Otsuka Pharm. Co., Ltd. v. Zydus Pharms. USA,

Case Name: Otsuka Pharm. Co., Ltd. v. Zydus Pharms. USA, C.A. Nos. 14-3168 (JBS/KMW),14-4671 (JBS/KMW),14-5878 (JBS/KMW),14-6398 (JBS/KMW),14-7252 (JBS/KMW), 2015 U.S. Dist. LEXIS 138853 (D.N.J. Oct. 13, 2015) (Simandle, C.J.)

Drug Product and Patents-in-Suit: Abilify® (aripiprazole); U.S. Patents Nos. 5,006,528 (“the ’528 patent”), 7,053,092 (“the ’092 patent”), 8,017,615 (“the ’615 patent”), 8,580,796 (“the ’796 patent”), 8,642,600 (“the ’600 patent”), 8,642,760 (“the ’760 patent”), and 8,759,350 (“the ’350 patent”)

Nature of the Case and Issue(s) Presented: Defendants Zydus, Torrent, Hetero, and Teva moved to dismiss Otsuka’s direct, induced, and contributory infringement claims related to the ’350 patent. Defendants argued that their proposed ANDA products cannot, as a matter of law, directly infringe any claim of the ’350 patent because their proposed products contain only a single active ingredient, aripiprazole, and not the multi-component pharmaceutical composition (consisting of aripiprazole in addition to either citalopram and/or escitalopram) disclosed by the ’350 patent. Moreover, defendants argued that Otsuka’s induced and/or contributory infringement claims lack essential allegations, namely, that the proposed ANDA product labels actively and intentionally encourage and instruct the use of their generics in an infringing manner, i.e., as products for the “Adjunctive Treatment of Major Depressive Disorder,” the primary indication of the ’350 patent.

Otsuka did not oppose dismissal of its claims for direct and contributory infringement of the ’350 patent, but did argue that dismissal of its claims for induced infringement would be premature before claim construction, and prior to the resolution of certain “factual issues” regarding whether defendants’ proposed labels actively instruct or encourage infringement of the ’350 Patent (despite having “carved out” the patented indication).

The court granted-in-part and denied-in-part Defendants’ motion. Otsuka’s claims for direct and contributory infringement of the ’350 patent were dismissed with prejudice and its claims for induced infringement of the ’350 patent were dismissed without prejudice and with leave to amend.

Why Defendants Prevailed: Independent claims 1-3 of the ’350 patent claim a pharmaceutical composition comprising (i) aripiprazole in combination with (ii) at least one serotonin reuptake inhibitor selected from citalopram, escitalopram and salts thereof. Each Defendants’ ANDA included a “section viii” statement, certifying that the applicant would not seek approval for any indications or uses asserted to be covered by the ’350 patent. Despite these “carve outs”, Otsuka alleges that the label for each Defendant’s ANDA product “recommend[s], suggest[s], encourage[s] and/or instruct[s] others to use [the proposed generic aripiprazole product] in a manner that infringes at least one claim of the ’350 patent.”

The focus of the inquiry concerned the pleading sufficiency of Otsuka’s induced infringement claims. The court therefore turned to the standard for induced infringement, and to the issue of whether Otsuka’s Amended Complaints suffice to state plausible claims of induced infringement of the ’350 patent. In order to state a claim for inducement, the patent owner must allege direct infringement, and that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another's infringement. Otsuka’s claims for induced infringement equally rest upon 35 U.S.C. § 271(e)(2)(A), which provides that an ANDA filer can only be liable for infringement if it submits an ANDA seeking approval “for a drug claimed in a patent or the use of which is claimed in a patent” prior to the patent’s expiration. The court found that Otsuka’s pleadings contained no such allegations. Rather, they allege only that Defendants’ have “actual knowledge” of the ’350 patent, and that “the label[s] for [Defendants’] generic products will recommend, suggest, encourage and/or instruct others to use [Defendants'] generic products in a manner that infringes at least one claim of the ’350 patent.” Thus, the court found that the amended complaints contain no allegations regarding Defendants’ specific intent or any specific acts taken to encourage such infringement, much less any attendant factual support to render these allegations plausible. Otsuka’s simple reiteration of the legal conclusion that Defendants induced infringement fails to plead the “factual content” necessary for the court to draw the “reasonable inference” of culpable conduct intended to induce infringement.