Senju Pharma. Co. Ltd. v. Apotex, Inc.

Case Name: Senju Pharma. Co. Ltd. v. Apotex, Inc., Civ. No. 12-159-SLR, 2013 U.S. Dist. LEXIS 15791 (D. Del. February 6, 2013) (Robinson, J.)

Drug Product and Patent(s)-in-Suit: Zymaxid® (0.5% solution of gatifloxacin); U.S. Pat. Nos. 6,333,045 (“the ’045 patent”) and 5,880,283 (“the ’283 patent”)

Nature of the Case and Issue(s) Presented: Senju filed suit alleging infringement of the ’045 and ’283 patents. Apotex answered and asserting counterclaims and affirmative defenses including invalidity and unenforceability of the asserted patents. Senju filed a motion seeking partial dismissal of Apotex’s counterclaims and affirmative defenses. The issue here concerns whether Apotex adequately pled counterclaims and affirmative defenses concerning invalidity and inequitable conduct.

At issue were Apotex counterclaims II, IV and V and its second and fourth and fifth affirmative defenses.  Counterclaims II and IV and the second and fourth affirmative defenses were related to invalidity, while counterclaim V and the fifth affirmative defense were related to inequitable conduct. The court granted partial dismissal of the counterclaims and affirmative defenses, dismissing counterclaims II, IV and V, and the fifth affirmative defense.  The court denied Senju’s motion to dismiss with respect to the second and fourth affirmative defenses, which were directed towards the invalidity of the patents in suit.

Why Senju Partially Prevailed: The court first considered Apotex’s invalidity counterclaims. Senju contested the invalidity counterclaims on the basis that they merely recited legal conclusions without any factual support. Apotex did not dispute this, but argued that its counterclaims were not subject to the heightened pleading standards set forth in the Twombly and Iqbal cases.In support of its argument, Apotex noted that requiring such a high level of detail at the pleading stage would render local patent rules superfluous, and would be in excess of the pleading standard established in Form 18 of the Federal Rules of Civil Procedure. The court was not persuaded by Apotex’s argument. For one thing, the District of Delaware has yet to adopt any local patent rules. Second, the court noted that although Form 18 remains the standard for pleading patent infringement claims, that fact alone did not provide a sufficient basis for departing from the heightened pleading standards established in Iqbal and Twombly for other causes of action. The court also rejected Apotex’s argument that Senju should be on notice of Apotex’s invalidity contentions based on correspondence exchanged in relation to the litigation.

Next, the court considered the sufficiency of Apotex’s affirmative defenses related to invalidity. Unlike counterclaims, the court determined that affirmative defenses were not subject to the heightened pleading standards dictated by Iqbal and Twombly.  Additionally, Federal Rules of Civil Procedure 8(a) and 8(c) differ significantly, because unlike counterclaims, affirmative defenses need not be plausible to survive a motion to dismiss. The court determined that although Apotex’s affirmative defenses related to invalidity were relatively bare bones in nature, they were sufficient for the purposes of an affirmative defense.

The next issue was whether Apotex’s inequitable conduct counterclaim had been properly pled. Apotex alleged that Senju had omitted material prior art. In response, Senju argued that this counterclaim was “self-evidently false” because Senju had submitted nearly identical or substantively identical documents during a reexamination proceeding. The court found that although Senju claimed to have submitted substantively identical documents, it never submitted the actual documents that Apotex claimed it had omitted during prosecution. The court concluded that it would have been wrong for it to dismiss the counterclaim solely on this basis, because there needed to be a determination of whether the omitted documents would establish “but for” materiality. Making such a determination at the pleading stage would have been improper. On that basis, the court disagreed with Senju that Apotex’s inequitable conduct counterclaims were “self-evidently false.” However, the court next moved on to the issue of whether the counterclaims adequately pled inequitable conduct. Claims of inequitable conduct are subject to the heightened pleading standard for fraud, as set forth in Federal Rule of Civil Procedure 9(b), requiring the pleading party to establish the who, what, where, when and how elements of material misrepresentation. The court took particular issue with Apotex’s failure to identify a specific “who” in its counterclaim. A broad identification of “Senju, Kyorin, the inventors and/or those acting on their behalf” was too vague, and could potentially implicate all or none of those individuals. The court found that Apotex’s inequitable conduct affirmative defense failed as well, because it too was subject to the Rule 9(b) fraud standard.