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ASTRAZENECA v. MYLAN LABORATORIES

May 20, 2003

ASTRAZENECA AB, ET AL., PLAINTIFFS,
v.
MYLAN LABORATORIES, INC. AND MYLAN PHARMACEUTICALS, INC., DEFENDANTS ASTRA AKTIEBOLAG, ET AL., PLAINTIFFS, V. EON LABS MANUFACTURING, INC., DEFENDANT. IN RE OMEPRAZOLE PATENT LITIGATION



The opinion of the court was delivered by: Barbara S. Jones, United States District Judge

OPINION AND ORDER

Plaintiffs, AstraZeneca AB, Aktiebolaget Hassle, KBI-E-Inc., KBI Inc., and AstraZeneca, LP, (collectively "Astra"), seek leave to amend their complaint against defendants Mylan Laboratories Inc., and Mylan Pharmaceuticals, Inc. (collectively "Mylan") to add Esteve Quimica S.A. ("Esteve Quimica") and Laboratorios Dr. Esteve S.A ("Laboratories Dr. Esteve"), (collectively "Esteve") as defendants accused of inducing infringement of U.S Patent No. 4,786,505 ("the `505 patent") and U.S. Patent No. 4,853,230 ("the `230 patent"). Likewise, Astra seeks to amend its complaint against defendant Eon Labs Manufacturing Inc. ("Eon") to add Hexal AG ("Hexal") and A/S GEA Farmaceutisk Fabrik ("GEA") as defendants accused of infringement of the `505 and `230 patents. For the reasons to follow, Astra's motion to amend with respect to the Mylan and Eon complaints is denied.

BACKGROUND

These actions relate to Astra's patents for PRILOSEC ®, a pharmaceutical product that inhibits the production of acid in the stomach. The present controversies began when defendants notified Astra that they had submitted to the FDA Abbreviated New Drug Applications ("ANDAs") seeking approval to manufacture a generic version of Astra's PRILOSEC ®. In response to the notices, Astra filed a complaint against Eon on May 15, 2000 and a complaint against Mylan on September 8, 2000. Those complaints contend that Eon and Mylan's ANDA filings constituted infringement of Astra's `505 and `230 patents.*fn1 Discovery in these cases was consolidated before the Special Master on December 2, 2002 providing approximately six months for completion of fact discovery from the five defendants.

Astra served document requests on Mylan and Eon on December 13, 2002 in addition to a request that Mylan produce documents from the files of Esteve Quimica and Laboratorios Dr. Esteve, and a request that Eon produce documents from the files of Hexal and GEA. Mylan denied custody and control over the Esteve documents and informed Astra that it would provide some documents related to Mylan's ANDA products. Eon likewise denied custody and control over the Hexal and GEA documents and stated that it would not assist Astra in obtaining discovery from either Hexal or GEA.*fn2

On January 10, 2003, Astra requested that Mylan and Eon consent to an amendment to the complaints against them to add Esteve Quimica and Laboratorios Dr. Esteve, and Hexal and GEA, respectively, as defendants. Both Mylan and Eon responded that they would not consent. This motion for leave to amend followed.

DISCUSSION

A. Legal Standard for Motion to Amend

Pursuant to Rule 15(a) of the Federal Rules of Civil Procedure, "leave [to amend] shall be freely given when justice so requires." The Second Circuit has stated that leave to amend should "generally not be denied" unless such amendment would be futile, or "there is evidence of undue delay, bad faith, [or] undue prejudice to the non-movant. . . ." Milanese v. Rust-Oleum Corp., 244 F.3d 104, 110 (2d Cir. 2001) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).

Further, Rule 20(a) and Rule 21 of the Federal Rules of Civil Procedure provide for the addition of parties. Under Rule 20(a), the movant must aver a right to relief "against each defendant relating to or arising out of the same transaction, occurrence, or series of transactions or occurrences" and that some "question of law or fact common to all defendants will arise in the action." Deleo v. Zconnexx Corp., 00 CV 0319, 2000 U.S. Dist. LEXIS 18765, at *4 (W.D.N.Y. Dec. 18, 2000) (internal quotations and citation omitted). Rule 21 provides that a party may be added to an action "at any stage of the action and on such terms as are just." Fed.R.Civ.P. 21.

Mylan and Eon both contend that Astra's motion to amend the respective complaints against them should be denied because Astra's claims against the four proposed defendants are defective as a matter of law and thus are futile. Additionally, Mylan and Eon argue that Astra's motion should be denied because it is untimely, improperly motivated, and unduly prejudicial to them. Finally, Mylan contends that even if Astra does have a cause of action against the Esteve companies, those claims should be pursued in a separate action. Because the Court finds that Astra's claims against the four proposed defendants are futile, Astra's motion to amend the respective complaints is denied.

B. The Claims for Inducement Against Esteve Quimica, Dr. Laboratorios Esteve, GEA, and Hexal are Futile
The Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat 1585 (1984) (codified at 21 U.S.C. § 355 and 260cc and 35 U.S.C. § 156 and 271) (the "Hatch-Waxman Act") provides that "whoever actively induces infringement of a patent shall be liable as an infringer." 35 U.S.C. § 271(b). The Federal Circuit has said that to succeed on a theory of inducement under § 271(b) "a plaintiff must prove that the defendants' actions induced infringing acts and that they knew or should have known their actions would induce actual infringement." Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1363 (Fed. Cir. 2003) (internal quotations and citation omitted). Moreover, to prove inducement, a plaintiff must show "actual intent to cause the acts which constitute the infringement" and "that the accused infringer knowingly aided and abetted another's direct infringement of the patent". Warner-Lambert, 316 F.3d at 1363 (internal quotations and citation omitted).

Two other district courts have reasoned that because the filing of the ANDA is an act of infringement, the active inducement of an ANDA submission is a remediable act of infringement. See SmithKline Beecham Corp. v. Geneva Pharms., Inc., 99 CV 2926, 2002 U.S. Dist. LEXIS 19411, at *31 (E.D. Pa. Oct. 1, 2002) (stating that "[w]here neither the terms of [Hatch-Waxman] nor its legislative history contain any express language precluding inducement liability under § 271(b) for the act of infringement defined in § 271(e)(2), we will not write such a provision into the law."); SmithKline Beecham Corp. v. Pentech Pharms., Inc., 00 C 2855, 2001 U.S. Dist. LEXIS 1935 (N.D. Ill. Feb. 20, 2001). In Geneva, plaintiff SmithKline, who was the owner of a series of patents relating to its drug Paxil ®, alleged that Sumika, a manufacturer and seller of chemicals including bulk pharmaceutical compounds, provided information and technical assistance that formed the basis of Geneva and Zenith's ANDAs for a generic version of Paxil. In further support of its inducement claim, SmithKline alleged that Sumika filed its Drug Master File ("DMF") with the FDA and authorized the FDA to rely on it for purposes of evaluating Geneva and Zenith's ANDAs.*fn3 SmithKline further alleged that Sumika would make and sell the active ingredient of Geneva and Zenith's generic product if the ANDAs were approved. The court permitted SmithKline to amend its complaint to add Sumika as a party, finding that the allegations "that Sumika collaborated as a partner with Geneva and Zenith, and actively and knowingly induced the act of infringement committed with the submission of their ANDAs" were sufficient to state a claim for inducement. 2002 U.S. Dist. LEXIS 19411, at *26.

Likewise, in Pentech, a case also involving SmithKline's drug Paxil®, the court permitted SmithKline to amend its complaint to add a claim for inducement against Asahi, a manufacturer and marketer of pharmaceutical compounds. In its proposed amended complaint, SmithKline alleged that Asahi actively induced the filing of Pentech's ANDA for a generic form of Paxil. when it collaborated with Pentech with respect to the research and development of Pentech's ANDA, provided material for use in Pentech's clinical studies, and permitted Pentech and the FDA to rely on its DMF in support of Pentech's ANDA. Pentech, 2001 U.S. Dist. LEXIS 1935, at *11-12. The ...


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