Allergan USA, Inc. v. Sun Pharm. Indus. Ltd.

Case Name: Allergan USA, Inc. v. Sun Pharm. Indus. Ltd., No. CV 19-1727-RGA, 2022 WL 16921800 (D. Del. Nov. 14, 2022) (Andrews, J.) 

Drug Product and Patents-in-Suit: Viberzi® (eluxadoline); U.S. Patents Nos. 9,675,587 (“the ’587 patent”), 10,188,632 (“the ’632 patent”), 11,007,179 (“the ’179 patent”), 11,090,291 (“the ’291 patent”), 11,160,792 (“the ’792 patent”), 11,229,627 (“the ’627 patent”), and 11,311,516 (“the ’516 patent”)

Nature of the Case and Issue(s) Presented: In September 2019, in response to Sun filing its eluxadoline ANDA, Allergan filed a complaint against Sun asserting the ’587 and ’632 patents. Allergan filed continuation applications and continued to prosecute its patent family, eventually obtaining the ’179 patent, the ’291 patent, the ’792 patent, the ’627 patent, and the ’516 patent. Allergan then asserted those five additional patents against Sun.

In its latest Answer, Sun pled a counterclaim and an affirmative defense for unclean hands related to the ’516 patent. Specifically, Sun alleged that Allergan misused Sun’s confidential information relating to its eluxadoline ANDA product formulation to obtain claims that Allergan did not invent. Sun alleged that before Allergan filed suit against Sun, its patents consistently claimed “colloidal silica” or “colloidal silica dioxide”; after accessing Sun’s confidential information, Allergan dropped that limitation from its later-prosecuted claims. Sun further alleged that one of the inventors named on the ’516 patent had stated “that he never invented any eluxadoline composition that did not include colloidal silica.” Sun pled other affirmative defenses related to prosecution history estoppel and/or judicial estoppel, the equitable doctrines of waiver, estoppel, and/or laches, and the doctrine of patent misuse.

Allergan moved to dismiss Sun’s unclean hands counterclaim and to strike the related defenses. The court denied Allergan’s motion (though Sun withdrew its waiver, estoppel, and/or laches defense).

After briefing the motion to dismiss, the parties stipulated that Sun “will not introduce evidence at trial to support an argument that Plaintiffs violated the Protective Order, D.I. 100, or fraudulently used confidential information belonging to Defendants in connection with the [ ] matter.” Based on that stipulation, Allergan moved for judgment on the pleadings on Sun’s unclean hands counterclaim and related affirmative defenses (unclean hands, prosecution history estoppel and/or judicial history estoppel, and patent misuse, all premised on the same set of allegations). The court granted-in-part and denied-in-part Allergan’s Rule 12(c) motion.

Why Allergan Prevailed: In denying Allergan’s earlier motion to dismiss, the court determined that Sun had stated a plausible claim for relief because it alleged that Allergan misused its confidential information to prosecute the ’516 patent, to cover Sun’s ANDA formulation. The court relied on Sun’s allegations identifying a change in prosecution strategy following access to Sun’s confidential information.

Now Sun had stipulated that it would not introduce evidence at trial suggesting that Allergan misused Sun’s confidential information, seemingly eviscerating its previously plausible counterclaim. Still, Sun opposed the motion for judgment on the pleadings, offering a modified unclean hands theory in its response brief (Sun did not amend its answer and counterclaim). Sun argued that Allergan used public information learned during the case to infer details about Sun’s confidential formulation and prosecute claims that would fare better against Sun. But the court determined that Sun’s arguments did not match its pleading, which relied on misuse of Sun’s confidential information. Sun’s stipulation undermined its allegations supporting its unclean hands counterclaim, and the court granted Allergan’s motion for judgment on the pleadings with respect to Sun’s unclean hands counterclaim and affirmative defense.

The court went a step further, holding that even if Sun were able to prove the facts that it alleged in its brief (different than the theory pled) related to accessing public information and making inferences regarding Sun’s confidential formulation, Sun still would not prevail on an unclean hands counterclaim. Accessing public information and “making intelligent guesses” based on that information does not amount to misuse of confidential information or unconscionable conduct. In particular, the court noted, “I would think, by definition, there is nothing by itself wrong with using public information to shape patent strategy including the drafting of claims.”

The court, however, determined that Allergan was not entitled to judgment on the pleadings on Sun’s affirmative defenses of prosecution history estoppel and/or judicial estoppel and patent misuse. In short, Allergan did not do the work: it did not show the court how those affirmative defenses were deficient simply because Sun’s unclean hands defense failed.