-FBS Pfizer Inc., et al v. Teva Pharmaceuticals USA, Inc., No. 2:2010cv00128 - Document 497 (E.D. Va. 2011)
Court Description: MEMORANDUM OPINION that the court hereby GRANTS Pfizer' s Motion for Attorney Fees Pursuant to 35 U.S.C. § 285, and AWARDS attorney fees in the amount of $378,285. Signed by District Judge Rebecca Beach Smith and filed on 10/17/2011. (rsim)
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UNITED STATES DISTRICT EASTERN DISTRICT COURT OF VIRGINIA Norfolk Division PFIZER INC. and PFIZER LTD., Plaintiffs and Counterclaim Defendants, Civil No. v. TEVA PHARMACEUTICALS USA, 2:10cvl28 INC., Defendant and Counterclaim Plaintiff. MEMORANDUM OPINION This matter comes before the court on the plaintiffs', Pfizer Inc. and Pfizer Limited (collectively "Pfizer") , Motion for Attorney Fees Pursuant to 35 U.S.C. § 285 ("Motion"). On August this court entered its Opinion and Final Order in pertinent part, Inc. ("Teva"), Answer and Counterclaim, and found that See Pfizer, Inc., 2:10cvl28, Dist. fees of 12, 2011) . 2011 U.S. Federal did LEXIS not commit Patent No. Inc. v. Teva Pharms. USA, 90021, at *70-*71 (E.D. Pfizer now moves this court to award "attorney relating to Teva's the Pfizer in the prosecution of United States ("the *012 patent") . Aug. which, Motion for Leave to File its Proposed Second Amended 6,469,012 Va. ("Opinion"), 2011, denied the defendant's, Teva Pharmaceuticals USA, inequitable conduct No. 12, inequitable Circuit's decision conduct in defense Therasense, from the date Inc. v. Becton, Dickinson and Co., 2011 WL 2028255 (Fed. Cir. May 25, 2011) ." Mot. for Attorney Fees 1, Docket # 476. to deny Pfizer's Motion or, sought by Pfizer to authorized by the court. attorney fees to reduce the award related to discovery Def.' s Opp'n to Pis .' Mot. 2, Docket #481. For the reasons stated herein, Attorney Teva in turn asks the court in the alternative, exclude Pis.' the court GRANTS Pfizer's Motion for Fees. I. Procedural History On March 24, 2010, Pfizer1 filed suit in this court against Teva2 alleging imminent infringement of Pfizer's United States Patent No. 6,469,012 the ("the Treatment '012 patent"), of (filed May 13, entitled "Pyrazolopyrimidinones for Impotence." 1994) United (issued Oct. 22, States 2002). Patent The No. 6,469,012 "012 patent claims the use of certain chemical compounds as a method of treating erectile dysfunction. Leave to On November 12, 2010, Teva filed its first Motion for File an Amended Answer and Counterclaim ("First Motion to 1 Upon Motion by Pfizer, and over Teva's objection, this court added Pfizer Ireland plaintiff on Pharmaceuticals June Amended Complaint by agreement 2 # Pfizer on of Pharmaceuticals Docket 30, 2011, the same the 4, day. from # See Liability 406, Docket # dismissed this suit on Co. and Pfizer 407. The Pfizer July 14, as a filed an court, Ireland 2011. See 434. initially complaint dismissed May Unlimited Docket parties, Partnership brought Pharmaceutical Industries, The see against without 2010. See suit Ltd., Teva Pharmaceutical prejudice Docket # against 26. two defendants: and Teva Pharmaceuticals USA, upon Industries, agreement of the Teva Inc. Ltd. parties was on Amend"). See Docket #55. In particular, Teva sought to amend its Answer and Counterclaim to add the allegation that the '012 patent was invalid because Pfizer engaged in inequitable conduct during the patent's prosecution and reexamination. The Memorandum Order allowing the amendment on court January 18, issued 2011. a See Pfizer, Inc. v. Teva Pharms. USA, Inc., No. 2:10cvl28, 2011 U.S. Dist. LEXIS 90762 (E.D. Va. Jan. 18, 2011). that, "[t] hough it [pleading] 9(b)." [was] a close question, requirements Id. at *11. Specifically, the court found of . . . [Federal] the Thus, Rule directed court [of Teva ha[d] met the Civil Teva Procedure] to file its Answer and regarding the Amended Answer and Counterclaim. On June Counterclaim, 17, 2011, Teva seeking to change inequitable conduct claim. attorneys Watson McMunn again moved its to amend its allegations Teva first alleged that "Pfizer in-house and Dr. Peter Richardson, and Pfizer's outside counsel Daniel DiNapoli of the Kaye Scholer law firm, engaged in inequitable conduct during the prosecution of the application for the *012 patent," by failing to disclose that a Pfizer competitor, Bayer Aktiengesellschaft and Bayer, ("the Bayer Statement of Claim") . Inc., Mem. filed a claim in Canada of Law in Supp. of Mot. Leave to File Proposed Second Am. Ans. & Countercl., Second Am. 347. Countercl. f 15, Docket # The Ex. A, Bayer for Proposed Statement of Claim argued that the claims of the Canadian patent directed to the treatment of non-human animals were According to Teva, Mr. McMunn, invalid for overbreadth. Dr. Richardson, Id. and Mr. DiNapoli knew about this allegedly material information and should have disclosed the Bayer Claim to the PTO, the information possible. so Id^ at that 15 but instead they intentionally withheld the '012 patent would issue as soon as 17-18. Teva also alleged that Mr. O'Rourke, who was named in the First Amended Answer and Counterclaim, the time at the law firm of and Rudolph Hutz, Connolly Bove Lodge & both partners at Hutz ("Connolly Bove") , 3 learned that the patent examiner was going to allow the claims of the x012 patent, disclosures to the PTO. inequitable conduct and Id. because therefore at SI Mr. 19. no Teva O'Rourke longer submitted stated that instituted a any this was system of "willful blindness," the object of which was to avoid awareness of any information that would normally be disclosed to the PTO to prevent delaying the The Second issuance of the '012 patent. Id^ at 1 20. court denied Teva's Motion for Leave to File Amended Answer and prejudice and futility.4 Counterclaim Pfizer, Inc. v. on the its grounds Teva Pharms. Proposed of USA, both Inc., 3 Connolly Bove was hired by Pfizer during the prosecution of the '012 patent to submit documents to the PTO pursuant to the duty of disclosure. 4 For a full discussion of Teva's motion, see Pfizer, Inc. v. Teva Pharms. USA, and the court's holding, Inc., 2011 U.S. Dist. LEXIS 2011 U.S. Dist. LEXIS 90021, at *70-*71. amendment at such a late juncture, The court held that indeed three days into the trial, "would severely prejudice both Pfizer and the individuals named in the Proposed Second Amended Answer and Counterclaim." Additionally, showing that the court stated Teva "failed to Id. make a at *66. plausible [Mr. McMunn and Mr. DiNapoli] had any duty of disclosure to the PTO such that they could have had any intent to deceive the PTO," while also failing "to make any plausible showing of but-for materiality of *67-*68. against the This Mr. information not ruling O'Rourke left only alleged in disclosed to the the inequitable the First Counterclaim to proceed on the merits at PTO." Id. conduct Amended at claim Answer and trial. This court issued its Opinion on August 12, 2011, finding that Pfizer did not commit inequitable conduct in the prosecution of the x012 patent. contentions See as id. at *139. The court summarized Teva's follows: Teva argue [d] that Mr. O'Rourke's failure to turn over the Bayer Statement of Claim constituted inequitable conduct because the reference proved the invalidity of the animal claims in the patent, and it was withheld with the specific intent to deceive the PTO and to speed the issuance of the x012 case patent. of Further, affirmative Teva maintain[ed] egregious O'Rourke was engaged in a misconduct 90021, at to be turned *44-*71. over to this because is a Mr. scheme of willful blindness to prevent his discovery of material need that the information that would PTO. Id. at *131-*32. However, the court found "there evidence as to either of these elements," id. Federal Circuit's Dickinson & Co., 2011) opinion in at *132, Therasense, 649 F.3d 1276, 2011 W.L. 2028255 citing the Inc. v. Becton, (Fed. Cir. May 25, (en bane).5 On August § recent is utterly no 285, Teva's 30, 2011, requesting that Pfizer filed this Motion under 35 U.S.C. the court award attorney inequitable conduct defense. Teva fees relating to filed its Opposition to Pfizer's Motion on September 15, 2011, arguing that the court should deny Pfizer's request, either on the merits or because the ruling is premature in light of Teva's pending appeal of the underlying decision. Def.'s Opp'n to Pis.' Mot. 2, Docket # 481. argued that if the court did award attorney fees, Teva also it should reduce the fee award sought by Pfizer to exclude attorney fees related to discovery authorized its Reply Memorandum in Further Support of its Motion on September 22, 2011. The Motion is now ripe II. First, premature. by Teva the court. Ld^ Pfizer filed for decision. Timing of Consideration argues that Pfizer's Motion of Motion should be denied as Teva filed its Notice of Appeal of the court's decision on September 9, 2011. Teva is correct in its assertion that if the Federal Circuit finds the '012 patent invalid or unenforceable, Teva 5 See discussion infra Section III.B. 6 would be the prevailing party in the suit; therefore, not be entitled to attorney fees under 35 U.S.C. inequitable conduct Berkline Corp., ruling 134 F.3d 1473 is not persuaded that After an appeal a claim for is fees, it upheld. See (Fed. Cir. Pfizer would § 285, Gentry 1998). is taken, defer the ruling, or dismiss Amendments). court will In many fees cases the issues immediately judgment on the merits of the case. affords an See Fed. R. The Civ. P. Advisory state: nonjury attorneys' Notes resolved. the motion without (1993 Committee also the court the court has the option to rule on 54 (d) Notes v. should delay ruling on Pfizer's Motion. is Committee Gallery However, prejudice until after the appeal Advisory even if the opportunity for the want after . . . court to consider rendering Prompt to its filing resolve fee disputes shortly after trial, while the services performed are freshly appropriate in mind. It circumstances also to enables make its the ruling court on a in fee request in time for any appellate review of a dispute over fees to proceed at the same time as review on the merits of Id. in the case. The court finds this reasoning persuasive, and will not delay ruling on the Motion. III. Under "Exceptional" 35 U.S.C. award reasonable § Case Pursuant 285, attorney "[t]he fees court to in 35 U.S.C. § 285 exceptional cases may to the prevailing party." A determination whether to award attorney fees under § 285 involves a two-step process. First, a district court must determine whether the prevailing party has proved by clear and convincing evidence that the case is exceptional. . . . Second, if exceptional, award of the the attorney appropriate, district court the court must fees is amount of then finds appropriate the the determine and, to be whether case an if fees are award. Eon-Net LP v. Flagstar Bancorp, 2011 U.S. App. LEXIS 15650, at *19-*20 (Fed. is Cir. July 29, exceptional conduct "when related infringement, 2011). to A district there the has matter that violates Brooks Furniture Mfq., 1381 (Fed. Cir. "[Absent imposed . bad . and inappropriate such as willful vexatious or unjustified litigation, R. Inc. v. Civ. P. 11, or Dutailier Int'l, like infractions." Inc., 393 F.3d 1378, during litigation,] sanctions (2) the litigation is objectively may Inc. v. Cornell Corp., baseless." 635 F. 3d 539, 543-44 (quoting Brooks Furniture, 393 F. 3d at 1381) . foundation, the and the Google, be knew was baseless." "[a] or, [accused party's] on 631 F.3d 1372, Haynes Int'l Inc. 1377 investigation, v. (Fed. case must have no objective (Fed. frivolous infringement suit reasonable Old "Under this [accused party] must actually know this." Inc., Correspondingly, patentee Fed. misconduct exacting standard, v. litigation, case 2005). Reliable Wholesale, LLC material a . only if both (1) the litigation is brought in subjective faith, Cir. 2011) in some find that fraud or inequitable conduct in procuring the patent, misconduct during litigation, conduct been court may Cir. iLOR, 2011). is one which the should Jessop Steel Co., have 8 known, F.3d 1573, 1579 544 be (Fed. Cir. 1993); (finding that succeed" that (quoting no reasonable iLOR, litigation," without more, Aug. No. 3:09cv86, 16, 631 litigant F.3d at it must could believe 1377)). it "Hard-fought will not result in a level of misconduct permitting an award of fees. Inc., 635 F.3d at for a claim to be objectively baseless, "so unreasonable would see also Old Reliable Wholesale, See Humanscale Corp. 2010 U.S. Dist. LEXIS 83876, v. Compx Intern, at *22 (E.D. Va. 2010). A. Pfizer argues that Teva's conduct in pursuing its inequitable conduct counterclaim after the Federal Circuit's decision in Therasense makes this case exceptional, because Teva knew its claim was unjustified and "objectively baseless," such that "no reasonable litigant could believe Mot. 17, Docket # 47 9. it would succeed." Pis.' Mem. in Supp. of To assess Pfizer' s characterization of Teva' s claim, the court first must again review the requirements for a valid inequitable conduct claim laid out in Therasense,6 in which "[t]he Federal Circuit significantly narrowed the number which a court may find inequitable conduct." Pharms. USA, Inc., 2011 U.S. Dist. of Pfizer, LEXIS 90021, instances Inc. at *124. v. in Teva At a base 6 The history of the inequitable conduct defense in patent cases, as well as the opinion, Inc. v. factual background and reasoning behind the Therasense are covered in depth in the court's Opinion. Teva *124-*31. Pharms. USA, Inc., 2011 U.S. Dist. See Pfizer, LEXIS 90021, at level, "[Unequitable infringement Therasense, that, 2011 conduct if W.L. In Therasense, is proved, 2028255, an equitable bars at defense enforcement of to a patent patent." M. the Federal Circuit tightened the standards for demonstrating the two requisite elements of inequitable conduct, the materiality of the patentee's conduct and its intent to deceive the United States Patent and Trademark Office ("PTO") . Id. at *9. Both of these elements must be proven separately by clear and convincing evidence. Id. at *10-*ll. In addressing materiality, the court held that "the materiality required to establish inequitable conduct is but-for materiality." Id. at *11 (emphasis added). Therefore, the court must assess "whether the PTO would have allowed the claim if it had been aware of the undisclosed reference." Circuit did carve out an exception to Id. "but-for" The Federal materiality, "affirmative acts of egregious misconduct" by the patentee, originates from the "unclean hands" doctrine. Id. at *12. for which If a court finds such behavior, for example the willful filing of a false affidavit, assumed. prior art materiality references to references in affirmative egregious omissions an require is the PTO [or] affidavit," "[M]ere failure however, misconduct. proof Id. Id. of to mention prior art does Claims of but-for materiality." 10 nondisclosure not constitute "based Id. on such As for the intent element, the Federal Circuit held that courts may infer intent from direct and circumstantial evidence, such intent must be "the single most reasonable be drawn from the evidence." and internal quotation Id^_ at *10 marks omitted). inference able to (emphasis added) This but that prong (citation will not be satisfied if "multiple reasonable inferences may be drawn" from the evidence presented. Id. B. Turning now to the evidence presented at trial, Teva's inequitable conduct claim was objectively baseless after the Federal Circuit's ruling in Therasense, believed that its claim would and Teva could not have reasonably succeed. As this court previously found when looking at Teva's arguments for materiality and intent, and recounts below, these elements."7 Dist. that LEXIS its "there is utterly no evidence as to either of Pfizer, Inc. v. Teva Pharms. USA, Inc., 2011 U.S. 90021, at inequitable *132. conduct In other words, claim, far Teva must from being have even known remotely 7 It is worth noting at the outset of this discussion that the court does not consider Teva's frequent quotations from the June 3, 2011, hearing on Teva's motion front for sanctions and a continuance in of Magistrate Judge Stillman relevant to this determination. Stillman, Judge as he himself indicated, was focused on discovery rulings, and "not ruling on any sort of inequitable conduct motion." Proceedings, 6/3/11 Hr'g on Mots. 34:21-24, Docket # 322. Tr. of Judge Stillman also expressly did not take into account Therasense in his considerations. See id. at 9:4-5. 11 supported by clear and convincing evidence, was objectively baseless. 1. Teva's O'Rourke8 initial pleading failure to alleged disclose the Bayer Def.'s Revised First Amended Countercl. the court found, Statement of Claim Dist. LEXIS Teva argues, blindness" on Statement M 44-46, based on of Claim. Docket # 80. Mr. See As and Teva does not contest,9 by itself, "the Bayer hardly required by Therasense." 10 2011 U.S. materiality the part of the but-for materiality Pfizer, Inc. v. Teva Pharms. USA, Inc., 90021, however, approaches at *132. that its allegation at trial of "willful Mr. O'Rourke constitutes affirmative 8 The Counterclaim also named Dr. Ellis and Messrs. Benson and Jones, who were later dropped from the litigation by Teva at the beginning of trial. 9 Teva states that Pfizer' s argument that the Bayer Statement of Claim cannot support an inequitable conduct claim "misstates Teva's trial contention." Def.'s Opp'n to Pis.' Mot. 14, Docket # 481. Teva argues that its contention at trial was instead that the alleged "willful blindness" scheme of Mr. O'Rourke alleviated the need for but-for materiality showing. Id. at 14-15. Similarly, Teva any points to this scheme, and not the Bayer Statement of Claim, as providing the basis of its assertion of Mr. O'Rourke's intent. Id. at 16. 10 Because Teva no longer contends, and the court agrees, that the Bayer Statement of Claim could or did provide an objective basis for demonstrating materiality for an inequitable conduct claim, the court does not need to spend significant time supplementing its See Pfizer, Inc. v. Teva Pharms. LEXIS 90021, at *132-*34; supra note 9. previous discussion of the matter. USA, Inc., 2011 U.S. Dist. 12 egregious misconduct "but-for" # 481. under Therasense, materiality. Teva notes Def.'s that egregious misconduct, Opp'n bypassing to Therasense, Pis.' in the Mot. need to 14-15, discussing show Docket affirmative stated that the doctrine is "flexible enough to capture varying manifestations of egregious and abusive conduct." Id. at 17. inequitable contention The of This conduct, court court any need finding that Mr. argument the O'Rourke "does posits, objectively baseless." affirmative provides court's does not agree egregious underlying not decide the misconduct, the commit render Teva's Id. that support not did not to flexibility of the as discussed Teva's theoretical in Therasense, contention question as concept to here. The whether a "deliberately planned and carefully executed scheme to defraud the PTO, " to quote methods from Therasense, utilized could provide could be hypothesized in which the a basis for an inequitable conduct claim while also being properly termed "willful blindness." Teva's repeated invocation of the label "willful blindness" itself provides no objective basis for a finding of materiality - the inquiry must focus on the actual underlying factual circumstances of this case. And when examining those facts, rather than Teva's "smokescreen," it is clear that no evidence exists that would allow any reasonable 13 litigant, including Teva, to think that Mr. O'Rourke engaged in affirmative egregious misconduct.11 Most importantly, the Federal Circuit distinguished in Therasense that "neither mere nondisclosure of prior art references to the PTO nor failure to mention prior art references in an affidavit constitutes affirmative egregious misconduct, claims of inequitable conduct that are based on such omissions require proof of but-for materiality." 2028255, Therasense, 2011 W.L. at *12. Mr. O'Rourke's actions here are most akin to acts of nondisclosure, Teva has made absolutely no showing of "but-for" materiality. and While Teva attempts to recharacterize Mr. O'Rourke's inaction with foreign litigation material as a scheme of affirmative action, the court does not find such an interpretation reasonable, the record in this case. schemed to deceive the especially in light of The evidence, far from showing Mr. O'Rourke PTO, shows that his system was a reaction, albeit a sloppy one,12 to a general directive from the PTO itself. See Pfizer, 90021, at In Inc. See contrast, infra at the false note 12 See Pfizer, 90021, Teva Pharms. USA, Inc., 2011 U.S. Dist. LEXIS *133. unmistakenly ii v. 12 Federal affidavit," and Circuit cited "the or cases under past accompanying n.106. 14 the of an "unclean text. Inc. v. Teva Pharms. USA, *137-*38, filing Inc., 2011 U.S. Dist. LEXIS hands" doctrine involving perjury, evidence, and Therasense, bribery, 2011 W.L. as manufacture and suppression of examples 2028255, at of *13. affirmative misconduct. Further, the Federal as Circuit noted in justifying the exception to materiality, "a patentee is unlikely to go to great lengths to deceive the PTO with a falsehood unless it believes that the falsehood will affect issuance of the patent." Id. at directly from *12. the Here, statement Mr. O'Rourke's the patent by behavior officer that stemmed further foreign litigation material was not needed, and thus would not affect the issuance O'Rourke's of lack the of patent. action as To a attempt to "carefully characterize executed Mr. scheme[] to defraud the PTO," id. , would strain Therasense' s distinction between affirmative acts and nondisclosures to the point of breaking. all, After the court's clear intent in Therasense to heighten the bar of materiality for nondisclosures by requiring "but-for" materiality would be largely subverted if Teva's argument was found to have an objective basis. Thus, to show See id.13 as previously indicated by this court, any materiality of the nondisclosed "Teva has failed reference material." 13 Therasense' s attempt to reign in the pursuit of inequitable conduct claims would be greatly frustrated by such a discussed apply to heightened standard non-disclosures of "but-for" unexamined by the reading, as the much materiality patentee. would not Moreover, a distinction would emerge between different types of non-material non-disclosures, some of which would, by Teva' s reading, still permit inequitable conduct claims. 15 Pfizer, Inc. v. Teva Pharms. USA, at *133-*34. Inc., 2011 U.S. Dist. LEXIS 90021, This lack of evidence obviously falls far short of the necessary clear and convincing standard requisite conduct, and calls into question the objective for inequitable basis for Teva's claim. 2. Turning now to the intent element of inequitable conduct, court similarly found "that Teva has the failed to bring any evidence to the court's attention which shows that Mr. the specific intent to deceive the PTO." O'Rourke acted with Id. at *137. Even assuming that Teva had made some showing of materiality, intent must be proven separately by clear and convincing evidence, may be used element's Indeed, to compensate strength. even one element's Therasense, "[p]roving that the 2011 weakness W.L. applicant should have known of its materiality, and no sliding scale with 2028255, knew of a the other at *10. reference, and decided not to submit it to the PTO does not prove specific intent to deceive." Id. Once again, the court has already found that the Bayer Statement of Claim provides no basis to support an intent allegation.14 See 14 Teva no longer argues that the Bayer Statement of Claim alone provides any objective basis for an inequitable conduct claim. See supra notes 9 and 10. The court, therefore, only briefly restates its examination of the Bayer Statement of Claim, laid out in full in its Opinion. See Pfizer, Inc. v. Teva Pharms. USA, Inc., 2011 U.S. Dist. LEXIS 90021, at *135-*37. 16 Pfizer, Inc. v. Teva Pharms. USA, at *135, *137. Mr. Inc., 2011 U.S. Dist. LEXIS 90021, The court found that due to the timing of its receipt, O'Rourke had no duty to disclose the claim in the first place. Additionally, an intent to deceive "is hardly the single most likely inference from instruction his that actions," which such intent must be contradicts "the single most inference able to be drawn from the evidence. " Teva again blindness" support, alleges scheme, this time as instead argued for that at intent, to Id. reasonable {emphasis added) . O'Rourke's provides prevent determined to be objectively baseless. 16, Docket # 481. Mr. trial, Therasense's its the claim "willful requisite from Def.'s Opp'n to Pis.' being Mot. In fact, Teva goes as far as to suggest that "[t]he single most reasonable inference to be drawn from the evidence is that Mr. O'Rourke devised and implemented his system with the intent to deceive the USPTO by ensuring that no such material reference would be provided to the USPTO." Id. Although Teva admits it provided no direct evidence of specific intent to deceive, it contends "[i]t was not illogical" for Teva to conclude from Mr. O'Rourke's failure to review documents that the "single most reasonable inference" was he acted "to deceive The court, the USPTO." Id. quite to the contrary, is precisely "illogical." finds that Teva's position As the court previously stated: "The only inference the court can draw from the evidence presented at trial 17 was that Mr. 0'Rourke was a busy young law partner who devised a somewhat "sloppy" system for sorting foreign litigation material." Pfizer, at Inc. v. Teva Pharms. USA, *137 (emphasis added). Inc., After 2011 U.S. all, Dist. LEXIS 90021, "the patent examiner specifically requested not to receive any other foreign references similar to those already submitted," a statement that instigated the change to Further, Mr. 0'Rourke's much of the review information as the Bayer Statement of Claim, issue fee, to the at a time when Mr. PTO. "The Id^ at court sees of documents. that Mr. 0'Rourke Id. at received, *133. such came in after payment of Pfizer's O'Rourke could not have submitted it *136-*37. through this smokescreen and finds that Teva has failed to bring any evidence to the court's attention which shows that Mr. 0'Rourke acted with the specific intent to deceive the PTO." Id. at *137. The record is so far from "requir[ing] a finding of deceitful intent in the light of all the circumstances,"15 that the court simply cannot find Teva's stated inference to be reasonable, or to provide any objective basis to allege that Mr. an improper 0'Rourke had intent. C. Other courts, claims, when faced with the pursuit of similar baseless have found the cases to be "exceptional" within the meaning 15 See Therasense, 2011 W.L. 2028255, at *10. 18 of 35 U.S.C. Inc., § 285. In Phonometrics, 65 Fed. App'x 284, concluded that [the] 285 case Inc. (Fed. Cir. [was] v. 2003), Choice Hotels Int'l, "[t]he district court exceptional because Phonometrics continued to litigate the case even after it knew that it could not prevail on the merits." During litigation in that the Federal Circuit issued an opinion, of certain patent claims, Phonometrics "took litigation;" therefore, no 284-85. and concerning the construction Id. Despite the intervening affirmative steps to end th[e] the Federal Circuit affirmed the district court's finding that Phonometrics' "vexatious as here, which was controlling for the underlying issues in front of the trial court. ruling, case, deserving of maintenance of its lawsuit was exceptional case status." id. at Teva's actions here in continuing to pursue its inequitable conduct claim after Therasense, and indeed attempting to expand its allegations during trial, demonstrate the same sort of "exceptional" baseless claim. Correspondingly, No. in AstraZeneca AB v. 07cv6790, 2010 U.S. Dist. LEXIS 32883 Dr. Reddy's Labs., Ltd., (S.D.N.Y. March 30, 2010), the district court awarded attorney fees after finding "there was no evidence infringement. whatsoever" to support AstraZeneca's Id. at *14 (emphasis in original). contention of "When a plaintiff is notified of the defects of its case yet continues to assert its claims in light of overwhelming 19 evidence to the contrary, and proceeds with arguments baseless, consistent that a reasonable attorney would know are it litigates in bad faith." findings. See, e.g., Id. Other cases have made Multi-Tech, Inc., 708 F. Supp. 615, 620 (D.D.C. 1989) Inc. v. Components, (finding a case exceptional after finding "this litigation was unjustified and that this was a frivolous lawsuit which intelligent people should have known would have no chance at success"). Given this court's finding that Teva presented no evidence of either the materiality or intent elements of a successful inequitable conduct termed "frivolous" and claim, this case is properly "exceptional." D. In sum, the court FINDS that Pfizer has demonstrated, by clear and convincing evidence, that Teva's continued litigation of its claim for inequitable conduct after the Federal Circuit's decision in Therasense meaning of 35 was frivolous, U.S.C. § 285. and thus Teva's "exceptional," counterclaim under was the rendered objectively baseless by the Federal Circuit's opinion in Therasense, such that no reasonable litigant could have expected it to succeed. Moreover, given the clear directive in Therasense, and Teva' s failure to present any evidence supporting its claim of inequitable conduct as discussed above, Teva's unabated "exceptional." 20 pursuit of the claim was IV. Appropriateness of Attorney Fees "If the district court finds the case to be exceptional, then determine whether Forest Labs, 2003). Inc. Abbott Labs., 339 In making its determination, and tangible the v. an award of attorney factors: closeness of the the degree of question, fees is F.3d 1324, it must appropriate." 1328 (Fed. Cir. a court may weigh "intangible culpability of the litigation behavior, infringer, and any other factors whereby fee shifting may serve as an instrument of justice." Superior Fireplace Co. (Fed. Cir. under 35 2001). U.S.C. First, Here, § the substantial v. Majestic Prods. Co., 270 F.3d 1358, several factors weigh in favor of an award 285. Federal Circuit's encouragement Federal Circuit lamented, to an opinion award of in Therasense attorney adjudication settlement, backlog, 2028255, cost and the reduced quality."16 among them, likelihood of increased PTO Therasense, 2011 W.L. To achieve the court's stated purpose in Therasense of "redirect [ing] of the public," complexity, strained PTO resources, impaired patent at *9. As "low standards for intent and materiality burdened courts, and provides fees. have inadvertently led to many unintended consequences, increased 1378 a doctrine that has been overused to the detriment id., courts must be willing to impose consequences 16 See also Pfizer, Inc. v. Teva Pharms. USA, Inc., 2011 U.S. Dist. LEXIS 90021, at *124-*31. 21 for parties who continue to overreach in the aftermath of its issuance. Furthermore, of the action tightening Pharms. of USA, in this case, "this court the Federal the standards Inc., finds that this case is the archetype Circuit 2011 U.S. in was aiming Therasense." to curtail Pfizer, Dist. LEXIS 90021, Inc. at *139. with v. the Teva The record in addition to being devoid of evidence of inequitable conduct as discussed above, is also filled with examples of related wasted not resources. inequitable amend the allegations Teva conduct claim and only persisted claim through trial, three new days into individual but trial, it defendants. The new allegations Most incredibly, against one of its baseless also attempted to proposing Teva "unnecessarily" delayed filing its motion, prejudicial and futile. in new court factual found that which was denied as Teva attempted to include Pfizer's trial counsel for the duration of this suit, Mr. DiNapoli, a concern expressed specifically by the Federal Circuit in Therasense.17 This conduct demonstrates that the interests of justice necessitate an award of attorney fees to Pfizer. 17 "Most prominently, inequitable conduct has become a significant litigation A strategy. charge of inequitable conduct conveniently expands discovery into corporate practices before patent filing and disqualifies the prosecuting attorney from the patentee's litigation team." Therasense, 2011 W.L. 2028255, 22 at *9. The cases cited supra in Section III.C, for similar finding. See, Inc., 65 FINDS that Fed. pursuing § frivolous e.g., and baseless claims, Phonometrics, Inc. App'x 284 awarding this awarding attorney fees (Fed. Pfizer Cir. case v. 2003). attorney "exceptional" further Choice Hotels Accordingly, fees is support for Teva's appropriate such Int'l, the court conduct under a 35 in U.S.C. 285. V. Amount of Attorney Fees Pfizer requests an award of $378,285 in attorney fees related to defending Teva's motion for inequitable conduct.18 Teva does not contest submitted either Pfizer. argue, the hourly rate Def.'s Opp'n to Pis.' however, that if the or the Mot. court time 27-30, awards entries Docket # 481. attorney by Teva does fees, it should 18 The Federal Circuit has suggested that a hybrid lodestar approach may be employed attorney fees. 568 (Fed. Cir. by a court to determine an appropriate See Maxwell v. Angel-Etts of Cal., award of 53 Fed. App'x 561, 2002). Under this approach, the court first determines a lodestar figure by multiplying the number of hours reasonably spent on the litigation by a reasonable hourly rate. This lodestar figure may then be increased or decreased based on a variety of factors, such as skill and time required, novelty of the questions involved, basis, results attorney and Id. (internal based on requested with one this is obtained, fixed or contingent fee and/or relationship between client. citations omitted). approach. reasonable, exception, The a Pfizer's court conclusion that discussed infra 23 calculated determines in is text not at that total the is amount opposed by Teva, 23-25. not award fees related to Pfizer's opposition of Teva's Motion for Sanctions and a Continuance of the June 15, 2011, Trial Date, nor for preparing for and defending the depositions of Robert MacFarlane, Esq., and Dr. Peter Richardson. court granted-in-part its Id. continue, and granted Teva's request to take the two additional depositions, it cannot now award Pfizer attorney fees. The court sees motion to Teva argues that because the Id. no reason to relation to those proceedings. decrease Pfizer's fee award in Although Teva protests that Pfizer has not cited any authority for awarding fees for court sanctioned proceedings, Teva itself has not cited any authority that such proceedings must be excluded from an award under 35 U.S.C. § 285.19 The court finds above that Teva's pursuit of its inequitable conduct claim was meritless Therasense. conserved Thus, the after the prompt litigants', Federal dismissal and the Circuit's of its court's, claim time including those expended at the hearing on June 3, resulting depositions, Therasense 19 Cf. 740 opinion Talon, Inc. (9th Cir. 1959) and v. issuance would of have and resources, 2011, and at the all of which occurred after the date of the after Union trial Slide of this case Fastener, had Inc., begun. 266 F.2d See 731, ("A proper construction of Title 35, Section 285, does not require a district judge in awarding attorney's fees to a prevailing defendant to separately evaluate the services rendered under each separate defense contained in the defendant's answer and then to reduce or increase such award depending upon whether a particular defense failed or is sustained."). 24 Mueller Brass Co. v. (E.D. aff'd, Pa. 1972), purpose of Reading Indus., [35 U.S.C. § 285] monies which he had to but for the losing 487 F.2d Inc., 1395 352 F. (3d Cir. 1357, 1973) 1381 ("The major is to compensate a prevailing party for spend which he would not party's Supp. misconduct."). have Teva has had to not spend provided suitable explanation for why the hearing and the depositions had any additional Therefore, attorney merit the fees not court is reflected FINDS that in its Pfizer's arguments request for at trial. 20 $378,285 in reasonable. VI. For the reasons set out Conclusion in this Memorandum Opinion, the court hereby GRANTS Pfizer' s Motion for Attorney Fees Pursuant to 35 U.S.C. § 285, and AWARDS attorney fees in the amount of $378,285. The Clerk is DIRECTED to send a copy of this Memorandum Opinion to all counsel in this case. IT IS SO ORDERED. /s/ Rebecca Beach Smith United States District Judge Rebecca United Norfolk, October States Smith District Judge Virginia if} , 2011 20 See also supra note 7. deposition conduct Beach testimony at claim, an Teva, as previously discussed, used this trial attempt to this attempt court to found amend to its inequitable create unnecessary delay, as well as being both unnecessarily prejudicial and completely futile on the merits. See supra note 25 4 and accompanying text.
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