Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 1 of 33 PageID #: 1415
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`BAXTER HEALTHCARE
`CORPORATION,
`
`
`
`
`
`HOSPIRA, INC. and ORION CORP.,
`
`
`
`v.
`
`
`
`Plaintiff,
`
`Defendants.
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`C.A. No. 18-303-RGA
`
`
`
`
`
`DEFENDANTS’ BRIEF IN SUPPORT OF THEIR
`MOTION TO DISMISS OR, IN THE ALTERNATIVE, TO STAY
`COUNTS III-IX OF BAXTER’S FIRST AMENDED COMPLAINT
`
`
`Of Counsel:
`
`Bradford P. Lyerla
`Sara T. Horton
`Yusuf Esat
`Ren-How Harn
`JENNER &BLOCK LLP
`353 N. Clark Street
`Chicago, IL 60654-3456
`Telephone: 312 222-9350
`Facsimile: 312 527-0484
`blyerla@jenner.com
`shorton@jenner.com
`yesat@jenner.com
`rharn@jenner.com
`
`Dated: November 14, 2018
`
`
`
`
`CONNOLLY GALLAGHER LLP
`Arthur G. Connolly, III (#2667)
`Ryan P. Newell (#4744)
`The Brandywine Building
`1000 West Street, Suite 1400
`Wilmington, DE 19801
`(302) 757-7300
`aconnolly@connollygallagher.com
`rnewell@connollygallagher.com
`
`Attorneys for Defendants Hospira, Inc. and
`Orion Corp.
`
`
`
`
`
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 2 of 33 PageID #: 1416
`
`TABLE OF CONTENTS
`
`I. 
`
`II. 
`
`III. 
`
`IV. 
`
`INTRODUCTION .............................................................................................................. 1 
`
`NATURE AND STAGE OF PROCEEDINGS .................................................................. 2 
`
`SUMMARY OF ARGUMENT .......................................................................................... 3 
`
`STATEMENT OF FACTS ................................................................................................. 5 
`
`A. 
`
`B. 
`
`Baxter’s Antitrust Allegations ................................................................................ 6 
`
`The ‘867 Patent Had No Effect On The Timing Of Baxter’s FDA
`Approval ................................................................................................................. 6 
`
`1. 
`
`2. 
`
`A patent addressed by a section viii statement will not serve as a
`barrier to ANDA approval .......................................................................... 7 
`
`Baxter’s ANDA addresses the ‘867 patent with a section viii
`statement, but submits Paragraph IV certifications for the Glass
`Patents ......................................................................................................... 8 
`
`3. 
`
`Baxter’s allegations regarding a first applicant for the ‘867 patent .......... 10 
`
`V. 
`
`ARGUMENT .................................................................................................................... 11 
`
`A. 
`
`B. 
`
`Governing Law ..................................................................................................... 11 
`
`Baxter’s Antitrust Claims Fail To Plausibly Allege That Any Act Of
`Defendants Caused Any Harm To Baxter ............................................................ 13 
`
`1. 
`
`2. 
`
`The ‘867 patent did not delay Baxter’s approval because Baxter
`submitted a section viii carve-out for the patent ....................................... 14 
`
`The ‘867 patent did not delay Baxter’s approval because the first-
`filer did not maintain a Paragraph IV challenge to the patent .................. 15 
`
`C. 
`
`Baxter’s Antitrust Claims Fail To Allege Antitrust Injury ................................... 16 
`
`1. 
`
`2. 
`
`Baxter’s alleged injury was a barrier controlled by a third party
`competitor that affected which of two competitors could launch
`first ............................................................................................................ 18 
`
`Any delay in FDA approval of Baxter’s ANDA did not flow from
`the existence of any 180-day exclusivity due to the ‘867 patent,
`even if such exclusivity existed ................................................................ 19 
`
`
`
`i
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 3 of 33 PageID #: 1417
`
`3. 
`
`None of the alleged antitrust violations that occurred within the
`four-year period of the statute of limitations caused any delay in
`FDA approval of Baxter’s ANDA ............................................................ 19 
`
`D. 
`
`E. 
`
`Counts Three And Nine Should Be Dismissed Because Baxter Fails To
`Adequately Plead Deceptive Intent ....................................................................... 21 
`
`In The Alternative, Counts Four-Nine Should Be Stayed Because They
`May Become Moot ............................................................................................... 24 
`
`VI. 
`
`CONCLUSION ................................................................................................................. 26 
`
`
`
`
`
`ii
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 4 of 33 PageID #: 1418
`
`
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`1st Media, LLC v. Elec. Arts,
`694 F.3d 1367 (Fed. Cir. 2012)................................................................................................23
`
`Apotex, Inc. v. Senju Pharm. Co.,
`921 F. Supp. 2d 308 (D. Del. 2013) .........................................................................................26
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ...........................................................................................................11, 12
`
`AstraZeneca Pharm. LP v. Apotex Corp.,
`669 F.3d 1370 (Fed. Cir. 2012)................................................................................................12
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) .....................................................................................................11, 12, 13
`
`Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,
`429 U.S. 477 (1977) .......................................................................................................4, 17, 19
`
`Cumberland Pharm. Inc. v. Sagent Agila LLC,
`No. CV 12-825-LPS, 2013 WL 5913742 (D. Del. 2013) ........................................................13
`
`Eon Labs Mfg. Inc. v. Watson Pharm., Inc.,
`164 F. Supp. 2d 350 (S.D.N.Y. 2001) ......................................................................................15
`
`Exergen Corp. v. Wal-Mart Stores, Inc.,
`575 F.3d 1312 (Fed. Cir. 2009)..............................................................................21, 22, 23, 24
`
`Frederico v. Home Depot,
`507 F.3d 188 (3d Cir. 2007).....................................................................................................12
`
`Hospira, Inc. v. Sandoz Inc.,
`No. CIV.A. 09-4591 MLC, 2012 WL 1587688 (D.N.J. May 4, 2012), vacated,
`No. CIV.A. 09-4591 MLC, 2014 WL 794589 (D.N.J. Feb. 27, 2014) ....................................22
`
`In re Burlington Coat Factory Sec. Litig.,
`114 F.3d 1410 (3d Cir. 1997)...................................................................................................12
`
`Lujan v. Defenders of Wildlife,
`504 U.S. 555 (1992) .................................................................................................................13
`
`Mariana v. Fisher,
`338 F.3d 189 (3d Cir. 2003)...............................................................................................13, 15
`
`
`
`iii
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 5 of 33 PageID #: 1419
`
`Masimo Corp. v. Philips Elecs. N. Am. Corp.,
`No. CIV.A 09-80-JJF-MPT, 2010 WL 925864 (D. Del. Mar. 11, 2010) ..........................24, 25
`
`Orthophoenix, LLC v. Dfine, Inc.,
`No. CV 13-1003-LPS, 2015 WL 1938702 (D. Del. Apr. 28, 2015) ..................................25, 26
`
`Philadelphia Taxi Ass’n, Inc v. Uber Techs., Inc.,
`886 F.3d 332 (3d Cir. 2018), cert. denied sub nom. Philadelphia Taxi Ass’n,
`Inc. v. Uber Techs., Inc., 2018 WL 3306879 (Oct. 1, 2018) ...................................................13
`
`Pressure Prods. Med. Supplies, Inc. v. Greatbatch Ltd.,
`599 F.3d 1308 (Fed. Cir. 2010)................................................................................................21
`
`Princo Corp. v. Int’l Trade Comm’n,
`616 F.3d 1318 (Fed. Cir. 2010)................................................................................................13
`
`Prof’l Real Estate Inv’rs, Inc. v. Columbia Pictures Indus., Inc.,
`508 U.S. 49 (1993) ...................................................................................................................25
`
`TCA Bldg. Co. v. Northwestern Res. Co.,
`861 F. Supp. 1366 (S.D. Tex. 1994) ....................................................................................5, 20
`
`Teva Pharm. USA, Inc. v. Sebelius,
`595 F.3d 1303 (D.C. Cir. 2010) .........................................................................................14, 20
`
`Umland v. PLANCO Fin. Serv., Inc.,
`542 F.3d 59 (3d Cir. 2008).......................................................................................................12
`
`Westlake Services, LLC v. Credit Acceptance Corp.,
`No. 15-cv-07490, 2017 WL 8948263 (C.D. Cal. Dec. 28, 2017) ............................................20
`
`Zenith Radio Corp. v. Hazeltine Research, Inc.,
`401 U.S. 321 (1971) .................................................................................................................19
`
`STATUTES
`
`21 U.S.C. § 355 (j)(5)(C) ...............................................................................................................18
`
`21 U.S.C. § 355(j)(2)(A)(viii) ..........................................................................................................8
`
`21 U.S.C. § 355(j)(5)(B)(iv) ..........................................................................................................14
`
`21 U.S.C. § 355(j)(5)(B)(iv)(II)(bb) ....................................................................................7, 11, 16
`
`21 U.S.C. § 355(j)(5)(D) ..................................................................................................................9
`
`35 U.S.C. § 271(e)(5) .....................................................................................................................18
`
`iv
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 6 of 33 PageID #: 1420
`
`OTHER AUTHORITIES
`
`Fed. R. Civ. P. 9(b) ................................................................................................................ passim
`
`Fed. R. Civ. P. 12(b)(6)................................................................................................11, 12, 13, 15
`
`Fed. R. Civ. P. 42(b) ......................................................................................................................25
`
`U.S. Const. art. III, § 2 ...................................................................................................................13
`
`
`
`
`
`v
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 7 of 33 PageID #: 1421
`
`I.
`
`INTRODUCTION
`
`After receiving FDA approval and after launching its generic product, Baxter filed its
`
`Amended Complaint containing eight brand new counts—including five counts accusing
`
`Hospira, Inc. and Orion Corp of violating the Antitrust Laws and other counts asserting the ‘867
`
`patent is invalid and unenforceable. Defendants Hospira, Inc. and Orion Corp. (collectively,
`
`“Hospira and Orion”) seek an order dismissing with prejudice Baxter’s new claims for antitrust
`
`liability and inequitable conduct. (D.I. 56.)
`
`Baxter’s Counts Four through Nine should be dismissed. Its antitrust violation
`
`allegations regarding injury fail as a matter of law. Baxter fails to allege either that there was
`
`any injury-in-fact caused by Hospira and Orion or that Baxter suffered any antitrust injury. For
`
`the reasons admitted by Baxter in its Amended Complaint, these failures are incurable, so the
`
`dismissal should be with prejudice and without leave to amend.
`
`Despite its allegations that the ‘867 patent prevented or delayed the FDA’s approval of
`
`Baxter’s generic drug application, Baxter admits it obtained that approval on August 21, 2018,
`
`and has since launched a generic version of Hospira’s Precedex Premix® product. This FDA
`
`approval came without Hospira or Orion withdrawing or changing any of their allegations and
`
`assertions regarding the ‘867 patent, demonstrating the implausibility of Baxter’s allegations that
`
`Hospira and Orion’s assertion of this patent delayed Baxter from getting FDA approval.
`
`Instead, as the Amended Complaint and documents integral thereto demonstrate, the ‘867
`
`patent did not delay Baxter’s FDA approval. Any alleged delay was due to independent causes,
`
`and was not Hospira or Orion’s doing (and certainly bore no relation to anything Hospira or
`
`Orion did with the ‘867 patent). As a result, Baxter cannot plausibly allege either injury-in-fact
`
`or antitrust injury, both essential elements of a claim for relief under the antitrust laws.
`
`
`
`1
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 8 of 33 PageID #: 1422
`
`In addition, Hospira and Orion move to dismiss Count Three, which alleges inequitable
`
`conduct. Baxter’s allegations are conclusory and courts regularly dismiss inequitable conduct
`
`claims when they are plead in such a fashion.
`
`Accordingly, the Court should dismiss Counts Three through Nine of the Amended
`
`Complaint with prejudice.
`
`II.
`
`NATURE AND STAGE OF PROCEEDINGS
`
`Baxter filed this lawsuit in February 2018 seeking a declaratory judgment of non-
`
`infringement against Orion and Hospira as to four patents. (D.I. 1.) Of these patents, three are
`
`patents directed to premix dexmedetomidine formulations in sealed glass containers (“the Glass
`
`Patents”), and the other, U.S. Patent No. 6,716,867 (“the ’867 patent”), covers methods of using
`
`dexmedetomidine in an intensive care unit. (Id.) Baxter’s original Complaint did not allege that
`
`the ‘867 patent was invalid or unenforceable. Rather, Baxter’s only cause of action on the ‘867
`
`patent sought a declaration of non-infringement. (Id.)
`
`From the start, Baxter tried to rush this case to conclusion on the grounds that a non-
`
`infringement judgment on all four patents was necessary for Baxter to obtain final approval for
`
`its generic version of Hospira’s patented drug product, Precedex Premix. (See e.g., D.I. 18 at 2;
`
`D.I. 20 at 1-2.) Hospira agreed to non-infringement judgments for the Glass Patents. (D.I. 40.)
`
`That left only the ’867 patent. According to Baxter, it could not obtain FDA approval until after
`
`this Court found the ‘867 patent not infringed, and therefore sought an expedited schedule with a
`
`very early trial date. (D.I. 18 at 1-2.) However, according to Hospira, a decision on the ‘867
`
`patent was not necessary for Baxter to obtain FDA approval. (D.I. 18 at 4; D.I. 19, ¶ 6.)
`
`Unsurprisingly, in August, and without the non-infringement judgment on the ‘867 patent
`
`that Baxter claimed it needed, Baxter obtained FDA approval and then proceeded to market with
`
`its generic product.
`
`2
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 9 of 33 PageID #: 1423
`
`Upon learning that Baxter had commercially launched the product described in its
`
`ANDA, Hospira and Orion met and conferred with Baxter and filed an Amended Counterclaim
`
`on September 18, 2018 seeking money damages for Baxter’s infringement. (D.I. 52.) Three
`
`weeks later, seeking leverage in the litigation, Baxter filed the Amended Complaint asserting for
`
`the first time invalidity, inequitable conduct and antitrust violations. (D.I. 56.) The Court
`
`subsequently entered the parties’ stipulation regarding briefing for Hospira and Orion’s motion
`
`to dismiss the Amended Complaint. (D.I. 57.)
`
`Hospira and Orion now move to dismiss Counts Three through Nine of the Amended
`
`Complaint or, in the alternative, to bifurcate and stay Counts Four through Nine pending
`
`resolution of the parties’ dispute concerning infringement and validity of the ‘867 patent.
`
`III.
`
`SUMMARY OF ARGUMENT
`
`1.
`
`In its antitrust claims, Baxter alleges that Hospira and Orion’s assertion of the
`
`’867 patent created or perpetuated a monopoly that was a barrier to FDA approval of generic
`
`versions of Hospira’s product—including Baxter’s. However, as Baxter admits in its Amended
`
`Complaint, the ‘867 patent, and its alleged exclusivity, did not block Baxter from obtaining FDA
`
`approval because Baxter obtained that approval in August 2018. (D.I. 56, ¶ 107.)
`
`Baxter also alleges that the presence of the ‘867 patent in the FDA’s Orange Book
`
`delayed the FDA’s approval of its ANDA from January 2018 to August 2018. (See e.g., D.I. 56,
`
`¶¶ 81-82, 83, 125, 174, 190, 199, 205, 214, 235 and 240.) But the sole source of this alleged
`
`delay was, according to Baxter, a third party’s 180-day exclusivity rights. Under the Hatch-
`
`Waxman Act, the first ANDA applicant who challenges an Orange Book-listed patent receives
`
`the right to 180-days of market exclusivity before the FDA will approve the ANDAs for other
`
`generic applicants.
`
`Baxter’s claims fail as a matter of law for three reasons:
`
`3
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 10 of 33 PageID #: 1424
`
`a.
`
`First, any delay caused by this third party’s alleged 180-day exclusivity
`
`has nothing to do with Hospira or the ‘867 patent. Baxter avoided the ‘867 patent in the FDA
`
`using what is called a “section viii statement.” (D.I. 56, ¶ 74.) According to Baxter’s Amended
`
`Complaint, “ANDA applicants are not subject to any 30-month stay of approval, or any 180-day
`
`exclusivity period, with respect to any patent(s) addressed via a section viii statement.” (D.I. 56,
`
`¶ 31.) Because Baxter addressed the ‘867 patent via a section viii statement, that patent had no
`
`effect on the timing of the approval of Baxter’s ANDA.
`
`b.
`
`Second, Baxter’s allegations do not even make it plausible that any 180-
`
`day exclusivity ever existed with respect to the ‘867 patent. Specifically, Baxter fails to allege a
`
`predicate fact necessary for the actual existence of any 180-day exclusivity in that patent. In
`
`order for such exclusivity to exist, there must be a third party ANDA applicant—someone other
`
`than Baxter or Hospira and Orion—who filed and maintained a Paragraph IV certification on the
`
`‘867 patent. Baxter fails to allege that such a third party exists and Hospira and Orion are aware
`
`of no facts that would permit Baxter to make such an allegation, even on information and belief.
`
`
`
`c.
`
`Third, Baxter’s allegations fail to properly allege antitrust injury. To
`
`qualify as an antitrust injury, the delay alleged by Baxter must both be the type of injury “the
`
`antitrust laws were intended to prevent” and be an injury that “flows from that which makes
`
`defendants’ acts unlawful.” Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489
`
`(1977).
`
`Here, however, Baxter’s alleged injury is not that Hospira and Orion’s acts allegedly
`
`leading to 180-day exclusivity for the ‘867 patent made it so that no generic could launch; rather,
`
`Baxter alleges that Hospira and Orion’s acts allowed one generic to be in a position to launch
`
`first and that generic was not Baxter. That alleged injury is not anti-competitive. Baxter is just
`
`4
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 11 of 33 PageID #: 1425
`
`griping that it had a third party competitor with additional rights. Moreover, Baxter’s allegations
`
`establish that Baxter’s launch was controlled, not by Hospira and Orion, but by other factors
`
`beyond Hospira and Orion’s control. Baxter fails to allege what those factors are and why
`
`Baxter could not have pursued its own course of action to obtain earlier FDA approval. Finally,
`
`not one of the alleged bad acts of Hospira and Orion that occurred during the four-year statute of
`
`limitations period had any effect on Baxter’s FDA approval date. Even if prior acts had an effect
`
`on this date, any delays were “the inertial consequences of [defendants’] pre-limitation actions”
`
`and Baxter’s claims are therefore barred. TCA Bldg. Co. v. Northwestern Res. Co., 861 F. Supp.
`
`1366, 1378 (S.D. Tex. 1994).
`
`2.
`
`Baxter’s new inequitable conduct counterclaim, Counts Three and Nine, fails to
`
`satisfy the pleading requirements for alleging intent to deceive. Baxter conclusorily asserts that
`
`“[t]here is no credible good-faith explanation” for Orion’s now-deceased inventor’s failure to
`
`disclose references to the PTO other than an “intentional effort to deceive the PTO.” (D.I. 56, ¶
`
`153.) Nowhere do they allege specific facts or evidence to support this conclusion. Baxter also
`
`fails to plausibly allege these references are not cumulative to the information the PTO had
`
`before it. Courts routinely dismiss inequitable conduct allegations containing such broad
`
`conclusory allegations as failing to satisfy Fed. R. Civ. P. 9(b) and the Court should do so here.
`
`IV.
`
`STATEMENT OF FACTS
`
`Months after filing its original complaint, securing FDA approval, and launching its
`
`generic dexmedetomidine product, Baxter now alleges in its amended complaint that Hospira
`
`and Orion’s alleged antitrust violations injured Baxter. (See e.g., D.I. 56, ¶¶ 83, 125, 174, 190,
`
`199, 205, 214, 235 and 240.) However, the allegations in Baxter’s complaint, as well as the
`
`undisputed statements in documents integral to that complaint, establish that the ‘867 patent had
`
`5
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 12 of 33 PageID #: 1426
`
`no effect on Baxter’s ability to launch its product. There is no causal link between the alleged
`
`antitrust violations and any harm to Baxter.
`
`A.
`
`Baxter’s Antitrust Allegations
`
`Baxter levies a litany of serious-sounding allegations of misconduct against Hospira and
`
`Orion, ranging from fraudulent procurement of the ‘867 patent to alleged abuses in enforcing the
`
`patent. Counts Four through Nine all hinge on the allegation that the ‘867 patent somehow
`
`delayed Baxter’s launch of its generic premix product.1 Baxter alleges harm of lost sales, delay
`
`of market penetration, as well as other unidentified “costs and expenses.” (D.I. 56, ¶¶ 176-177,
`
`189-190, 204-205, 214-215, 239-240).
`
`Admissions in Baxter’s Amended Complaint show this is untrue, as shown below.
`
`Consequently, Baxter’s conclusory allegations that Hospira and Orion caused any injury to
`
`Baxter are necessarily implausible.
`
`B.
`
`The ‘867 Patent Had No Effect On The Timing Of Baxter’s FDA Approval
`
`Baxter obtained approval from the FDA to market that product on August 21, 2018.
`
`Baxter has launched and is currently marketing a generic version of Hospira’s Precedex
`
`Premix® product. (D.I. 56, ¶ 82.)
`
`Even so, in its original complaint against Hospira and Orion, Baxter alleged that without
`
`non-infringement judgments on all four patents in suit, it would not be permitted to launch until
`
`the patents expired. (D.I. 1, ¶ 76.) The ‘867 patent expires March 31, 2019 and has been
`
`awarded an additional six-months of pediatric exclusivity to October 1, 2019. (D.I. 56, ¶ 38.)
`
`
`1
`Baxter’s Count Four (“Patent Misuse”) is related to the antitrust counts because it seeks a
`judgment that the ‘867 patent is unenforceable on the grounds that Hospira and Orion allegedly
`knew the patent was invalid, and “Defendants’ assertion of the ‘867 patent was done solely to
`delay the entry of generic competition for premix dexmedetomidine.” (D.I. 56, ¶ 163.)
`
`6
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 13 of 33 PageID #: 1427
`
`Yet Baxter launched in August 2018, more than a year before expiry of exclusivity and without a
`
`non-infringement judgment on the ’867 patent.
`
`Baxter also alleged that FDA’s final approval of its application was being blocked by a
`
`third party’s 180-day exclusivity. (D.I. 1, ¶ 72 (“But for a first applicant’s continued eligibility
`
`for 180-day exclusivity, FDA would have finally approved ANDA No. 208532, thus permitting
`
`the immediate marketing of the Baxter ANDA Product.”)) In general, a first applicant is the
`
`generic manufacturer that first files a complete ANDA and also challenges patents that the brand
`
`company has listed in the Orange Book. 21 U.S.C. § 355(j)(5)(B)(iv)(II)(bb).
`
`1.
`
`A patent addressed by a section viii statement will not serve as a
`barrier to ANDA approval
`
`In its Amended Complaint, Baxter re-alleges its theory that the ‘867 patent controlled the
`
`timing of its FDA approval, but instead of alleging the patent prevented approval altogether, it
`
`now alleges that the patent caused delay in that approval. However, other facts alleged by Baxter
`
`undercut this contention and establish that the ‘867 patent did not delay Baxter’s FDA approval.
`
`Long before filing suit in this Court, Baxter’s initial FDA application addressed the ‘867
`
`patent with a “section viii statement” (often referred to as a “carve out”). The section viii carve
`
`out on the ‘867 patent removed that patent from consideration in the FDA’s review process.
`
`(D.I. 56, ¶ 31.) These facts are admitted in Baxter’s complaint and described by the FDA in
`
`documents integral to the Amended Complaint. By filing the section viii statement, Baxter
`
`ensured that the ‘867 patent could not be and was not a barrier to FDA approval.
`
`One of those documents is the FDA’s August 18, 2014 decision related to the ‘867 patent
`
`and Precedex. (D.I. 56, ¶ 68, citing and quoting Ex. A.) As that FDA decision explains, an
`
`ANDA applicant who seeks approval for a generic version of a patented drug before the patent
`
`expires has two ways of obtaining FDA approval. The first way is to submit to the FDA a
`
`7
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 14 of 33 PageID #: 1428
`
`Paragraph IV certification asserting that the patent is invalid or not infringed. This usually leads
`
`to the typical Hatch-Waxman litigation frequently seen in this District and automatically requires
`
`the FDA to stay approval of the ANDA for 30 months.
`
`The second way is to submit to the FDA a statement under 21 U.S.C. § 355(j)(2)(A)(viii),
`
`referred to as a “section viii statement.” This statement is available for patents claiming methods
`
`of using drugs, such as the ‘867 patent. In a section viii statement, the ANDA applicant states
`
`“that the patent at issue does not claim a use for which the applicant seeks approval,” and omits
`
`from its label any affirmative descriptions of this claimed use. (Ex. A at 5.) If the ANDA
`
`applicant files a section viii statement, the FDA can approve the ANDA without requiring a
`
`Paragraph IV certification and without waiting for the patent to expire. A patent addressed by a
`
`section viii statement plays absolutely no role in prohibiting or delaying the FDA’s approval of
`
`an ANDA. “If an ANDA applicant files a section viii statement (and makes the requisite
`
`labeling carve out), the patent claiming the protected method of use will not serve as a barrier to
`
`ANDA approval….” (Id.) Baxter admits the same in its Amended Complaint. (D.I. 56, ¶ 31.)
`
`2.
`
`Baxter’s ANDA addresses the ‘867 patent with a section viii statement,
`but submits Paragraph IV certifications for the Glass Patents
`
`The original party that controlled Baxter’s ANDA, Celerity,2 submitted its ANDA with a
`
`section viii statement for the ‘867 patent. (D.I. 56, ¶ 72.) Accordingly, that section viii
`
`statement removed the ‘867 patent as a barrier to FDA approval. However, Celerity filed
`
`Paragraph IV certifications for each of the Glass Patents, asserting non-infringement. (Id. ¶ 73.)
`
`Therefore, unlike the ‘867 patents, the Glass Patents could have acted as a barrier to FDA
`
`approval of the ANDA now held by Baxter.
`
`
`2
`Celerity was the only publicly known company associated with the ANDA until February
`2018, when Baxter, with no prior notice, filed this lawsuit against Hospira and Orion.
`
`8
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 15 of 33 PageID #: 1429
`
`Hospira could have triggered a 30-month stay of regulatory approval had it sued Celerity
`
`on the Glass Patents within 45 days of receipt of Celerity’s Paragraph IV certifications on the
`
`Glass Patents. However, Hospira did not sue Celerity3 and, therefore, Hospira did not cause a
`
`30-month stay preventing FDA approval of the ANDA.
`
`There was also, as we know today, an additional barrier to FDA’s approval of Baxter’s
`
`ANDA for any patent that Baxter addressed by way of a Paragraph IV certification, such as the
`
`Glass Patents. This barrier was created by a third party, unrelated to Hospira and Orion, and is
`
`called “180-day exclusivity.” This exclusivity is granted to the first ANDA applicant who
`
`maintains a Paragraph IV certification on required patents and allows the first applicant to launch
`
`180 days before the FDA will approve later-submitted ANDA applications. These first
`
`applicants are sometimes referred to as “first filers.” First filer rights to 180-day exclusivity may
`
`be forfeited by, for example, failure of the first filer to launch within the statutory deadline for
`
`obtaining FDA approval. See 21 U.S.C. § 355(j)(5)(D).
`
`By the time Baxter expected the FDA to act on its ANDA application—January 2018—it
`
`appeared to Baxter that the first filer had forfeited its 180-day exclusivity rights by failing to
`
`obtain approval within the statutory deadline. (D.I. 56. ¶ 81.)4
`
`However, unbeknownst to either Baxter or Hospira, even though it appeared as if the first
`
`filer did not meet the statutory deadline for obtaining approval, the FDA nevertheless decided
`
`
`3
`And after Baxter filed this lawsuit seeking a declaratory judgment of non-infringement of
`the Glass Patents, Hospira agreed to have one entered. (D.I. 40.)
`4
`The FDA website publicly discloses the dates for the first ANDAs filed for every
`product. This public information showed that the earliest ANDA for Precedex Premix was
`December 2013. (See Ex. C at 1, Paragraph IV Patent Certifications,
`https://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopeda
`ndApproved/ApprovalApplications/AbbreviatedNewDrugApplicationANDAGenerics/UCM293
`268.pdf.)
`
`
`9
`
`

`

`Case 1:18-cv-00303-RGA Document 64 Filed 11/14/18 Page 16 of 33 PageID #: 1430
`
`that the first filer had not forfeited some 180-day exclusivity. (D.I. 56, ¶ 81.) Accordingly, in
`
`January 2018, the FDA refused to provide final approval to Baxter’s ANDA. (Id. ¶ 82.)
`
`The refusal had nothing to do with Hospira and Orion or the ‘867 patent. Hospira and
`
`Orion had no role or influence whatsoever in the FDA process or decision with respect to that
`
`decision. Moreover, Baxter did not file a Paragraph IV statement on the ‘867 patent as it had
`
`done on the Glass Patents. Instead, Baxter addressed the ‘867 patent with a section viii
`
`statement. Just as section viii statements avoid the potential of a 30 month stay, they also avoid
`
`180-day exclusivity barriers. As the FDA explained in its August 2014 Decision, and as Baxter
`
`admits in its Complaint, section viii statements avoid 180-day exclusivity. The FDA explained:
`
`If an ANDA applicant files a section viii statement (and makes the
`requisite labeling carve out), the patent claiming the protected
`method of use will not serve as a barrier to ANDA approval, nor
`will any 180-day exclusivity for which another ANDA applicant
`may be eligible with respect to that patent serve as a barrier to
`approval of the section viii applicant’s product.
`
`(Ex. A at 5 (emphasis added).) And Baxter admits: “ANDA applicants are not subject to any 30-
`
`month stay of approval, or any 180-day exclusivity period, with respect to any patent(s)
`
`addressed via a section viii statement.” (D.I. 56, ¶ 31 (emphasis added).)
`
`Consequently, the existence of the ‘867 patent did not cause any delay in the FDA’s
`
`approval of Baxter’s ANDA, and therefore the ‘867 caused no harm to Baxter.
`
`3.
`
`Baxter’s allegations regarding a first applicant for the ‘867 patent
`
`While Hospira and Orion believe the above facts are dispositive because even if 180-day
`
`exclusivity exists on the ‘867 patent, it could not have delayed Baxter’s approval. Baxter’s claim
`
`fails for a second reason: Baxter fails to allege facts making it plausible that there even was a
`
`first applicant in existence who held 180-day exclusivity in this patent.
`
`10
`
`

`

`Case 1:18-cv-00303-RGA Document 64 File