Judge Stark Denies Motion to Strike Affirmative Defenses of Patent Misuse and Assertion of Invalid Patent Claims

In a recent memorandum opinion, Judge Stark denied an ANDA plaintiff’s motion to strike two of the defendant’s affirmative defenses. The plaintiff filed a complaint for patent infringement in response to the defendant’s filing of an Abbreviated New Drug Application, and the defendant asserted counterclaims. The defendant contended that it had provided the plaintiff with a paragraph IV notification before the suit was filed, and therefore, the plaintiff’s infringement suit constituted patent misuse. The defendant also contended that the plaintiff was barred from recovering costs under 35 U.S.C. § 288 because claims of the patents-in-suit were invalid and the plaintiff did not enter a disclaimer of these invalid claims with the PTO before commencing their suit. The plaintiff moved to strike both affirmative defenses, and Judge Stark denied the motion as to the first defense because there were disputed questions of fact and as to the second defense because there were disputed questions of law. Cadence Pharmaceutical, Inc. v. Paddock Laboratories, Inc., C.A. No. 11-733-LPS, at 1-7 (D. Del. Oct. 1, 2012).

Judge Stark first agreed with the “majority of the District Courts within the Third Circuit that have . . . determined that the heightened pleading requirements of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), do not apply to the pleading of affirmative defenses.” “The Court agrees with these authorities,” he stated, “[t]herefore, Plaintiffs’ contention that Defendants’ affirmative defenses are not pled in a manner that would satisfy Twombly and Iqbal is unavailing.” Id. at 2-3. Further considering the sufficiency of the pleading of counterclaims, Judge Stark rejected the plaintiff’s argument that “an affirmative defense of patent misuse must be pled with particularity to satisfy Federal Rule of Civil Procedure 9(b ).” Judge Stark found that “[i]t is unclear from the pleadings whether the defense sounds in fraud and this Court is unaware of any cases that hold that patent misuse claims inherently sound in fraud.” Id. at 5 n.2.

Judge Stark then turned to the defendant’s contention that it had provided plaintiff with a paragraph IV notification before the suit was filed, explaining how the patents-in-suit were not infringed by the proposed ANDA product and were invalid or unenforceable, and that the plaintiff had therefore engaged in patent misuse by filing a baseless complaint with no reasonable basis for doing so that “impermissibly broadened the physical or temporal scope of the patent grant with anticompetitive effect.” Id. at 3-5. Judge Stark refused to strike this defense, finding that “[a]lthough Defendants have not nearly proven the purported facts on which their patent misuse defense is based (and may never do so), neither does the Court perceive any clear deficiency in the pleading that would justify the relief of striking the affirmative defense and removing it from this case.” Id. at 5.

Judge Stark also refused to strike the defendant’s affirmative defense under § 288. The defendant contended that § 288 barred the plaintiff from recovering costs because the plaintiff did not enter a disclaimer of invalid claims at the PTO prior to commencement of the suit. Judge Stark pointed out that there had been “no finding that any claim of the patents-in-suit is either invalid or unenforceable . . . [and] Plaintiffs cite persuasive authority, in the form of non-precedential decisions from the Federal Circuit and this District, to the effect that§ 288 applies only when patent litigation is commenced after a determination of invalidity.” Id. at 5-6. Although this authority was not precedential, especially in the sense that “there is no such thing as ‘the law of the district,’” id. at 6 n.3, the Federal Circuit has generally agreed with this conclusion, stating that “the argument essentially relied on here by Defendants ‘borders on the ridiculous.’” Id. at 6 (citing Bradford Co. v. Jefferson Smurjit Corp., 2001 WL 35738792, at *7 (Fed. Cir. Oct. 31, 2001)). Nevertheless, because the defendant cited to “arguably inconsistent authority from the Supreme Court and the Third Circuit, among others, construing the predecessor statute to § 288, [a] motion to strike [was] not the appropriate vehicle to resolve this disputed question of law,” and Judge Stark denied the motion. Id. at 6-7.

Cadence Pharmaceutical, Inc. v. Paddock Laboratories, Inc., C.A. No. 11-733-LPS (D. Del. Oct. 1, 2012).

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