JAZZ PHARMACEUTICALS, INC. v. ROXANE LABORATORIES, INC., No. 2:2010cv06108 - Document 282 (D.N.J. 2013)
Court Description: OPINION. Signed by Magistrate Judge Joseph A. Dickson on 12/30/2013. (nr, )
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THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY DRAFT NOT FOR PUBLICATION Civil Action No.: 2:10-CV-06108-ES-JAD JAZZ PHARMACEUTICALS, INC., Plaintiff, OPINION ON DEFENDANT' S MOTION TO AMEND ITS ANSWER v. ROXANE LABORATORIES, INC., [ECF No. 218] Defendant. I. INTRODUCTION The instant action is a patent-infringement case Plaintiff Jazz Pharmaceuticals, Roxane patents Laboratories, after Application ("FDA") ( "ANDA'') ("Jazz") for ( "Roxane") Inc. Roxane's Inc. filing of with the U.S. an in which is suing Defendant infringing Abbreviated various New Drug Food and Drug Administration seeking the FDA's approval to market and sell a generic version of Jazz's Xyrem® drug. Pending before this Court is Defendant Roxane Laboratories, Inc.'s ("Roxane") Motion to Amend its Answer to include two additional affirmative defenses: hands; Jazz considered has the opposed parties' the (2) prosecution laches and unclean instant submissions motion. and for The the Court has reasons set forth below defendant's motion to amend is hereby Granted. 1 II. RELEVANT FACTUAL AND PROCEDURAL HISTORY On or about July 8, 2010, Roxane filed an ANDA with the FDA seeking approval to market and distribute a generic sodium oxybate product stated to be the bioequivalent to Jazz's XYRE~ product. (ECF No. Amend, at p. at 11). p. initiated 6; Roxane's Brief In Support of Motion to see also ECF No. In five 219, response 222, Roxane's separate ( 5) to actions Jazz's Opposition Brief, ANDA application, which consolidated into the above captioned matter. were Jazz ultimately (See ECF No. 222, at p. 11; see also ECF No. 214, April 12, 2013 Opinion and Order Granting Jazz's Motion to Consolidate). filed on November ( "Cmpl t. ") ) . The consolidated under 12, 2013. 22, 2010 (see aforementioned the The instant action was ECF No. five 1, (5) above-captioned docket Jazz's Complaint actions number were on April (See ECF No. 214 1 ) . On February 7, 2011, an initial scheduling conference was held in the instant matter. Entry from February 7, 2011). (ECF No. 12, Letter Order) ; (Minute During that conference, the Court reserved on setting a pretrial scheduling order to permit Jazz 1 The Court's Order and Opinion dated April 12, 2013 [ECF No. 214], consolidated the suits docketed under Civil Action Nos. 10-6108; 12-6761 and 12-7459 under the earliest filed action, Civil Action No. 10-6108. It also should be noted that prior to the Court's April 12, 2013 Opinion and Order, two prior actions (Civil Action Nos. 11-660 and 11-2523 had already been consolidated with the 10-6108 action, thereby accounting for the five (5) actions that are substantively contained in the 10-6108 action. (See ECF No. 222 at. p. 6, FN 3). 2 to obtain information from a third party it needed in order to submit the its Due Infringement Contentions. parties, a formal scheduling (ECF No. order was 60, not Pretrial between entered until Scheduling Order September 1, ("PSO")). This initial PSO set a deadline of December 5, 2011, as 2011. to disputes the deadline for the parties to amend the pleadings and/or On July 28, add parties. ( Id.) . to Cathy L. the were Hon. filed on Waldor, December 5, 2011, this case was reassigned U.S.M.J. 2011, Opening Markman expert Markman issues closed on January 5, discovery 2012, briefs regarding and Markman briefing closed on February 3, 2012 with the filing of responsive Markman (PSO at papers. After various ~~ 7, 9, and 10). engaging discovery irt extensive related motion issues on December instant action was transferred to the U.S.M.J. 15, On consolidate, April 2013, after for (ECF No. 215, Scheduling Order, at 2013 Scheduling motion on April 26, Amend). Roxane Jazz 10, regarding 2012, Hon. Steven C. granting Jazz's the Mannion, motion to the Court entered an Amended Scheduling Order that included a briefing schedule 15, practice Order, 2013. filed a the ~ Roxane instant motion to amend. timely (See ECF No. timely Opposition filed a timely Reply. Pursuant to the April 7). 218, the instant Roxane' s Motion to [See (See ECF No. 3 filed ECF No. 224, 222] Roxane' s and Reply Brief). On September 9, 2013, the instant matter was reassigned to the undersigned Magistrate Judge. III. DISCUSSION B. Rule lS{a) Rule 15 (a) of the Federal Rules of Civil Procedure, which governs amendments to pleadings, provides, in relevant part: A party (1) Amending as a Matter of Course. may amend its pleading once as a matter of course within: (A) 21 days after serving it, or (B) if the responsive pleading pleading is is one to required, which 21 a days after service of a responsive pleading or 21 days after 12(b), service of a motion under Rule (e), or (f), whichever is earlier. (2) Other Amendments. In all other cases, a party may amend its pleading only with the opposing party's court's leave. written consent or the The court should freely give leave when justice so requires. Fed. R. Civ. amendments in P. 15 (a). light of The federal the rules liberally allow for "principle 4 that the purpose of pleading is to facilitate a proper decision on the merits," and provide that if the underlying facts might be a proper subject of relief, relied by a party that party should have the opportunity to test its claims on the merits. 371 U.S. 178, 182 (1962) upon Foman v. Davis, (internal quotations marks omitted). Under Rule 15, the decision to permit an amendment rests in the See id.; sound discretion of the Court. Heyl Paterson & Int'l Inc. v. F.D. Rich Housing of V.I., Inc., 663 F.2d 419, The United States Supreme Court has stated that (3d Cir. 1981). leave to undue delay; amend under (2) prejudice; or (4) Rule bad 15 may be faith or denied dilatory futility of amendment. in cases motive; of: (3) ( 1) undue See Foman, 371 U.S. at 182; see also Arthur v. Maersk, Inc., 434 F.3d 196, 204 2006) 425 (3d Cir. (stating that "[1] eave to amend must generally be granted unless equitable considerations Stated differently, absent render it otherwise substantial prejudice, unjust"). an amendment should be allowed under Rule 15 unless denial can be grounded in bad faith or dilatory motive, repeated failure allowed, or truly undue or unexplained delay, to cure deficiencies by amendments previously futility of the proposed amendment ( s) . Long v. on the Wilson, 393 F.3d 390, 400 (3d Cir. 2004). Jazz opposes Roxane's motion to amend primarily basis of the futility of the two defenses that Roxane seeks to add stating that "the legal theories it asserts have no basis in 5 law and directly contradict the rights accorded to an inventor under United States patent law" (ECF No. 222, Jazz's Opposition Brief, at p. 6). Jazz also argues, less vigorously, that because Roxane could have asserted the two defenses years ago, the instant motion to amend is untimely. (Id.). a. Undue Delay & Prejudice Regarding undue delay, the Court of Appeals for the Third Circuit has stated: The passage of time, without more, does not require that a motion to amend a complaint be denied; however, at some point, the delay will become "undue," placing an unwarranted burden on the court, or will become "prejudicial," placing an unfair burden on the opposing party. The question of undue delay, as well as the question of bad faith, requires that we focus on the plaintiffs' motives for not amending their complaint to assert this claim earlier; the issue of prejudice requires that we focus on the effect on the defendants. Adams v. Gould, Inc., citations omitted). (3d Cir. 2001) 739 F.2d 858, 868 (3d Cir.1984) (internal See also Cureton v. NCAA, 252 F.3d 267, 273 (stating that "the question of undue delay requires that we focus on the movant's reasons for not amending sooner"). Furthermore, under Rule 15, leave to amend is generally granted where, during the course of discovery, a party discovers "new CIV.A.90-1417, evidence." 1990 WL See, 153960, at 6 ~' *4 Slade (D.N.J. v. Fauver, Sept. 24, No. 1990) (granting leave to amend where new claims were discovered and "proposed amendments had no dilatory purpose and no significant discovery or Kronfeld v. (D.N.J. 1986) pretrial First preparation had Jersey Nat' 1 Bank, taken 638 F. place Supp. ."); 1454, 1460 (granting motion to amend upon discovery of new evidence where it did "not appear that the incidental prejudice is an insufficient ground on which to deny leave to amend, undue delay or undue prejudice support denial. To determine if a party would be unduly prejudiced, the Court considers whether the amendment will result in additional discovery or costs, theories, or the need to defend against new facts or Cureton, 252 F. 3d at 273, or an inability to obtain and present evidence that the non-movant would have offered had the amendment been timely. 652 (3d Cir. undue proposed the pleading Robinson, 886 F.2d 644, As the Long court observed, 1989). prejudice, Bechtel v. non-moving would "(i) party require the show opponent significant additional resources prepare trial; significantly delay the for the dispute; or ( ii) (iii) prevent the to must conduct [non-movant] timely action in another jurisdiction." to establish Long, that to expend discovery and resolution of from bringing a 393 F.3d at 400 (adopting the standard of Block v. First Blood Assocs., 34 4 ( 2d Cir. 1993) ) (internal quotation marks omitted) . 7 the 988 F.2d As an initial point, this Court rejects Jazz's contention that Roxane's filing of the instant motion to amend is untimely. The operative Scheduling Order in this case set the deadline for Roxane to 2013. (See motion file on its motion ECF No. April 215, 26, to at <Jl 2013 amend Answer Roxane 7). in its compliance for filed with April the the 2 6, instant operative Scheduling Order, thereby making its motion timely. To the extent that Jazz has also argued that Roxane's motion to amend should be denied due to undue delay, As Jazz asserts in its Opposition also rejects this contention. Brief, "Roxane filed the Court its Answers to the Complaints concerning the '650 and '275 patent actions on November 9, 2012 and January 4, 2013 respectively." equitable defenses infringement of the not view the Given only the fact pertain to that the Roxane's proposed allegations of '650 and '275 patent claims, the Court does 4-6 month between Roxane filing its Answers and Roxane seeking leave to amend its Answers as constituting undue delay. This view is especially true considering: minimal discovery time period; 2) that occurred during this 1) there was relatively short the parties were awaiting hearing and decision by the Court on Roxane' s Order to Show Cause concerning Jazz's alleged violation of the discovery confidentiality order- a decision that may have obviated the need for Roxane to pursue the two proposed affirmative defenses; and 3) 8 the fact that the Court had not yet granted Jazz's motion to issued the related amended scheduling order. and circumstances lean heavily in favor consolidate and All of these facts of not finding that Roxane unreasonably delayed in seeking to amend its Answers to include the prosecution laches and unclean hands defenses. Jazz's argument that it will be unduly prejudiced if Roxane is allowed to add these fact the that related motion defenses parties remain practice and is also engaged the fact unavailing. Given the in discovery extensive that Jazz is primarily responsible- due to it filing multiple actions against Roxanefor the magnitude and protracted nature of this litigation, the Court is not persuaded that Jazz will be unreasonably prejudiced by any additional discovery that may need to be taken by the parties pertaining to Roxane's two proposed equitable defenses. Therefore, arguments, given the weakness of Jazz's undue delay & prejudice the Court rejects these arguments and turns its attention to the issue of futility. b. A court frivolou~ or will consider advances insufficient on its 133 F.R.D. Futility 462, a face." 468 an claim or defense futile if it that is legally Harrison Beverage Co. (D.N.J. quotations marks omitted). amendment 1990) (internal v. "is Dribeck, citations and In determining whether an amendment 9 is "insufficient on is its standard that dismiss. Burlington, analysis, the face," applied the under a Court Rule 114 F. 3d at 1434. question before the movant will ultimately prevail, employs the 12(b) (6) same motion to Under a Rule 12 (b) ( 6) Court is not whether the but whether the complaint sets forth "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, Detailed (2007). factual allegations are 550 U.S. not 544, 570 necessary to survive a Rule 12(b) (6) motion, but "a [pleader's] obligation to provide the grounds of his entitlement to relief requires more conclusions, than labels [, ] the elements "[f]actual of a cause of action" be allegations and a formulaic recitation of and enough relief above the speculative level demands raise to that right a the to . on the assumption that all the allegations in the [pleading] are true (even if doubtful in fact)." Id. at 555 (internal quotation marks omitted). A two-part met. Fowler, 556 U.S. 662, analysis determines 57 8 F. 3d at 210 667, 129 S. Ct. whether standard (interpreting Ashcroft v. 1949). First, the factual and legal elements of a claim. 210. this is Iqbal, a court separates Fowler, 578 F.3d at All well-pleaded facts set forth in the pleading and the contents of the documents incorporated therein must be accepted as true, but the Court may disregard any legal conclusions. at 210; Iqbal, 556 U.S. at 667 10 (noting that a complaint Id. is insufficient if it offers "labels and conclusions," a "formulaic recitation of the assertions devoid elements of of a further cause factual of action," or "naked (internal enhancement") quotations marks and alterations omitted). Second, a court must determine whether the plaintiff's complaint articulates "enough facts to state a claim to relief that is plausible on its pleads "[a] U.S. at 570; claim has facial plausibility when the plaintiff factual reasonable 550 As the Supreme Court instructed accord Fowler, 578 F.3d at 211. in Iqbal, Twombly, face." content inference misconduct alleged." that that allows the Iqbal, the defendant court is 556 U.S. at 667. to draw for liable the the Although this is not a "probability requirement," the well-pleaded facts must do more than demonstrate that the conduct is "merely consistent" with liability so as to "permit the court to infer more than the mere possibility of misconduct" to make a showing of entitlement to relief. Id. at 1949-50 (internal quotation marks omitted). This "context-specific task requires the reviewing court to draw on its judicial experience and common sense." Fowler, 578 F.3d at 211 (quoting Iqbal, 556 U.S. at 679). Federal pleading Rule standard allegations. of Civil that Procedure does not 8 require creates a liberal detailed factual Regarding defenses, Rule 8(b) requires the pleader to "state in short and plain terms its defenses to each claim 11 asserted against it." Fed.R.Civ.P. 8 (b) (A). Accordingly, to satisfy the Rule 8(a), a pleading must contain facts- facts that the Court must accept as true at this stage- that are consistent with a legal theory that amendments are determining in Thus, relief. would entitle futile, the Court Roxane's proposed Amended Answer. the pleading party to must proposed Roxane's whether turn its attention More specifically, to the Court must evaluate whether Roxane's proposed defenses of prosecution laches and unclean as hands, Amended sufficiently prosecution Answer, pleaded laches the facts and Court that concludes pleading that Roxane both the (See ECF No. the futility of Roxane's defenses, has defense hands. unclean support ~~ Roxane's Proposed Amended Answer, at far too much. the After carefully reviewing Roxane' s requirements of Rule 8 (b) . proposed satisfy pled, 5-47). Also, of 218-3, in arguing Jazz's arguments have proven By attacking the factual strength of the Roxane's proposed prosecution laches and unclean hands defenses instead of the legal sufficiency of Roxane'e pleading of those defenses, Jazz's arguments go far beyond what the Court may properly consider at this stage. Regarding prima the the prosecution facie defense, following three laches defense, to the pleading must aver facts ( 3) elements: unexplained delay by the patentee; 12 2) 1) an establish a that support unreasonable and that results in prejudice to the accused infringer; intervening rights. Labs., 625 F.3d 724, Inc. See and 3) Cancer 729 the prejudice is evidenced by Research (Fed. Cir. Tech. Ltd. v. Barr On the first .. 2010). element, Roxane has alleged that Jazz delayed the filing of its patents applications litigation this for no other purpose but to (based on information gleaned during the litigation about Roxane's proposed product) prolong course of and thereby effectively prevent Roxane from introducing a competing product (See ECF No. 224, at p. 9; ECF No. 218-3 at into the market. 16, that 36-38). since Jazz's challenge to this element the 1994 amendments to is the patent ~~ its assertion law changed the life of a patent from beginning to run from the date of filing to the date of issuance, delay by the patentee in filing patent applications cannot extend the life of a patent. 222 at pp. 16-17). (See ECF No. While this argument may be true in and of itself, the Court is agreement with Roxane that this point does nothing to render the prosecution laches defense futile in this case because, reply, as Roxane has articulated in its moving brief and it is not arguing that Jazz's delay in filing its patent applications has effectively extended the life of its patents. Roxane's argument is that Jazz's unexplained delays have had the effect of prolonging this litigation which has the practical effect of preventing Roxane from launching its product. Jazz's opposition is devoid of any argument and/or legal authority that 13 the prosecution laches defense may not be applied under the Jazz's other facts and circumstances that Roxane has alleged. argument on this element is an improper merits based argument in which Jazz argues that it did not unreasonably delay in filing its patent applications. the Court concludes Therefore, (See ECF No. 222 at p. 23). that this element has been sufficiently pled. Regarding second the Roxane (prejudice), element has alleged that it has been prejudiced by Jazz's delay in filing as Jazz's delays has prevented timely its patent applications, resolution of Roxane's legal rights, which, in turn, effectively prevent Roxane from launching its product. No. 224, at p. 11; ECF No. 218-3 at (also merits based) ~ would (See ECF 16). Jazz's main argument is that Roxane has not received FDA approval for its generic product and therefore, not been prejudiced. Jazz argues, (See ECF No. 222 at p. 29). Roxane has This argument is unpersuasive as it does not address the fact that taking its allegations prejudiced litigation as by true, Roxane having to longer than it has remain been and embroiled otherwise would be delayed the filing of its patent applications purpose keeping of Roxane entangled in in to be the instant if Jazz had not for the alleged litigation, undermining the goals of the Hatch-Waxman Act. 14 continues thereby On the third alleged that reliance on element its its (intervening intervening good-faith rights belief rights), are that Roxane from Jazz's originally filed patents its and/or its did not derived product infringe of Jazz's intellectual property rights as in has that represented those patents were invalid when Roxane endeavored to develop its product. ECF No. Jazz's 224, at p. challenge 11; ECF No. to this 218 - 3 at goes element <[ far too 39). (See Once as again, Jazz argues that Roxane has no intervening rights because Roxane' s product infringes on Jazz original patent claims. Jazz's 25). infringement, this stage, argument, if (See ECF No. 222 at p. would believed, prove the underlying issue in this action. patent However, at the Court is only concerned with whether Roxane may intervening rights, not whether it actually did have intervening rights. Stated differently, pleading stage is not the whether Court's Roxane inquiry at actually this infringed the on Jazz's original patent claims but whether Roxane has adequately alleged facts consistent with the theory that it did not believe it was infringing on Jazz original patent claims and therefore had acquired rights via its reliance based infringement of Jazz's patents. On its face, pleading standard with third satisfies element of the its pleading prosecution 15 laches on its non- Roxane's proposed respect defense. to the Therefore, because it has pled sufficient facts relative to each element, Roxane has adequately pled the defense of prosecution laches. The Court is likewise convinced that Roxane has adequately pled its defense proposed of unclean unclean hands hands doctrine elements must be pled: First, act the alleged; Secondly, In defense. to apply, order three for (3) the basic there must be an unconscionable unconscionable act must affect the equitable relations between the parties; and finally the alleged unconscionable act must concern an issue that is before the Court. See In Re Valley Corp., 181 F.3d 517, 524 (3d Cir. 1999). In its proposed Amended Answer, Roxane has alleges that Jazz used confidential information that it acquired during the course of the instant litigation regarding Roxane's sodium oxybate product and its method of dosing I distributing said product for the purpose of filing and prosecuting continuation patents, based on what the inventors thought they invented, purpose of prolonging the instant litigation not but for the in order to effectively prevent Roxane from launching its generic product. (See ECF No. 224, at p. 13; ECF No. 218-3 at in challenging this proposed defense, ~~ 43-47). Again, Jazz does not attack the legal sufficiency of Roxane' s proposed pleading of its unclean hands defense, but proposed defense. instead Jazz argues the merits of Roxane' s (See ECF No. 222 at p. 30-31). Therefore, because Roxane's Proposed Amended Answer makes out a prima facia 16 showing of an unclean hands defense, as facts that support the required elements, Roxane has asserted and because Jazz has failed to show how Roxane's pleading of this defense is legally the insufficient, Court finds that Roxane's unclean hand defense, as pled, passes the futility test. CONCLUSION IV. For Roxane the reasons Laboratories, articulated Inc.'s in Motion this to opinion, Amend its Defendant Answers to include the defenses of prosecution laches and unclean hands is hereby Granted. The Court shall issue an Order consistent with opinion. Joseph A. Dickson, U.S.M.J. Date: December 30, 2013 Cc: Hon. Esther Salas, U. S.D.J. 17 this
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