Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 1 of 15 PageID #: 7222
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`C.A. No. 14-1043-RGA
`
`
`
`
`
`
`
`
`
`
`
`
`
`C.A. No. 14-1289-RGA
`C.A. No. 14-1494-RGA
`C.A. No. 15-78-RGA
`
`
`
`
`
`C.A. No. 14-1196-RGA
`C.A. No. 14-1508-RGA
` C.A. No. 15-128-RGA
`
`
`v.
`
`
`
`
`v.
`
`
`
`
`v.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`NOVARTIS PHARMACEUTICALS
`CORPORATION and NOVARTIS AG,
`
`
`
`
`BRECKENRIDGE PHARMACEUTICAL, INC.,
`
`
`
`
`NOVARTIS PHARMACEUTICALS
`CORPORATION and NOVARTIS AG,
`
`
`
`
`PAR PHARMACEUTICAL, INC.,
`
`
`
`
`NOVARTIS PHARMACEUTICALS
`CORPORATION and NOVARTIS AG,
`
`
`
`
`WEST-WARD PHARMACEUTICALS
`INTERNATIONAL LIMITED,
`
`
`
`
`Plaintiffs,
`
`Defendant.
`
`Plaintiffs,
`
`Defendant.
`
`Plaintiffs,
`
`Defendant.
`
`NOVARTIS’S OPENING BRIEF ON ESTOPPEL UNDER 35 U.S.C. § 315(e)(2)
`
`
`
`
`
`
`
`
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 2 of 15 PageID #: 7223
`
`TABLE OF CONTENTS
`
`Page:
`
`I. 
`II. 
`
`III. 
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`2. 
`
`PROCEDURAL BACKGROUND ..................................................................................... 1 
`ARGUMENT ...................................................................................................................... 4 
`1.  Defendants Are Estopped Under 35 U.S.C. § 315(e)(2) From Maintaining
`Their § 103 Invalidity Challenge Against ’772 Patent Claims 1-3 And 8-10 ........... 4 
`Breckenridge’s Arguments For Why Estoppel Should Not Apply Here Lack
`Merit .......................................................................................................................... 6 
`This Court Need Not Consider Whether Estoppel Applies to Claim 7, But
`Regardless, Breckenridge and Par Are Estopped Under 35 U.S.C. § 315(e)(2)
`From Maintaining Their § 103 Invalidity Challenge ................................................ 9 
`CONCLUSION ................................................................................................................. 10 
`
`3. 
`
`
`
`i
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 3 of 15 PageID #: 7224
`
`TABLE OF AUTHORITIES
`
`
`
`
`
`Page(s)
`
`Cases
`
`Am. Tech. Ceramics Corp. v. Presidio Components, Inc.,
`No. 14-6544 (KAM)(GRB), 2019 WL 365709 (E.D.N.Y. Jan. 30, 2019) ................................7
`
`Bio-Rad Labs., Inc. v. 10x Genomics, Inc.,
`322 F. Supp. 3d 537 (D. Del. 2018) .......................................................................................5, 7
`
`Biscotti Inc. v. Microsoft Corp.,
`No. 2:13-cv-01015-JRG-RSP, 2017 WL 2526231 (E.D. Tex. May 11, 2017)
`adopted by 2017 U.S. Dist. LEXIS 143675 (E.D. Tex. June 2, 2017) ......................................7
`
`Cobalt Boats, LLC v. Sea Ray Boats, Inc.,
`No. 2:15cv21, 2017 WL 2605977 (E.D. Va. June 5, 2017).......................................................7
`
`Douglas Dynamics, LLC v. Meyer Prods. LLC,
`No. 14-cv-886-jdp, 2017 U.S. Dist. LEXIS 58773 (W.D. Wis. Apr. 18, 2017) ........................7
`
`Ilife Techs., Inc. v. Nintendo of Am., Inc.,
`No. 3:13-cv-4987-M, 2017 U.S. Dist. LEXIS 87769 (N.D. Tex. May 30,
`2017) ..........................................................................................................................................8
`
`Intellectual Ventures I LLC v. Toshiba Corp.,
`221 F. Supp. 3d 534 (D. Del. 2016) ...........................................................................................9
`
`Milwaukee Electric Tool Corp. v. Snap-On Inc.,
`271 F. Supp. 3d 990 (E.D. Wisc. 2017) .....................................................................................7
`
`Network-1 Techs., Inc. v. Alcatel-Lucent USA, Inc.,
`No. 6:11-cv-00492-RWS, 2017 U.S. Dist. LEXIS 178857 (E.D. Tex. Oct. 27,
`2017) ..........................................................................................................................................7
`
`Oil-Dri Corp. of Am. v. Nestlé Purina Petcare Co.,
`No. 15-cv-1067, 2017 WL 3278915 (N.D. Ill. Aug. 2, 2017) ...............................................6, 7
`
`Par Pharm., Inc. v. Novartis AG,
`Case No. IPR2016-00084, 2018 WL 389192 (P.T.A.B. Jan. 11, 2018) ................................3, 4
`
`Parallel Networks Licensing, LLC v. IBM Corp.,
`No. 13-2072 (KAJ), 2017 WL 1045912 (D. Del. Feb. 22, 2017) ..........................................6, 7
`
`ii
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 4 of 15 PageID #: 7225
`
`
`
`Statutes
`
`35 U.S.C. § 103 ........................................................................................................................1, 5, 9
`
`35 U.S.C. § 315(e)(2) ............................................................................................................. passim
`
`Other Authorities
`
`157 Cong. Rec. S1375 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl) ........................................8
`
`iii
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 5 of 15 PageID #: 7226
`
`
`
`Pursuant to this Court’s February 28, 2019, order (C.A. No. 14-1043, D.I. 206), Novartis
`
`Pharmaceuticals Corporation and Novartis AG (collectively “Novartis”) file this brief explaining
`
`why the three Defendants1 are estopped under 35 U.S.C. § 315(e)(2) from asserting their sole
`
`remaining invalidity defense against claims 1-3, 7 and 10 of U.S. Patent No. 5,665,772 (“the
`
`’772 patent”).2 That 35 U.S.C. § 103 defense is based on prior art that Defendants knew about
`
`and “raised or reasonably could have raised during” the ’772 patent IPR proceedings for which
`
`there is a final written decision (claims 1-3 and 8-103) and de facto final written decision (claim
`
`7) upholding patentability. Because Defendants are estopped, judgment for Novartis should be
`
`entered, disposing of the above-captioned litigations. Thus, this Court need not evaluate
`
`Defendants’ substantive § 103 defense.
`
`I. PROCEDURAL BACKGROUND
`
`Novartis sued Defendants for ’772 patent infringement based on their generic versions of
`
`Novartis’s Zortress® and Afinitor® products in multiple litigations.4 The parties agreed that the
`
`
`1 Breckenridge Pharmaceutical, Inc. (“Breckenridge”), Par Pharmaceutical Inc. (“Par”) and
`West-Ward Pharmaceuticals International-Limited (f/k/a Roxane Laboratories, Inc., n/k/a Hikma
`Pharmaceuticals International Limited) (“West-Ward”) (collectively “Defendants”).
`2 Unlike Par and Breckenridge who filed counterclaims, West-Ward can only challenge claim 10
`of the ’772 patent as Novartis withdrew its infringement contentions against claims 1-3 at trial,
`and against claim 7 after trial. See C.A. No. 14-1043, D.I. 162 at 1 n.1, D.I. 205 at 2.
`3 Although claims 8 and 9 are discussed in this brief as they were included in the ’772 patent
`IPRs and estoppel applies to those claims, no party presented evidence on claims 8 or 9 at the
`’772 patent trial and this Court need not address whether estoppel applies to those claims.
`4 The first ’772 patent suits were filed in August 2014 (Breckenridge, C.A. No. 14-1043),
`September 2014 (West-Ward, C.A. No. 14-1196), and October 2014 (Par, C.A. No. 14-1289)
`(collectively, “the Zortress® litigations”). Six additional suits were subsequently filed, C.A.
`Nos. 14-1494 and 15-0078 (Par); 14-1508 and 15-0128 (West-Ward); and C.A. Nos. 16-0431-
`RGA and 17-00420 (Breckenridge) (collectively, “the Afinitor® litigations”). The Breckenridge
`Afinitor® litigations were dismissed in August 2018. See C.A. No. 16-431, D.I. 99, 108.
`
`1
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 6 of 15 PageID #: 7227
`
`
`
`validity of the ’772 patent would be tried only once in the Zortress® litigations, and would not
`
`be tried again in the subsequent Afinitor® litigations. See C.A. No. 14-1043, D.I. 152 at 3-4. At
`
`trial, Defendants presented evidence on the obviousness of claims 1-3, 7 and 10 of the ’772
`
`patent (Novartis, however, limited its case at trial to claims 7 and 10). Defendants’ prima facie
`
`obviousness challenge was based on 27 pieces of prior art—8 publications and 19 issued U.S.
`
`patents (“Defendants’ trial references;” see table in Section II.1, below). C.A. No. 14-1043, D.I.
`
`162 at 1-18 (Defendants’ September 26, 2016 Post-Trial Brief).
`
`While the Zortress® litigation was pending, Par challenged in an IPR proceeding
`
`(IPR2016-00084, “the Par I IPR”) claims 1-3 and 8-10 of the ’772 patent. Schwarz Ex. 1,5 (Par I
`
`IPR, Paper 1, Oct. 26, 2015). The Patent Trial and Appeal Board (“Board”) instituted the Par I
`
`IPR on April 29, 2016. Schwarz Ex. 2, (Par I IPR, Paper 8).
`
`After institution of the Par I IPR, Defendants filed four additional IPR petitions
`
`challenging the ’772 patent (the “second wave IPRs”) accompanied by motions to join the Par I
`
`IPR. All five IPRs are summarized in the table below. On October 27, 2016, the Board instituted
`
`two of the second wave IPRs—those challenging ’772 patent claims 1-3 and 8-10
`
`((“Breckenridge I” and “West-Ward” (in part)) in the table below), and joined them with the Par
`
`I IPR. See Schwarz Ex. 3 (Par I IPR, Paper 37) at 19-20. Thus, all Defendants were parties to the
`
`Par I IPR. As for the claim 7 IPRs (“Par II,” “Breckenridge II” and “West-Ward” (in part) in the
`
`table below), the Board held that, as a substantive matter, “[i]nstitution of trial as to claim 7 on
`
`the Par II [IPR], Breckenridge II [IPR] and Roxane [IPR] Petitions is warranted.” Id. at 10-12
`
`(emphasis added). However, the Board denied joinder of the claim 7 IPRs because institution
`
`
`5 “Schwarz Ex. __” refers to the exhibits of the declaration of Christina Schwarz, Esq., filed
`concurrently with this brief.
`
`2
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 7 of 15 PageID #: 7228
`
`
`
`would adversely affect the Par I IPR schedule and Petitioners failed to explain why claim 7 was
`
`omitted from the Par I IPR petition. Id. at 15-18.
`
`IPR
`
`Case No.
`
`Date Petition
`Submitted
`
`’772 Claims
`Challenged
`
`Institution Status
`
`Par I
`
`Par II
`
`IPR2016-00084
`
`Oct. 26, 2015
`
`1-3 and 8-10
`
`Instituted
`
`IPR2016-01059 May 17, 2016
`
`7
`
`Institution warranted, but
`joinder denied
`
`Instituted and joined with
`Par I IPR
`
`Institution warranted, but
`joinder denied
`
`Instituted and joined with
`Par I IPR (claims 1-3 and
`8-10); institution warranted,
`but joinder denied (claim 7)
`
`Breckenridge I
`
`IPR2016-01023 May 20, 2016
`
`1-3 and 8-10
`
`Breckenridge II IPR2016-01103 May 26, 2016
`
`7
`
`Roxane
`(West-Ward)
`
`IPR2016-01102 May 26, 2016
`
`1-3 and 7-10
`
`On January 11, 2018, the Board issued a final written decision in the Par I IPR upholding
`
`the patentability of ’772 patent claims 1-3 and 8-10. Par Pharm., Inc. v. Novartis AG, Case
`
`IPR2016-00084, 2018 WL 389192, *1 (P.T.A.B. Jan. 11, 2018). No Petitioner appealed this
`
`decision. The Board also denied Petitioners’ request to rehear the claim 7 non-joinder decision.
`
`See, e.g., Schwarz Ex. 4 (Par II IPR, Paper 23). In that rehearing denial, the Board included the
`
`following statement about the patentability of claim 7:
`
`In light of our determination in today’s Final Written Decision in IPR2016-00084
`[the Par I IPR (including IPRs joined with it)] that Petitioners have not proven the
`unpatentability of claim 1 of the ’772 patent; however, Petitioners’ rehearing
`requests are moot. Petitioners advanced no ground of unpatentability as to claim
`7 that did not rely on the unpatentability of claim 1. As claim 1 has not been
`proven unpatentable, there is no basis to conclude that claim 7 is separately
`unpatentable. Therefore, even if we were to reconsider exercising our discretion
`not to join claim 7 to IPR2016-00084, as Petitioners ask, the claim would
`remain patentable.
`
`3
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 8 of 15 PageID #: 7229
`
`
`
`Id. at 2-3 (emphasis added). Thus, the Board evaluated Petitioners’ challenge to claim 7 on the
`
`merits and concluded that, had the IPRs been instituted on claim 7, claim 7 would be patentable.
`
`No Petitioner appealed this decision either. As explained below, the Board’s IPR decisions
`
`trigger the estoppel provision of 35 U.S.C. § 315(e)(2) for each of claims 1-3 and 7-10.
`
`II.
`
`ARGUMENT
`
`1.
`
`Defendants Are Estopped Under 35 U.S.C. § 315(e)(2) From Maintaining
`Their § 103 Invalidity Challenge Against ’772 Patent Claims 1-3 And 8-10
`
`Under 35 U.S.C. § 315(e)(2), an IPR petitioner who receives a final written decision
`
`cannot assert in a civil action that any patent claim is invalid on any ground that the petitioner
`
`raised or reasonably could have raised during the IPR:
`
`The petitioner in an inter partes review of a claim in a patent under this chapter
`that results in a final written decision under section 318(a), or the real party in
`interest or privy of the petitioner, may not assert either in a civil action arising in
`whole or in part under section 1338 of title 28 . . . that the claim is invalid on any
`ground that the petitioner raised or reasonably could have raised during that
`inter partes review.
`
`35 U.S.C. § 315(e)(2) (emphases added).
`
`Estoppel applies to ’772 patent claims 1-3 and 8-10 because each of the § 315(e)(2)
`
`requirements is met. The same is true for claim 7, discussed in Section II.3 below. Defendants
`
`were each parties to the Par I IPR, and that IPR resulted in a final written decision upholding
`
`claims 1-3 and 8-10. See Par v. Novartis, 2018 WL 389192, *1, 15. And Defendants’ invalidity
`
`challenge in this Court was based on art that was “raised or reasonably could have [been] raised
`
`during [the Par I IPR].” Defendants cannot credibly argue otherwise.
`
`Each of the 27 references Defendants asserted at trial before this Court is a prior art
`
`patent or printed publication and therefore could have been cited in an IPR. Each of these
`
`references meet the “raised or reasonably could have [been] raised” standard because they
`
`unquestionably were known to Defendants during the pendency of the Par I IPR. The August-
`
`4
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 9 of 15 PageID #: 7230
`
`
`
`September 2016 Zortress® trial took place before the Petitioners’ joint IPR reply brief was filed
`
`in December 2016 and therefore all 27 of Defendants’ trial references were known before the
`
`Par I IPR reply due date. Schwarz Ex. 5 (Par I IPR, Paper 46). In addition, 18 of Defendants’
`
`trial references were exhibits in the Par I IPR as shown below (Schwarz Ex. 6 (Par IPR, Papers
`
`61 and 53):
`
`JTX No. Description
`JTX 6
`Baumann 1992
`
`Par I IPR Ex.
`
`
`JTX 32 Morris 1992
`
`Ex. 1005
`
`JTX 42
`
`Schreiber 1991 Ex. 1012
`
`JTX 51
`
`JTX 60
`
`JTX 61
`
`JTX 64
`
`Van Duyne
`1991
`U.S. Patent No.
`5,120,842
`U.S. Patent No.
`5,100,899
`Hiestand 1992
`
`JTX 97
`
`JTX 98
`
`U.S. Patent No.
`5,023,263
`U.S. Patent No.
`5,130,307
`U.S. Patent No.
`5,233,036
`JTX 100 Morris 1989
`
`JTX 99
`
`JTX 136 Christians 1992
`
`JTX 139
`
`Findlay 1980
`
`JTX 150 U.S. Patent No.
`4,316,885
`
`Ex. 1006
`
`
`
`Ex. 1070
`
`
`
`Ex. 2143
`
`Ex. 2136
`
`Ex. 1009
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`JTX No. Description
`JTX 152 U.S. Patent No.
`5,023,262
`JTX 173 U.S. Patent No.
`5,151,413
`JTX 174 U.S. Patent No.
`5,164,399
`JTX 175 U.S. Patent No.
`5,177,203
`JTX 208 U.S. Patent No.
`5,194,447
`JTX 209 U.S. Patent No.
`5,023,264
`JTX 211 U.S. Patent No.
`5,118,678
`JTX 212 U.S. Patent No.
`5,162,333
`JTX 214 U.S. Patent No.
`5,221,670
`JTX 220 U.S. Patent No.
`5,100,883
`JTX 221 U.S. Patent No.
`5,102,876
`JTX 222 U.S. Patent No.
`5,120,726
`JTX 223 U.S. Patent No.
`5,138,051
`
`
`
`
`Par I IPR Ex.
`
`
`
`
`Ex. 2042
`
`Ex. 2119
`
`Ex. 2075
`
`Ex. 2117
`
`Ex. 2130
`
`Ex. 2118
`
`Ex. 2121
`
`Ex. 1011
`
`Ex. 2039
`
`Ex. 2038
`
`Ex. 2040
`
`
`
`Because § 315(e)(2)’s requirements are satisfied, Defendants are estopped from
`
`maintaining in this Court a § 103 challenge against ’772 patent claims 1-3 and 8-10. See, e.g.,
`
`Bio-Rad Labs., Inc. v. 10x Genomics, Inc., 322 F. Supp. 3d 537, 541 (D. Del. 2018) (“Bio-Rad”)
`
`5
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 10 of 15 PageID #: 7231
`
`
`
`(citing Bio-Rad Labs., Inc. v. 10x Genomics, Inc., No. 15-152-RGA, D.I. 228 at 28:17-29:14
`
`(public transcript of Sept. 6, 2017 conference) (D. Del. Sept. 26, 2017) (“Bio-Rad Transcript”)).
`
`Judgment in Novartis’s favor as to those claims is warranted.
`
`2.
`
`Breckenridge’s Arguments For Why
`Estoppel Should Not Apply Here Lack Merit
`
`In the Joint Status Report, Breckenridge argued that § 315(e)(2) does not apply to the
`
`facts here, and Bio-Rad does not control, because: (1) this Court already has held a ’772 patent
`
`trial, and (2) the Par I IPR references were not identical to Defendants’ trial arguments. See C.A.
`
`No. 14-1043, D.I. 205 at 3-4. These arguments lack merit and are not supported by the language
`
`of § 315(e)(2), the prevailing view of district courts, or the legislative history and policy goals
`
`underlying § 315(e)(2).
`
`Breckenridge’s first argument, that estoppel should not apply after a trial, is unsupported.
`
`Section 315(e)(2) provides no time limit on its application, stating only that when its
`
`requirements are met, an IPR petitioner “may not assert . . . that the claim is invalid.”
`
`Breckenridge has identified no cases or legislative history that support its narrow reading, and
`
`Novartis is not aware of any such authority. Rather, key policy goals of the estoppel provision
`
`include conserving judicial resources and prohibiting patent challengers who avail themselves of
`
`the IPR procedure from taking a second bite at the apple in district court. Parallel Networks
`
`Licensing, LLC v. IBM Corp., No. 13-2072 (KAJ), 2017 WL 1045912, at *12 (D. Del. Feb. 22,
`
`2017); Oil-Dri Corp. of Am. v. Nestlé Purina Petcare Co., No. 15-cv-1067, 2017 WL 3278915,
`
`at *8 (N.D. Ill. Aug. 2, 2017). Estopping Defendants here achieves these goals.
`
`Breckenridge’s second argument that estoppel should not apply because the Par I IPR
`
`references differed from Defendants’ trial arguments likewise lacks merit. As explained above,
`
`Defendants’ trial arguments were based on public documents that either were or reasonably
`
`6
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 11 of 15 PageID #: 7232
`
`
`
`could have been raised in the Par I IPR (or in the Breckenridge I and West-Ward IPR petitions
`
`that led to joinder), and all were known to Defendants during the Par I IPR. The prevailing view
`
`of district courts support applying estoppel here.
`
`Although the Federal Circuit has not yet ruled on whether estoppel applies to arguments
`
`that were not (but could have been) raised in an IPR, a majority of district court judges have
`
`applied §315(e)(2) estoppel to any prior art that reasonably could have been raised, even if not
`
`raised in the IPR.6 This prevailing view is based on the clear language of the statute itself and the
`
`policy argument that IPR proceedings aim to conserve judicial resources, and thus an IPR
`
`petitioner should not be permitted “to hold a second-string invalidity case in reserve in case the
`
`IPR does not go defendant’s way,” like it did for Defendants here. Douglas Dynamics, 2017 U.S.
`
`Dist. LEXIS 58773, at *12-13; see also Am. Tech., 2019 WL 365709, at *5 (“When a party
`
`chooses to seek IPR, but only on certain grounds, that choice comes with consequences, notably
`
`the risk of estoppel.”). The Defendants here strategically decided to file IPRs against the ’772
`
`patent, and cannot now avoid the estoppel consequences simply because they do not like the
`
`result.
`
`
`
`The legislative history is also consistent with the majority view, as it indicates that
`
`Congress intended estoppel to apply to prior art that could have been identified by a diligent
`
`
`6 See, e.g., Bio-Rad, 322 F. Supp. 3d at 541; Bio-Rad Transcript at 28:17-29:14; see also Am.
`Tech. Ceramics Corp. v. Presidio Components, Inc., No. 14-CV-6544 (KAM)(GRB), 2019 WL
`365709, at *2, 4-5 (E.D.N.Y. Jan. 30, 2019); Parallel Networks, 2017 WL 1045912, at *11-12;
`Oil-Dri, 2017 WL 3278915, at *8-9; Cobalt Boats, LLC v. Sea Ray Boats, Inc., No. 2:15cv21,
`2017 WL 2605977, at *3 (E.D. Va. June 5, 2017); Biscotti Inc. v. Microsoft Corp., No. 2:13-cv-
`01015-JRG-RSP, 2017 WL 2526231, at *7-8 (E.D. Tex. May 11, 2017), adopted by 2017 U.S.
`Dist. LEXIS 143675, at *4 (E.D. Tex. June 2, 2017); Network-1 Techs., Inc. v. Alcatel-Lucent
`USA, Inc., No. 6:11-cv-00492-RWS, 2017 U.S. Dist. LEXIS 178857, at *6-7 (E.D. Tex. Oct. 27,
`2017); Milwaukee Electric Tool Corp. v. Snap-On Inc., 271 F. Supp. 3d 990, 1029-30 (E.D.
`Wisc. 2017); Douglas Dynamics, LLC v. Meyer Prods. LLC, No. 14-cv-886-jdp, 2017 U.S. Dist.
`LEXIS 58773, at *12-13 (W.D. Wis. Apr. 18, 2017).
`
`7
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 12 of 15 PageID #: 7233
`
`
`
`search—and not simply prior art that was raised in an IPR. See, e.g., 157 Cong. Rec. S1375
`
`(daily ed. Mar. 8, 2011) (statement of Sen. Kyl) (“Adding the modifier ‘reasonably’ ensures that
`
`could-have-raised estoppel extends only to that prior art which a skilled searcher conducting a
`
`diligent search reasonably could have been expected to discover.”).
`
`Because the majority’s reading of § 315(e)(2) is consistent with the statutory language
`
`and legislative history and best achieves Congress’s stated policy goals, it should be applied
`
`here. Your Honor previously reached the same conclusion. Bio-Rad Transcript at 28:17-29:14 (“I
`
`would say that the statute is better effected, and it seems consistent with the statutory language, if
`
`there’s a fairly broad estoppel. . . . [I]n terms of what’s the legal rule that I’m going to adopt, I’m
`
`going to go with . . . what seems to be the majority view of the District Courts.”); see also Ilife
`
`Techs., Inc. v. Nintendo of Am., Inc., No. 3:13-cv-4987-M, 2017 U.S. Dist. LEXIS 87769, at *14
`
`(N.D. Tex. May 30, 2017) (“[T]he plain meaning of § 315(e) is that an IPR petitioner is estopped
`
`from reasserting invalidity on any ground that the petitioner raised or reasonably could have
`
`raised in a petition. . . . The Court believes that the legislative history of § 315(e) supports this
`
`reading, and strongly suggests that Congress intended IPR estoppel to apply not only to grounds
`
`actually raised, but also to grounds that could have been raised but, for whatever reason, were
`
`not.”).
`
`Novartis recognizes there are instances where district court judges have held that estoppel
`
`under § 315(e)(2) requires that the litigation arguments were actually raised in the IPR
`
`proceeding; however, these decisions are in the minority, and some have recognized that
`
`excluding from estoppel “prior art references that were never presented to the PTAB at all
`
`(despite their public nature) confounds the very purpose of this parallel administrative
`
`proceeding.” See, e.g., Intellectual Ventures I LLC v. Toshiba Corp., 221 F. Supp. 3d 534, 553-
`
`8
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 13 of 15 PageID #: 7234
`
`
`
`54 (D. Del. 2016). This Court should adopt the majority view, which applies estoppel under
`
`§ 315(e)(2) to non-petitioned references and preclude Defendants from pursuing a § 103
`
`invalidity argument as to ’772 patent claims 1-3 and 8-10.
`
`3.
`
`This Court Need Not Consider Whether Estoppel Applies to Claim 7, But
`Regardless, Breckenridge and Par Are Estopped Under 35 U.S.C. § 315(e)(2)
`From Maintaining Their § 103 Invalidity Challenge
`
`Claim 7 was not challenged in the Par I IPR; however, that does not impede this Court’s
`
`ability to enter judgment in Novartis’s favor.
`
`First, to simplify the application of § 315(e)(2) estoppel, Novartis has withdrawn its
`
`infringement contentions as to claim 7 of the ’772 patent and is willing to provide Defendants a
`
`covenant not to sue on that claim. Accordingly Breckenridge can no longer maintain its
`
`complaint in the Joint Status Report that its counterclaim for declaratory relief as to claim 7
`
`remains. See C.A. No. 14-1043, D.I. 205 at 3 n.3.
`
`Second, it would be a waste of judicial resources if Defendants asked this Court to
`
`consider the validity of claim 7 alone. Even if this Court were to agree that estoppel does not
`
`apply to claim 7, estoppel applies to claim 10 for the reasons above, and claim 10 alone prohibits
`
`Defendants from marketing their generic products.
`
`Third, because of the unique facts here, the § 315(e)(2) requirements are met as to claim
`
`7, notwithstanding there is no formal final written decision on that claim. All Defendants here
`
`filed IPR petitions challenging claim 7, and expressly argued claim 7 was unpatentable for the
`
`same reasons as claim 1 and “rises or falls” with claim 1. See Schwarz Ex. 3 (Par I IPR, Paper
`
`37) at 10-12. The Board considered this very argument in its January 11, 2018, rehearing
`
`decision in the claim 7 IPRs, and made the following statement:
`
`Petitioners advanced no ground of unpatentability as to claim 7 that did not rely on
`the unpatentability of claim 1. As claim 1 has not been proven unpatentable, there
`is no basis to conclude that claim 7 is separately unpatentable. Therefore, even if
`
`9
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 14 of 15 PageID #: 7235
`
`
`
`we were to reconsider exercising our discretion not to join claim 7 to IPR2016-
`00084 [the Par I IPR], as Petitioners ask, the claim would remain patentable.
`
`Schwarz Ex. 4 (Par II, Paper 23) at 2. Thus, the Board concluded that claim 7 was patentable for
`
`the same reasons as claim 1, which was addressed in the Par I IPR final written decision. The
`
`Board’s statements, read alongside its decision in the Par I IPR and the Petitioners’ own arguments
`
`that “claim 7 rises or falls with claim 1,” is in effect a final written decision on claim 7, and justifies
`
`applying estoppel.
`
`III. CONCLUSION
`
`Novartis respectfully requests this Court find that Defendants are estopped under
`
`§ 315(e)(2) from maintaining their sole remaining invalidity argument against the ’772 patent,
`
`and enter judgment in Novartis’s favor.
`
`10
`
`

`

`Case 1:14-cv-01289-RGA Document 193 Filed 03/11/19 Page 15 of 15 PageID #: 7236
`
`
`
`Respectfully submitted,
`
`
`
`
`
` March 11, 2019
`
`
`
`
`
`
`
`
`
`
`
`McCARTER & ENGLISH, LLP
`
`
`/s/Daniel M. Silver
`Daniel M. Silver (#4758)
`Renaissance Centre
`405 N. King Street, 8th Floor
`Wilmington, Delaware 19801
`(302) 984-6300
`dsilver@mccarter.com
`
`Of Counsel:
`
`VENABLE LLP
`
`Nicholas N. Kallas
`Christina Schwarz
`Christopher Loh
`Susanne Flanders
`Jared Stringham
`Shannon Clark
`Laura Fishwick
`1290 Avenue of the Americas
`New York, NY 10104-3800
`(212) 218-2100
`nkallas@venable.com
`cschwarz@venable.com
`cloh@venable.com
`slflanders@venable.com
`jlstringham@venable.com
`skclark@venable.com
`lfishwick@venable.com
`
`Attorneys for Plaintiffs Novartis
`Pharmaceuticals Corporation and Novartis
`AG
`
`
`
`
`
`11
`
`