations of infringement." (Id. at ¶¶ 60–62.)

The pending motion followed.

III. STANDARD OF REVIEW

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 factual allegations must be facially sufficient to demonstrate a "plausible" right to relief, by pleading factual content sufficient for the Court "to draw the reasonable inference that the [plaintiff] is liable for the misconduct alleged." 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).

In evaluating whether a counterclaim meets this pleading standard, the Court strips away conclusory statements and reviews instead the "well-pled factual allegations, assume[s] their veracity, and then determine[s] whether" the allegations demonstrate a plausible "entitlement to relief." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (...