Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 1 of 37 PageID #: 1498
`
`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
`
`DEMAND FOR JURY TRIAL
`
`ANSWER TO BAXTER’S FIRST AMENDED COMPLAINT
`
`Defendants Hospira, Inc. (“Hospira”) and Orion Corp. (“Orion”) (collectively,
`
`“Defendants”), through counsel, hereby answer the October 15, 2018 Complaint of Plaintiff
`
`Baxter Healthcare Corporation (“Baxter”).
`
`I.
`
`NATURE OF THE SUIT
`
`1.
`This is a civil action brought by Baxter against Defendants seeking declaratory
`judgment, treble damages, and other relief for harms arising out of Defendants’ unlawful misuse
`of an invalid patent. United States Patent No. 6,716,867 (the “’867 Patent”) is invalid as obvious,
`as originally determined by the United States District Court for the District of New Jersey in
`Civil Action No. 3:09-cv-04591 (2012). Despite the invalidity of the ’867 Patent, Defendants
`have misused the ’867 Patent to unlawfully exclude generic competition from the market for
`dexmedetomidine hydrochloride injection, 200 mcg base/50mL and 400 mcg base/100mL, a
`drug manufactured and marketed by Defendants under the brand name Precedex. As alleged
`below, Defendants devised a scheme using a variety of illegal and deceptive acts to unlawfully
`preclude or delay generic competition for Precedex. Through these acts, Defendants have
`unlawfully monopolized and attempted to monopolize the dexmedetomidine hydrochloride
`market in violation of numerous antitrust laws, including but not limited to the Sherman Act, 15
`U.S.C. § 2, and the Clayton Act, 15 U.S.C. §§ 15 and 26.
`
`ANSWER: No answer is required because the allegations of this paragraph relate solely to the
`
`counts that Defendants have moved to dismiss.1
`
`
`1 Defendants reserve the right to answer the allegations subject to the motion to dismiss in the event the motion is
`denied.
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 2 of 37 PageID #: 1499
`
`2.
`Specifically, Defendants have engaged in a pattern and scheme to abuse the patent
`system and have engaged in sham litigation to restrain competition from Baxter and other
`generic manufacturers of premix dexmedetomidine hydrochloride. Defendants’ unlawful conduct
`includes, inter alia:
`
`Conspiring to monopolize and restrain trade by entering into a settlement
`(a)
`agreement with Sandoz in Case No. 3:09-cv-04591 (D.N.J.) to vacate the district court’s
`judgment declaring the ’867 Patent invalid. Vacatur of this judgment through settlement enabled
`Defendants to improperly manipulate the use codes for the ’867 Patent and to continue
`monopolizing the dexmedetomidine hydrochloride market by asserting against Baxter and other
`generic manufacturers a patent that they knew was invalid. The vacatur occurred after a full
`bench trial on the merits and while the case was awaiting oral argument at the United States
`Court of Appeals for the Federal Circuit;
`
`Continuing to list the ’867 Patent in the Orange Book despite knowledge
`(b)
`of the patent’s fraudulent procurement and invalidity;
`
`(c) Misrepresenting and improperly altering the use code for the ’867 Patent
`to preclude generic competition despite knowing that the claims in the ’867 Patent do not extend
`to the new use code;
`
`Asserting the ’867 Patent against Baxter despite knowing that this patent
`(d)
`is unenforceable and invalid as obvious, and that the patent was obtained through fraudulent
`misrepresentations; and
`
`Filing a sham counterclaim against Baxter for infringement of the ’867
`(e)
`Patent, despite knowing that such claim is objectively baseless, asserted in bad faith, and brought
`for an anti-competitive purpose in violation of § 2 of the Sherman Act (as interpreted in
`Handgards Inc. v. Ethicon Inc., 743 F.2d 1282 (9th Cir. 1984)) to unlawfully restrain competition
`in a relevant market causing antitrust injury to Baxter and other generic premix
`dexmedetomidine hydrochloride manufacturers.
`
`ANSWER: No answer is required because the allegations of this paragraph relate solely to the
`
`counts that Defendants have moved to dismiss.
`
`3.
`Baxter seeks judgment, damages, injunctive, and other relief for Defendants’ unlawful
`conduct with respect to the ’867 Patent and monopolization of the market for premix
`dexmedetomidine hydrochloride injection.
`
`ANSWER: No answer is required because the allegations of this paragraph relate solely to the
`
`counts that Defendants have moved to dismiss.
`
`II.
`
`PARTIES
`
`4.
`Baxter Healthcare Corporation is a corporation incorporated in Delaware with its
`principal place of business at One Baxter Parkway, Deerfield, IL 60015.
`
`2
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 3 of 37 PageID #: 1500
`
`ANSWER: Admitted, on information and belief.
`
`5.
`Upon information and belief, Hospira, Inc. is a Delaware corporation with its
`principal place of business at 275 North Field Drive, Lake Forest, Illinois 60045.
`
`ANSWER: Admitted.
`
`6.
`Upon information and belief, Orion Corp. is a corporation organized under the
`laws of Finland with its principal place of business at Orionintie 1, FIN-02200 Espoo, Finland.
`
`ANSWER: Admitted.
`
`III.
`
`JURISDICTION AND VENUE
`
`7.
`This First Amended Complaint arises under the Patent Laws of the United States,
`35 U.S.C. §§ 100 et seq., the antitrust laws of the United States, 15 U.S.C. § 2, the Declaratory
`Judgment Act, 28 U.S.C. §§ 2201-02, and the Federal Food, Drug and Cosmetic Act, 21 U.S.C.
`§§ 301 et seq., as amended, based upon an actual controversy between the parties.
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, admitted that Baxter’s Amended Complaint purports to arise under the laws cited in
`
`this paragraph and there is a controversy as to patent infringement by Baxter’s ANDA pursuant
`
`to the cited statutes. Otherwise denied.
`
`8.
`This Court has subject matter jurisdiction over Baxter’s claims under 28 U.S.C.
`§§ 1331, 1337(a), and 1338, and 15 U.S.C. § 15.
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, admitted.
`
`9.
`Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) and 15 U.S.C. §
`22, at least because Hospira resides in this District and the Court may exercise personal
`jurisdiction over Hospira.
`
`3
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 4 of 37 PageID #: 1501
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, admitted that venue is proper for purposes of this action only.
`
`10.
`This Court has personal jurisdiction over Hospira because, among other things,
`Hospira is a Delaware corporation that, having availed itself of Delaware’s corporate laws, is
`subject to personal jurisdiction in Delaware.
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, admitted that this Court has personal jurisdiction over Hospira for purposes of this
`
`action only.
`
`11.
`Hospira is also engaged in the sale of Precedex in interstate commerce and in this
`judicial District.
`
`ANSWER: Admitted.
`
`12.
`This Court has personal jurisdiction over Orion because, among other things, on
`information and belief, Orion does business in this District by co-owning a patent covering
`Precedex (i.e., the ’867 Patent), licensing in the United States its interest in that patent to
`Hospira—a Delaware corporation—and receiving royalty payments from Hospira for the sale of
`Precedex, which is sold in Delaware.
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, admitted that this Court has personal jurisdiction over Orion for purposes of this
`
`action only. Otherwise denied.
`
`13.
`This Court also has personal jurisdiction over Orion because Orion has regularly
`and purposefully availed itself of the privileges and benefits of this forum, having brought
`multiple suits in this District, including suits specifically alleging infringement of the ’867
`Patent: Hospira, Inc. & Orion Corp. v. Sandoz Int’l GmbH, et al., Civ. No. 09-00665 (D. Del.);
`
`4
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 5 of 37 PageID #: 1502
`
`Hospira, Inc. & Orion Corp. v. Aurobindo Pharma Ltd., et al., Civ. No. 14-00486 (D. Del.);
`Hospira, Inc. & Orion Corp. v. Ben Venue Labs, Inc., Civ. No. 14-00487 (D. Del.); Hospira, Inc.
`& Orion Corp. v. Actavis LLC et al., Civ. No. 14-00488 (D. Del.); Hospira, Inc. & Orion Corp.
`v. Ben Venue Labs., Inc., et al., Civ. No. 14-1008 (D. Del.).
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, admitted that this Court has jurisdiction over Orion for the purposes of this action
`
`only. Otherwise denied.
`
`14.
`Upon information and belief, the license agreement between Orion and Hospira
`obliges Orion to participate in the enforcement or defense of the ’867 Patent with Hospira, which
`is engaged in exploiting the patent rights in Delaware through its sale of Precedex.
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, denied.
`
`15.
`By repeatedly asserting infringement of the ’867 Patent in this District, Orion has
`waived any argument that it is not subject to specific personal jurisdiction in this District for
`actions relating to the ’867 Patent.
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, admitted that this Court has personal jurisdiction over Orion for purposes of this
`
`action only. Otherwise denied.
`
`16.
`Venue is proper in this district for Orion pursuant to 28 U.S.C. §§ 1391(b) and
`1400(b) and 15 U.S.C. § 22 because, inter alia, Orion is a corporation organized and existing
`under the laws of Finland and is subject to personal jurisdiction in this judicial District.
`
`5
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 6 of 37 PageID #: 1503
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, admitted that venue is proper in this district for purposes of this action only.
`
`Otherwise denied.
`
`IV.
`
`FACTUAL BACKGROUND
`
`A.
`
`The ’867 Patent
`
`17.
`On its face, the ’867 Patent, entitled “Use of Dexmedetomidine for ICU
`Sedation,” indicates it was issued by the U.S. Patent and Trademark Office (“PTO”) on April 6,
`2004. A copy of the ’867 Patent is attached as Exhibit A.
`
`ANSWER: Admitted.
`
`18.
`Patent.
`
`According to records at the PTO, Hospira and Orion are co-assignees of the ’867
`
`ANSWER: Admitted.
`
`19.
`On information and belief, Hospira is the exclusive licensee in the United States
`of Orion’s interest in the ’867 Patent.
`
`ANSWER: Denied.
`
`20.
`
`The ’867 Patent contains twelve claims.
`
`ANSWER: Admitted.
`
`21.
`
`The ’867 Patent contains two independent claims.
`
`ANSWER: Admitted.
`
`22.
`Each independent claim of the ’867 Patent recites “[a] method of sedating a
`patient in an intensive care unit, which comprises administering to the patient an effective
`amount of dexmedetomidine or a pharmaceutically acceptable salt therefor, wherein the patient
`remains arousable and orientated.” (emphasis added).
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent a response is required, admitted that Claim 1 recites, among other things, “[a] method
`
`of sedating a patient in an intensive care unit.” Otherwise denied.
`
`6
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 7 of 37 PageID #: 1504
`
`23.
`The ’867 Patent’s ten dependent claims incorporate the limitations of the claims
`from which they depend. Thus, all claims of the ’867 Patent require “[a] method of sedating a
`patient in an intensive care unit.”
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent a response is required, admitted that Claims 1 and 3 recite, among other things, “a
`
`method of sedating a patient in an intensive care unit.” Further admitted that Claim 2 depends
`
`from Claim 1 and Claims 4-12 depend from Claim 3. Otherwise denied.
`
`24.
`No portion of the ’867 Patent claims any method of use relating to administering
`the drug to patients in surgical or other procedures.
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent a response is required, denied.
`
`B.
`
`Statutory and Regulatory Background
`
`25.
`The Food and Drug Administration (“FDA”) regulates the approval, manufacture,
`and commercial sale of pharmaceuticals in the United States pursuant to the Federal Food, Drug
`and Cosmetic Act, 21 U.S.C. §§ 301 et seq. (the “Act”). Under the Act, a manufacturer who
`creates a new, pioneer drug must obtain the approval of FDA to sell the new drug by filing a
`New Drug Application (“NDA”). An NDA must include specific data concerning the safety and
`efficacy of the drug, as well as any information on applicable patents. A manufacturer may only
`promote a drug for uses that are approved by FDA.
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent a response is required, admitted that the cited statutory provision is entitled “Federal
`
`Food, Drug, and Cosmetic Act.” Defendants respectfully refer to the cited statutory provision
`
`for its full contents. Otherwise denied.
`
`26.
`In 1984, Congress passed the Hatch-Waxman Amendments to the Act, which
`permit a generic drug manufacturer to file an Abbreviated New Drug Application (“ANDA”)
`that expedites the drug approval process. Rather than go through full clinical trials, as a branded
`drug is required to undertake, an ANDA filer need only show that its drug is bioequivalent (as
`defined by FDA) to a branded drug that FDA has already approved.
`
`7
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 8 of 37 PageID #: 1505
`
`ANSWER: This paragraph contains conclusions of law to which no response is required.
`
`Defendants respectfully refer to the cited statutory provision for its full contents. Otherwise
`
`denied.
`
`27.
`Section 355(b)(1) of Title 21 of the United States Code mandates that the sponsor
`of a branded drug submit in its NDA “the patent number and the expiration date of any patent
`which claims the drug for which the [brand] submitted the [NDA] or which claims a method of
`using such drug.” 21 U.S.C. § 355(b)(1). Once an NDA is approved, the brand company
`provides the following information: (1) whether the patent claims one or more approved methods
`of using the drug product for which use approval is being sought and a description of each
`pending method of use or related indication and related patent claim of the patent being
`submitted; and (2) identification of the specific section of the approved labeling for the drug
`product that corresponds to the method of use claimed by the patent submitted. 21 C.F.R. §
`314.53(c)(2)(ii)(P), (b)(1).
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent a response is required, admitted that the cited statutory provision is entitled “Filing
`
`application; contents.” Defendants respectfully refer to the cited statutory provision for its full
`
`contents. Otherwise denied.
`
`28.
`This patent description submitted by the brand company is known as a “use
`code.” See 21 C.F.R. § 314.53(c)(2)(ii)(P)(3), (e). The brand company must attest under penalty
`of perjury that its submission of the patent information, including the use code, to FDA is “true
`and correct.” Id. § 314.53(c)(2)(ii)(R). FDA does not attempt to verify the accuracy of the use
`codes that brand companies supply, but relies on the certification of the brand company for its
`accuracy and specificity, and simply publishes the codes, along with the corresponding patent
`numbers and expiration dates, in a publication entitled “Approved Drug Products with
`Therapeutic Equivalence Evaluations,” known as the “Orange Book.” 21 U.S.C. §
`355(j)(7)(A)(iii).
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, Defendants respectfully refer to the cited statutory provision for its full contents.
`
`Otherwise denied.
`
`8
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 9 of 37 PageID #: 1506
`
`29.
`To obtain FDA approval of an ANDA (and thus the right to sell a generic version
`of a brand-name drug), a generic manufacturer must certify that the generic drug addressed in its
`ANDA does not violate any patent listed in the Orange Book as claiming the brand-name drug.
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent a response is required, Defendants respectfully refer to the Food, Drug, and Cosmetic
`
`Act for the approval requirements. Otherwise denied.
`
`30.
`If an ANDA applicant seeks approval to market a drug for which one or more
`method-of-use patents are listed in the Orange Book but does not seek approval for uses claimed
`by such patents, the ANDA may include a “section viii” statement to that effect. 21 U.S.C. §
`355(j)(2)(A)(viii). With a section viii statement, the ANDA applicant must “carve out” all
`references to the patented uses from its proposed label. FDA will not accept a section viii
`statement if the ANDA applicant’s proposed label contains the use identified in the description in
`the use code. The existence of method-of-use patents claiming uses omitted from the proposed
`label will thus not act as a barrier to FDA’s approval of the ANDA. Alternatively, the ANDA
`applicant may address the method-of-use patent with a certification of noninfringement or
`invalidity under 21 U.S.C. § 355(j)(2)(A)(vii)(IV) (“Paragraph IV Certification”), in which event
`the filing of an infringement suit by the reference listed drug holder would delay FDA approval.
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, Defendants respectfully refer to the cited statutory provision for its full contents.
`
`Otherwise denied.
`
`31.
`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.
`
`ANSWER: No answer is required because the allegations of this paragraph relate solely to the
`
`counts that Defendants have moved to dismiss.
`
`C.
`
`Hospira’s NDA And The ’867 Patent
`
`32.
`Hospira first began marketing Precedex in 1999, following FDA approval of its
`New Drug Application No. 021038 for dexmedetomidine hydrochloride, a sedative delivered by
`injection. When approved in 1999, the only available form of Precedex was a concentrate that
`required dilution before administration.
`
`ANSWER: Admitted.
`
`9
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 10 of 37 PageID #: 1507
`
`33.
`Two “ready to use” (“premix”) forms of Precedex were approved in supplements
`to NDA No. 021038 in March 2013, and a third was approved in November 2014.
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent a response is required, admitted that two forms of Precedex were approved in
`
`supplements to NDA 021038 and a third was approved in November 2014. Otherwise denied.
`
`34.
`As approved by FDA on December 17, 1999, NDA No. 021038 permitted
`Precedex to be used for the sedation of initially intubated and mechanically ventilated patients in
`an intensive care unit (“ICU”) setting (the “ICU Indication”). Hospira subsequently obtained
`FDA approval for a second indication involving sedation of non-intubated patients prior to
`and/or during surgical and other procedures (the “Procedural Indication”).
`
`ANSWER: Admitted that when Precedex was first approved, it was indicated for: “Sedation of
`
`initially intubated and mechanically ventilated patients during treatment in an intensive care
`
`setting. Administer Precedex by continuous infusion not to exceed 24 hours.” Further admitted
`
`that a second indication was later approved for: “Sedation of non-intubated patients prior to
`
`and/or during surgical and other procedures.” Otherwise denied.
`
`35.
`In connection with NDA No. 021038, Hospira certified that the ’867 Patent, U.S.
`Patent No. 5,344,840 (the “’840 Patent”), and U.S. Patent No. 4,910,214 (the “’214 Patent”) all
`claimed either Precedex or a method of use for Precedex. As a result, FDA listed these patents in
`the Orange Book.
`
`ANSWER: Admitted that, among other patents, the ‘867 patent, the ‘840 patent, and the ‘214
`
`patent are or were listed in the Orange Book in connection to NDA No. 021038. Otherwise
`
`denied.
`
`36.
`According to the Orange Book, the ’840 Patent expired on September 6, 2011,
`and the ’214 Patent expired on July 15, 2013, with an associated pediatric exclusivity period
`expiring on January 15, 2014.
`
`ANSWER: Admitted.
`
`37.
`The ’867 Patent is the only unexpired patent listed in the Orange Book for the
`concentrate form of Precedex and is among the patents listed for the premix forms of Precedex.
`
`ANSWER: Admitted.
`
`10
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 11 of 37 PageID #: 1508
`
`38.
`The ’867 Patent expires on March 31, 2019, and an associated pediatric
`exclusivity period will expire on October 1, 2019.
`
`ANSWER: Admitted.
`
`D.
`
`The ’867 Patent Has Been Adjudicated to Be Invalid
`
`39.
`Based upon information from prior proceedings, Sandoz Inc. submitted the first
`ANDA for generic dexmedetomidine injection, 100 mcg base/mL (ANDA No. 091465) on April
`7, 2009. ANDA No. 091465 was for a generic version of Precedex concentrate, not Precedex
`premix.
`
`ANSWER: Admitted that Sandoz submitted ANDA no. 091465 seeking approval for a generic
`
`dexmedetomidine hydrochloride injection 100 mcg/ml. Otherwise denied.
`
`40.
`Defendants asserted the ’214 Patent and ’867 Patent against Sandoz International
`GmbH and Sandoz Inc. in response to Sandoz’s filing of ANDA No. 091465. See Hospira, Inc.
`& Orion Corp. v. Sandoz Int’l GmbH et al., No. 3:09-cv-04591 (D.N.J.).
`
`ANSWER: Admitted that Defendants commenced a lawsuit asserting the ‘214 Patent and ‘867
`
`Patent against Sandoz International GmbH and Sandoz, Inc. Otherwise denied.
`
`41.
`On April 30, 2012, Judge Cooper, following a full bench trial, held the ’867
`Patent obvious under 35 U.S.C. § 103 and therefore invalid. Upon consideration of the Graham
`factors, the court concluded that all claims of the ’867 Patent “would have been obvious to a
`person of ordinary skill in the art by 1998.” ECF No. 380, at 61-62, Case No. 3:09-cv-04591
`(May 4, 2012).
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, admitted that the cited document contains the quoted language. Defendants
`
`respectfully refer to the cited document for its full contents. Otherwise denied.
`
`42.
`Specifically, the district court found that “[t]he prior art taught that
`dexmedetomidine sedated patients in a dose-dependent manner but that those patients were
`easily awakened and could participate in study assessments (i.e., they were orientated).
`Moreover, this effect was seen not only in healthy patients but in sick patients awaiting major
`vascular surgery. Therefore, a person of ordinary skill in the art would have had a reasonable
`expectation of success in achieving and maintaining arousable sedation in intensive care
`patients.” Id. at 73. In summary, the court noted that it “finds clear and convincing evidence that
`
`11
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 12 of 37 PageID #: 1509
`
`a person of ordinary skill in 1998 would have thought the ’867 Patent subject matter as a whole
`obvious in light of the prior art.” Id. at 75. The court issued this ruling even after expressly
`considering the high burden of proof Sandoz had to meet. Id. Indeed, the court stated that to find
`the ’867 Patent nonobvious would necessitate deviating from Supreme Court precedent. Id.
`
`ANSWER: This paragraph contains conclusions of law to which no response is required. To
`
`the extent this paragraph is directed towards Counts 3-9, no answer is required because
`
`Defendants have moved to dismiss those counts. To the extent this paragraph is directed towards
`
`Counts 1-2, admitted that the cited document contains the quoted language. Defendants
`
`respectfully refer to the cited document for its full contents. Otherwise denied.
`
`43.
`After the district court’s judgment of invalidity, Hospira negotiated with Sandoz
`and induced Sandoz to drop its suit in exchange for Hospira permitting Sandoz to enter the
`market with is generic dexmedetomidine product on December 26, 2014. (Hospira, Inc. 2013 10-
`K at 15.) In exchange for this early entry, Hospira requested Sandoz to join it in moving the
`district court to vacate the invalidity judgment in December 2013. This allowed Sandoz to share
`in the exclusivity of the ’867 Patent and enjoy a period as the sole generic dexmedetomidine
`product. The district court granted the parties’ motion.
`
`ANSWER: No answer is required because the allegations of this paragraph relate solely to the
`
`counts that Defendants have moved to dismiss.
`
`44.
`Hospira sought to vacate the district court’s invalidity judgment to maintain an
`illegal and anticompetitive monopoly on dexmedetomidine hydrochloride.
`
`ANSWER: No answer is required because the allegations of this paragraph relate solely to the
`
`counts that Defendants have moved to dismiss.
`
`45.
`Even though the ’867 Patent had been adjudicated to be invalid, and even though
`Hospira never obtained a reversal of that adjudication on the merits, Hospira continued to
`maintain the patent listed in the Orange Book to preclude generic competition.
`
`ANSWER: No answer is required because the allegations of this paragraph relate solely to the
`
`counts that Defendants have moved to dismiss.
`
`46.
`Hospira further has continued to assert the ’867 Patent against Baxter and other
`generic dexmedetomidine hydrochloride manufacturers to prevent these manufacturers from
`entering the market.
`
`12
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 13 of 37 PageID #: 1510
`
`ANSWER: No answer is required because the allegations of this paragraph relate solely to the
`
`counts that Defendants have moved to dismiss.
`
`E.
`
`The ’867 Patent Use Code Amendment
`
`47.
`Hospira’s vacatur of the Sandoz judgment allowed Defendants to perpetuate an
`anticompetitive scheme to preclude generic dexmedetomidine hydrochloride manufacturers from
`entering the market.
`
`ANSWER: No answer is required because the allegations of this paragraph relate solely to the
`
`counts that Defendants have moved to dismiss.
`
`48.
`Following vacatur, Hospira improperly and illegally manipulated the use code for
`the ’867 Patent to protect an unpatented indication of Precedex.
`
`ANSWER: No answer is required because the allegations of this paragraph relate solely to the
`
`counts that Defendants have moved to dismiss.
`
`49.
`On May 6, 2004, Hospira submitted the ’867 Patent for listing in the Orange
`Book, with use code U-572: “intensive care unit sedation.” At the time of this submission,
`Hospira’s belief was that the consequence of administering Precedex was “to provide a method
`of sedating a patient in an intensive care unit wherein the patient remains arousable and
`orientated, and accordingly that U.S. Patent No. 6,716,867 claims an approved use of the drug
`product.”
`
`ANSWER: To the extent this paragraph is directed towards Counts 3-9, no answer is required
`
`because Defendants have moved to dismiss those counts. To the extent this paragraph is directed
`
`towards Counts 1-2, admitted that the ‘867 Patent was initially listed in connection with use code
`
`U-572: “intensive care unit sedation.” Otherwise denied.
`
`50. When Hospira submitted the ’867 Patent with the use code U-572, Precedex was
`only approved for sedation of initially intubated and mechanically ventilated patients in an ICU
`setting.
`
`ANSWER: To the extent this paragraph is directed towards Counts 3-9, no answer is required
`
`because Defendants have moved to dismiss those counts. To the extent this paragraph is directed
`
`towards Counts 1-2, admitted that Precedex was approved for “Sedation of initially intubated and
`
`13
`
`

`

`Case 1:18-cv-00303-RGA Document 65 Filed 11/14/18 Page 14 of 37 PageID #: 1511
`
`mechanically ventilated patients during treatment in an intensive care setting. Administer
`
`Precedex by continuous infusion not to exceed 24 hours.” Otherwise denied.
`
`51.
`On October 17, 2008, Hospira gained FDA approval for the second indication:
`sedation of non-intubated patients prior to and/or during surgical and other procedures.
`
`ANSWER: To the extent this paragraph is directed towards Counts 3-9, no answer is required
`
`because Defendants have moved to dismiss those counts. To the extent this paragraph is directed
`
`towards Counts 1-2, admitted that Precedex received approval for a second indication for
`
`“Sedation of non-intubated patients prior to and/or during surgical and other procedures.”
`
`Otherwise denied.
`
`52.
`On November 21, 2008, Hospira submitted the ’840 Patent for listing in the
`Orange Book, with use code U-912: “Sedation of non-intubated patients prior to and/or during
`surgical and other procedures.” Due to its expiry, the ’840 Patent is no longer listed in the
`Orange Book for NDA No. 021038.
`
`ANSWER: To the extent this paragraph is directed towards Counts 3-9, no answer is required
`
`because Defendants have moved to dismiss those counts. To the extent this paragraph is directed
`
`towards Counts 1-2, denied.
`
`53. When Hospira submitted the ’840 Patent for listing, Hospira did not make any
`amendments to the use code for the ’867 Patent