`
`UNITED STATES DISTRICT COURT
`DISTRICT OF MASSACHUSETTS
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`
`
`TEVA PHARMACEUTICALS
`INTERNATIONAL GMBH and TEVA
`PHARMACEUTICALS USA, INC.,
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`
`
`
` Plaintiffs and Defendants-in-
`Counterclaim,
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`
`
`
`
`BURROUGHS, D.J.
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`In this patent infringement suit, Teva Pharmaceuticals International GmbH (“Teva
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`GmbH”) and Teva Pharmaceuticals USA, Inc. (“Teva USA” and together with Teva GmbH,
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`“Teva”) allege that Eli Lilly and Company (“Lilly”) has infringed claims in nine patents owned
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`by Teva related to a product marketed under the brand name Ajovy™, which contains the active
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`ingredient fremanezumab and is used to treat migraines. [ECF No. 1 (“Compl.”)]. Lilly has
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`brought counterclaims against Teva, seeking declaratory judgments that its product marketed
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`under the brand name Emgality™, which contains the active ingredient galcanezumab and is also
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`used to treat migraines, does not infringe Teva’s patents and that Teva’s patents are invalid.
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`[ECF No. 17]. Before the Court is Lilly’s Motion to Transfer, or If Not Transferred, Then to
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`Stay This Litigation Pending Inter Partes Review (“Motion to Transfer or Stay”) [ECF No. 18].
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`After consideration of the parties’ respective positions and taking into account the inter partes
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`review (“IPR”) proceedings, the Motion to Transfer or Stay is GRANTED in part and DENIED
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`Civil Action No. 18-cv-12029-ADB
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`**********
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`
`*
`
`
`v.
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`ELI LILLY AND COMPANY,
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`
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`Defendant and Plaintiff-in-
`Counterclaim.
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`
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`MEMORANDUM AND ORDER ON DEFENDANT’S MOTION TO TRANSFER OR
`STAY PENDING INTER PARTES REVIEW
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`
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 2 of 18
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`in part. The case will not be transferred out of the District of Massachusetts, but it will be stayed
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`pending the IPR proceedings that have been instituted.1
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`I.
`
`BACKGROUND
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`A.
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`Factual and Procedural Background
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`
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`Teva GmbH is a Swiss limited liability company with a principal place of business at
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`Schlüsselstrasse 12, Jona (SG) 8645, Switzerland. [Compl. ¶ 8]. Teva USA is a Delaware
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`corporation with a principal place of business in Pennsylvania. [Id. ¶ 9].
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`
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`Lilly is an Indiana corporation with a principal place of business in Indiana. [Id. ¶ 10].
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`Lilly maintains a “Cambridge Innovation Center” at 450 Kendall Street, Cambridge, MA 02142,
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`where a subset of Lilly’s research and development scientists and engineers work. [Id. ¶¶ 39–
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`43].
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`This action is the third in a series of cases involving Teva and Lilly’s dispute over their
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`migraine treatment drugs. See Complaint, Teva Pharms. Int’l GmbH v. Eli Lilly & Co., No. 17-
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`cv-12087 (D. Mass. Oct. 24, 2017) (“Teva I”); Complaint, Teva Pharms. Int’l GmbH v. Eli Lilly
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`& Co., No. 18-cv-10242 (D. Mass. Feb. 6, 2018) (“Teva II”).2
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`
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`Teva’s corporate affiliate, Labrys Biologics, Inc. (“Labrys”), has conducted research on a
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`biologic product to treat migraines with an active ingredient called fremanezumab. [Compl. ¶ 3].
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`Fremanezumab is a humanized monoclonal antibody that targets calcitonin gene-related peptide
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`(“CGRP”), which is a molecule that plays a role in migraine headaches. [Id.]. Labrys’ research
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`
`1 Lilly’s request to stay the action pending the decisions on whether to institute IPRs is denied as
`moot. See [ECF No. 19 at 26].
`2 Both of these earlier cases were dismissed for lack of subject matter jurisdiction pursuant to
`Federal Rule of Civil Procedure 12(b)(1) based on the Court’s finding that there was “no
`controversy of sufficient immediacy and reality” at the time the complaints were filed. See
`Order, Teva I, No. 17-cv-12087 (D. Mass. Sept. 27, 2018), ECF No. 42 (dismissing both Teva I
`and Teva II).
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`2
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`
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 3 of 18
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`resulted in innovations related to fremanezumab that are protected by U.S. Patents Nos.
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`8,586,045 (“’045 Patent”); 8,597,649 (“’649 Patent”); 9,266,951 (“’951 Patent”); 9,340,614
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`(“’614 Patent”); 9,346,881 (“’881 Patent”); 9,884,907 (“’907 Patent”); 9,884,908 (“’908
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`Patent”); 9,890,210 (“’210 Patent”); and 9,890,211 (“’211 Patent”) (collectively, the “Patents-in-
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`Suit”). [Id. ¶ 4].
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`
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`The Patents-in-Suit include six patents for compositions of matter and three patents for
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`methods of treatment. The patents for compositions of matter cover:
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`• “[a]n isolated human or humanized anti-CGRP antagonist antibody with a binding
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`affinity (KD) to human α-CGRP of 50 nM or less as measured by surface plasmon
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`resonance at 37º C,”3 [ECF No. 1-21 at 71 (’649 Patent)];
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`• a “human or humanized monoclonal anti-CGRP antagonist antibody that (1) binds human
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`α-CGRP and (2) inhibits cyclic adenosine monophosphate (cAMP) activation in cells”
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`along with the pharmaceutical composition of the same, [ECF No. 1-22 at 73 (’951
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`Patent)];
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`• a “human or humanized monoclonal anti-CGRP antagonist antibody that preferentially
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`binds to human α-CGRP as compared to amylin” along with the pharmaceutical
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`composition of the same, [ECF No. 1-23 at 74 (’614 Patent)];
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`• a “human or humanized monoclonal anti-CGRP antagonist antibody that (1) binds human
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`α-CGRP and (2) inhibits human α-CGRP from binding to its receptor as measured by a
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`radioligand binding assay in SK-N-MC cells,” [ECF No. 1-24 at 73 (’881 Patent)];
`
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`3 α-CGRP is one of two types of CGRP that exists in humans; the other type is β-CGRP. [ECF
`No. 1-21 at 21]. An anti-CGRP antagonist antibody is defined as “an antibody that is able to
`bind to CGRP and inhibit CGRP biological activity and/or downstream pathway(s) mediated by
`CGRP signaling.” [ECF No. 1-20 at 27].
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`3
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 4 of 18
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`• a humanized monoclonal anti-CGRP antagonist antibody comprising “two human IgG
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`heavy chains, each heavy chain comprising three complementarity determining regions
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`(CDRs) and four framework regions, wherein portions of the two heavy chains together
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`form an Fc region; and two light chains, each light chain comprising three CDRs and four
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`framework regions; wherein the CDRs impart to the antibody specific binding to a CGRP
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`consisting of amino acid residues 1 to 37 of SEQ ID NO:15 or SEQ ID NO:43,”4 [ECF
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`No. 1-34 at 78 (’210 Patent)]; and,
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`• a humanized monoclonal anti-CGRP antagonist antibody comprising “two human IgG
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`heavy chains, each heavy chain comprising three complementarity determining regions
`
`(CDRs) and four framework regions, wherein portions of the two heavy chains together
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`form an Fc region; and two light chains, each light chain comprising three CDRs and four
`
`framework regions; wherein the CDRs impart to the antibody specific binding to a CGRP
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`consisting of amino acid residues 1 to 37 of SEQ ID NO:15 or SEQ ID NO:43, and
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`wherein the antibody binds to the CGRP with a binding affinity (KD) of about 10 nM or
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`less as measured by surface plasmon resonance at 37º C, [ECF No. 1-35 at 78 (’211
`
`Patent)].
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`The patents for methods of treatment include:
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`• a method for reducing the incidence of or treating at least one vasomotor symptom,
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`selected from the group consisting of hot flush, a migraine with or without an aura,
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`hemiplegic migraine, cluster headache, migrainous neuralgia, chronic headache, and
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`tension headache, by administering a human or humanized anti-CGRP antagonist
`
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`4 SEQ ID NO:15 refers to the amino acid sequence of human α-CGRP, and SEQ ID NO:43
`refers to the amino acid sequence of human β-CGRP. [ECF No. 1-32 at 64].
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`4
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 5 of 18
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`antibody, [ECF No. 1-20 at 70 (’045 Patent)];
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`• a method for treating headache in individuals by administering an effective amount of a
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`humanized monoclonal anti-CGRP antagonist antibody, comprised of “two human IgG
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`heavy chains, each heavy chain comprising three complementarity determining regions
`
`(CDRs) and four framework regions, wherein portions of the two heavy chains together
`
`form an Fc region; and two light chains, each light chain comprising three CDRs and four
`
`framework regions; wherein the CDRs impart to the antibody specific binding to a CGRP
`
`consisting of amino acid residues 1 to 37 of SEQ ID NO:15 or SEQ ID NO:43,” [ECF
`
`No. 1-32 at 78 (’907 Patent)]; and,
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`• a method for treating headache in individuals by administering an effective amount of a
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`humanized monoclonal anti-CGRP antagonist antibody, comprised of “two human IgG
`
`heavy chains, each heavy chain comprising three complementarity determining regions
`
`(CDRs) and four framework regions, wherein portions of the two heavy chains together
`
`form an Fc region; and two light chains, each light chain comprising three CDRs and four
`
`framework regions; wherein the CDRs impart to the antibody specific binding to a CGRP
`
`consisting of amino acid residues 1 to 37 of SEQ ID NO:15 or SEQ ID NO:43, and
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`wherein the antibody binds to the CGRP with a binding affinity (KD) of about 10 nM or
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`less as measured by surface plasmon resonance at 37º C,” [ECF No. 1-33 at 76 (’908
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`Patent)].
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`5
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 6 of 18
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`
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`Labrys assigned the Patents-in-Suit to Teva on September 19, 2016. [Compl. ¶ 4].
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`Currently, Teva GmbH owns the Patents-in-Suit, and Teva USA holds an exclusive license to the
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`Patents-in-Suit. [Id. ¶¶ 8–9].5
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`
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`On October 16, 2017, Teva6 submitted a Biologics License Application (“BLA”) to the
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`U.S. Food and Drug Administration (“FDA”) that sought approval to market fremanezumab for
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`the treatment of episodic and chronic migraines. [Id. ¶ 4]. On October 24, 2017, Lilly
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`announced that it had submitted a BLA for its galcanezumab biologic product for the prevention
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`of migraine. [ECF No. 17 at 75 ¶ 11]. Like fremanezumab, galcanezumab also targets CGRP.
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`[Compl. ¶ 5].
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`
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`On September 19, 2018, Teva received FDA approval to market fremanezumab under the
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`brand name Ajovy™. [Id. ¶ 4]. On September 27, 2018, Lilly obtained FDA approval to market
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`galcanezumab under the brand name Emgality™. [Id. ¶ 6].
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`
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`Also on September 27, 2018, Teva filed this lawsuit. See [id.]. On November 2, 2018,
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`Lilly answered the Complaint, asserted counterclaims, and filed its Motion to Transfer or Stay.
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`[ECF Nos. 17, 18]. Teva opposed the Motion to Transfer or Stay on December 4, 2018. [ECF
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`No. 26]. Lilly filed a reply brief on December 21, 2018, and Teva filed a sur-reply on January 4,
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`2019. [ECF Nos. 29, 33]. The parties submitted eight letters thereafter, which advised the Court
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`of the status of the IPR petitions and provided additional argument on the request to stay the
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`
`5 The ’045 Patent, ’649 Patent, ’951 Patent, ’614 Patent, and ’881 Patent were issued to Labrys
`as assignee in 2013 and 2016. See [ECF Nos. 1-20, 1-21, 1-22, 1-23, 1-24]. The ’907 Patent,
`’908 Patent, ’210 Patent, and ’211 Patent were issued to Teva GmbH as assignee in 2018. See
`[ECF Nos. 1-32, 1-33, 1-34, 1-35].
`6 Teva Branded Pharmaceuticals Products R&D, Inc. submitted the BLA, and then transferred
`the BLA to Teva USA on March 22, 2018. [Compl. ¶ 4].
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`6
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 7 of 18
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`case. See [ECF Nos. 34, 35, 37–42]. The Court held oral argument on March 5, 2019. [ECF
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`No. 36].
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`B.
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`Patent Trial and Appeal Board Decisions
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`On August 8, 2018, Lilly filed six IPR petitions with the Patent Trial and Appeal Board
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`of the United States Patent and Trademark Office (the “Board”) alleging that the ’649 Patent,
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`’951 Patent, ’614 Patent, ’881 Patent, ’210 Patent, and ’211 Patent were invalid as obvious.
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`[Compl. ¶ 32]; see [ECF Nos. 35-1, 35-2, 35-3, 37-1, 37-2, 37-3]. On October 1, 2018 Lilly filed
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`two more IPR petitions alleging that the ’907 Patent and the ’908 Patent were invalid as obvious.
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`See [ECF Nos. 39-2, 39-3]. On October 4, 2018 Lilly filed an IPR petition alleging that the ’045
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`Patent was invalid as obvious. See [ECF No. 39-1].
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`The Board has instituted IPR proceedings for all nine Patents-in-Suit. Specifically, on
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`February 21, 2019, the Board issued institution decisions granting Lilly’s petitions for IPR of
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`every challenged claim in the ’614 Patent, the ’951 Patent, and the ’881 Patent.7 [ECF No. 35].
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`On February 25, 2019, the Board issued institution decisions granting Lilly’s petitions for IPR of
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`the ’210 Patent, the ’211 Patent, and the ’649 Patent.8 [ECF No. 37]. Finally, on April 3, 2019,
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`the Board issued institution decisions granting Lilly’s petitions for IPR of the ’045 Patent, the
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`’907 Patent, and the ’908 Patent.9 [ECF No. 39].
`
`
`7 The Board concluded that there was a reasonable likelihood that at least one of claims 1–7 and
`15–20 of the ’614 Patent and at least one of claims 1–6 and 14–19 of the ’951 Patent is
`unpatentable as obvious. [ECF Nos. 35-1, 35-2]. The Board also concluded that there was a
`reasonable likelihood that claims 1–6 and 14–19 of the ’881 Patent are unpatentable as obvious.
`[ECF No. 35-3].
`8 The Board concluded that there was a reasonable likelihood that at least one of claims 1–15 of
`the ’210 Patent and at least one of claims 1–15 of the ’211 Patent is unpatentable as obvious.
`[ECF Nos. 37-1, 37-2]. The Board also concluded that there was a reasonable likelihood that
`claims 1–9 of the ’649 Patent are unpatentable as obvious. [ECF No. 37-3].
`9 The Board concluded that there was a reasonable likelihood that at least one of claims 1, 3, 4,
`8–17, 19, 20, and 24–31 of the ’045 Patent and at least one of claims 1–18 of the ’907 Patent is
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`7
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 8 of 18
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`II.
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`MOTION TO TRANSFER
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`A.
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`Legal Standard
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`
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`In a patent infringement suit, venue is proper in the district where the defendant resides or
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`where the defendant has allegedly committed acts of infringement and has a regular and
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`established place of business. See 28 U.S.C. § 1400(b). A corporate defendant resides in “any
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`judicial district in which [it] is subject to the court’s personal jurisdiction with respect to the civil
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`action in question . . . .” 28 U.S.C. § 1391(c).
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`
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`Under 28 U.S.C. § 1404(a) (“Section 1404”), a district court, “for the convenience of
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`parties and witnesses, in the interest of justice,” may transfer any civil action from a proper
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`venue to any other district in which the case could have been brought. 28 U.S.C. § 1404(a).
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`“When considering a motion to transfer venue, courts consider both private and public interest
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`factors, including ‘1) the plaintiff’s choice of forum, 2) the relative convenience of the parties,
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`3) the convenience of the witnesses and location of documents, 4) any connection between the
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`forum and the issues, 5) the law to be applied and 6) the state or public interests at stake.’” Fed.
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`Ins. Co. v. XTRA Intermodal, Inc., No. 14-cv-14010-ADB, 2015 WL 4275181, at *4 (D. Mass.
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`July 15, 2015) (quoting Momenta Pharm., Inc. v. Amphastar Pharm., Inc., 841 F. Supp. 2d 514,
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`522 (D. Mass. 2012)). To warrant transfer, the party seeking to litigate in another forum must
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`establish that “considerations of convenience and judicial efficiency strongly favor litigating the
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`claim in the second forum.” Iragorri v. Int’l Elevator Inc., 203 F.3d 8, 12 (1st Cir. 2000).
`
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`unpatentable as obvious. [ECF Nos. 39-1, 39-2]. The Board also concluded that there was a
`reasonable likelihood that claims 1–18 of the ’908 Patent are unpatentable as obvious. [ECF No.
`39-3].
`
`8
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 9 of 18
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`B.
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`Discussion
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`
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` The parties do not dispute that venue in the District of Massachusetts is proper under the
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`patent venue statute as a district in which Lilly has allegedly committed acts of infringement and
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`has a regular and established place of business.10 See [ECF No. 19 at 11; ECF No. 26 at 13].
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`Nevertheless, Lilly requests that this Court transfer the case to the Southern District of Indiana,
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`which it contends is more convenient for the parties and witnesses, has a more significant
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`connection to the issues in the case, and is favored by public and state interests. [ECF No. 19 at
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`11–21]. Teva does not dispute that the Southern District of Indiana is a venue in which this case
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`may have been brought, but argues that transfer is not appropriate because its choice of forum is
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`entitled to deference and because the District of Massachusetts is more convenient, more
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`connected to the issues in this case, and favored by the interests of the Commonwealth of
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`Massachusetts. [ECF No. 26 at 11–20]. Although there may be alternative appropriate venues in
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`which this case could have been brought, the private and public interest factors of the Section
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`1404 analysis do not “strongly favor” transferring this case away from the District of
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`Massachusetts and do not outweigh the presumption in favor of Teva’s selected forum.
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`
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`As an initial matter, “a plaintiff enjoys some degree of deference for his original choice
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`of forum.” Adelson v. Hananel, 510 F.3d 43, 53 (1st Cir. 2007). The greatest degree of
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`deference is afforded to plaintiffs who select their home forum. Piper Aircraft Co. v. Reyno, 454
`
`
`10 Lilly maintains its “Cambridge Innovation Center” in Cambridge, MA, where a subset of
`Lilly’s research and development scientists and engineers work. [Compl. ¶¶ 39–43]. The
`Innovation Center is a “regular and established place of business.” See 28 U.S.C. § 1400(b). In
`addition, alleged acts of infringement were committed in Massachusetts, including but not
`limited to sales of the allegedly infringing product and the phase 2 clinical trials of the allegedly
`infringing product. See id.; see also [ECF No. 1 ¶ 6; ECF No. 26-2; ECF No. 29 at 8–9
`(conceding involvement of Cambridge-based Arteaus in development of galcanezumab and
`clinical trials, but arguing that involvement was minimal)].
`
`9
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 10 of 18
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`U.S. 235, 256 (1981).11 Courts afford less deference to a plaintiff’s choice of venue, however,
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`when the plaintiff is a nonresident of its selected venue. See Friends of Animals v. Phifer, No.
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`15-cv-30011, 2015 WL 1943898, at *3 (D. Mass. Apr. 29, 2015) (collecting cases). Here,
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`Teva’s choice of forum is due limited deference because it has not selected its home forums of
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`Delaware or Pennsylvania, but such deference still weighs against transfer. See id. (concluding
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`that plaintiff’s choice of non-home forum weighed slightly against transfer); Harpel v.
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`Nicholson, No. 12-cv-10280-RWZ, 2012 WL 4965335, at *6 (D. Mass. Oct. 17, 2012)
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`(concluding that plaintiff’s choice of non-home forum was entitled to “less deference” but still
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`outweighed defendant’s case for transfer).
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`
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`Two of the factors to be considered are neutral: the law to be applied and state or public
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`interests. Federal patent law will be applied regardless of the forum. See [ECF No. 19 at 11;
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`ECF No. 26 at 20]. Public interest factors considered in a Section 1404 analysis include
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`“administrative difficulties flowing from court congestion,” “local interest in having localized
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`controversies decided at home,” and “the interest in having the trial of a diversity case in a forum
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`that is at home with the law.” Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas,
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`571 U.S. 49, 63 n.6 (2013) (quoting Piper Aircraft, 454 U.S. at 241 n.6). Here, there is no
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`indication that courts in this district are any more or less congested than courts in the Southern
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`District of Indiana; there is no “localized controvers[y]” at issue; and, this is not a case brought
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`under diversity jurisdiction.
`
`
`11 Although Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981), is a forum non conviens case,
`courts routinely apply it in Section 1404 cases. See, e.g., Montoya v. CRST Expedited, Inc., 285
`F. Supp. 3d 493, 500 (D. Mass. 2018); Atari v. United Parcel Serv., Inc., 211 F. Supp. 2d 360,
`362 (D. Mass. 2002).
`
`10
`
`
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 11 of 18
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`
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`The remaining three factors—the relative convenience of the parties, the convenience of
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`the witnesses and location of documents, and the connection between the forum and the issues—
`
`do not outweigh the presumption in favor of Teva’s selected forum. Teva’s choice of forum was
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`restricted by 28 U.S.C. § 1400(b), which designates appropriate venues for patent infringement
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`suits, and by Lilly’s seven U.S. locations. Under Lilly’s view, only one of the seven possible
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`venues allowed under the statute, Lilly’s headquarters’ location in Indiana, would be appropriate.
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`That outcome is not contemplated by the patent venue statute, which allows a plaintiff to sue
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`alleged infringers anywhere the infringer maintains a place of business and the alleged
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`infringement has occurred, rather than restricting a plaintiff to the district where the alleged
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`infringer’s headquarters is located. In addition, Lilly has not made any showing that Indiana
`
`would be more convenient than Massachusetts for Teva. See Wolverine Proctor & Schwartz,
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`Inc. v. Aeroglide Corp., 394 F. Supp. 2d 299, 312 (D. Mass. 2005) (noting that on motion to
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`transfer, “court must consider the convenience of both parties”). Any convenience Lilly might
`
`gain from litigating in Indiana based on Lilly’s outsized presence in Indiana does not outweigh
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`the presumption in favor of Teva’s selected forum. Accordingly, the Court denies Lilly’s request
`
`under Section 1404 to transfer this action to the Southern District of Indiana.
`
`III.
`
`MOTION TO STAY
`
`A.
`
`Legal Standard
`
`
`
`The Court has the inherent power to manage its docket by staying proceedings, including
`
`pending IPR. Landis v. N. Am. Co., 299 U.S. 248, 254–55 (1936); Ethicon, Inc. v. Quigg, 849
`
`F.2d 1422, 1426–27 (Fed. Cir. 1988). The decision to grant a stay is discretionary. ACQIS,
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`LLC v. EMC Corp., 109 F. Supp. 3d 352, 356 (D. Mass. 2015). Courts typically consider three
`
`factors when deciding a motion to stay patent litigation while an IPR is pending:
`
`11
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 12 of 18
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`(1) the stage of the litigation, including whether discovery is complete and a trial
`date has been set; (2) whether a stay will simplify the issues in question and the
`trial of the case; and (3) whether a stay will unduly prejudice or present a clear
`tactical disadvantage to the nonmoving party.
`
`Id. (quoting SurfCast, Inc. v. Microsoft Corp., No. 2:12-cv-00333, 2014 WL 6388489, at *1 (D.
`
`Me. Nov. 14, 2014)).12 The analysis considers the totality of the circumstances, and “the inquiry
`
`is largely case specific.” Id. (citation omitted). As described below, the Court concludes that
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`two factors weigh in favor of a stay and one factor weighs slightly against a stay.
`
`B.
`
`Stage of the Litigation
`
`
`
`The first factor concerns “the stage of litigation, including whether discovery is complete
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`and a trial date has been set.” SurfCast, 2014 WL 6388489, at *1. As a general rule, “[t]he
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`earlier the stage of proceedings, the greater the reason to grant a stay.” Id. at *2. Lilly argues
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`that the “infancy” of this case and its pre-discovery posture favor a stay. See [ECF No. 19 at 23].
`
`Teva concedes that the litigation “is in its early stages,” but maintains that Lilly has been on
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`notice that Teva would be enforcing its patent rights concerning its migraine therapy since
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`October 2017. [ECF No. 26 at 26].
`
`
`
`Notwithstanding the fact that this action is the third in a series of related actions, the case
`
`remains in a nascent stage. Lilly’s request for a stay came shortly after the action was initiated.
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`The Court has not yet set a schedule for discovery; no Markman hearing has taken place;
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`summary judgment motions have not been filed; no trial has been scheduled. The parties have
`
`been focused on the instant motion practice and, as far as the Court is aware, have not yet begun
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`discovery. The lion’s share of this litigation lies ahead of both the parties and the Court. It is
`
`
`12 Because the IPR process remains relatively new, “courts have analyzed motions for stay using
`the framework applicable to motions to stay pending reexamination by the Patent Office.”
`Canatelo, LLC v. Avigilon Corp., No. 12-cv-01431, 2014 WL 2533407, at *1 (D.P.R. June 5,
`2014).
`
`12
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 13 of 18
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`common for courts to stay proceedings that are at this early stage pending the resolution of IPRs.
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`See, e.g., KAZ USA, Inc. v. E. Mishan & Sons, Inc., No. 13-cv-40037-TSH, 2014 WL 3501366,
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`at *4 (D. Mass. July 9, 2014) (finding that case in “very early stages” “weigh[ed] heavily in
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`favor of granting a stay” where “[l]ittle discovery had occurred and the parties had not yet
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`exchanged claim constructions); Bos. Heart Diagnostics Corp. v. Health Diagnostics Lab., Inc.,
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`No. 13-cv-13111-FDS, 2014 WL 2048436, at *2, *4 (D. Mass. May 16, 2014) (finding that
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`“very early stage” of litigation weighed in favor of a stay where discovery had not begun and no
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`dates had been set for a Markman hearing or trial). But see ADA Sols., Inc. v. Eng’rd Plastics,
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`Inc., 826 F. Supp. 2d 348, 352 (D. Mass. 2011) (adopting position that even in cases in the early
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`stages of litigation, “this factor does not compel a stay but rather is one of measure of whether it
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`is prudent to stay the litigation or not”). Thus, the first factor weighs in favor of a stay.
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`C.
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`Simplification of the Issues
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`The second factor assesses “whether a stay will simplify the issues in question and the
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`trial of the case.” SurfCast, 2014 WL 6388489, at *1. “A stay no doubt simplifies the issues
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`where all of the patents-in-suit are subject to IPR.” SCVNGR, Inc. v. eCharge Licensing, LLC,
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`No. 13-cv-12418-DJC, 2014 WL 4804738, at *10 (D. Mass. Sept. 25, 2014) (citing
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`Semiconductor Energy Lab. Co., Ltd. v. Chimei Innolux Corp., No. SACV 12-21-JST JPRX,
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`2012 WL 7170593, at *2 (C.D. Cal. Dec. 19, 2012)).
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`Lilly argues that granting a stay will significantly simplify the issues in this case because
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`the IPRs “could cancel the majority of patents and claims at issue in this litigation.” [ECF No.
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`19 at 23–24]. Teva responds that a stay will not simplify the issues in this case because the IPR
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 14 of 18
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`proceedings are unlikely to resolve “all issues” between the parties. [ECF No. 40 at 1].13 Both
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`parties rely on various statistics related to historical IPR proceedings to support their respective
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`arguments about whether challenged claims are more likely to be cancelled or to survive. See
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`[ECF No. 19 at 24; ECF No. 40 at 2; ECF No. 41 at 2].
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`The Court agrees with Lilly that the IPRs are likely to simplify the issues in this case,
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`regardless of the specific outcomes of the IPRs, because all nine Patents-in-Suit are now subject
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`to IPR proceedings. “[T]he IPR ruling will eliminate the need for any trial if all claims are
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`cancelled and, even if most or all of the claims survive IPR, the [Board’s] order will facilitate
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`trial by providing the court with the [Board’s] expert opinion and likely will clarify the scope of
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`the claims remaining for trial.” Irwin Indus. Tool Co. v. Milwaukee Elec. Tool Corp., No. 3:15-
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`cv-30005-MGM, 2016 WL 1735330, at *3 (D. Mass. Apr. 28, 2016). “Further, ‘if all the
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`asserted claims survive [IPR], the case could still be simplified because the defendant[ ] would
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`be bound by the estoppel provisions for [IPR] and thus could not raise before this court any
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`arguments that they raised or reasonably could have raised at the PTO.’” Id. (quoting Verinata
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`Health, Inc. v. Ariosa Diagnostics, Inc., No. 12-cv-05501 SI, 2014 WL 121640, at *2 (N.D. Cal.
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`Jan. 13, 2014)).14 Thus, the second factor weighs in favor of a stay.
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`13 Teva’s briefing, which was submitted before the Board had issued institution decisions,
`focused on the fact that the IPRs had not yet been instituted. See [ECF No. 26 at 24]. Following
`institution of the nine IPRs, the parties submitted three letters to the Court that address, inter
`alia, the issue of whether the resolution of the IPRs will simplify the issues. See [ECF Nos. 40,
`41, 42]. The Court considers these letters in its assessment of the simplification of the issues
`factor because they represent the parties’ most current and concrete understanding of how the
`IPRs will impact this litigation.
`14 The Court expects Lilly not to attempt to relitigate any invalidity arguments that are or could
`be addressed in the IPRs.
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`14
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 15 of 18
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`D.
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`Prejudice to the Nonmoving Party
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`The third factor weighs “whether a stay will unduly prejudice or present a clear tactical
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`disadvantage to the nonmoving party.” SurfCast, 2014 WL 6388489, at *1. Because “staying
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`any case pending an IPR risks delaying the final resolution of the dispute,” the “potential for
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`delay does not, by itself, establish undue prejudice.” SCVNGR, 2014 WL 4804738, at *9
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`(quoting Neste Oil OYJ v. Dynamic Fuels, LLC, No. 12-cv-00662, 2013 WL 424754, at *2 (D.
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`Del. Jan. 31, 2013)) (emphasis in original). A party seeking to avoid a stay must establish undue
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`prejudice separate from the potential for delay, such as a dilatory motive on the part of the party
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`seeking a stay, unavailability of legal remedies once the stay is lifted, or the parties’ relationship
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`as direct competitors in the marketplace. See Irwin Indus. Tool Co., 2016 WL 1735330, at *4
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`(“Courts are more likely to find undue prejudice when the parties are direct competitors.”
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`(quoting Autoalert, Inc. v. Dominion Dealer Sols., LLC, No. SACV 12-1661-JST (JPRx), 2013
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`WL 8014977, at *2 (C.D. Cal. May 22, 2013))); ACQIS, LLC, 109 F. Supp. 3d at 358 (finding
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`that party’s decision to not seek preliminary injunction undermined its claim of undue prejudice
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`because it would have its legal and equitable remedies available when the stay lifted); SCVNGR,
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`2014 WL 4804738, at *9 (noting that a party’s dilatory motive can weigh against a stay).
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`The parties each interpret the undue prejudice factor to weigh in their favor for different
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`reasons. On the one hand, Lilly contends that a stay will not prejudice Teva because Teva seeks
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`only money damages and has not sought a preliminary injunction. See [ECF No. 19 at 25]. Lilly
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`further argues that a stay would not impede the timely enforcement of Teva’s rights. See [ECF
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`No. 29 at 12]. On the other hand, Teva responds that its status as a direct competitor of Lilly
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`establishes undue prejudice and causes a clear tactical disadvantage. [ECF No. 26 at 23]; see
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`also [ECF No. 33 at 7]. Teva further contends that the length of time required for the Board to
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`Case 1:18-cv-12029-ADB Document 43 Filed 04/22/19 Page 16 of 18
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`issue decisions, which can sometimes extend beyond a year, will cause undue prejudice and
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`counsels against a stay. [ECF No. 26 at 23–24].
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`The thrust of the prejudice inquiry is harm to the non-moving party. Cf. ACQIS, 109 F.
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`Supp. 3d at 358 (requiring demonstration of actual prejudice). Stays are disfavored in cases
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`involving direct competitors because “there is a reasonable chance that delay in adjudicating the
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`alleged infringement will have outsized consequences to the party asserting infringement has
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`occurred, including the potential for loss of market share and an erosion of goodwill.” Neste Oil
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`OYJ v. Dynamic Fuels, LLC, No. 12-cv-01744, 2013 WL 3353984, at *3 (D. Del. Jul 2, 2015)
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`(quoting Neste Oil OYJ, 2013 WL 424754, at *2); see also Verinata Health, 2014 WL 121640, at
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`*3 (“Infringement among competitors can cause harm in the marketplace that is not compensable
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`by readily calculable money damages. Staying a case while