IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
TAKEDA PHARMACEUTICAL COMPANY,
LTD., a Japanese Corporation, and TAP
PHARMACEUTICAL PRODUCTS, INC. a
Delaware Corporation,
Plaintiffs and
Counterclaim-Defendants,
vs.
TEVA PHARMACEUTICALS USA, INC.,
a Delaware corporation,
and TEVA PHARMACEUTICAL INDUSTRIES,
LTD., an Israeli Corporation,
Defendants and
Counterclaim-Plaintiffs.
Civil Action No. 06-33-SLR
PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO
DEFENDANTS’ MOTION FOR LEAVE TO AMEND ANSWER,
DEFENSES, AND COUNTERCLAIMS TO ASSERT INEQUITABLE CONDUCT
CONNOLLY BOVE LODGE & HUTZ LLP
Arthur G. Connolly, III (#2667)
The Nemours Building
1007 North Orange Street
P.O. Box 2207
Wilmington, DE 19801
(302) 658-9141
Attorneys for Plaintiffs
Takeda Pharmaceutical Company, Ltd. and
TAP Pharmaceutical Products, Inc.
Case 1:06-cv-00033-SLR Document 107 Filed 04/06/2007 Page 1 of 16
Of Counsel:
Eric J. Lobenfeld
Tedd W. Van Buskirk
Arlene L. Chow
HOGAN & HARTSON L.L.P.
875 Third Avenue
New York, NY 10022
(212) 918-3000
Philippe Y. Riesen
HOGAN & HARTSON L.L.P.
Shinjuku Center Building, 46th Floor
25-1 Nishi-Shinjuku 1-chome
Shinjuku, Tokyo 163-0646
Japan
(81) 3-5908-0470
Attorneys for Plaintiff Takeda Pharmaceutical Company, Ltd.
William F. Cavanaugh, Jr.
Stuart E. Pollack
Chad J. Peterman
PATTERSON BELKNAP WEBB & TYLER LLP
1133 Avenue of the Americas
New York, NY 10036
(212) 336-2000
Attorneys for Plaintiff TAP Pharmaceutical Products, Inc.
Case 1:06-cv-00033-SLR Document 107 Filed 04/06/2007 Page 2 of 16
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TABLE OF CONTENTS
TABLE OF AUTHORITIES........................................................................................... ii
NATURE AND STAGE OF THE PROCEEDING.......................................................... 1
PRELIMINARY STATEMENT ..................................................................................... 1
SUMMARY OF ARGUMENT ....................................................................................... 3
STATEMENT OF FACTS.............................................................................................. 4
ARGUMENT.................................................................................................................. 4
TEVA’S MOTION SHOULD BE DENIED AS FUTILE BECAUSE ITS
PROPOSED AMENDMENTS CANNOT WITHSTAND A MOTION TO
DISMISS UNDER RULE 12(b) .......................................................................... 4
A. Teva Confuses a Patentee’s Duty of Disclosure During a Patent Term
Extension With a Patent Applicant’s Duty of Disclosure During
Prosecution .............................................................................................. 5
B. Teva Fails to Assert Any Legal Support for Its Assertion That a
Failure to Disclose Data Relating to Patentability During a Patent
Term Extension Proceeding Amounts to Inequitable Conduct .................. 8
CONCLUSION............................................................................................................. 10
Case 1:06-cv-00033-SLR Document 107 Filed 04/06/2007 Page 3 of 16
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TABLE OF AUTHORITIES
Cases
Cowell v. Palmer Twp., 263 F.3d 286 (3d Cir. 2001) ....................................................... 5
Foman v. Davis, 371 U.S. 178 (1962).............................................................................. 5
Glaxo Operations UK Ltd. v. Quigg, 894 F.2d 392 (Fed. Cir. 1990) ................................ 6
In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410 (3d Cir. 1997) ......................... 5
Kemin Foods, L.C. v. Pigmentos Vegetales Del Centro S.A. de C.V., 464 F.3d 1339
(Fed. Cir. 2006) ................................................................................................... 5
Oran v. Stafford, 226 F.3d 275 (3d Cir. 2000) ................................................................. 5
Pfizer, Inc. v. Ranbaxy Labs., Ltd., 457 F.3d 1284 (Fed. Cir. 2006) ............................. 8, 9
Pfizer, Inc. v. Ranbaxy Labs., Ltd., 405 F. Supp. 2d 495 (D. Del. 2005), rev’d in
part, 457 F.3d 1284 (Fed. Cir. 2006).................................................................... 9
Shane v. Fauver, 213 F.3d 113 (3d Cir. 2000) ................................................................. 5
United Sweetener USA, Inc. v. Nutrasweet Co., 760 F. Supp. 400 (D. Del. 1991) ............ 8
Statutes and Rules
35 U.S.C. § 156 (2000) ................................................................................................... 6
37 C.F.R. § 1.56(a).......................................................................................................... 6
37 C.F.R. § 1.720............................................................................................................ 6
37 C.F.R. § 1.720(a)........................................................................................................ 9
37 C.F.R. § 1.765(a)........................................................................................................ 5
37 C.F.R. § 1.765(b).................................................................................................... 5, 7
Fed. R. Civ. P. 15(a)........................................................................................................ 4
H.R. Rep. No. 98-857, at 14-15 (1984), reprinted in 1984 U.S.C.C.A.N. 2647,
2647-48).......................................................................................................... 6, 7
Rules for Extension of Patent Term, 52 F.R. 9386, 9392 (Mar. 24, 1987)........................ 7
Case 1:06-cv-00033-SLR Document 107 Filed 04/06/2007 Page 4 of 16
Plaintiffs Takeda Pharmaceutical Company, Ltd (“Takeda”) and TAP
Pharmaceutical Products, Inc. (“TAP”) submit this memorandum in opposition to
Defendants Teva Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries, Ltd.’s
(collectively “Teva”) motion for leave to amend their Answer, Defenses and
Counterclaims to assert post-grant inequitable conduct during a patent term extension
proceeding. Teva’s proposed amendment is futile and should be denied.
NATURE AND STAGE OF THE PROCEEDING
Plaintiffs filed this action on January 17, 2006 alleging infringement of five
Takeda patents, including the ‘098 patent. Plaintiffs allege that Teva’s amendment of
Abbreviated New Drug Application (“ANDA”) No. 77-255 to include a Paragraph IV
certification constitutes infringement under 35 U.S.C. §271(e)(2). On January 24, 2007,
the Court approved a stipulation dismissing three of the five patents, leaving the ‘098
patent and U.S. Patent 5,045,321. In its Answer, Teva denies infringement and asserts
affirmative defenses and counterclaims of non-infringement and invalidity. Teva now
moves for leave to amend its Answer to add affirmative defenses and counterclaims of
unenforceability based on alleged inequitable conduct: (1) during prosecution of the
application that resulted in the ‘098 patent; and (2) during the later petition for an
extension of the term for the ‘098 patent. Plaintiffs oppose the motion as to its second
respect as futile.
PRELIMINARY STATEMENT
This is a patent case. Plaintiff TAP markets PREVACID®, a drug of the “proton
pump inhibitor” (“PPI”) class used for treating gastric ulcers in the United States. Its
active ingredient is lansoprazole, a compound discovered and patented by Plaintiff
Case 1:06-cv-00033-SLR Document 107 Filed 04/06/2007 Page 5 of 16
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Takeda. That patent, the ‘098 patent, is one of several TAP and Takeda listed in the
Orange Book as covering PREVACID®. PREVACID® is one of several highly
successful PPI’s and was among the top 10 selling drugs in the U.S. in 2006, with sales in
excess of $4 billion.
Not surprisingly, given PREVACID’s® commercial success, Teva wants to get in
on the action. Teva filed ANDA No. 77-255 on August 27, 2004 seeking permission to
market lansoprazole capsules upon expiration of the Orange Book patents. But Teva
apparently changed its mind and, on December 5, 2005, filed a “Paragraph IV”
certification alleging that five of the listed patents were either invalid or would not be
infringed by Teva’s generic lansoprazole capsules. In response to Teva’s notice of
Paragraph IV certification, Plaintiffs commenced this action.
Seven months ago, Teva first raised the issue of alleged inequitable conduct in
connection with the ‘098 patent term extension during a September 20, 2006 discovery
conference before the Court. (Disc. Hr’g Tr., D.I. 59 at 18-20, Sept. 20, 2006.) The
Court, skeptical of the relevance of the patent term extension to the validity of the ‘098
patent, questioned whether a patentee’s duty of candor to the PTO lasted “forever and
ever and ever and ever.” (D.I. 59 at 26.) Nevertheless, the Court invited Teva to submit
by letter any support for its position that a patentee has an ongoing post-grant duty of
disclosure in petitioning for a patent term extension. (D.I. 59 at 24.) Teva waited seven
weeks, until November 9, 2006, before submitting its letter. (D.I. 72.) Takeda promptly
responded (D.I. 74.). Within three weeks of the fact discovery cutoff, Teva now seeks
leave to amend its Answer to add two claims: (1) inequitable conduct during
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prosecution; and (2) inequitable conduct based on an alleged duty of disclosure during
patent term extension proceedings.
Without conceding that there is any merit to Teva’s first proposed amendment,
Plaintiffs do not object to Teva adding an affirmative defense and counterclaim of
inequitable conduct during prosecution. Those allegations, while late in the day, state a
claim for relief. Plaintiffs only object to Teva’s second amendment to add a charge of
inequitable conduct with respect to Takeda’s petition for a patent term extension.
SUMMARY OF ARGUMENT
1. Takeda and TAP respectfully submit that the Court should deny Teva’s
motion as to alleged inequitable conduct in connection with the patent term extension of
the ‘098 patent. As noted by Teva, Plaintiffs do not oppose Teva’s proposed amendment
as to alleged inequitable conduct during prosecution of the ‘098 patent.
2. Teva’s motion should be denied as futile because its proposed allegations
cannot withstand a motion to dismiss. Teva mistakenly conflates a patentee’s duty to
disclose information material to entitlement to the extension sought in petitioning for a
patent term extension with a patent applicant’s duty to disclose information material to
patentability during patent prosecution. As understood by the PTO and the courts, a
patentee has no affirmative duty to disclose information material to patentability during a
patent term extension proceeding. This is because by definition, the duty ends when the
patent issues. Also, Teva admits that there is no case law directly supporting its novel
theory, yet it seeks to inject these allegations anyway.
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STATEMENT OF FACTS
Takeda spent years developing lansoprazole, the active ingredient in
PREVACID®. In doing so, it sought to develop a novel compound that was more
effective than prior art PPI’s in anti-ulcer and cytoprotective action. During its
development, Takeda synthesized and tested hundreds of compounds, using various
experimental models to assess the profile of the compounds. Because the indomethacin-
induced gastric antral ulcer model mimicked the human ulcer (as opposed to the other
experimental models used by Takeda), Takeda submitted results from the indomethacin-
induced gastric antral ulcer in its patent application.
As a new and nonobvious compound, the ‘098 patent issued without any office
action by the Examiner. Had she relied on superiority or unexpected results over prior art
compounds in her determination of patentability, she would have likely stated such
reliance in a Statement of Reasons for Allowance. Significantly, the Notice of
Allowability cited no specific reason for allowance. (See U.S.P.T.O. Notice of
Allowability, ‘098 prosecution history, May 16, 1986.)
ARGUMENT
TEVA’S MOTION SHOULD BE DENIED AS FUTILE BECAUSE ITS
PROPOSED AMENDMENTS CANNOT WITHSTAND A MOTION TO DISMISS
UNDER RULE 12(b)
Federal Rule of Civil Procedure 15(a) provides that leave to amend “shall be
freely given when justice so requires.” Fed. R. Civ. P. 15(a). The Supreme Court has
outlined the reasons by which a district court, in its discretion, may deny leave to amend.
They include: “undue delay, bad faith or dilatory motive on the part of the movant,
repeated failure to cure deficiencies by amendments previously allowed, undue prejudice
Case 1:06-cv-00033-SLR Document 107 Filed 04/06/2007 Page 8 of 16
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to the opposing party by virtue of allowance of the amendment [or] futility of
amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962); Cowell v. Palmer Twp., 263
F.3d 286, 296 (3d Cir. 2001); In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410,
1434 (3d Cir. 1997).
A proposed amendment is futile if it would not withstand a Rule 12(b)(6) motion
to dismiss. Oran v. Stafford, 226 F.3d 275, 291 (3d Cir. 2000); Shane v. Fauver, 213
F.3d 113, 115 (3d Cir. 2000); Burlington Coat Factory, 114 F.3d at 1434-35. A party
whose motion for leave to amend is challenged on futility grounds must “demonstrate
that its pleading states a claim on which relief could be granted, and it must proffer
sufficient facts supporting the amended pleading that the claim could survive a
dispositive pretrial motion.” Kemin Foods, L.C. v. Pigmentos Vegetales Del Centro S.A.
de C.V., 464 F.3d 1339, 1355-56 (Fed. Cir. 2006) (denying leave to amend antitrust and
unfair competition counterclaims in patent infringement case). Teva’s proposed
amendment to add an affirmative defense and counterclaim of unenforceability due to
inequitable conduct during patent term extension proceedings should be denied because it
fails as a matter of law.
A. Teva Confuses a Patentee’s Duty of Disclosure During a Patent Term
Extension With a Patent Applicant’s Duty of Disclosure During Prosecution
A patentee’s duty of disclosure in a patent term extension proceeding applies
solely to “material information adverse to a determination of entitlement to the extension
sought . . . .” 37 C.F.R. § 1.765(a) (emphasis added). The rule specifically states that
there is “no duty to transmit information which is not material to the determination of
entitlement to the extension sought.” 37 C.F.R. § 1.765(b) (emphasis added). The
requirements for entitlement to a patent term extension do not include a duty to submit
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information relating to information or test results after the grant of the patent. See 35
U.S.C. § 156 (2000); 37 C.F.R. § 1.720. Instead, the basic requirements for patent term
extensions are: (a) “[t]he patent claims a product or a method of using or manufacturing
a product” as defined; (b) “[t]he term of the patent has never been previously extended”;
(c) a compliant application has been submitted; (d) “[t]he product has been subject to a
regulatory review period . . . before its commercial marketing or use”; (e) “[t]he product
has received permission for commercial marketing or use . . .”; (f) the application is
submitted within sixty days of the grant of permission; (g) the application is submitted
before the term of the patent expires; and (h) “[n]o other patent term has been extended
for the same regulatory review period for the product.” 37 C.F.R. § 1.720. There is
simply no requirement concerning patent validity.
Conversely, a patent applicant’s duty of disclosure before the PTO during
prosecution is notably different. Rule 56 defines an applicant’s duty to disclose as
follows: “[e]ach individual associated with the filing and prosecution of a patent
application has a duty of candor and good faith in dealing with the Office, which includes
a duty to disclose to the Office all information known to that individual to be material to
patentability as defined in this section.” 37 C.F.R. § 1.56(a) (emphasis added).
This difference in language in the respective regulations was purposeful and
consistent with the different purposes of the two proceedings. Under the Hatch-Waxman
Act, patent term extensions were meant “to further encourage new drug research by
restoring some of the patent term lost while drug products undergo testing and await FDA
pre-market approval.” Glaxo Operations UK Ltd. v. Quigg, 894 F.2d 392, 396 (Fed. Cir.
1990) (citing H.R. Rep. No. 98-857, at 14-15 (1984), reprinted in 1984 U.S.C.C.A.N.
Case 1:06-cv-00033-SLR Document 107 Filed 04/06/2007 Page 10 of 16
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2647, 2647-48). They were not intended as a vehicle to reopen prosecution on the merits,
re-examine patent validity, or impose on a patentee an ongoing duty of disclosure of
information material to patentability for an already issued patent.
The PTO’s comments in promulgating its rules further support the different duty
with respect to patent term extensions. The PTO recognized that “Congress expected that
[a patent term extension] would be an administratively simple proceeding.” Rules for
Extension of Patent Term, 52 F.R. 9386, 9392 (Mar. 24, 1987). “Since the determination
as to whether a patent is eligible for extension . . . may be made solely on the basis of the
representations made in the application for extension, a final determination to refuse a
patent term extension because of fraud or a violation of the duty of disclosure is expected
to be rare.” Id. As noted above, those representations do not include anything about
patent validity or enforceability. Further, in response to a comment asking whether the
duty of disclosure extends to prior art discovered since the issuance of the patent, the
PTO simply restated the rule: “Section 1.765(b) specifically states that an attorney, agent
or patent owner has no duty to transmit information which is not material to the
determination of entitlement to the extension sought.” Id. (emphasis added). The plain
language of the rule and the PTO’s comments support the conclusion that the duty of
disclosure for patent term extensions is limited to information relevant to the
requirements of the extension—including whether the patent covers the “product” subject
to the delay in regulatory approval (i.e., requirement “(a)”)—and does not include, as
Teva suggests, a reexamination of patent validity.
In the only case to squarely address this issue, this Court concluded that a
patentee’s duty of disclosure during a patent term extension proceeding bears no
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connection to a patent applicant’s duty during prosecution: “we cannot imagine that,
without so specifying, Congress intended that a patentee, in seeking an extension under §
155, justify ab initio the original grant of the patent.” United Sweetener USA, Inc. v.
Nutrasweet Co., 760 F. Supp. 400, 420 (D. Del. 1991) (granting motion to dismiss claim
that alleged inequitable conduct during patent term extension proceedings would render
patent unenforceable). Noting the presumption of validity of patents, the Court
concluded that matters relevant to the original patent application are irrelevant to a
petition for a patent term extension. Id. “[W]e cannot see that a patentee should have to
challenge the validity of its own patent in seeking an extension under § 155.” Id.
Despite its clear applicability here, Teva would have the Court ignore United Sweetener
on the basis it was decided in 1991 and not appealed. At best, all Teva can say is that it is
not aware of any Federal Circuit decision adverse to its position. But so far as Plaintiffs
are aware, the Court is free to follow its own prior decisions too.
B. Teva Fails to Assert Any Legal Support for Its Assertion That a Failure to
Disclose Data Relating to Patentability During a Patent Term Extension
Proceeding Amounts to Inequitable Conduct
Teva cannot cite any support for its assertion that alleged inequitable conduct
before the PTO during prosecution is somehow relevant to entitlement to a patent term
extension. As noted above, this Court, in one of the only decisions on the issue, has
directly rejected Teva’s contention. See id. Teva admits the lack of case law in direct
support of its assertion. (Def.’s Mem. at 12.) Teva also admits that Pfizer, Inc. v.
Ranbaxy Labs., Ltd., 457 F.3d 1284 (Fed. Cir. 2006) does not squarely address the issue.
(Def.’s Mem. at 12.) As a result, Teva resorts to a misplaced attempt to contort the
holding of Pfizer to create a basis for its position.
Case 1:06-cv-00033-SLR Document 107 Filed 04/06/2007 Page 12 of 16
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First, the main issue in Pfizer with respect to the patent term extension was
whether the patent in fact covered the product, Lipitor® (i.e., requirement “(a)”). Pfizer,
Inc. v. Ranbaxy Labs., Ltd., 405 F. Supp. 2d 495, 511 (D. Del. 2005), rev’d in part on
other grounds, 457 F.3d 1284. The first requirement for a patent term extension is that
“[t]he patent claims a product or a method of using or manufacturing a product.” 37
C.F.R. § 1.720(a). This is not an issue here because Teva admits that the ‘098 patent
covers lansoprazole, the active ingredient in PREVACID®. Second, in Pfizer, the
defendant argued that the patent term extension was invalid because during the extension
proceeding, Pfizer failed to disclose statements made in connection with the prosecution
of foreign counterparts and a subsequent U.S. patent. Pfizer, 405 F. Supp. 2d at 512.
These statements allegedly related to the construction of the claims of the extended
patent, and therefore to requirement “(a).” The Court evaluated Pfizer’s statements in its
claim construction but found them irrelevant. Id. at 506; 457 F.3d at 1291 (affirming the
district court’s finding). Thus, they were not material to Pfizer’s entitlement to a patent
term extension. Pfizer, 405 F. Supp. 2d. at 512; 457 F.3d at 1291. Here, any subsequent
test data allegedly relates only to patentability are, a fortiori, completely irrelevant to
Takeda’s entitlement to a patent term extension.1
1 In addition to being futile, Teva’s proposed amendment will cause undue delay
and prejudice. Pursuant to the Court’s Scheduling Order of March 21, 2006, the close of
fact discovery is April 12, 2007. (D.I. 26 at ¶ 2(b).) With the close of fact discovery less
than three weeks away, Teva seeks to add alleged inequitable conduct during the ‘098
patent term extension, an issue it first raised with the Court seven months ago during the
September 20, 2006 discovery conference. As of that date, Teva was aware of the facts
on which it based its proposed claim regarding the patent term extension. Nevertheless, it
waited seven months before moving to amend. By the time this motion is decided, fact
discovery will be closed, and the parties will be in the midst of expert discovery.
Reopening fact discovery would unduly delay expert discovery and delay the case from
proceeding to trial.
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CONCLUSION
For the foregoing reasons, Takeda and TAP respectfully submit that Teva’s
Motion for Leave to Amend Its Answer, Defenses, and Counterclaims to include a claim
of inequitable conduct concerning the patent term extension of the ‘098 patent should be
denied.
CONNOLLY BOVE LODGE & HUTZ LLP
April 6, 2007 By: /s/ Arthur G. Connolly, III
Arthur G. Connolly, III (#2667)
The Nemours Building
1007 North Orange Street
P.O. Box 2207
Wilmington, DE 19801
(302) 658-9141
Attorneys for Plaintiffs
Takeda Pharmaceutical Company, Ltd. and
TAP Pharmaceutical Products, Inc.
Of Counsel:
Eric J. Lobenfeld
Tedd W. Van Buskirk
Arlene L. Chow
HOGAN & HARTSON L.L.P.
875 Third Avenue
New York, NY 10022
(212) 918-3000
Philippe Y. Riesen
HOGAN & HARTSON L.L.P.
Shinjuku Center Building, 46th Floor
25-1 Nishi-Shinjuku 1-chome
Shinjuku, Tokyo 163-0646
Japan
(81) 3-5908-0470
Attorneys for Plaintiff Takeda Pharmaceutical Company, Ltd.
Case 1:06-cv-00033-SLR Document 107 Filed 04/06/2007 Page 14 of 16
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William F. Cavanaugh, Jr.
Stuart E. Pollack
Chad J. Peterman
PATTERSON BELKNAP WEBB & TYLER LLP
1133 Avenue of the Americas
New York, NY 10036
(212) 336-2000
Attorneys for Plaintiff TAP Pharmaceutical Products, Inc.
#531726v2
Case 1:06-cv-00033-SLR Document 107 Filed 04/06/2007 Page 15 of 16
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on April 6, 2007, I electronically filed the foregoing
document with the Clerk of the Court using CM/ECF and caused the foregoing document
to be served upon the following counsel of record in the manner indicated:
VIA ELECTRONIC MAIL:
Karen L. Pascale, Esq.
Young Conaway Stargatt & Taylor LLP
The Brandywine Building
1000 West St., 17th Floor
Wilmington, DE 19899
VIA ELECTRONIC MAIL
John L. North, Esq.
Jeffrey J. Toney, Esq.
Jeffrey D. Blake
Sutherland Asbill & Brennan LLP
999 Peachtree Street
Atlanta, GA 30309-3996
/s/ Arthur G. Connolly, III
Arthur G. Connolly, III (#2667)
Case 1:06-cv-00033-SLR Document 107 Filed 04/06/2007 Page 16 of 16
