Genentech, Inc. et al v. Amgen Inc.

ANSWERING BRIEF in Opposition re MOTION to Dismiss Based upon Defendant's Unenforceability Counterclaims and to Strike Defendant's Eleventh Affirmative Defense

D. Del.Mar 7, 2019

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE GENENTECH, INC. and CITY OF HOPE, Plaintiffs, v. AMGEN INC., Defendant and Counterclaim Plaintiff. Case No. 1:18-cv-00924-CFC AMGEN INC.’S OPPOSITION TO PLAINTIFFS’ MOTION TO DISMISS AMGEN’S UNENFORCEABILITY COUNTERCLAIMS AND TO STRIKE AMGEN’S ELEVENTH AFFIRMATIVE DEFENSE Dated: March 7, 2019 Of Counsel: Orion Armon Cooley, LLP 380 Interlocken Crescent Suite 900 Broomfield, CO 80021-8023 P 720-566-4119 oarmon@cooley.com Eamonn Gardner Cooley, LLP 4401 Eastgate Mall San Diego, CA 92121-1909 P 858-550-6086 egardner@cooley.com Susan Krumplitsch Michelle Rhyu Daniel Knauss Cooley, LLP 3175 Hanover Street Palo Alto, CA 94304-1130 P 650-843-5287 skrumplitsch@cooley.com rhyums@cooley.com dknauss@cooley.com SMITH, KATZENSTEIN & JENKINS, LLP Neal C. Belgam (No. 2721) Eve H. Ormerod (No. 5369) 1000 West Street, Suite 1501 Wilmington, DE 19801 (302) 652-8400 nbelgam@skjlaw.com eormerod@skjlaw.com Attorneys for Defendant Amgen Inc. Nancy Gettel Thomas Lavery, IV Amgen, Inc. One Amgen Center Drive Thousand Oaks, CA 91320-1799 P 805-447-1000 ngettel@amgen.com tlavery@amgen.com Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 1 of 20 PageID #: 11420 Table of Contents Page -i- I. NATURE AND STAGE OF THE PROCEEDINGS ........................................................ 1 II. SUMMARY OF ARGUMENT ......................................................................................... 2 III. STATEMENT OF FACTS ................................................................................................ 4 A. Amgen’s Compliance With The BPCIA................................................................ 4 B. Amgen’s Eleventh Affirmative Defense Is That Genentech Committed Inequitable Conduct Before the U.S.P.T.O ............................................................ 5 C. Many Patents-In-Suit Will Expire Soon or Are Being Challenged In Other Proceedings ............................................................................................................ 6 IV. LEGAL STANDARDS ..................................................................................................... 8 A. Motion to Strike under F.R.C.P. 12(f) ................................................................... 8 B. Motion to Dismiss under F.R.C.P. 12(b)(6)........................................................... 9 V. ARGUMENT ................................................................................................................... 10 A. Amgen’s Eleventh Affirmative Defense of Inequitable Conduct and Its Inequitable Conduct Counterclaim Count 3 Are Legally Sufficient ................... 10 B. Amgen’s Unenforceability Counterclaims Are Legally Sufficient ..................... 13 VI. CONCLUSION ................................................................................................................ 15 Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 2 of 20 PageID #: 11421 Table of Authorities Page(s) -ii- Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009) ...................................................................................................................9 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) .............................................................................................................9, 10 Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313 (1971) ...................................................................................................................9 Butamax Adv. Biofuels v. Gevo, No. 11-54, 2012 U.S. Dist. LEXIS 86215 (D. Del. June 21, 2012).........................................11 ePlus, Inc. v. Lawson Software, Inc., 789 F.3d 1349 (Fed. Cir. 2015)................................................................................................14 Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009)................................................................................................10 Fesnak & Assoc., LLP v. U.S. Bank. Nat’l Ass’n, 722 F. Supp. 2d 496 (D. Del. 2010) ...........................................................................................8 Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009)...............................................................................................10, 14 IBM v. Priceline Grp., Inc., Case No. 15-137-LPS-CJB, 2017 U.S. Dist. LEXIS 54285 (D. Del. Apr. 10, 2017) ....................................................................................................................................3, 12 Idenix Pharms., Inc. v. Gilead Scis., Inc., Case No. 13-1987-LPS, 2014 U.S. Dist. LEXIS 118789 (D. Del. Aug. 25, 2014) ........................................................................................................................................14 Kimble v. Marvel Entm’t, LLC, 135 S. Ct. 2401 (2015) .............................................................................................................13 Moody v. Atl. City Bd. of Educ., 870 F.3d 206 (3d Cir. 2017).......................................................................................................9 Precision Instrument Mfg. Co. v. Auto Maint. Mach. Co., 324 U.S. 806 (1945) .................................................................................................................10 Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 3 of 20 PageID #: 11422 Table of Authorities (continued) Page(s) -iii- Quest Integrity USA, LLC v. Clean Harbors Indus. Servs., No. 14-cv-01482, 2015 U.S. Dist. LEXIS 95148 (D. Del. July 22, 2015) ..............................12 Refac Int’l, Ltd. v. Lotus Dev. Corp., 81 F.3d 1576 (Fed. Cir. 1996)..................................................................................................11 Ring Plus, Inc. v. Cingular Wireless Corp., 614 F.3d 1354 (Fed. Cir. 2010)................................................................................................12 Senju Pharm. Co., Ltd. v Apotex, Inc., 921 F. Supp. 2d 297 (D. Del. 2013) ...........................................................................................9 Southco, Inc. v. Penn Eng’g & Mfg. Corp., 768 F. Supp. 2d 715 (D. Del. 2011) .............................................................................11, 12, 13 Symbol Techs. Inc. v. Aruba Networks, Inc., 609 F. Supp. 2d 353 (D. Del. 2009) .......................................................................................3, 9 Therasense Inc. v. Becton Dickenson & Co., 649 F.3d 1276 (Fed. Cir. 2011)................................................................................................10 Tyco Fire Prods. LP v. Victaulic Co., 777 F. Supp. 2d 893 (E.D. Pa. 2011) .......................................................................................14 Umland v. PLANCO Fin. Servs., Inc., 542 F.3d 59 (3d Cir. 2008).........................................................................................................9 Wyeth Holdings Corp. v. Sandoz, Inc., No. 09-cv-00955, 2012 U.S. Dist. LEXIS 26912 (D. Del. Feb. 3, 2012) ..........................11, 13 Statutes 42 U.S.C. § 262(k)(2) ......................................................................................................................4 42 U.S.C. § 262(l)(2)(B) ..................................................................................................................4 42 U.S.C. § 262(l)(3)(A) ..................................................................................................................4 42 U.S.C. § 262(l)(3)(B)(ii)(I) .....................................................................................................1, 4 42 U.S.C. § 262(l)(3)(C) ..............................................................................................................1, 5 Other Authorities Federal Rule of Civil Procedure Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 4 of 20 PageID #: 11423 Table of Authorities (continued) Page(s) -iv- 12(b)(6) ............................................................................................................................................9 8(a) .............................................................................................................................................3, 13 8(a)(2) ............................................................................................................................................14 9(b) .......................................................................................................................................2, 12, 13 12(f)..............................................................................................................................................2, 8 12(b)(6) ............................................................................................................................................2 Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 5 of 20 PageID #: 11424 1 I. NATURE AND STAGE OF THE PROCEEDINGS This case concerns Amgen Inc.’s (“Amgen”) ABP 980, a biosimilar trastuzumab developed to treat various cancers, including breast cancer. Almost a year before this case began, the parties engaged in the pre-suit exchange of information as set forth in the Biologics Price Competition and Innovation Act (the “BPCIA”), 42 U.S.C. § 262(l) et seq. As part of this information exchange, Genentech, Inc. (“Genentech”) and City of Hope (collectively, “Plaintiffs”) provided a list of patents, purportedly related to trastuzumab, that they believed could be asserted against Amgen’s ABP 980 product. In response, Amgen provided a detailed statement under 42 U.S.C. § 262(l)(3)(B)(ii)(I) (“Amgen’s (3)(B) statement”) that included, on a claim-by-claim basis, the factual and legal bases that the patents identified by Plaintiffs were invalid and/or unenforceable and not infringed. Genentech then provided its statement under 42 U.S.C. § 262(l)(3)(C) setting forth its validity and infringement positions. After completing the information exchange, the parties negotiated the list of patents to be included in the resulting lawsuit. On June 21, 2018, Plaintiffs brought this action for patent infringement against Amgen. D.I. 1. About a month later, Plaintiffs amended their complaint to drop nineteen patents, leaving eighteen patents at issue. D.I. 15. On November 7, 2018, Plaintiffs identified ten patents and twenty claims to assert in the litigation, including a patent application that has since issued as U.S. Patent No. 10,160,811 (“the ’811 patent”). See D.I. 44. On January 17, 2019, Plaintiffs filed a second amended complaint to add the ’811 patent and remove an expired patent. D.I. 75. At present, the total number of asserted patents remains eighteen.1 1 On February 21, 2019, Plaintiffs supplemented their disclosures under the BPCIA to include newly-issued U.S. Patent No. 10,184,106, but have not yet amended their complaint to assert this Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 6 of 20 PageID #: 11425 2 Amgen filed its Answer and Counterclaims to the second amended complaint on January 31, 2019. D.I. 80. Amgen’s Answer includes an eleventh affirmative defense of unclean hands and inequitable conduct stemming from false statements that Genentech made to the U.S. Patent Office during prosecution of U.S. Patent No. 6,407,213 (the “’213 patent”). Amgen’s counterclaim Count 3 against the ’213 patent incorporates by reference these unclean hands and inequitable conduct arguments. And consistent with the positions taken in its (3)(B) statement, Amgen included counterclaims that each of the patents-in-suit is invalid and/or unenforceable and not infringed. On February 21, 2019, Plaintiffs filed the pending motion to strike Amgen’s eleventh affirmative defense under Federal Rule of Civil Procedure 12(f) and to strike Amgen’s counterclaims of unenforceability under Federal Rule of Civil Procedure 12(b)(6). D.I. 86.2 Plaintiffs do not argue that any other language should be stricken from Amgen’s counterclaims. Because Plaintiffs’ motion is meritless and should be denied, Amgen opposes. II. SUMMARY OF ARGUMENT 1. Plaintiffs are not entitled to the dismissal of Amgen’s inequitable conduct affirmative defense or the striking of Amgen’s counterclaim that Genentech engaged in inequitable conduct while prosecuting the ’213 patent. Amgen’s inequitable conduct theory meets the pleading standard of Federal Rule of Civil Procedure 9(b). It is undisputed that Amgen’s patent. 2 This motion is nearly identical to Plaintiffs’ motion filed on August 23, 2018 with respect to Amgen’s Answer, Affirmative Defenses, and Counterclaims to the First Amended Complaint. D.I. 23. Plaintiffs have not withdrawn that earlier motion, but have now abandoned their previous argument that the counterclaims regarding seventeen of the patents-in-suit must satisfy Rule 9(b)’s heightened pleading standard. As such, Plaintiffs concede that Rule 9(b)’s heightened pleading standard does not apply to the counterclaims regarding these seventeen patents-in-suit. See infra Section V.B, n.4. Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 7 of 20 PageID #: 11426 3 inequitable conduct allegations were pled with particularity, identifying the “who, what, when, where, and how of the material misrepresentation or omission committed before the PTO.” IBM v. Priceline Grp., Inc., Case No. 15-137-LPS-CJB, 2017 U.S. Dist. LEXIS 54285, at *13-14 (D. Del. Apr. 10, 2017). Plaintiffs’ sole argument is that their false and misleading statements to the U.S.P.T.O. should be characterized as permissible attorney argument, rather than inequitable misrepresentations. This factual issue, however, cannot be resolved on a motion to dismiss or a motion to strike. The Court is required to take the allegations in Amgen’s Answer as true and, as such, Amgen has adequately pled that Plaintiffs committed inequitable conduct by deliberately misleading the Patent Office. 2. Plaintiffs are similarly not entitled to strike Amgen’s counterclaims of unenforceability of each of the eighteen asserted patents. Plaintiffs argue that all counterclaims of unenforceability “fail to meet even the most liberal pleading standard.” However, seven of Genentech’s patents are set to expire within the next three to four months or have already expired. An expired patent cannot be enforced against activities that occurred after the expiration date. Additionally, a subset of patents have been found invalid at the Patent Office, and if those decisions are upheld by the Federal Circuit, those patents will also be unenforceable. Moreover, another subset of patents are currently being challenged in other district court litigations. Those patents will be unenforceable in this proceeding if they are found invalid in a final judgment in another proceeding. Amgen’s counterclaims thus meet the broad notice-pleading standards of Federal Rule of Civil Procedure 8(a). As with Genentech’s motion to dismiss, when ruling on a motion to strike, this Court must construe all facts in favor of Amgen, “and deny the motion if the defense is sufficient under the law.” Symbol Techs. Inc. v. Aruba Networks, Inc., 609 F. Supp. 2d 353, 356 (D. Del. 2009). Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 8 of 20 PageID #: 11427 4 III. STATEMENT OF FACTS Amgen is a biotechnology pioneer with expertise in the development and manufacture of biologic drugs, including biosimilars. D.I. 80, (Countercl.) ¶ 6. Biosimilar products are intended to be “highly similar” to the reference product, with no clinically meaningful differences in safety, purity, and potency. 42 U.S.C. § 262(k)(2). One of Amgen’s biosimilar products is ABP 980, a biosimilar of Genentech’s biologic drug, Herceptin. Amgen has invested significant resources in developing ABP 980, including developing the cell culture, harvest, and numerous purification steps to manufacture and purify the ABP 980 antibody, and conducting numerous clinical studies in human patients. D.I. 80, (Countercl.) ¶ 9. A. Amgen’s Compliance With The BPCIA The BPCIA, enacted by Congress in 2009, sets forth an abbreviated regulatory pathway for FDA approval of biosimilar products. D.I. 80, (Countercl.) ¶¶ 10, 12. Amgen is seeking FDA approval for ABP 980 as a biosimilar to Genentech’s Herceptin. D.I. 80 (Ans.), ¶ 7. Under the BPCIA, the reference product sponsor (here, Genentech) and the biosimilar applicant (here, Amgen) exchanged specific information under a statutorily proscribed timeline. Amgen complied with these information exchange provisions. Under the first exchange, Amgen provided its BLA to Genentech, along with additional manufacturing information requested by Genentech. 42 U.S.C. § 262(l)(2)(B). Genentech then identified patents for inclusion on its (3)(A) statement, for which it purportedly believes that a claim of patent infringement could reasonably be brought against Amgen. 42 U.S.C. § 262(l)(3)(A). Amgen then responded with its (3)(B) statement, a detailed description, on a claim-by-claim basis, the factual and legal basis for its opinion that the patents identified by Genentech are invalid, unenforceable, or will not be infringed. 42 U.S.C. § 262(l)(3)(B)(ii)(I). Amgen’s (3)(B) statement contains over a thousand pages setting forth its invalidity, unenforceability, and non-infringement analysis. Genentech replied with its (3)(C) Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 9 of 20 PageID #: 11428 5 statement, which purported to set forth its validity and infringement positions for a subset of the original patents on its (3)(C) list. 42 U.S.C. § 262(l)(3)(C). After this series of information exchanges, the BPCIA provides that the parties shall engage in good faith negotiations to identify the patents that should be asserted in the resulting district court litigation. Genentech and Amgen negotiated a list of patents, and Genentech filed suit in this Court. D.I. 1. Genentech later amended its complaint to exclude nineteen originally-asserted patents. D.I. 15. Genentech amended its complaint a second time to assert one newly-issued patent and drop one expired patent. D.I. 75. Amgen timely filed its Answer and Counterclaims that are the basis of the instant motion. D.I. 80. B. Amgen’s Eleventh Affirmative Defense Is That Genentech Committed Inequitable Conduct Before the U.S.P.T.O Amgen’s inequitable conduct theory rests on the misrepresentations and omissions made by Genentech during the prosecution of the ’213 patent. Amgen pled with particularity the “who, what, when, where, and how” of Genentech’s material misrepresentations and omissions. As Amgen recited in its Answer, Genentech deliberately misrepresented the teachings of U.S. Patent No. 5,530,101 (“the ’101 patent”) to the Patent Office in order to overcome a rejection based on that reference. Specifically, Genentech told the Examiner that the ’101 patent does not use the Kabat numbering system, despite its repeated references to “numbering according to Kabat” and “the Kabat system.” Genentech also made deliberate misrepresentations and omissions regarding Queen 1989, including (i) falsely distinguishing Queen 1989 on the ground that it used “sequential numbering,” as opposed to the Kabat numbering system; and (ii) providing information at the request of the Examiner that conspicuously omitted a key residue (“62L”) disclosed in the prior art. Deceptive intent by Genentech is the single most reasonable inference to be drawn from the prosecution history and all other available evidence. . . . Contrary to Genentech’s representations to the Patent Office—namely, that the ’101 patent does not use the Kabat numbering system—the ’101 patent states: Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 10 of 20 PageID #: 11429 6 “Residues are numbered according to the Kabat system (E. A. Kabat et al., Sequences of Proteins of Immunological Interest (National Institutes of Health, Bethesda, Md.) (1987).” (’101 patent at 9:13–18.) In addition, the ’101 patent expressly refers to “numbering according to Kabat, op. cit.” with specific reference to position 93 in the heavy chain. (See id. at 15:17–37.) . . . In order to overcome the § 102 rejection based on the ’101 patent, Genentech falsely represented to the Patent Office that the ’101 patent used sequential numbering, while arguing that the “claims of the instant application use Kabat numbering for the framework region residues.” Genentech misrepresented the teachings of the ’101 patent, despite clear and repeated references in the ’101 patent to the Kabat numbering system. Absent Genentech’s false and misleading distinction, the Examiner had no reason to withdraw the § 102 rejection based on the ’101 patent. Genentech also made deliberate and material misrepresentations and omissions regarding Queen 1989 during the prosecution of the ’213 patent. Genentech distinguished Queen 1989 on the ground that it used “sequential numbering,” as opposed to the Kabat numbering system. At the Examiner’s request, Genentech submitted a comparison of the different numbering systems purportedly utilized in Queen 1989 and the pending claims.3 The alignments provided by Genentech to the Examiner conspicuously omitted the “62L” residue in both numbering systems. As noted above, residue “62L” was recited in then-pending claims of the ’213 patent, and Queen 1989 expressly discloses “residues at positions corresponding to . . . 47 and 62 of the light chain (Fig. 2).” (See Queen 1989 at 10032.) Importantly, Queen 1989 discloses residues in the Kabat numbering system and, in particular, residue “62 of the light chain.” D.I. 19 at 30-33. C. Many Patents-In-Suit Will Expire Soon or Are Being Challenged In Other Proceedings Genentech currently asserts eighteen patents against Amgen. Many of these patents are set to expire in the next three to four months or have already expired, have been found unpatentable 3 See [D.I. 19, n.1] 10/7/97 Applicant Remarks at 6–10 (“As requested by the Examiner in the interview, alignments of heavy chain variable domain (Exhibit A) and light chain variable domain (Exhibit B) sequences of the 101 patent (including the sequences for the murine and humanized anti-Tac antibody of Queen et al.) with sequential and Kabat residue numbering is attached.”). Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 11 of 20 PageID #: 11430 7 in inter partes review proceedings at the U.S. Patent Office, and/or are involved in other district court or Federal Circuit proceedings. The following patents have expired or will in the next three to four months: EXPIRED • 6,331,415: expired 12/18/2018 • 7,923,221: expired 12/18/2018 • 6,121,428: expired 6/12/2018 WILL EXPIRE IN NEXT 3-4 MONTHS • 6,407,213: will expire 6/18/2019 • 6,417,335: will expire 5/3/2019 • 9,249,218: will expire 5/3/2019 • 6,620,918: will expire 5/6/2019 Amgen’s Answer plainly listed the expiration dates of each asserted patent. See D.I. 80 (Countercl.) ¶¶ 33-50. Furthermore, the following patents have been found unpatentable at the U.S. Patent Office: ALL CHALLENGED CLAIMS INVALIDATED • 7,846,441 (IPR2017-01121; IPR2017-00731) • 7,892,549 (IPR2017-00737) SUBSET OF CHALLENGED CLAIMS INVALIDATED • 6,407,213 (IPR2017-01488) Finally, the following patents are at issue in other ongoing litigations: Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 12 of 20 PageID #: 11431 8 PATENTS ASSERTED IN CASE NO. 1-18-CV-01363 (D. DEL.) • 6,331,415 • 7,923,221 • 6,407,213 • 7,846,441 • 7,892,549 • 6,627,196 • 7,371,379 • 6,417,335 • 9,249,218 • 8,574,869 • 7,993,834 • 8,076,066 • 8,440,402 • 8,512,983 • 9,714,293 • 10,160,811 PATENTS ASSERTED IN CASE NO. 1-17-CV-01407, -01471 (D. DEL.) • 6,331,415 • 8,574,869 • 8,512,983 PATENTS AT ISSUE IN FEDERAL CIRCUIT APPEALS • 7,846,441 (Case Nos. 19-1267, 19-1263) • 7,892,549 (Case Nos. 19-1265, 19-1270) • 6,627,196 (Case No. 19-1174) • 7,371,379 (Case No. 19-1173) IV. LEGAL STANDARDS A. Motion to Strike under F.R.C.P. 12(f) Motions to strike an affirmative defense under Federal Rule of Civil Procedure 12(f) are generally disfavored. Fesnak & Assoc., LLP v. U.S. Bank. Nat’l Ass’n, 722 F. Supp. 2d 496, 502 Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 13 of 20 PageID #: 11432 9 (D. Del. 2010). This Court has held that such a motion should not be granted “unless the insufficiency of the defense is clearly apparent.” Senju Pharm. Co., Ltd. v Apotex, Inc., 921 F. Supp. 2d 297, 301 (D. Del. 2013) (citing Symbol Techs., Inc., 609 F. Supp. 2d 353 at 356). The purpose of pleading an affirmative defense “is to give the opposing party notice of the plea.” Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 350 (1971). Generally, an affirmative defense “need not be articulated with any rigorous degree of specificity.” Moody v. Atl. City Bd. of Educ., 870 F.3d 206, 218 (3d Cir. 2017) (internal citations omitted). The pleading standard set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 583 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009) does not extend to affirmative defenses. Senju Pharm., 921 F. Supp. 2d at 301 (citing Internet Media Corp. v. Hearst Newspapers, LLC, Case No. 10-cv-690, 2012 U.S. Dist. LEXIS 126788, at *2 (D. Del. Sept. 6, 2012)). Further, when ruling on a motion to strike an affirmative defense, this Court must construe all facts in favor of Amgen, the nonmoving party, and deny the motion “if the defense is sufficient under the law.” Symbol Techs., 609 F. Supp. 2d at 356. B. Motion to Dismiss under F.R.C.P. 12(b)(6) This court, in weighing a motion to dismiss a counterclaim under Federal Rule of Civil Procedure 12(b)(6), must ask “not whether a [counterclaim] plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claim.” Twombly, 550 U.S. at 583 (internal citation omitted); see also Ashcroft v. Iqbal, 556 U.S. 662 (2009). When considering a Rule 12(b)(6) motion to dismiss, the court must accept as true all factual allegations in the counterclaims and view them in the light most favorable to the counterclaim-plaintiff. Umland v. PLANCO Fin. Servs., Inc., 542 F.3d 59, 64 (3d Cir. 2008). A well-pleaded counterclaim may not be dismissed simply because “it strikes a savvy judge that actual proof of [the alleged] facts is improbable, and that a recovery is very remote and Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 14 of 20 PageID #: 11433 10 unlikely.” Twombly, 550 U.S. at 556 (internal citation omitted). Determining whether a claim is plausible is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009) (quoting Iqbal, 556 U.S. at 679). V. ARGUMENT A. Amgen’s Eleventh Affirmative Defense of Inequitable Conduct and Its Inequitable Conduct Counterclaim Count 3 Are Legally Sufficient It is black letter law that Genentech may not seek to enforce rights that were obtained by fraud against the public. Precision Instrument Mfg. Co. v. Auto Maint. Mach. Co., 324 U.S. 806, 816 (1945) (“The far-reaching social and economic consequences of a patent, therefore, give the public a paramount interest in seeing that patent monopolies spring from backgrounds free from fraud or other inequitable conduct.”); see also Therasense Inc. v. Becton Dickenson & Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011) (“Inequitable conduct is an equitable defense to patent infringement, that, if proved, bars enforcement of a patent.”). Amgen properly pled its affirmative defense of inequitable conduct, calling out Genentech’s fraudulent behavior and including the “who, what, when, where, and how” of Genentech’s inequitable conduct. See Section III.B; Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327 (Fed. Cir. 2009). For example, Amgen alleged that during prosecution of the ’213 patent, Genentech deliberately misrepresented the teachings of the ’101 patent and the Queen 1989 references to overcome a rejection of pending claims, and further provided empirical information at the Examiner’s request that conspicuously omitted a claim element disclosed in the prior art. D.I. 19 at 30-33. Amgen further pled that “deceptive intent by Genentech is the single most reasonable inference to be drawn” from Genentech’s conduct in prosecuting the ’213 patent. Id. at 30. Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 15 of 20 PageID #: 11434 11 Other courts in this District have denied a patent owner’s motion to dismiss inequitable conduct counterclaims based on allegations nearly identical to Amgen’s: that a patentee committed inequitable conduct when it affirmatively “misrepresented the teachings of the prior art in a manner that would be recognized as false by a person of ordinary skill in the art, and also submitted incomplete, misleading, and internally inconsistent empirical data.” Wyeth Holdings Corp. v. Sandoz, Inc., No. 09-cv-00955, 2012 U.S. Dist. LEXIS 26912, at *28 (D. Del. Feb. 3, 2012); see also Southco, Inc. v. Penn Eng’g & Mfg. Corp., 768 F. Supp. 2d 715 (D. Del. 2011). In Wyeth, the court rejected the patent owner’s argument that simply presenting arguments and interpretations concerning a reference that was in front of the examiner did not constitute inequitable conduct. Wyeth, 2012 U.S. Dist. LEXIS 26912 at *33-34, 36 (“As an initial matter, the Court agrees with Sandoz that Wyeth is not relieved of responsibility for any alleged misstatements simply because the ’277 reference and the stabilization data were before the PTO.”). Instead, the court found that at the motion to dismiss stage, it “could reasonably infer that Wyeth’s statements crossed the line from permissible advocacy to impermissible representation.” Id. Further, while Plaintiffs dispute Amgen’s allegations and attempt to characterize Genentech’s misleading statements as merely attorney argument, this is irrelevant. Butamax Adv. Biofuels v. Gevo, No. 11-54, 2012 U.S. Dist. LEXIS 86215, at *10 (D. Del. June 21, 2012) (noting that whether plaintiffs agree or disagree with defendants’ inequitable conduct allegations “is irrelevant, as the court is not required to judge the merits of the parties’ respective positions at this stage in the proceedings”); Refac Int’l, Ltd. v. Lotus Dev. Corp., 81 F.3d 1576, 1584 (Fed. Cir. 1996) (“While an affiant may insist that his sworn statements were truthful or that any omissions were not material or not made with intent to deceive, these are matters of proof and credibility.”). Whether Genentech’s statements are misleading statements or attorney argument raises a Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 16 of 20 PageID #: 11435 12 factual dispute that is not properly resolved on a motion to dismiss. Quest Integrity USA, LLC v. Clean Harbors Indus. Servs., No. 14-cv-01482, 2015 U.S. Dist. LEXIS 95148, at *15-16 (D. Del. July 22, 2015) (declining to dismiss inequitable conduct claim where the patentee merely “disagree[d] with the factual representations made by [defendant]”); IBM v. Priceline Grp., Inc., No. 15-cv-00137, 2017 U.S. Dist. LEXIS 54285, at *39-40 (D. Del. Apr. 10, 2017) (“[A patentee’s] factual disagreement . . . does not support dismissal of Defendants’ counterclaim at the pleading stage.”). Even though this Court need not resolve any factual disputes at this stage, Plaintiffs’ arguments that their misrepresentations were simply unobjectionable attorney argument misstates the law. “Although an attorney is free to argue vigorously in favor of patentability without being subject to allegations of inequitable conduct, ‘the law prohibits genuine misrepresentations of material fact.’” Ring Plus, Inc. v. Cingular Wireless Corp., 614 F.3d 1354, 1360-61 (Fed. Cir. 2010) (citing Rothman v. Target Corp., 556 F.3d 1310, 1328 (Fed. Cir. 2009).) Accordingly, an attorney can commit inequitable conduct by mischaracterizing references that the Examiner is free to independently review. Ring Plus, 614 F.3d at 1360-61 (holding that a statement misrepresenting the substance of two references before the Examiner was “outside the bounds of permissible attorney argument”). Moreover, attorney argument made with intent to deceive can give rise to inequitable conduct. Southco, Inc., 768 F. Supp. 2d at 723 (“[Patentee’s] arguments to the Examiner amounted to material representations because [patentee] knew its arguments were factually and patently false.”). At this stage in the proceedings, to survive Plaintiffs’ motion to dismiss and strike, Amgen must demonstrate that it pled its inequitable conduct allegations in accordance with Federal Rule of Civil Procedure 9(b). As explained above, Amgen has provided the proper notice to Genentech; Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 17 of 20 PageID #: 11436 13 it need not prove that the factual allegations are true or that it will prevail on the merits. See Southco, Inc, 768 F. Supp. 2d at 720 (“The purpose of Rule 9(b) is to provide [the opposing party] with notice of the precise nature of the claim against them, not to test the factual allegations of the claim.”); Wyeth, 2012 U.S. Dist. LEXIS 26912, at *20-28 (distinguishing the pleading standard for inequitable conduct from the standard for proving it). Here, Amgen has pled with particularity that Genentech deliberately mischaracterized the prior art and made other misrepresentations during prosecution. This is sufficient to state an inequitable conduct affirmative defense and counterclaim. B. Amgen’s Unenforceability Counterclaims Are Legally Sufficient Genentech broadly attacks all of Amgen’s unenforceability counterclaims, arguing that they contain boilerplate allegations that fail to meet Rule 8’s pleading standard. As an initial point, Amgen’s counterclaim of unenforceability of the ’213 patent is based on Genentech’s inequitable conduct and adequately meets even the heightened pleading standard under Rule 9(b), as discussed above. For the remaining counterclaims, however, Rule 8(a) simply mandates “a short and plain statement of the claim showing that the pleader is entitled to relief.”4 Amgen’s pleadings easily satisfy this threshold. As described above, there are a number of ways in which Genentech’s patents are likely unenforceable now or in the near term. For example, as explicitly set forth in Amgen’s counterclaims, many of the asserted patents will expire shortly—or, in three cases, have already expired. See D.I. 80 (Countercl.) ¶¶ 33-50. These patents are, or will shortly become, unenforceable with respect to any activities that occurred after patent expiry. See, e.g., Kimble v. 4 As noted above, by removing its previous argument that the remaining seventeen counterclaims must satisfy a heightened pleading standard, Plaintiffs concede that Rule 9(b) does not apply to these counterclaims. See supra Section I, n.1. Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 18 of 20 PageID #: 11437 14 Marvel Entm’t, LLC, 135 S. Ct. 2401, 2406-09 (2015) (noting that “when the patent expires, the patentee’s prerogatives expire too, and the right to make or use the article, free from all restriction, passes to the public”). Similarly, in the past few months, the U.S. Patent Office has found claims of three of Genentech’s asserted patents unpatentable. Further, many of these patents are also being challenged in other district court and Federal Circuit proceedings. Once Genentech has exhausted its right to appeal and the patent is held invalid, it will not be enforceable. ePlus, Inc. v. Lawson Software, Inc., 789 F.3d 1349 (Fed. Cir. 2015). In this district, courts use the same standard in ruling on a motion to dismiss a counter claim under Rule 12(b)(6) as they do in assessing a claim in a complaint. See Idenix Pharms., Inc. v. Gilead Scis., Inc., Case No. 13-1987-LPS, 2014 U.S. Dist. LEXIS 118789, at *5 (D. Del. Aug. 25, 2014); Tyco Fire Prods. LP v. Victaulic Co., 777 F. Supp. 2d 893, 898-99 (E.D. Pa. 2011) (citing cases). This Court must accept all of the facts pled in the counterclaims as true, and determine “whether the facts alleged in the complaint are sufficient to show that the plaintiff has a ‘plausible claim for relief.’” Fowler, 578 F.3d at 211 (internal citations omitted). In assessing the plausibility of a claim, the court must “construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Id. at 210 (quoting Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)). Amgen has met the general pleading standard set forth in Federal Rule of Civil Procedure 8(a)(2) for its counterclaims of unenforceability. Amgen has also met the heightened pleading standard for its counterclaim of unenforceability of the ’213 patent due to inequitable conduct. Given that Amgen’s counterclaims must be construed in the light most favorable to Amgen, these counterclaims should not be dismissed. Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 19 of 20 PageID #: 11438 15 VI. CONCLUSION For the foregoing reasons, Amgen respectfully requests that the Court deny Plaintiffs’ motion in its entirety. Dated: March 7, 2019 Of Counsel: Orion Armon Cooley, LLP 380 Interlocken Crescent Suite 900 Broomfield, CO 80021-8023 P 720-566-4119 oarmon@cooley.com Eamonn Gardner Cooley, LLP 4401 Eastgate Mall San Diego, CA 92121-1909 P 858-550-6086 egardner@cooley.com Susan Krumplitsch Michelle Rhyu Daniel Knauss Cooley, LLP 3175 Hanover Street Palo Alto, CA 94304-1130 P 650-843-5287 skrumplitsch@cooley.com mrhyu@cooley.com dknauss@cooley.com SMITH, KATZENSTEIN & JENKINS, LLP /s/ Neal C. Belgam Neal C. Belgam (No. 2721) Eve H. Ormerod (No. 5369) 1000 West Street, Suite 1501 Wilmington, DE 19801 (302) 652-8400 nbelgam@skjlaw.com eormerod@skjlaw.com Attorneys for Defendant Amgen Inc. Nancy Gettel Thomas Lavery, IV Amgen, Inc. One Amgen Center Drive Thousand Oaks, CA 91320- 1799 P 805-447-1000 ngettel@amgen.com tlavery@amgen.com Case 1:18-cv-00924-CFC Document 94 Filed 03/07/19 Page 20 of 20 PageID #: 11439