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Rite Aid Corp. v. Purdue Pharma

August 21, 2007

RITE AID CORPORATION, PLAINTIFF,
v.
PURDUE PHARMA, L.P., THE PURDUE FREDERICK COMPANY, PURDUE PHARMACEUTICALS, L.P., P.F. LABORATORIES INC., THE PURDUE PHARMA COMPANY, AND EUROCELTIQUE, SA, DEFENDANTS.



The opinion of the court was delivered by: Sidney H. Stein, U.S. District Judge

OPINION & ORDER

Rite Aid Corporation brings this declaratory judgment action against Purdue Pharma, L.P., the Purdue Frederick Company, Purdue Pharmaceuticals, L.P., P.F. Laboratories Inc., the Purdue Pharma Company, and Euroceltique, SA (collectively "Purdue") pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201, 2202. Rite Aid seeks a declaration that Purdue's patents protecting a controlled-release oxycodone pain reliever sold under the brand name OxyContin are invalid and unenforceable. Purdue has moved to dismiss Rite Aid's complaint pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction or, in the alternative, for a stay of these proceedings pursuant to this Court's inherent powers.

The Court concludes that it lacks subject matter jurisdiction over the patent-infringement issues raised in this action because they do not present a "case of actual controversy" pursuant to 28 U.S.C. § 2201(a). In addition, to the extent that Rite Aid presses antitrust claims in this suit, the Court declines jurisdiction over those claims in light of Rite Aid's separate pending suit against Purdue for antitrust violations. Accordingly, the Court grants Purdue's motion to dismiss Rite Aid's complaint without prejudice.

I. BACKGROUND

Rite Aid is in the business of selling pharmaceuticals directly to the public through its chain of thousands of pharmacies. Among the products sold by Rite Aid are OxyContin -- Purdue's patented controlled-release oxycodone pain reliever -- and its generic equivalents manufactured at various times by Endo Pharmaceuticals, Inc., Teva Pharmaceuticals, Inc., and Impax Laboratories, Inc. (Vucurevich Decl. ¶¶ 5, 12-13.) Beginning in 1999, Purdue filed patent-infringement actions against Endo, Teva, Impax, and Boehringer Ingelheim, GmbH*fn1 for marketing or attempting to market products that allegedly infringed Purdue's OxyContin patents. The action against Endo proceeded to trial, and on January 5, 2004, this Court held that Endo had infringed Purdue's OxyContin patents, but those patents were invalid due to Purdue's inequitable conduct in prosecuting them before the Patent and Trademark Office. See Purdue Pharma L.P. v. Endo Pharms., Inc., No. 00 Civ. 8029, 01 Civ. 2109, 01 Civ. 8177, 2004 U.S. Dist. LEXIS, at *10 (S.D.N.Y. Jan. 5, 2004). The Court's ruling was initially affirmed by the U.S. Court of Appeals for the Federal Circuit in an opinion issued on June 7, 2005. See Purdue Pharma L.P. v. Endo Pharms. Inc., 410 F.3d 690 (Fed. Cir. 2005).

Nearly eight months later -- on February 1, 2006 -- the Federal Circuit withdrew its affirmance of this Court's January 5, 2004 Opinion and vacated the finding of patent invalidity. Purdue Pharma L.P. v. Endo Pharms., Inc., 438 F.3d 1123 (Fed. Cir. 2006).

Thereafter, Purdue sent a letter dated May 15, 2006 to Robert Sari, Esq. -- the General Counsel and Secretary of Rite Aid -- notifying him of the Federal Circuit's decision. (Inz Decl., Exh. 1; Mem. Opp. Mot. Dismiss, Exh. 6.) In that letter, Purdue cautioned Rite Aid that the Federal Circuit's ruling -- a copy of which was attached to the letter -- "may be important for you in considering your continued sale of infringing generic versions of OxyContin." (Id.) Purdue then expressed its intention to "vigorously pursue its previously filed patent infringement actions" against the generic drug manufacturers, and "[i]n addition to the named defendants in these actions, Purdue intends, to the extent necessary, to pursue infringement claims against other entities that have been, or continue to be, involved in the manufacture, sale, distribution or importation of infringing generic OxyContin Tablets." (Id.) The letter closed by encouraging Rite Aid to discuss its "involvement in the sale of infringing generic OxyContin Tablets . . . with your patent counsel." (Id.)

In a subsequent letter addressed to Sari dated September 5, 2006, Purdue reiterated its concern that Rite Aid was selling "infringing generic versions of OxyContin manufactured by Impax Laboratories Inc." (Inz Decl., Exh. 2.) Purdue stated its plans to "vigorously pursue its previously filed patent infringement action against Impax" and that it "reserves the right to pursue infringement claims against other persons that have been, or continue to be, responsible for the manufacture, sale, importation or distribution of infringing generic OxyContin products." (Id.)

In October 2006, Purdue settled its infringement actions against Endo and Teva. (See Inz Decl., Exhs. 14, 16.) The settlements included licensing agreements permitting Endo and Teva to manufacture generic OxyContin and releases of patent-infringement liability for both Endo and Teva and for third-party re-sellers -- such as Rite Aid -- for their past manufacture and sale of generic OxyContin. (See id., Rebuck Decl., Exh. A.)

Two months later, Rite Aid brought this declaratory judgment action arising from its sales of generic OxyContin products, which had not been authorized by Purdue, and what it perceived to be Purdue's threat of a patent-infringement suit. Rite Aid seeks a declaration that Purdue's OxyContin patents are invalid and therefore unenforceable, and Purdue has moved to dismiss the action for lack of subject matter jurisdiction.

Since the filing of Rite Aid's complaint and Purdue's motion to dismiss, Purdue has reached a settlement of its infringement action against Impax. As part of that settlement, Purdue released re-sellers of Impax's oxycodone product -- including Rite Aid -- from liability for past infringement (Rebuck Decl., Exh. B at P842924 -- 842927), as it had done previously in connection with the Endo and Teva settlements (Inz Decl., Exh. 14, 16; Rebuck Decl., Exh. A). In addition, Purdue and Impax arrived at a licensing agreement for future sales by Impax of its generic OxyContin. (See Rebuck Decl., Exh. B.) As a result of this agreement, there is no unauthorized generic OxyContin on the market at present, because all three of the generic manufacturers have now reached settlement and licensing agreements with Purdue.

II. DISCUSSION

A. The Court Lacks Subject Matter Jurisdiction over the Patent-Infringement Issues Raised in this Action

Purdue has moved to dismiss the patent-infringement issues raised in this action on the grounds that they do not constitute a "case of actual controversy" as required by the ...


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