Case-narrowing decisions are a one-way street
Reviewing Exeltis USA v. Lupin Ltd.Exeltis USA, Inc. and other parties (Exeltis) recently prevailed against Lupin Ltd. and Lupin Pharmaceuticals, Inc. (Lupin) in a patent infringement suit brought in the District of Delaware. After a three-day bench trial, the court found that Lupin infringed all asserted claims and that all asserted claims were valid. However, the patents and claims ultimately litigated were substantially reduced from those initially asserted. In an attempt to keep the not-litigated patents and claims alive, Exeltis filed a post-trial motion to dismiss the not-litigated claims and patent without prejudice. The court denied this request.
SLYND®
Exeltis is the New Drug Application (NDA) holder for SLYND®, four-milligram drospirenone tablets used as an oral contraceptive. The Orange Book listing for SLYND® includes 15 patents covering the drug product and its use. Lupin submitted an Abbreviated New Drug Application (ANDA) seeking approval to market a generic version of SLYND®. Lupin’s Paragraph IV certification set forth its arguments that the patents were invalid; unenforceable; and/or would not be infringed by the manufacture, use, or sale of Lupin’s ANDA product. Exeltis timely filed suit, initially asserting six Orange Book-listed patents. The asserted claims included drospirenone particle size and certain dissolution parameters.
Two months after Exeltis filed its lawsuit, it amended the complaint to add two more Orange Book-listed patents. Two months later, Exeltis added two additional Orange Book-listed patents. And, five months later, Exeltis added five more patents to the lawsuit, two of which were not Orange Book-listed. The court issued a case narrowing order, requiring Exeltis to drop patents and Lupin to drop invalidity defenses in a step-wise fashion, such that Exeltis was permitted to try seven claims and Lupin was permitted to assert three defenses per patent.
Exeltis’ attempted re-assertion of a dropped patent
During the multiple rounds of case narrowing, Exeltis dropped claim 16 of the 11,491,113 patent (the ’113 patent). Just three days before trial, the court issued a claim construction order that resulted in Exeltis stipulating to non-infringement of a different asserted claim. This resulted in Exeltis having only six claims to assert at trial, when the case narrowing order allowed for seven claims. Exeltis then petitioned the court to allow it to re-assert dropped claim 16.
Exeltis argued that there was good cause to reassert this claim, and that in doing so, there would be no prejudice to Lupin. Exeltis argued that if it had known that the claim construction would have led to another dropped claim, it would have chosen to keep claim 16 of the ’113 patent. Exeltis also claimed that there was no prejudice to Lupin since it was able to conduct fact and expert discovery on claim 16 before it was dropped from the case. The Court focused on prejudice differently, stating “the more important issue is whether its failure to be asserted would prejudice plaintiffs,” and denied Exeltis’ request.
The case proceeded to trial and Exeltis succeeded in proving infringement and validity of the six asserted claims. In post-trial briefing, Exeltis sought an order dismissing without prejudice dropped claim 16 of the ’113 patent, along with the six other patents dropped during the case narrowing procedure. Exeltis argued that fundamental fairness dictated that it should be allowed to assert those non-litigated patents in a second lawsuit. The court was not persuaded and dismissed the dropped patents with prejudice. The court reasoned that litigation under the Hatch-Waxman Act was designed to be orderly and resolve infringement before any generic launch – serial litigation was therefore at odds with this design.
Since the court issued final judgment and dismissed all dropped claims with prejudice, Lupin filed an appeal with the Federal Circuit. Exeltis also filed a second lawsuit against Lupin, asserting another Orange Book-listed patent not asserted in the first litigation.
Care should be taken when narrowing a case – courts are unlikely to permit reassertion of a dropped claim
When narrowing the scope of a case in response to a court’s order, plaintiffs are encouraged to make strategic, informed decisions, as a court may not permit reassertion of a dropped claim, patent, or infringement theory. A plaintiff should also argue for dismissal without prejudice of any dropped claims when the case narrowing order is entered. Finally, parties are encouraged to monitor the appeal and any resulting decision by the Federal Circuit on this issue.
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