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Teva Pharmaceutical Industries Ltd. v. AstraZeneca Pharmaceuticals

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


August 24, 2009

TEVA PHARMACEUTICAL INDUSTRIES LTD., PLAINTIFF,
v.
ASTRAZENECA PHARMACEUTICALS LP AND IPR PHARMACEUTICALS, INC., DEFENDANTS.

The opinion of the court was delivered by: Yohn, J.

Memorandum

Plaintiff Teva Pharmaceutical Industries Ltd. ("Teva") brings this patent infringement action against defendants AstraZeneca Pharmaceuticals, LP ("AZLP") and IPR Pharmaceuticals, Inc. ("IPR").*fn1 Presently before the court is defendants' motion to transfer venue, pursuant to 28 U.S.C. § 1404(a), to the District of Delaware. For the reasons discussed below, the court will deny the motion.

I. Facts and Procedural History

Teva is an Israeli corporation with its principal place of business in Israel. (Compl. ¶ 4.) Teva has an American subsidiary, Teva Pharmaceuticals USA, Inc. ("Teva USA"), which is a Delaware corporation with its principal place of business in this judicial district. (Defs.' Mem. Law Supp. Mot. Transfer Venue ("Defs.' Venue Mem.") at 8.) Teva USA is not a party to this lawsuit. Teva owns United States Patent No. RE 39,502 (the "'502 Patent"), entitled "Stable Pharmaceutical Compositions containing 7-Substituted-3,5-Dihydroxyheptanoic Acids or 7-Substituted-3,5-Dihydroxyheptenoic Acids," which was reissued by the United States Patent and Trademark Office on March 6, 2007. U.S. Patent No. RE 39,502 (filed Mar. 17, 2005). The '502 Patent contains 55 claims and covers certain compositions of statins*fn2 that are stabilized to prevent degradation over time.*fn3 (Compl. ¶¶ 11-12, Ex. A.) Plaintiff claims the invention disclosed in the '502 Patent comprises pharmaceutical formulations of statins combined with "a stabilizing effective amount of at least one amido-group containing polymeric compound or at least one amino-group containing polymeric compound, or combination thereof." '502 Patent col.16 ll.28-31. The claimed formulations do not contain a stabilizing amount of other stabilizers, id. col.16 ll.31-34, but may contain "at least one pharmaceutically acceptable excipient*fn4 selected from the group consisting of a lubricant, a glidant, a binder, a filler, a disintegrant, a diluent, a carrier, a colorant, a coating material, and a preservative," id. col.18 ll.60-64. Thus, while not claiming any particular active drug compound, the '502 Patent claims certain stabilized formulations of statins.

Defendant AZLP is a Delaware Corporation with its principal place of business in Delaware. (Comp. ¶ 5; Defs.' Venue Mem. at 8.) AZLP maintains a "business center" in this judicial district. (Id. ¶ 10; Answers of AZLP and IPR ¶ 10; see also Pl.'s Opp'n Defs.' Mot. Transfer Venue ("Pl.'s Venue Resp.") at 4.) Defendant IPR is a Puerto Rican corporation with its principal place of business in Puerto Rico. (Compl. ¶ 8; Defs.' Venue Mem. at 8.) AZLP and IPR are sister corporations, sharing a common parent, AstraZeneca PLC, a British corporation. (Id. ¶ 9.) IPR manufactures-and holds the approved New Drug Application*fn5 ("NDA") No. 21-366 for-Crestor in 5, 10, 20, and 40 mg dosages. (Compl. ¶¶ 13-15.) Crestor (the active ingredient of which has the generic name rosuvastatin calcium) is a statin, (id. ¶ 14; Defs.'s Venue Mem. at 9), and AZLP markets, distributes, and sells Crestor in the United States, (Compl. ¶ 15; Answers of AZLP and IPR ¶ 15; Defs.' Venue Mem. at 8). Plaintiff alleges that Crestor, as currently formulated and sold, infringes the '502 Patent. (Compl. ¶¶ 15-16.) Accordingly, plaintiff brings the present infringement suit.

On December 11, 2007, AZLP, IPR, AstraZeneca UK Ltd., and Shionogi Seiyaku Kabushiki Kaisha*fn6 (collectively, "ANDA plaintiffs") filed suit (the "ANDA action") against several generic drug manufacturers ("ANDA defendants"), alleging that the ANDA defendants infringed upon U.S. Patent No. RE 37,314 (the "'314 Patent"). (Defs.' Venue Mem. at 9.) The ANDA plaintiffs added Teva USA as a defendant to the ANDA action in July 2008. (Id.) The ANDA action is a multi-district litigation consolidated in the District of Delaware now involving at least eight defendants, captioned In re: Rosuvastatin Calcium Patent Litigation, 08-1949 (D. Del.). (See Defs.' Venue Mem. Ex. 10.)*fn7 The '314 Patent, entitled "Pyrimidine Derivatives," covers rosuvastatin calcium, the active ingredient in Crestor. (Id. at 9; see also id. Ex. 9.) In the ANDA action, ANDA plaintiffs allege that ANDA defendants infringed the '314 Patent when they filed Abbreviated New Drug Applications*fn8 ("ANDAs") to market generic rosuvastatin calcium. (Id. at 9.) When filing their ANDAs, ANDA defendants certified that at least one of ANDA plaintiffs' patents was invalid or would not be infringed by the generic rosuvastatin calcium that ANDA defendants seek to market. (See Defs.' Venue Mem. Ex. 1.) Congress has defined such an application, if erroneous, as an act of infringement, enabling patent holders to file suit against would-be generic manufacturers; however, only limited remedies are available to patent holders in such suits. 35 U.S.C. § 271(e). This type of infringement, consisting "of submitting an ANDA containing a certification . . . that a listed patent is invalid or that the manufacture, sale, or use of the proposed product would not infringe that patent" has come to be known as an "artificial act of infringement." Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1358 (Fed. Cir. 2003); see Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 675-78 (1990) (explaining the relevant statutory regime and discussing "the creation of a highly artificial act of infringement that consists of submitting an ANDA . . . that is in error as to whether commercial manufacture, use, or sale of the new drug (none of which, of course, has actually occurred) violates the relevant patent").*fn9

II. Discussion

Under 28 U.S.C. § 1404(a), "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." The decision to grant a motion for a transfer of venue lies within the discretion of the district court, but "the plaintiff's choice of venue should not be lightly disturbed." Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995); see also Shutte v. ARMCO Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970) (reminding that "plaintiff's choice of a proper forum is a paramount consideration in any determination of a transfer request"). The defendant bears the burden of proving that venue is proper in the transferee district and that convenience and justice would be served by transferring the action to another district. Jumara, 55 F.3d at 879. "There is nothing . . . in the language or policy of § 1404(a) to justify its use by defendants to defeat the advantages accruing to plaintiffs who have chosen a forum which, although it was inconvenient, was a proper venue." Van Dusen v. Barrack, 376 U.S. 612, 633-34 (1964); see also Shutte, 431 F.2d at 25 (reasoning that "unless the balance of convenience of the parties is strongly in favor of defendant, the plaintiff's choice of forum should prevail." (emphasis in Shutte; internal quotation omitted)).

The Third Circuit*fn10 has enumerated several public and private factors for district courts to consider when determining whether to grant a motion for a transfer of venue. Jumara, 55 F.3d at 879. The private interests include: (1) plaintiff's choice of forum; (2) defendant's choice of forum; (3) where the claim arose; (4) "the convenience of the parties as indicated by their relative physical and financial condition"; (5) "the convenience of the witnesses-but only to the extent that the witnesses may actually be unavailable for trial in one of the fora"; and (6) "the location of the books and records (similarly limited to the extent that the files could not be produced in the alternative forum)." Id. The public interests include: (1) "the enforceability of the judgment"; (2) "practical considerations that could make the trial easy, expeditious, or inexpensive"; (3) "the relative administrative difficulty in the two fora resulting from court congestion"; (4) "the local interest in deciding local controversies at home"; (5) "the public policies of the fora"; and (6) judicial familiarity "with the applicable state law in diversity cases."

Id. at 879-80. While examining these factors, courts must be mindful that the plaintiff's choice of forum deserves great weight. Id.

The court must first consider whether venue is proper in the District of Delaware, where defendants seek to have this case transferred-that is, whether the action "might have been brought" in the District of Delaware. Pursuant to 28 U.S.C. § 1400(b), "[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business." Crestor products with formulations allegedly infringing the '502 Patent are sold nationwide, and AZLP is a Delaware corporation with its principal place of business in Delaware. Undisputedly, the District of Delaware is a proper venue for this action as to AZLP.

As to IPR, however, the record does not include sufficient information from which the court could conclude whether venue would be proper in the District of Delaware. Section 1400(b) provides two tests under which, if either is satisfied, venue is proper in patent infringement cases. Under those tests, venue is proper (1) "in the judicial district where the defendant resides" or (2) "where the defendant has committed acts of infringement and has a regular and established place of business." (emphasis added). IPR has failed to show Delaware would be a proper venue under either§ 1400(b) test. First, the record does not establish that IPR passes the § 1400(b) residency test. Regarding the residency of corporations, 28 U.S.C. § 1391(c) states, in relevant part:

For purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.

In arguing for transfer to the District of Delaware, defendants made no attempt to establish that IPR is subject to personal jurisdiction in Delaware.*fn11 Thus, the court cannot determine whether venue would be proper in Delaware under the first § 1400(b) test.*fn12 For the reasons discussed below, however, even assuming IPR could be held to "reside" in Delaware, the court would still deny defendants' motion.

Second, the court cannot conclude that venue would be proper in Delaware under the second test of § 1400(b) because the record contains no information from which the court could determine that IPR "has a regular and established place of business" in Delaware. Thus, IPR has failed to show that it satisfies the second half of the second § 1400(b) test. See 15 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3823 pp. 223-24 (2d ed. 1986) (stating the infringement and place of business prongs of the second § 1400(b) test "are stated in the conjunctive and both must be satisfied" and collecting supporting cases.) Thus, as to IPR, the court cannot determine whether venue would be proper in the District of Delaware, and the court must deny transfer of venue, as to IPR, on that basis.*fn13 Moreover, even assuming that IPR does have a "regular and established place of business" in Delaware (which is not established in the record), the court would still deny defendants' motion. As discussed below, upon consideration of the Jumara factors, the court will deny the motion to transfer venue because, as to both defendants, the factors do not weigh in favor of transfer.

1. Plaintiff's Choice of Forum

Plaintiff chose the Eastern District of Pennsylvania for this action. Defendants argue that plaintiff's preference is entitled to little or no deference because Teva is a foreign corporation without a particularized business presence in this district. (Defs.' Venue Mem. at 17-18.) Teva counters by explaining that its American subsidiary, Teva USA, "and its in-house lawyers are located" in this district.*fn14 (Pl.'s Venue Resp. at 3.) Although Teva USA is not a party to this action, the court finds it thoroughly understandable that Teva should prefer to litigate this case in the district of its American subsidiary. While plaintiff's choice of forum is, perhaps, not as persuasive a factor as it would be if plaintiff were more closely connected to this district, the court will not wholly disregard Teva's preference, which weighs against transfer.

2. Defendants' Choice of Forum

As evidenced by their motion, defendants prefer the District of Delaware. As a Delaware corporation with its principal place of business in Delaware, AZLP has strong connections to the District of Delaware. Both defendants emphasize AZLP's presence in Delaware and, as discussed below, the resulting presence of relevant witnesses and documents in Delaware. Moreover, defendants argue that Delaware is more closely related to the alleged infringement because, while Crestor is sold nationwide, AZLP "directs the marketing and sales" of Crestor from Delaware. (Defs.'s Mem. at 18.) Accordingly, this factor weighs in favor of transfer.

3. Where the Claim Arose

As mentioned above, AZLP sells Crestor throughout the United States. Therefore, if Crestor's formulation does infringe upon the '502 Patent, such infringement occurs nationwide, and plaintiff's claim can be said to have arisen both in this district as well as in the District of Delaware. Considering the national (and, indeed, international) nature of pharmaceutical sales, AZLP's corporate presence in Delaware cannot override the fact that Teva's claim arose in this district (and, likely, every other district in the United States). This recognition is consistent with Congress's pronouncement in § 1400(b), discussed above. Thus, this factor is neutral.

4. The Convenience of the Parties as Indicated by their Relative Physical and Financial Condition

Both sides of this litigation feature large corporations that conduct business on a global scale. The court finds that, considering the relative physical and financial conditions of the parties, the Eastern District of Pennsylvania is not appreciably less convenient to the parties than the District of Delaware. Moreover, the court notes the close geographical proximity of these two districts.*fn15 It is unlikely that the Eastern District of Pennsylvania would be significantly less convenient to any litigant for whom the District of Delaware is convenient, let alone large corporate litigants. Accordingly, this factor is neutral.

5. The Convenience of the Witnesses-but Only to the Extent that the Witnesses May Actually be Unavailable for Trial in One of the Fora

Defendants have failed to identify a single witness who would be available in the District of Delaware but is unavailable in the Eastern District of Pennsylvania, nor do defendants contend that such a witness exists.*fn16 Party witnesses are presumed to be willing to testify in either forum.

Accordingly, unavailability is an issue only as to non-party witnesses. Defendants have pointed to no non-party witnesses who would be unavailable for trial in this district. Moreover, defendants' key non-party inventor witness resides in Newark, Delaware, which is well within this court's 100 mile subpoena power. Therefore, this factor is neutral.

6. The Location of the Books and Records (similarly limited to the extent that the files could not be produced in the alternative forum)

Given AZLP's corporate presence in Delaware, many books and records germane to this suit are, doubtless, located in Delaware. Defendants represent as much to the court. (Defs.' Venue Mem. at 16-17.) However, defendants do not contend that any books or records could not easily be produced in this district. Therefore, this factor is neutral.

7. The Enforceability of the Judgment

Undisputedly and undoubtably, a judgment of this court is equally as enforceable as a judgment of a court sitting in the District of Delaware. This factor is, therefore, neutral.

8. Practical Considerations that Could Make the Trial Easy, Expeditious, or Inexpensive

All of the factors, other than the parties' choices of forum, discussed thus far have been neutral, and defendants have not contended otherwise. Defendants' argument for transfer focuses, primarily, on the second of the Jumara public factors-practical considerations that could make the trial easy, expeditious, or inexpensive. Defendants assert that transferring this case to the District of Delaware would conserve judicial resources because, as compared to the ANDA action, the instant suit "involves related scientific issues." (Defs.' Venue Mem. at 15.)

Defendants further argue that the Delaware ANDA court "has been educated about the underlying technology by the parties" and is, therefore, already familiar with the substantive and technical issues surrounding Crestor. (Id.)

Defendants do not contend that, should this case be transferred to the District of Delaware, it could be consolidated with the ANDA action. Even if ineligible for consolidation, however, courts may handle certain cases as related to each other.*fn17 At first blush, these two cases may appear related, as that term is used in common parlance. However, based on the information submitted by the parties, the court concludes that the two suits present distinct scientific issues and separate questions of law and fact. The court suspects that, were two other cases with a similar degree of circumstantial overlap to arise in a context less esoteric than pharmaceutical patents and organic chemistry, impartial observers would be unlikely to consider them related.

The '502 Patent, a drug formulation patent owned by Teva, is at issue in this case. A drug formulation comprises essentially the mixture (or recipe) of active and inactive ingredients in a particular drug product. In contrast, the ANDA action centers on the '314 Patent, which covers the active pharmaceutical ingredient (API) in Crestor, rosuvastatin calcium. An API differs from excipients (inert substances that form a vehicle for a drug), which are added to a formulation for purposes such as stabilization, adding bulk, adding disintegrating capabilities, promoting ease of manufacturing, and the like. A drug formulation is a combination of one or more APIs and excipients. Whereas the present action concerns defendants' alleged infringement of the '502 Patent based on the formulation of Crestor, the ANDA action is to resolve whether Teva USA and seven other generic manufacturers artificially infringed the '314 Patent by filing for regulatory approval to manufacture and market generic versions of Crestor.

As plaintiff asserts, and as appears to be the case based on the information before the court, "[t]he only real commonality between the two cases is that they involve pharmaceutical products with the same active ingredient, rosuvastatin calcium," and "the issues raised by the asserted patent claims" differ. (Pl.'s Venue Resp. at 8.) Plaintiff correctly points out that different patents are at issue in the two cases. Id. Moreover, those patents deal with differing areas of technology: "The Delaware ANDA case presumably will focus on organic and/or medicinal chemistry, and in particular, statins, while this case will focus on polymer chemistry and pharmaceutical formulations." Id. at 9. Consequently, the claim construction, prior art, and invalidity arguments relevant to each of the cases will differ.*fn18

The two suits are not related under the Eastern District of Pennsylvania's Local Rule 40.1(b)(3)(A). Although the District of Delaware appears to have a somewhat more inclusive rule for the relation of cases,*fn19 the court is not convinced that the instant suit and the ANDA action would be deemed related under that standard either.

Based on the information currently before it, the court can only conclude that the respective scopes of the '502 and '314 Patents-as well as the legal issues involved in this case and the ANDA action-are patently distinct.*fn20 This case involves stabilization, not Crestor's active compound. The ANDA action involves Crestor's active compound, not stabilization issues. A familiarity with the technology involved in the ANDA action regarding the active compound (rosuvastatin calcium) will not educate the court about the very different technology at issue here (the stabilization of pharmaceutical formulations containing statins). Moreover, there is no assurance that, if this action were transferred to Delaware, it would be assigned to the same judge as the ANDA action.*fn21 Therefore, to whatever extent this case and the ANDA action involve overlapping scientific issues, defendants' argument concerning the familiarity and education of the ANDA action judge regarding technical issues is of little force. Thus, despite defendants' contentions, this factor does not weigh in favor of transfer. Rather, it counsels against transfer.

9. The Relative Administrative Difficulty in the Two Fora Resulting From Court Congestion

Plaintiff argues that the District of Delaware's docket is presently strained due to a vacant judgeship. (Pl.'s Venue Resp. at 21.) In support of that contention, plaintiff points to orders from the Chief Judge of the Third Circuit temporarily designating and assigning six judges from this district and six from the District of New Jersey to hold court in the District of Delaware. (Pl.'s Venue Resp. Exs. G, I.) Moreover, in rebutting another of defendants' arguments, plaintiff rightly recognizes that, pursuant to those Third Circuit orders, another case to which Teva is a party in the District of Delaware is actually before the Chief Judge of this district. (Pl.'s Surreply at 2; see Pl.'s Venue Resp. Ex. H.) Defendants fail to rebut plaintiff's argument on this factor, which weighs heavily against transfer.

10. The Local Interest in Deciding Local Controversies at Home

This factor is neutral because this case simply cannot be considered a "local" controversy.

Rather, it is a dispute of national scope with questions of federal law. Defendants argue that Delaware has a greater interest in this case than Pennsylvania because AZLP is a Delaware corporation whereas plaintiff is not a Pennsylvania corporation. (Defs.' Venue Mem. at 18-19.) The court finds little or no merit to this argument in the context of this case. As a patent dispute, this case does not implicate internal corporate governance matters or local issues peculiar to Delaware. Instead, this case involves a patent, granted by the federal government, that applies equally throughout the United States. The court fails to see how a patent holder's state of incorporation necessarily has a greater interest in a patent suit than does another state in which the patented product is also commonly found. While it is true that AZLP is a corporate citizen of Delaware, AZLP has a corporate presence in this district, and Crestor is sold nationwide.

11. The Public Policies of the Fora

Defendants have failed to enunciate a single policy difference between the two fora relevant to patent law, and, as federal law governs patents, it is likely that no such policy differences exist. Therefore, this factor is neutral.

12. Judicial Familiarity with the Applicable State Law in Diversity Cases

As the present suit is not a diversity case, this factor has no relevance.

III. Conclusion

In summary, the factors do not weigh in favor of transfer. Plaintiff's choice of forum outweighs that of defendants, and the District of Delaware may not even be a proper venue for IPR. The legal issues in this case are clearly distinct from those in the ANDA action, which weighs against transfer. The congestion in the District of Delaware's docket very strongly weighs against transfer. The other Jumara factors are neutral. Thus, even if the court were to afford little deference to plaintiff's choice of forum, as defendants urge, transfer of venue would still be inappropriate. Especially since the court does grant weight to plaintiff's preference, defendants have clearly failed to meet their burden of proving that the balance of the factors favors transfer. Accordingly, the court will deny defendants' motion to transfer venue.


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