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Apotex, Inc. v. Cephalon

February 23, 2010

APOTEX, INC., PLAINTIFF,
v.
CEPHALON, INC., ET AL., DEFENDANTS.



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

MEMORANDUM OPINION

This case involves allegations of patent invalidity and infringement. Before the Court is Defendant, Cephalon, Inc.'s "Motion to Dismiss Counts III Through XIII of Plaintiff's Second Amended Complaint," (doc. nos. 157 & 197). For reasons set forth herein, Defendant's Motion will be denied.

I. BACKGROUND

This lawsuit (hereinafter referred to as the Apotex Litigation) is one of several consolidated cases collectively named In re Modafinil.*fn1 This multi-party litigation emanates from the settlement of a patent infringement suit in late 2005 - early 2006, in the District of New Jersey, between Cephalon, a brand name drug manufacturer, and four (4) generic drug manufacturers (Barr, Mylan, Teva and Ranbaxy, hereinafter "the Generic Defendants").*fn2 The settled patent suit revolved around the proposed sale of a generic version of Provigil(r), a sleep disorder drug.*fn3 The gist of the controversy as it generally pertains to the consolidated cases in In re Modafinil, is that the four (4) settlement agreements in the patent infringement suit constitute unlawful, anti-competitive conduct under the Sherman Antitrust Act, 15 U.S.C. §§ 1, 2.

The Apotex Litigation commenced on June 26, 2006, with the filing of the original Complaint, which raised patent claims regarding Cephalon's RE'516 patent for Provigil(r) and antitrust claims against Cephalon and the Generic Defendants relating to the settlements noted above. Since that time, the original Complaint has been consolidated with a separate complaint filed by Apotex regarding a second Cephalon patent - '346, also relating to Provigil(r). Thereafter, Apotex filed an Amended Complaint and Second Amended Complaint, the latter of which is the subject of the Motion to Dismiss before the Court. As with the original Complaint, Apotex's Second Amended Complaint sets forth patent and antitrust claims.

On January 20, 2010, I granted Apotex's Motion to Bifurcate the patent claims from the antitrust claims. Given the bifurcation, this Opinion will only consider Cephalon's Motion to Dismiss as it relates to the declaratory judgment patent claims, Counts III - V.*fn4 Thus, the patent claims currently at issue are: Count (III) declaratory judgment for non-infringement of the RE'516 patent against Cephalon; Count (IV) declaratory judgment for patent invalidity of the '346 patent against Cephalon; and Count (V) declaratory judgment for non-infringement of the '346 patent against Cephalon.

Cephalon has moved to dismiss Count III, non-infringement of the RE'516 patent, arguing that there are no allegations set forth in the Complaint as to why the RE'516 patent is not infringed. Cephalon further asserts that Count III is impermissibly redundant with Count I (invalidity of the RE'516 patent). Cephalon also seeks dismissal of Counts IV and V claiming that Apotex lacks standing to bring a declaratory judgment action on the '346 patent because there is no case and controversy regarding the '346 patent, due to the fact that a declaratory judgment on the RE'516 patent is enough to trigger the 180-day market exclusivity under the Hatch-Waxman Act for the Generic Defendants.

Apotex generally responds that it has pled with sufficient specificity as to how its generic product, Abbreviated New Drug Application (hereinafter "ANDA") 77-667, does not infringe upon the RE'516 patent. They also argue that the Court has jurisdiction to hear the declaratory judgment claims on the '346 patent, because there is a case and controversy.

II. ANALYSIS - MOTION TO DISMISS COUNT III (NON-INFRINGEMENT OF THE RE'516 PATENT)

A. Legal Standard - Motion to Dismiss For Failure to State a Claim Upon Which Relief Can Be Granted

A motion to dismiss under FED. R. CIV. P. 12(b)(6) for failure to state a claim upon which relief can be granted examines the legal sufficiency of the complaint. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). FED. R. CIV. P. 8(a)(2) requires that a pleading contain a "short and plain statement of the claim showing that the pleader is entitled to relief." According to the Supreme Court, the Rule 8 pleading standard "does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The Iqbal Court recently summarized the pleading standard established in Twombly:

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.

Iqbal, 129 S.Ct. at 1949 (citations omitted).

The Iqbal Court articulated two (2) principles that underlie Twombly's holding. First, a court must accept as true all of the factual allegations made in a pleading, but not the legal conclusions. Id. Second, only a complaint that states a "plausible claim for relief survives a motion to dismiss." Id. at 1950. Determining plausibility is a "context specific task." Id. In short, "where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown-that the pleader is entitled to relief." Id. (citations omitted). The Third Circuit has found that in light of Twombly, it is no longer sufficient to make an unsupported statement asserting an entitlement to ...


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