Trials@uspto.gov
`Tel: 571-272-7822
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`
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`Paper 77
`Entered: August 12, 2019
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`DR. REDDY’S LABORATORIES, INC.,1
`Petitioner,
`
`v.
`
`HORIZON PHARMA USA, INC. and NUVO PHARMACEUTICALS
`(IRELAND) DESIGNATED ACTIVITY COMPANY,
`Patent Owners.
`
`Case IPR2017-01995
`Patent 9,220,698 B2
`_______________
`
`
`Before MICHELLE N. ANKENBRAND, Acting Vice Chief Administrative Patent
`Judge, TONI R. SCHEINER and DEBRA L. DENNETT, Administrative Patent
`Judges.
`
`DENNETT, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Dr. Reddy’s Request for Rehearing
`37 C.F.R. § 42.71
`
`
`1 Dr. Reddy’s Laboratories, Inc. (“Dr. Reddy’s”), the Petitioner in IPR2018-00894,
`was joined as a Petitioner in this proceeding. Paper 47, 6. The original Petitioner
`from this proceeding, Mylan Pharmaceuticals Inc. (“Mylan”), subsequently settled
`with Patent Owners (Paper 74), leaving Dr. Reddy’s as the sole Petitioner. We
`modify the caption accordingly.
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`

`

`IPR2017-01995
`Patent 9,220,698 B2
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`I. INTRODUCTION
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`On April 26, 2019, Mylan and Dr. Reddy’s filed a Request for Rehearing
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`(Paper 73, “Rehearing Request” or “Reh’g Req.”) of our Decision vacating
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`institution of an inter partes review (Paper 71, “Decision” or “Dec.”) of claims 1–7
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`of U.S. Patent No. 9, 220,698 (Ex. 1001, “the ’698 patent”) and terminating the
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`proceeding. In the Decision, we found that 35 U.S.C. § 315(a)(1) barred institution
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`of an inter partes review based on actions Mylan had taken in a district court
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`proceeding. Dec. 8–11. Subsequent to the Rehearing Request, Mylan settled with
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`Patent Owners (Paper 74), leaving Dr. Reddy’s as the sole Petitioner in this
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`proceeding.2
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`We deny the Rehearing Request for the reasons set forth below.
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`II. STANDARD OF REVIEW
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`When considering a request for rehearing, we review the Decision for an
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`abuse of discretion. 37 C.F.R. § 42.71(c). The party requesting rehearing bears
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`the burden of showing that the Decision should be modified, and “[t]he request
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`must specifically identify all matters the party believes [we] misapprehended or
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`overlooked.” 37 C.F.R. § 42.71(d).
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`III. ANALYSIS
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`Dr. Reddy’s argues that we based our decision on an erroneous
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`interpretation of the law regarding 35 U.S.C. § 315(a)(3). Req. Reh’g 1. More
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`specifically, Dr. Reddy’s argues that the statutory language of § 315(a)(3) is
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`
`2 In its motion requesting joinder to this proceeding, Dr. Reddy’s adopted the
`arguments and evidence Mylan put forth and agreed to take a passive role in the
`proceeding, becoming active only if Mylan ceased to participate. Paper 47, 6; see
`also IPR2018-00894, Paper 3, 6.
`
` 2
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`

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`IPR2017-01995
`Patent 9,220,698 B2
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`unambiguous in prohibiting the application of § 315(a)(1)’s statutory bar where a
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`counterclaim challenges the validity of a patent that is later the subject of a petition
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`for an inter partes review. Req. Reh’g 1. Dr. Reddy’s, therefore, argues that we
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`erred in our “conclusion that 35 U.S.C. § 315(a)(3) applies only to counterclaims
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`filed in response to allegations of infringement of the same patent.” Id.
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`Before addressing Dr. Reddy’s’ argument, we briefly review the relevant
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`facts of record in this case regarding the district court litigation between Mylan and
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`Patent Owners involving the ’698 patent. In response to Patent Owners’ second
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`amended complaint alleging infringement of other patents (DNJ Civil Action No.
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`15-cv-03322 (“Case II”)), Mylan filed an Answer and Counterclaims (“Answer”)
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`on February 19, 2016, that included allegations that the ’698 patent was invalid and
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`not infringed. Ex. 2005. This was the first time the ’698 patent was introduced
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`into the district court litigation between Mylan and Patent Owners. In its Answer,
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`Mylan denominated its allegation regarding the validity of the ’698 patent as
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`“Twelfth Counterclaim – Declaratory Judgement of Invalidity of U.S. Patent No.
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`9,220,698.” Id. at 45. Patent Owners thereafter filed a claim asserting that Mylan
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`infringes the ’698 patent (DNJ Civil Action No. 16-cv-04921 (“Case III”)). See
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`Ex. 1047. By stipulation of the parties and order of the District Court, Mylan’s
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`allegations regarding the ’698 patent in Case II were dismissed without prejudice.
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`Id. at 2–3. The stipulation and order further specified that the dismissal did not
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`apply to claims and counterclaims in Case III. Id.
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`We instituted an inter partes review of the ’698 patent on March 8, 2018.
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`Paper 18. Under precedent existing at that time, we did not determine whether
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`35 U.S.C. § 315(a)(1) applied to bar the Petition because we treated the dismissed-
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`without-prejudice district court invalidity claim as if the claim had never been
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`filed. Id. at 13–14. Subsequently, however, the Federal Circuit held in Click-to-
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` 3
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`IPR2017-01995
`Patent 9,220,698 B2
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`Call Technologies, LP v. Ingenio, Inc., 899 F.3d 1321 (Fed. Cir. 2018), that
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`dismissal without prejudice of claims does not avoid the time bar of 35 U.S.C.
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`§ 315(b). In our order vacating institution, we reasoned that the Federal Circuit’s
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`holding in Click-to-Call, that a voluntary, without prejudice dismissal of claims
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`does not nullify an administrative time bar, applies to § 315(a). Paper 71, 7. We
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`further determined that Mylan’s invalidity counterclaim on the ’698 patent
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`constituted “a civil action challenging the validity of a claim of a patent” under
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`§ 315(a)(1) and that the Petition, which was filed more than one year after the
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`counterclaim, was time-barred. Id. at 8–11. In view of those determinations, we
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`vacated institution of inter partes review of the ’698 patent and terminated the
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`proceeding. Id. at 12–14.3
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`Dr. Reddy’s asserts on rehearing that we erred in interpreting § 315(a)(3) as
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`applying only to the patent(s) that a defendant is charged with infringing, and not
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`to any patent that a defendant alleges is invalid, even if the patent has not been
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`asserted against the defendant. Reh’g Req. 1.
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`Section 315(a) concerns an infringer’s civil action. 35 U.S.C. § 315(a).
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`Section 315(a)(1) bars institution of an inter partes review “if, before the date on
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`which the petition for such a review is filed, the petitioner or real party in interest
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`filed a civil action challenging the validity of a claim of the patent.” Id. Section
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`315(a)(3) states: “[a] counterclaim challenging the validity of a claim of a patent
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`does not constitute a civil action challenging the validity of a claim of a patent for
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`purposes of this subsection.” Id.
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`3 Because Dr. Reddy’s would have been barred absent our grant of its joinder
`motion, we terminated the entire proceeding rather than terminating the proceeding
`only as to Mylan.
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` 4
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`IPR2017-01995
`Patent 9,220,698 B2
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`Dr. Reddy’s argues that the language of § 315(a)(3) is clear on its face.
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`Reh’g Req. 6. Specifically, Dr. Reddy’s contends that any claim denominated a
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`“counterclaim” is exempted from the bar of § 315(a)(1). Id. at 10. We disagree.
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`A declaratory judgment action, even though denominated a “counterclaim” by a
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`litigant, survives dismissal of the main case. See Federal Rule of Civil Procedure
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`(“FRCP”) 41(a)(2). For the same reasons we provided in our Decision vacating
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`institution and terminating the proceeding, see Decision 8–11, we interpret
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`§ 315(a)(3) as exempting counterclaims that do not survive dismissal of the main
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`case (compulsory counterclaims),4 but not declaratory judgment actions merely
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`characterized as “counterclaims.”
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`Mylan’s Answer in Case II included what Mylan called “Counterclaim—
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`Declaratory Judgment” claims of either invalidity or noninfringement against the
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`five patents that Patent Owners asserted in the second amended complaint, as well
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`as against the ’698 patent. Ex. 2005, 35–45. The counterclaims of invalidity and
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`noninfringement against the five patents identified in the second amended
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`complaint were compulsory counterclaims. See FRCP 13(a). However, Mylan,
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`not Patent Owners, elected to introduce the ’698 patent into Case II, in what Mylan
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`characterized as a “Sixth Counterclaim—Declaratory Judgment of
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`Noninfringement” of the ’698 patent and a “Twelfth Counterclaim—Declaratory
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`Judgment of Invalidity” of the ’698 patent (id. at 40, 45). As Patent Owners had
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`4 A compulsory counterclaim is one “that must be asserted to be cognizable,
`usu[ally] because it relates to the opposing party’s claim and arises out of the same
`subject matter. If a defendant fails to assert a compulsory counterclaim in the
`original action, that claim may not be brought in a later, separate action . . . .”
`Compulsory counterclaim, Black’s Law Dictionary (11th ed. 2019) (citing Federal
`Rule of Civil Procedure (“FRCP”) 13(a)).
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` 5
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`IPR2017-01995
`Patent 9,220,698 B2
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`not previously asserted the ’698 patent against Mylan, Mylan’s sixth and twelfth
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`claims were not compulsory counterclaims, but rather declaratory judgment actions
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`for invalidity and infringement, respectively. See FRCP 57. Dr. Reddy’s cannot
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`shelter Mylan’s declaratory judgment actions against the ’698 patent under
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`§ 315(a)(3) by characterizing the actions as counterclaims. Section 315(a)(3) does
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`not exempt Mylan’s declaratory judgment actions against the ’698 patent.
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`It is
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`IV. ORDER
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`ORDERED that Dr. Reddy’s Request for Rehearing is denied.
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` 6
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`IPR2017-01995
`Patent 9,220,698 B2
`
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`PETITIONER:
`
`Brandon M. White
`Emily Greb
`Bryan D. Beel
`Autumn Nero
`PERKINS COIE LLP
`white-ptab@perkinscoie.com
`greb-ptab@perkinscoie.com
`bbeel@perkinscoie.com
`anero@perkinscoie.com
`
`Alan Pollack
`Louis Weinstein
`WINDELS MARX LANE & MITTENDORF, LLP
`apollack@ buddlarner.com
`lweinstein@buddlarner.com
`
`PATENT OWNERS:
`
`Thomas A. Blinka, Ph.D.
`Jonathan G. Graves
`Ellen Scordino
`Susan Krumplitsch
`COOLEY LLP
`tblinka@cooley.com
`jgraves@cooley.com
`escordino@cooley.com
`skrumplitsch@cooley.com
`
`Margaret J. Sampson
`Stephen M. Hash
`Jeffrey S. Gritton
`BAKER BOTTS LLP
`Margaret.Sampson@bakerbotts.com
`Stephen.Hash@bakerbotts.com
`Jeffrey.Gritton@bakerbotts.com
`
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