IP Law Daily, PATENT—D. Del.: Magistrate urges denial of patent holder’s request to axe counterclaims and related defenses in cancer drug case, (Dec 7, 2015)

By Mark Engstrom, J.D.

In a patent case involving the alleged infringement of Celgene Corp.’s anti-cancer drug romidepsin (brand name Istodax) by Fresenius Kabi USA, a magistrate judge for the federal district court in Wilmington, Delaware, has decided in a Report and Recommendation that the district court should deny Celegne’s motion to dismiss three of Fresenius Kabi’s counterclaims (improper inventorship, improper continuing application, and lack of earlier priority date) and to strike the company’s related affirmative defenses (Celgene Corp. v. Fresenius Kabi USA, LLC, December 7, 2015, Thynge, M.). The parties were given 14 days to file objections to the magistrate’s findings.

Background. Celgene Corp. and Astellas Pharma Inc. sued Fresenius Kabi USA for the infringement of two patents—U.S. Patent Nos. 7,608,280 and 7,611,724—that were both titled “Method of Producing FR901228.” Fresenius filed an answer that included four counterclaims and seven affirmative defenses. Thereafter, Fresenius added three counterclaims and five affirmative defenses.

The plaintiffs filed a motion to dismiss three of the counterclaims (improper inventorship, improper continuing application, and lack of an earlier priority date). They also asked the court to strike the affirmative defenses that were related to those counterclaims.

Improper continuation application. The plaintiffs argued that Fresenius’s counterclaim for an improper continuation application was insufficiently pleaded because Fresenius failed to allege: (1) the elements of a claim for an improper continuation application and (2) the statue that supported that claim.

The magistrate disagreed. First, the defendant had relied on 35 U.S.C. §102(b) to support its counterclaims. Fresenius further alleged that the patents in suit would not have issued absent an earlier priority date—because of the statutory bar under 35 U.S.C. §102(b)—based on the 2002 publication of Astellas Pharma’s patent application, which was disclosed and dedicated to the public. In addition, Fresenius alleged that the plaintiffs had falsely claimed that their prior application had common inventors, which enabled Astellas to prosecute the patents in suit as continuation applications.

Finally, Fresenius argued that the plaintiffs had misused PTO procedure—by falsely claiming that the inventors were the same—to claim an earlier priority date. In the absence of that conduct, Fresenius reasoned, the patents would not have issued as continuation applications.

In light of those allegations, the magistrate concluded that Fresenius had sufficiently pleaded its counterclaim for an improper continuation application.

Lack of earlier priority date. The plaintiffs argued that a patent was entitled to the priority date of an earlier-filed application, under 35 U.S.C. §120, if the applications had at least one common inventor. According to the plaintiffs, §120 “only require[d] common inventors [to] be identified in the application process and nothing further.”

Fresenius disagreed. According to Fresenius, the plaintiffs’ application of the authorizing statute would allow the “gaming” of the patent system to access an earlier priority date. Further, the plaintiffs’ technical reading of §120 was flawed, in Fresenius’s view, because: (1) the inventors listed on the plaintiffs’ patent applications were “not the true inventors” and (2) the plaintiffs’ effort to amend the inventorship of those inventions would result in no common inventors.

The magistrate acknowledged that the plaintiffs had filed an amendment with the PTO, which resulted in a change of inventorship. In light of the early stage of the infringement proceedings, the magistrate concluded that Fresenius had alleged sufficient facts to support a claim for the lack of an earlier priority date. The plaintiffs’ motion to dismiss that claim was therefore denied.

Improper inventorship. The plaintiffs argued that the defendant’s counterclaim for improper inventorship should fail because 35 U.S.C. §256 allowed inventorships to be corrected at any time, and required corrections to avoid invalidation. Fresenius alleged that inventorship could not be corrected under §256 because the original patent was already disclaimed, under 35 U.S.C. §253, prior to the plaintiffs’ proposed amendment. According to Fresenius, Astellas had dedicated the original patent to the public six years ago, and thus had statutorily disclaimed it. As a result, the plaintiffs could not amend or correct the inventorship of an “already disclaimed” patent.

Because the disclaimer of an issued claim “inhere[d] in the original patent,” the Federal Circuit interpreted 35 U.S.C. §253 to mean that, after a disclaimer, the patent would be treated “as though the disclaimed claims never existed,” the magistrate observed. Moreover, under defendant’s disclaimer argument, there was no inventorship to correct.

According to the magistrate, Fresenius had asserted sufficient facts to support its claim for an improper inventorship. The plaintiffs’ motion to dismiss that claim was therefore denied.

Related affirmative defenses. The plaintiffs argued that four of the defendant’s affirmative defenses should be stricken because those defenses were analogous to the defendants’ counterclaims. The magistrate acknowledged that those four defenses were similar to Fresenius’s counterclaims, but it found that none of those defenses was redundant or improperly pleaded. According to the magistrate, counterclaims and affirmative defenses that raised similar contentions were not improper.

Further, motions to strike required a showing of prejudice, and the plaintiffs had not alleged or demonstrated any prejudice from the analogous nature of the counterclaims and affirmative defenses. Finally, the evidence that was required to prove the defendant’s counterclaims and affirmative defenses would “likely be similar” and would “not delay discovery or the litigation,” according to the magistrate.

The plaintiffs’ allegations regarding the affirmative defenses individually were similarly unavailing.

Conclusion. The magistrate recommended that the district court deny the plaintiffs’ motion to: (1) dismiss three of the defendant’s counterclaims for failure to state a valid claim for relief and to (2) strike the defendant’s related affirmative defenses.

The case is Civil Action No. 14-571-RGA.

Attorneys: Jack B. Blumenfeld (Morris, Nichols, Arsht & Tunnell LLP) for Celgene Corp. and Astellas Pharma Inc. Dominick T. Gattuso (Proctor Heyman Enerio LLP) and Claire Frezza (Wiley Rein LLP) for InnoPharma Inc.

Companies: Celgene Corp.; Astellas Pharma, Inc.; Fresenius Kabi USA, LLC

Cases: Patent DelawareNews