AZURITY PHARMACEUTICALS, INC. v. BIONPHARMA INC.

• Court: District Court, D. Delaware
• Decided: January 6, 2023
• Docket: 1:21-cv-01286
• Status: Unknown

Opinion

INTHEUNITEDSTATESDISTRICTCOURT FORTHEDISTRICTOFDELAWARE

AZURITYPHARMACEUTICALS,INC., Plaintiff, CivilAction v. Nos. 21-cv-1286,21-cv-1455 BIONPHARMAINC., Defendant.

MEMORANDUMOPINION Goldberg,J.1 January6,2023 These cases comprise what the parties refer to as the “Third Wave” in an ongoing patent infringement dispute between Plaintiff Azurity Pharmaceuticals, Inc. (“Azurity”) and Defendant Bionpharma Inc. (“Bionpharma”). The parties’ dispute revolves around Bionpharma’s generic

enalapriloralliquid. TheFirstWaveofthislitigationendedwithajudgmentofnoninfringementfor Bionpharma following a bench trial before the Honorable Leonard Stark. Thereafter, the Second Wavewasdismissedbystipulation. PresentlybeforemeisBionpharma’smotionforjudgmentonthepleadings,whereinBion- pharma asserts that the First and Second Wave judgments preclude Azurity’s claims in the Third Wave. For the reasons set out below, Bionpharma’s motion will be denied, as will its request to certifythisrulingforinterlocutoryappeal.

1 Pursuantto28U.S.C.§292(b),IhavebeendesignatedtoserveasavisitingjudgefortheDistrict ofDelawaretohandlethismatterandotherDistrictofDelawarecases. I. FACTUALANDPROCEDURALBACKGROUND Thematerialfactsareundisputed. InMayof2018,AzuritysuedBionpharmainwhatwould become the “First Wave” of patent infringement litigation over Bionpharma’s Abbreviated New

DrugApplication(ANDA)foranoralliquidformulationofthebloodpressuremedicineenalapril. TheFirstWaveinvolvedU.S.PatentNos.9,669,008,9,808,442,10,039,745,and10,154,987(col- lectively the “First Wave patents”). On April 27, 2021, Judge Stark entered judgment for Bion- pharma after a bench trial in the First Wave, finding that Bionpharma’s ANDA did not infringe the First Wave patents because, among other reasons, Bionpharma’s ANDA does not contain the bufferthattheFirstWaveclaimsrequire. (SeeNo.19-1067,DocketEntry244.)

The Second Wave lawsuit involved U.S. Patent Nos. 10,772,868, 10,786,482, and 10,918,621 (the “Second Wave patents”). The accused product was unchanged between the First and Second wave suits and remained Bionpharma’s ANDA for enalapril liquids. After judgment in the First Wave became final on appeal, Azurity stipulated to dismissal of the Second Wave lawsuit. The present lawsuits comprise the Third Wave and involve U.S. Patent Nos. 11,040,023 and11,141,405(the“ThirdWavepatents”). TheaccusedproductremainsBionpharma’sANDA.

TheFirst,Second,andThirdwavepatentsdescribeenalaprilliquids. Whiletheclaimshave some elements in common, they differ with respect to whether the claimed liquids must contain buffers. Each claim of the First and Second Wave patents requires a buffer. The following is illustrative: Astableoralliquidformulation,consistingessentiallyof: (i) about 0.6 to about 1.2 mg/ml enalapril or a pharmaceutically acceptable saltorsolvatethereof; (ii) a buffer to maintain the pH about 4.5 or below, wherein the buffer con- centrationisabout5mMtoabout20mM; (iii) about1mg/mlofapreservativethatissodiumbenzoate;and (iv) water; wherein the formulation optionally comprises a sweetener, a flavoring agent, or both; whereintheformulationisstableatabout5±3°C.foratleast12months;and wherein the stable oral liquid formulation has about 95% w/w or greater of the initial enalapril amount and about 5% w/w or less total impurity or related sub- stancesattheendofthegivenstorageperiod. (Claim1ofU.S.PatentNo.10,772,868(emphasisadded).) Bycontrast,theclaimsoftheThirdWavepatentsdonotrequireabuffer: Astableoralliquidformulation,consistingessentiallyof: (i) about 0.6 to about 1.2 mg/ml enalapril or a pharmaceutically acceptable saltorsolvatethereof; (ii) asweetener; (iii) a preservative, wherein the preservative comprises sodium benzoate, a parabenoramixtureofparabens; (iv) water;and (v) optionallyaflavoringagent; whereintheformulationisstableatabout5±3°C.foratleast12months;and wherein the stable oral liquid formulation has about 95% w/w or greater of the initial enalapril amount and about 5% w/w or less total impurity or related sub- stancesattheendofthegivenstorageperiod. (Claim1ofU.S.PatentNo.11,040,023.) TheFirst,Second,andThirdwavelawsuitswerereassignedtomeonMarch2,2022. Bion- pharmanowmovesforjudgmentonthepleadings,assertingthatthejudgmentofnoninfringement in the First Wave suits and subsequent stipulation of dismissal in the Second Wave are preclusive ofAzurity’sinfringementclaimsintheThirdWavesuits. II. LEGALSTANDARD AmotionunderFederalRuleofCivilProcedure12(c)forjudgmentonthepleadingswillbe grantedonlyif“themovantclearlyestablishesthatnomaterialissueoffactremainstoberesolved and that [the movant] is entitled to judgment as a matter of law.” Rosenau v. Unifund Corp., 539 F.3d218,221(3dCir.2008). Indecidingthemotion,thecourtmustacceptthenonmovingparty’s factualallegationsastrueandviewtheminthelightmostfavorabletothenonmovingparty. Id.

III. DISCUSSION Thepartiesprimarilyagreeonmostofthefactscentraltotheircurrentdisputeanddisagree only on the applicable test for determining whether two patent infringement claims are the “same cause of action” for purposes of claim preclusion. For the reasons set out below, I agree with

Azurity that the applicable test is whether “the scope of the asserted patent claims in the two suits is essentially the same.” SimpleAir, Inc. v. Google LLC, 884 F.3d 1160, 1167 (Fed. Cir. 2018). Applyingthattest,IconcludethattheThirdWavesuitsdonotinvolvethesamecauseofactionas theFirstandSecondWavesuits. A. ClaimPreclusion “[C]laim preclusion ... gives dispositive effect to a prior judgment if a particular issue,

although not litigated, could have been raised in the earlier proceeding.” CoreStates Bank, N.A. v. Huls America, Inc., 176 F.3d 187, 194 (3d Cir. 1999) (emphasis in original, quotation marks deleted). “Claim preclusion requires: (1) a final judgment on the merits in a prior suit involving; (2)thesamepartiesortheirprivities;and(3)asubsequentsuitbasedonthesamecauseofaction.” Id. “If these three factors are present, a claim that was or could have been raised previously must bedismissedasprecluded.”Id.

Forpurposesofthepresentmotion,thepartiesagreethattheFirstWavejudgmentofnonin- fringementandtheSecondWavestipulationofdismissalarefinaljudgmentsonthemeritsinprior suitsinvolvingthesameparties. Thus,theonlydisputeiswhethertheThirdWavesuitsinvolvethe “samecauseofaction”astheFirstandSecondwavesuits. 1. WhetherTwoInfringementClaimsarethe“SameCauseofAction”

“[A]causeofaction[isdefined]basedonthetransactionalfactsfromwhichitarises.”Sim- pleAir, 884 F.3d at 1165. “If the overlap between the transactional facts of the suits is substantial, the later action should ordinarily be precluded.” Id. “In a patent suit, essential transactional facts include both the asserted patents and the accused activity.” Id. Thus, preclusion will apply when: (1) “the accused activity between two cases [is] ‘essentially the same’”; and (2) “the scope of the assertedpatentclaimsinthetwosuitsisessentiallythesame.”Id.at1167. There is no dispute here that the accused infringing activity is identical between the First,

Second, and Third wave suits. (Azurity does not argue that the addition of a damages claim in the Third Wave makes any difference.) The only disagreement is whether “the scope of the asserted patentclaims”amongtheFirst,Second,andThirdwavepatents“isessentiallythesame.” In Azurity’s view, that question should be answered by comparing the scope of the claims from the First and Second wave patents to the scope of the claims from the Third Wave patents. AzuritypositsthatbecauseeachclaimoftheFirstandSecondWavepatentsrequiresabuffer,and

eachclaimoftheThirdWavepatentsdoesnotrequireabuffer,theclaimsoftheThirdWavepatent cover different scope. Thus, according to Azurity, “the scope of the asserted patent claims” is not “essentiallythesame,”andclaimpreclusiondoesnotapply. Bionpharma disagrees with Azurity’s proposed test based on claim scope. Bionpharma instead asks me to import a test from the law of “obviousness-type-double-patenting” and apply that test to the doctrine of claim preclusion. According to Bionpharma’s proposed test, two patent

claims are “essentially the same” if the second claim would have been obvious to one skilled in the art with knowledge of the first claim. (See Bionpharma’s Brief at 12.) Because the Third Wave claims are largely the same as the First and Second Wave claims, except for the removal of thebuffer,BionpharmaarguesthattheThirdWaveclaimswouldhavebeenobvioustoapersonof

ordinaryskillintheartwithknowledgeoftheFirstandSecondWaveclaims. Therefore,according to Bionpharma’s test, the Third Wave claims are “essentially the same” as the First and Second Waveclaims,andclaimpreclusionbarstheThirdWavesuits. The parties’ divergent positions stem from the following sentence in the Federal Circuit’s SimpleAirdecision: “Inapplying[theclaimpreclusion]standardtotheparticularcontexthere,we concludethatclaimswhicharepatentablyindistinctareessentiallythesame.”SimpleAir,884F.3d

at 1167(emphasis added). The underlinedterm “patentablyindistinct” isalso usedin thedoctrine of obviousness-type double patenting, where it means that “the [later] claims are obvious over the [earlier] claims.” In re Basell Poliolefine Italia S.P.A., 547 F.3d 1371, 1375 (Fed. Cir. 2008). Bionpharmaarguesthatbyusingtheterm“patentablyindistinct,”theFederalCircuitimportedthe test for obviousness-type double patenting into the claim preclusion context. For the following reasons,IdisagreewithBionpharma’sreadingofSimpleAir: First,theFederalCircuithasinterpretedSimpleAirdifferentlythanhowBionpharmaadvo-

cates. In XY, LLC v. Trans Ova Genetics, LC, 968 F.3d 1323 (Fed. Cir. 2020), the Federal Circuit quoted SimpleAir for the proposition that “a judgment in the first suit will trigger claim preclu- sion only if the scope of the asserted patent claims in the two suits is essentially the same.” Id. at 1333. In Indivior Inc. v. Dr. Reddy’s Labs., S.A., 930 F.3d 1325, 1336 (Fed. Cir. 2019), the court similarly characterized SimpleAir, citing it only for the proposition that claim preclusion turns on whether the claims are “essentially the same.” Notably, in both cases, the Federal Circuit did not

cite SimpleAir as importing a test from obviousness-type double patenting or quote SimpleAir’s use of the term “patentably indistinct.” While a prior non-precedential Federal Circuit opinion in Indivior did quote SimpleAir’s use of the term “patentably indistinct,” that decision did not apply thetestfromobviousness-typedoublepatentingandactuallyconcludedthattheclaimswerelikely

patentably indistinct only because “the scope of the claims did not materially change.” Indivior Inc. v. Dr. Reddy’s Labs., S.A., 752 F. App’x 1024, 1035 (Fed. Cir. 2018) (emphasis added). The Federal Circuit therefore does not read SimpleAir’s reference to patentably indistinct claims as importingthetestfromobviousness-typedoublepatenting. Second, other statements in SimpleAir show that the test for claim preclusion differs from thetestforobviousness-typedoublepatenting. Ifthetwotestswerethesame,featuresthataretrue

for one test would also be true for the other test, but this is not the case. As set out in SimpleAir, claim preclusion can be avoided if the later-asserted claims “provide larger claim scope” than the earlier-asserted ones. 884 F.3d at 1167. But obviousness-type double patenting is not avoided when the later claims are broader in scope than the earlier claims. In re Goodman, 11 F.3d 1046, 1053 (Fed. Cir. 1993). Because broadening claim scope avoids the test for preclusion but not the testforobviousness-typedoublepatenting,thetwotestsarenotinterchangeable. Third, to the extent SimpleAir impliedly referenced the test for obviousness-type double

patenting, that reference was unnecessary to the outcome and therefore dictum. See National American Ins. Co. v. United States, 498 F.3d 1301, 1306 (Fed. Cir. 2007) (finding the lower court was“correct”totreatunnecessarystatementsasdicta). InSimpleAir,theFederalCircuitreverseda districtcourtrulingthataterminaldisclaimer(adeviceusedtoovercomeobviousness-typedouble patenting) was dispositive on the issue of claim preclusion and directed the district court to redo the analysis based on “the scope of the [asserted] claims in comparison with the patents litigated

[previously].” See SimpleAir, 884 F.3d at 1166. The Circuit Court did so, in part, because a terminaldisclaimerisnotdispositiveofdouble-patentingandthusafortiorinotdispositiveofclaim preclusion. Id. at 1167-68. That reasoning holds regardless of whether the reference to patentably indistinctclaimsimportedthetestfromobviousness-typedoublepatenting. WhileIhavecarefully

consideredthisdictumfromtheFederalCircuit,Imustdefertotheconsistentholdingofthatcourt that the test for claim preclusion turns on the scope of the asserted claims. See XY, 968 F.3d at 1333;Indivior,930F.3dat1336;SimpleAir,884F.3dat1167. Lastly, Bionpharma urges me to adopt its reading of SimpleAir based on district court decisions that merely quote SimpleAir’s reference to patentably indistinct claims. See Corning Inc. v. Wilson Wolf Manufacturing Corp., 569 F. Supp. 3d 920, 933-34 (D. Minn. 2021); Kol-

craft Enterprises, Inc. v. Artsana USA, Inc., No. 13-cv-4863, 2020 WL 1491142, at *5 (N.D. Ill. March 27, 2020); Puget Bioventures, LLC v. Biomet Orthopedics LLC, No. 17-cv-502, 2018 WL 2933733,at*3(N.D.Ind.June11,2018). Butinnoneofthesecasesdidthedistrictcourtactually perform the test from obviousness-type double patenting. Tellingly, the district court on remand from SimpleAir itself concluded that the Federal Circuit “did not create a new standard requiring a showing of anticipation or obviousness to satisfy claim preclusion.” Google LLC v. SimpleAir, Inc.,No.16-cv-3758,2020U.S.Dist. LEXIS172293,at*15(C.D.Cal.Aug.20,2020).

Forthesereasons,Iconcludethatthepropertestfordeterminingwhetherclaimpreclusion appliesiswhether“thescopeoftheassertedpatentclaimsinthetwosuitsisessentiallythesame.” SimpleAir,884F.3dat1167. 2. ApplicationtotheFirst,Second,andThirdWaveSuits Applying the above test, there is no dispute that the Third Wave claims cover scope not

covered by the First and Second wave claims. Eliminating the buffer limitation allows the claims to encompass enalapril liquids that do not contain buffers. That distinction is material because it impacts two of the three grounds on which Judge Stark found noninfringement in the First Wave—those are, that Bionpharma’s ANDA did not infringe because it did not contain a buffer

andbecauseitdidnotcontainanequivalenttoacitratebuffer. Thelackofabufferlimitationinthe Third Wave claims is also significant because it underlies Bionpharma’s defense in this case that thepatents’writtenspecificationdoesnotadequatelydescribeliquidswithoutbuffers. The scope of the Third Wave claims is therefore not “essentially the same” as the scope of theFirstandSecondWaveclaims. Forthatreason,claimpreclusiondoesnotapply. B. TheKesslerDoctrine

Bionpharmaalsoarguesthat,ifclaimpreclusiondoesnotapply,theKesslerdoctrineshould nevertheless operate to bar some portion of Azurity’s infringement claims in the Third Wave. “[T]he ... Kessler doctrine ... preclude[s] assertion[] of a patent against ... post-judgment ac- tivity if the earlier judgment held that ‘essentially the same’ accused activity did not infringe that patent.”SimpleAir,884F.3dat1170. ButtheKesslerdoctrinedoesnot“barabroadersetofrights than would be barred by claim preclusion.” Id. (emphasis in original). Because claim preclusion

does not bar the set of rights contained in the Third Wave patents, the Kessler doctrine does not either. IV. CONCLUSION For the reasons set out above, Bionpharma’s motion for judgment on the pleadings will be

denied. Bionpharma asks me to certify this ruling for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). Because I conclude that there is no “substantial ground for difference of opinion” as to whether the test for obviousness-type double patenting applies to claim preclusion, I will not certifythisrulingforinterlocutoryappeal. Seeid. Anappropriateorderfollows.