Case 1:18-cv-00303-RGA Document 25 Filed 05/15/18 Page 1 of 8 PageID #: 839
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`BAXTER HEALTHCARE CORPORATION,
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` Plaintiff,
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`v.
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`HOSPIRA, INC. and ORION CORP.,
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` Defendants.
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`C.A. No. 18-303-RGA
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`BAXTER’S MOTION FOR REARGUMENT OF THE SCHEDULING ORDER
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`I.
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`INTRODUCTION
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`Plaintiff Baxter Healthcare Corporation (“Baxter”), by counsel, submits this Motion for
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`Reargument of the Scheduling Order pursuant to Local Rule 7.1.5. Baxter requests that the Court
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`reconsider its prohibition on dispositive motions and its summary denial of Baxter’s Motion for
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`Judgment on the Pleadings (“Judgment Motion”). (D.I. 21, ¶ 12.) This case presents a unique
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`situation where litigating all four patents-in-suit through trial would be unjust to Baxter, and result
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`in an inefficient allocation of the parties’ and Court’s resources.
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`For three of the four patents-in-suit, Baxter seeks a declaration of noninfringement, and
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`Hospira, Inc. (“Hospira”) and Orion Corp. (collectively, “Defendants”) have NOT counterclaimed
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`for infringement. With respect to these patents, Defendants’ admissions in their answer are
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`sufficient for the Court to grant judgment as a matter of law to Baxter and streamline the issues for
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`discovery, claim construction, and trial. Moreover, through respective litigation counsel,
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`Defendants have signaled their agreement that Baxter does not infringe these patents.
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`The sole remaining patent claims a method of use that Baxter’s Abbreviated New Drug
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`Application (“ANDA”) No. 208532 carves out. Notably, Defendants have not asserted this patent
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`against any other ANDA filer that carved out this use. Baxter’s carve out makes this issue
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`amenable to judgment on the pleadings.
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`Defendants declined to sue Baxter for infringement when Baxter served its Paragraph IV
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`Certification notices. However, the Food and Drug Administration (“FDA”) unexpectedly only
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`tentatively approved Baxter’s ANDA, and Baxter now needs a declaration of noninfringement on
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`all patents-in-suit to obtain final FDA approval. Despite lacking a colorable case of infringement,
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`Defendants seek to prolong this case to preserve the status quo monopoly. Accordingly, Baxter
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`respectfully requests that the Court reconsider the Judgment Motion to avoid injustice.
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`Alternatively, Baxter requests revision of the Scheduling Order to provide for trial in late
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`2018.1 A 2018 trial is feasible and appropriate given the lack of disputed facts, limited need for
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`discovery and claim construction, and preclusion of dispositive motions. Baxter appreciates the
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`Court’s adoption of a May 3, 2019 trial date, but the ban on dispositive motions forecloses any
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`opportunity for Baxter to obtain a final judgment of noninfringement before expiry of the only
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`contested patent in this case. Without final judgment, FDA is effectively precluded from finally
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`approving Baxter’s ANDA until at least late 2019 and perhaps considerably longer. Thus, a 2018
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`trial date is necessary to avoid manifest injustice.
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`II.
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`NATURE OF THE CASE & PROCEDURAL POSTURE
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`Baxter is the holder of ANDA No. 208532 for a proposed drug product containing
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`dexmedetomidine hydrochloride in 0.9% sodium chloride injection, 200 mcg/50 mL and 400
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`mcg/100 mL (the “Baxter ANDA Product”). The Baxter ANDA Product is a generic form of
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`Precedex®, Hospira’s dexmedetomidine hydrochloride product. Hospira listed four patents
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`relevant to this case in FDA’s Orange Book: U.S. Patent Nos. 6,716,867 (“’867 Patent”), 8,242,158
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`1 A Proposed Revised Scheduling Order is attached at Exhibit A for the Court’s consideration.
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`2
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`(“’158 Patent”), 8,338,470 (“’470 Patent”), and 8,455,527 (“’527 Patent”) (collectively, “the
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`Patents-in-Suit”). The ’867 Patent expires on March 31, 2019, and the ’158 Patent, ’470 Patent,
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`and ’527 Patent (collectively, the “Glass Patents”) expire on January 4, 2032. Each patent is subject
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`to a six-month pediatric exclusivity period following expiration.
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`FDA tentatively approved Baxter’s ANDA on January 22, 2018, but withheld final
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`approval because of a first applicant’s eligibility for 180-day generic drug exclusivity. Unless the
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`first applicant triggers the running of its exclusivity period, FDA is presently prohibited from
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`finally approving Baxter’s ANDA Product until 2032, when the last of the Patents-in-Suit and any
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`pediatric exclusivity expire. Baxter can avoid this result only by obtaining a final judgment of
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`noninfringement on all patents asserted in the first applicant’s ANDA.
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`Baxter filed this lawsuit seeking declaratory judgment of noninfringement on February 22,
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`2018, exactly one month after FDA tentatively approved Baxter’s ANDA. (D.I. 1.) Defendants
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`admitted in their answer and subsequent submissions to this Court that the Baxter ANDA Product
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`does not infringe the Glass Patents. (D.I. 10, ¶¶ 33, 46, 58, 87-89, 95-96, 102-103; D.I. 18; D.I.
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`19.) The parties are discussing entry of a consent judgment on these patents, but no agreement has
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`yet been reached.
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`On April 24, 2018, Baxter filed its Judgment Motion. (D.I. 16.) Before Defendants’
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`opposition to the Judgment Motion was due, the Court entered a Scheduling Order prohibiting
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`dispositive motions. (D.I. 21, ¶ 12.) In the Scheduling Order, the Court wrote that Baxter’s “Motion
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`for Judgment on the Pleadings (D.I. 16) is DENIED.” (Id.) Trial is set for May 3, 2019 (id., ¶ 14),
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`which is over a month after the key patent in this case expires.
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`III.
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`LEGAL STANDARD
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`Reargument is appropriate where the Court has “patently misunderstood a party, or has
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`made a decision outside the adversarial issues presented to the Court by the parties, or has made
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`an error not of reasoning but of apprehension.” Brambles USA, Inc. v. Blocker, 735 F. Supp. 1239,
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`1241 (D. Del. 1990). The Court should grant a motion for reargument without hesitation when
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`“compelled to prevent manifest injustice or to correct clear error.” Id.; see Max’s Seafood Café ex
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`rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999); Fed. R. Civ. P. 59(e).
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`IV.
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`ARGUMENT
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`Reconsideration of the Scheduling Order is necessary to avoid manifest injustice for at
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`least two reasons. First, the ban on dispositive motions forces Baxter to litigate three patents in
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`which Defendants admit there is no infringement. Such an outcome unjustly delays Baxter’s relief,
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`and results in an inefficient allocation of time and resources to litigate uncontested allegations of
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`noninfringement that can be appropriately resolved through dispositive motions.
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`Second, summary denial of the Judgment Motion, coupled with the prohibition of
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`dispositive motions, denies Baxter any chance of obtaining a final judgment of noninfringement
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`before the ’867 Patent expires. Expiry of the ’867 Patent prior to final judgment forces Baxter to
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`delay marketing the Baxter ANDA Product until late 2019 or longer. This is contrary to the
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`legislative purpose of the Hatch-Waxman Amendments—a key element of which is to make non-
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`infringing generic products available to the American public as quickly as possible. For these
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`reasons, Baxter requests that the Court consider its Judgment Motion on the merits. In the
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`alternative, Baxter requests a 2018 trial date to resolve its case before the ’867 Patent expires.
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`A.
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`Judgment as a Matter of Law is Warranted on at Least the Glass Patents.
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`Dispositive motions are appropriate where there are no material issues of fact and judgment
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`can be granted as a matter of law. See Fed. R. Civ. P. 12(c), 56. The purpose of a dispositive motion
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`is not only to enable early case resolution, but also to dispose of meritless claims and streamline
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`issues for discovery and trial. These are the precise purposes for which Baxter filed its Judgment
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`Motion, and underscore why judgment as a matter of law is warranted.
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`Defendants expressly and repeatedly acknowledge in their answer and subsequent
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`submissions to this Court that Baxter does not infringe the Glass Patents (D.I. 10, ¶¶ 33, 46, 58,
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`87-89, 95-96, 102-103; D.I. 18; D.I. 19), and have indicated the same to Baxter through the parties’
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`respective litigation counsel. Defendants further have not counterclaimed for infringement of these
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`patents. The prohibition on dispositive motions, however, forces Baxter to litigate the Glass
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`Patents through trial, including serving noninfringement contentions, hiring experts, briefing claim
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`construction, and preparing a Markman presentation, despite Defendants’ admission that there is
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`no infringement. These are the exact circumstances that dispositive motions—and, in particular,
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`motions for judgment on the pleadings—were created to avoid. Thus, because Defendants have
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`admitted that Baxter does not infringe the Glass Patents, the Court should reconsider Baxter’s
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`Judgment Motion—at least with respect to the Glass Patents—to avoid manifest injustice.
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`B.
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`The Ban on Dispositive Motions Precludes Judgment Before the ’867 Patent
`Expires.
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`The impending expiry of the ’867 Patent makes it crucial that Baxter receive a final non-
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`appealable judgment of noninfringement before pediatric exclusivity for the ’867 Patent begins on
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`April 1, 2019. Practically speaking, this means Baxter needs a final non-appealable judgment by
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`January 11, 2019, because the first applicant has 75 days to either market its product or forfeit its
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`exclusivity upon entry of final judgment, and Baxter must still obtain final FDA approval if the
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`first applicant fails to market. The Court’s summary denial of the Judgment Motion and decision
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`to prohibit dispositive motions deny Baxter an opportunity to obtain timely relief before the ’867
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`Patent expires and exposes Baxter to irreparable harm and injustice.
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`Baxter’s inability to sell the Baxter ANDA Product results from a regulatory conundrum
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`plaguing generic manufacturers in which first-to-file generic applicants may indefinitely block
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`subsequent generics from entering the market. Shortly after Baxter submitted its ANDA, it
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`expected to receive full FDA approval because the first applicant had apparently forfeited its
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`exclusivity by failing to obtain tentative approval within 30 months after submitting its ANDA.
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`On January 22, 2018, however, FDA only tentatively approved Baxter’s ANDA. This action was
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`apparently based on a decision in which FDA determined that the first filer did not forfeit its
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`eligibility for exclusivity.
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`This regulatory landscape forces Baxter to obtain a judgment of noninfringement of the
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`’867 Patent—which it has carved out pursuant to 21 U.S.C. § 355(j)(2)(A)(viii)—simply because
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`the first applicant submitted a Paragraph IV Certification to that patent. Although Defendants have
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`not asserted the ’867 Patent against any other generic manufacturers that filed a section viii carve-
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`out, see Hospira v. Burwell, No. 14-02662, 2014 WL 4406901, at *6-8 (D. Md. Sept. 5, 2014),
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`Defendants counterclaimed for infringement of the ’867 Patent here because Baxter must obtain a
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`favorable judgment on all patents supporting the first applicant’s 180-day exclusivity. The ’867
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`Patent, however, expires on March 31, 2019, and trial is not scheduled until May 3, 2019.
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`This delay is unfair to Baxter, which is suffering lost profits from an inability to sell the
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`Baxter ANDA Product, and inventory loss as its product expires in the warehouse. The Scheduling
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`Order forces Baxter to wait potentially years to market its product despite Baxter’s extremely
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`strong noninfringement case. This exacerbates Baxter’s harm solely because of scheduling, and
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`not based on the merits of Baxter’s case. Relief before patent expiry is crucial given that the
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`alternative is an inability to acquire meaningful judicial relief. Therefore, Baxter respectfully
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`requests that the Court remedy this injustice by lifting its ban on dispositive motions and
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`considering the merits of Baxter’s Judgment Motion.
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`In the alternative, Baxter requests that the Court issue a new scheduling order setting a trial
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`date for late 2018. A trial in 2018 is feasible given the lack of disputed material fact and limited
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`claim construction issues. It is highly likely that Defendants’ sole topic for discovery would be
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`Baxter’s intent to not infringe the ’867 Patent (though, as Baxter has explained, its lack of intent
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`can be discerned as a matter of law). Thus, the issues in this case are narrow, warranting little
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`discovery or claim construction, and a trial in 2018 is both feasible and necessary to avoid manifest
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`injustice.
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`V.
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`CONCLUSION
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`For the foregoing reasons, the Court’s prohibition on dispositive motions and summary
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`denial of Baxter’s Judgment Motion in the Scheduling Order necessarily result in manifest
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`injustice and prejudice to Baxter. Baxter respectfully requests that the Court reconsider its ban on
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`dispositive motions and rule on the merits of Baxter’s Judgment Motion. Alternatively, Baxter
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`requests that the Court revise the Scheduling Order to provide for a 2018 trial date.
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`Case 1:18-cv-00303-RGA Document 25 Filed 05/15/18 Page 8 of 8 PageID #: 846
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`OF COUNSEL:
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`Neal Seth
`Lawrence M. Sung
`Bethany A. Corbin
`WILEY REIN, LLP
`1776 K St. NW
`Washington, DC 20006
`(202) 719-7000
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`Dated: May 15, 2018
`5811649
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`POTTER ANDERSON & CORROON LLP
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`By:
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`
`/s/ Philip A. Rovner
`Philip A. Rovner (#3215)
`Jonathan A. Choa (#5319)
`Alan R. Silverstein (#5066)
`Hercules Plaza
`P.O. Box 951
`Wilmington, DE 19899
`(302) 984-6000
`provner@potteranderson.com
`jchoa@potteranderson.com
`asilverstein@potteranderson.com
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`Attorneys for Plaintiff
`Baxter Healthcare Corporation
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