Case 1:15-cv-00078-RGA Document 125 Filed 04/11/19 Page 1 of 7 PageID #: 1873
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`NOVARTIS PHARMACEUTICALS CORP.,
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`Plaintiff,
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`V.
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`PAR PHARMACEUTICAL INC.,
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`Defendant.
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`NOVARTIS PHARMACEUTICALS CORP.,
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`Plaintiff,
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`V.
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`PAR PHARMACEUTICAL INC. ,
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`Defendant.
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`NOVARTIS PHARMACEUTICALS CORP.,
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`Plaintiff,
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`V.
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`PAR PHARMACEUTICAL INC.,
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`Defendant.
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`Civil Action No. 14-1289-RGA
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`Civil Action No . 14-1494-RGA
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`Civil Action No. 15-0078-RGA
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`MEMORANDUM ORDER
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`Currently pending before the Court is Plaintiff's Motion for Estoppel under 35 U. S.C.
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`§ 315(e)(2). (C.A. No. 14-1289, D.I. 193; C.A. No. 14-1494, D.I. 120; C.A. No. 15-0078, D.I.
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`Case 1:15-cv-00078-RGA Document 125 Filed 04/11/19 Page 2 of 7 PageID #: 1874
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`120). 1 Defendant Par Pharmaceutical has indicated that it "takes no position" on the estoppel issue.
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`(D.I. 195). Thus, Plaintiff's motion for estoppel is unopposed. However, as Plaintiff bears the
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`burden of demonstrating that estoppel applies under 35 U.S.C. § 315( e )(2), I have reviewed
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`Plaintiff's brief and the record to ensure that Plaintiff has met its burden.
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`I.
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`BACKGROUND
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`Plaintiff Novartis Pharmaceuticals filed three suits against Defendant Par Pharmaceutical
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`on October 10, 2014 (C.A. No. 14-1289, D.I. 1), December 18, 2014 (C.A. No. 14-1494, D.I. 1),
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`and January 23 , 2015 , (C.A. No. 15-78, D.I. 1), respectively. Plaintiff also filed related suits
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`against Defendants Breckenridge and West-Ward. (D .I. 193 at 5 n.4 ). The parties agreed that the
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`validity of U.S . Patent No. 5,665 ,772 ("the '772 patent") would be tried only once. (D.I. 139 at 3-
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`4). Before trial, Defendants conceded that their proposed products meet all limitations of the '772
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`patent. (D.I. 152 at 34). At trial, Defendants challenged the validity of claims 1-3, 7, and 10 of
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`the '772 patent on obviousness grounds, citing twenty-seven pieces of prior art. (D.I. 139 at 6).
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`While litigation was pending, Defendant Par challenged claims 1-3 and 8-10 of the '772
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`patent in an inter partes review ("IPR") proceeding. (IPR2016-00084, "the Par I IPR"). The Patent
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`Trial and Appeal Board ("PTAB") instituted the Par I IPR on April 29, 2016. After institution of
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`the Par I IPR, Defendants filed four additional IPR petitions challenging the '772 patent along with
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`motions to join the Par I IPR. (IPR2016-01059, IPR2016-01023 , IPR 2016-01103 , IPR2016-
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`01102). On October 27, 2016, the PTAB instituted the two IPRs which challenged claims 1-3 and
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`8-10 and joined them with the Par I IPR. (D.I. 139 at 6-7). The PTAB declined to institute and
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`join IPRs challenging claim 7 of the ' 772 patent because Defendant Par, failed to explain why
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`claim 7 was omitted from the Par I petition. (Id. ).
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`1 All docket item references in this order refer to C.A. No. I 4-1 289 unless otherwise specified.
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`Case 1:15-cv-00078-RGA Document 125 Filed 04/11/19 Page 3 of 7 PageID #: 1875
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`On March 28, 2017, I issued a trial opinion, determining that the asserted claims of the
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`'772 patent were invalid for obviousness-type double patenting. (D.I. 169 at 32). I did not address
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`Defendants' obviousness defenses or counterclaims. (Id.) . Defendants appealed. On January 11,
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`2018, while the appeal was pending on the obviousness-type double patenting decision, the PTAB
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`issued a final written decision in the Par I IPR upholding the patentability of claims 1-3 and 8-10
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`of the ' 772 patent. Par Pharm. Inc. v. Novartis AG, 2018 WL 389192, at *1 (P.T.A.B. Jan. 11 ,
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`2018). The Federal Circuit later reversed the obviousness-type double patenting decision.
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`Novartis Pharms. Corp. v. Breckenridge Pharm. Inc., 909 F.3d 1355, 1367 (Fed. Cir. 2018). After
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`the Federal Circuit issued its mandate in the appeal, I asked the parties in these cases to file a status
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`report summarizing the issues that still needed to be addressed in the suits relating to the '772
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`patent. (D.I. 187).
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`At that time, Plaintiff raised the possibility that 35 U.S.C. § 315(e)(2) would estop
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`Defendants' obviousness defenses and counterclaims based upon the final written decision of the
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`Par I IPR. (D.I. 191 at 2-3). Defendant Breckenridge raised several objections to the application
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`ofIPR estoppel and asserted that the Court should resolve the obviousness defenses/counterclaims
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`at the same time as estoppel. (Id. at 3-4). On March 1, 2019, I issued an order requesting briefing
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`by Plaintiff on estoppel and joint briefing from Defendants on obviousness. (D.I. 192). After that
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`order, the suits including Defendants Breckenridge and West-Ward were dismissed by joint
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`stipulation. (C.A. No. 14-1196, D.I. 221 ; C.A. No. 16-0431 , D.I. 99; C.A. No. 14-1043, D.I. 212).
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`Plaintiff has filed an opening brief moving for estoppel of Defendant Par' s obviousness
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`counterclaims. (D.I. 193). Defendant Par has indicated that it "takes no position" on the estoppel
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`issue. (D .I. 195). Defendant Par also has not filed any briefing on the obviousness issue in
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`response to my March 1 order, stating instead that it believes that a decision can be rendered based
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`upon the briefing and testimony submitted to date. 2 (Id.) .
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`II.
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`Standard for IPR Estoppel Under 35 U.S.C. § 315(e)(2)
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`35 U.S.C. § 315(e)(2) provides,
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`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) ... may not assert in either
`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 parties review.
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`The Federal Circuit has not directly addressed the issue of whether estoppel applies to prior art
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`references that were not raised in the IPR proceeding. However, the majority of District Courts
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`have determined that IPR estoppel applies to any prior art that reasonably could have been raised,
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`even if not actually raised in the IPR proceeding. See, e.g. , Bio-Rad Labs., Inc. v. I OX Genomics,
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`Inc., 322 F. Supp. 3d 537,541 (D. Del. 2018) (citing Bio-Rad Labs., Inc. v. I0XGenomics, Inc.,
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`C.A. No. 15-152, D.I. 228 at 28: 17-29: 14 (D. Del. Sept. 26, 2017)); Parallel Networks Licensing,
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`LLC v. IBM Corp., 2017 WL 1045912, at *11-12, (D. Del. Feb. 22, 2017) ; Am Tech. Ceramics
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`Corp. v. Presidio Components, Inc., 2019 WL 365709, at *2, 4-5 (E.D.N.Y. Jan. 30, 2019);
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`Milwaukee Electric Tool Corp. v. Snap-On Inc. , 271 F. Supp. 3d 990, 1029-30 (E.D. Wisc. 2017);
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`Network-I Techs., Inc. v. Alcatel-Lucent USA , Inc., No. 6:11-cv-00492-RWS, 2017 U.S. Dist.
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`LEXIS 178857, at *6-7 (E.D. Tex. Oct. 27, 2017).
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`As I have stated previously, the general purpose of the statute as well as the statutory
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`language indicate that the most plausible interpretation is that any prior art that the IPR petitioner
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`could have raised in the proceeding is estopped if there is a final written decision from the PT AB
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`2 I do note that Defendant Breckenridge was the party who requested further briefing on the obviousness issue, and
`that Defendant Par has maintained this position since the case was remanded from the Federal Circuit. (D.I. 191 at
`3-4).
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`Case 1:15-cv-00078-RGA Document 125 Filed 04/11/19 Page 5 of 7 PageID #: 1877
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`that the challenged claims are valid. See Bio-Rad, C.A. No. 15-152, D.I. 228 at 28:17-29:14. Prior
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`art "reasonably could have been raised" when "a skilled searcher conducting a diligent search
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`reasonably could have been expected to discover" the prior art. See, e.g., Cong. Rec. S 1375 (daily
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`ed. Mar. 8, 2011) (statement of Sen. Kyl). Moreover, one of the policy objectives behind the
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`introduction of IPR proceedings was an intention to conserve judicial resources. Am Tech. , 2019
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`WL 365709, at *2. Allowing an IPR petitioner to have two bites at the apple by holding back
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`certain obviousness combinations runs counter to both the clear language and purpose behind
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`§ 315. Parallel Networks, 2017 WL 1045912, at *12.
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`Defendant Breckenridge also raised an objection to the application of IPR estoppel after
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`the district court has held trial. (D.I. 191 at 3-4). I do not think the application of IPR estoppel is
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`dependent on the order in which certain events occur. This is a matter of first impression. While
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`previously raised in Senju Pharmaceutical Co. v. Lupin Ltd. , C.A. No. 14-667 (D.N.J.), the parties
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`settled before the Court could determine the issue. Senju Pharm., C.A. No. 14-667, D.I. 301
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`(D.N.J. Aug. 1, 2016), D.I. 302 (D.N.J. Aug. 2, 2016), D.I. 314 (D.N.J. Aug. 29, 2016).
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`The plain language of the statute does not indicate that Congress intended for there to be a
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`time limitation upon the estoppel effect of a final written decision of an IPR. The parties in Senju
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`focused upon the use of the terms "request" and "maintain" in § 315( e )(1) and the term "assert" in
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`§ 315(e)(2). Senju Pharm., C.A. No. 14-667, D.I. 302 at 1-3. It appears to me that the differences
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`in statutory language is a result of the forum in which the estoppel occurs, rather than evidence
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`that Congress intended IPR estoppel to be limited to time before trial is completed. Section (e)(l)
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`describes the estoppel effect of a final written decision on other PT AB proceedings. As this section
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`deals with administrative proceedings, the language is appropriately directed to that context. Thus,
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`§ 315(e)(l) states that after a final written decision is issued, the petitioner may not "request or
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`Case 1:15-cv-00078-RGA Document 125 Filed 04/11/19 Page 6 of 7 PageID #: 1878
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`maintain a proceeding."
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`( emphasis added). In contrast, § 315( e )(2) is directed at claims or
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`defenses that could be raised in a judicial proceeding and not the proceeding itself. Therefore,
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`§ 315(e)(2) uses the term "assert," which does not indicate a time limitation. Moreover, in the
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`context of judicial proceedings, the term "assert" is often used in a manner consistent with
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`"maintaining." For example, while a party may assert a multitude of patent claims at the beginning
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`of suit, by summary judgment, there may be only a few "Asserted Claims" left. Thus, the plain
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`language of the statute, along with the previously discussed policy objectives of judicial economy,
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`indicates that IPR estoppel will still apply post-trial where the Court has not entered a final
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`judgment on the relevant ground.
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`III. DISCUSSION
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`As I have determined that estoppel may apply post-trial, I now turn to whether estoppel
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`should apply to the twenty-seven references put forward by Defendants at trial. Plaintiff argues
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`that the twenty-seven trial references all "could reasonably have been raised" in the IPR proceeding
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`because they were used in the September 2016 trial which occurred before the reply due date in
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`the Par I IPR. Defendant does not contest Plaintiffs argument. (D.I. 195). Given their use at
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`trial, it is apparent that a diligent search would have revealed these references and therefore they
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`"could have been raised" at the IPR proceeding. Thus, Defendants are precluded from pursuing a
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`§ 103 invalidity argument as to the ' 772 patent claims 1-3 and 8-10.
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`However, no IPR was instituted as to the remaining '772 patent claim addressed at trial :
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`claim 7. Thus, IPR estoppel cannot apply. Plaintiff represents that a finding of infringement and
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`validity on claim 10 of the '772 patent is sufficient to prevent Defendant Par from launching its
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`generic products. (D.I. 193 at 13). Defendant does not contest this representation. (D.I. 195).
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`Plaintiff has therefore represented that "it has withdrawn its infringement contentions as to claim
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`Case 1:15-cv-00078-RGA Document 125 Filed 04/11/19 Page 7 of 7 PageID #: 1879
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`7 of the '772 patent and is willing to provide Defendant[] a covenant not to sue on that claim."
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`(D.1. 193 at 13).
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`As Defendant is estopped from pursuing an invalidity defense under§ 103 on claims 1-3
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`and 8-10, and Plaintiff has represented that it is no longer pursuing infringement as to claim 7, the
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`determination of validity of claim 7 will have no effect on Defendant Par' s ability to launch its
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`generic product. Thus, there is no "real and substantial" dispute of "sufficient immediacy and
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`reality to warrant issuance of a declaratory judgment" as to claim 7. Medimmune, Inc. v.
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`Genentech, Inc. , 549 U.S. 118, 128 (2007). Therefore, given Plaintiffs representations, I intend
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`to dismiss Plaintiffs infringement contentions as to claim 7 and to dismiss without prejudice
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`Defendant Par's counterclaim for declaratory judgment as to claim 7. But first, Plaintiff needs to
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`actually provide a satisfactory covenant not to sue on claim 7.
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`IV. CONCLUSION
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`Thus, IT IS HEREBY ORDERED that (1) Plaintiffs Motion for Estoppel (C.A. No. 14-
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`1289, D.I. 193; C.A. No. 14-1494, D.I. 120; C.A. No . 15-0078, D.I. 120) is GRANTED as to
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`claims 1-3 and 8-10 of the '772 patent, and (2) the parties are to submit a joint status report
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`concerning the covenant not to sue and a joint proposed form of order and judgment within two
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`weeks of this order.
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`Entered this .11_ day of April, 2019.
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