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In Re: Oxycontin Antitrust Litigation v. Varam

October 19, 2012


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

This document relates to: and


This action for patent infringement pursuant to 35 U.S.C. § 271(e) arises from defendant Varam, Inc.'s submission of Abbreviated New Drug Application ("ANDA") number 20-1523 to the Food and Drug Administration through defendant KVK-Tech, Inc. ("KVK") and its staff. Pursuant to 21 U.S.C. § 355(j), defendants sought FDA approval to manufacture and market a generic version of plaintiffs' OxyContin-branded oxycodone hydrochloride extended release tablets before certain patents underlying OxyContin expired.*fn1 In conjunction with the ANDA, defendants certified that plaintiffs' OxyContin patents are "invalid or will not be infringed" by defendants' proposed generic, within the meaning of 21 U.S.C. § 355(j)(2)(A)(vii)(IV)-termed the "paragraph IV certification." Plaintiffs claim that their patents are valid, that the proposed generic will infringe the patents, and thus that submitting the ANDA constitutes infringement. See 35 U.S.C. § 271(e)(2)(A) ("It shall be an act of infringement to submit [an ANDA] . . . for a drug claimed in a patent . . . if the purpose of such submission is to obtain approval . . . to engage in the commercial manufacture, use, or sale of a drug . . . before the expiration of such patent.").

Three motions by defendants are now before the Court. First, KVK has moved pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) to dismiss the claims against it for lack of subject matter jurisdiction and failure to state a claim for which relief can be granted. Second, Varam has moved pursuant to Rule 12(b)(2) to dismiss the claims against it for lack of personal jurisdiction over it. Third, defendants have jointly moved to transfer this action to the Eastern District of Pennsylvania, or in the alternative stay proceedings pending the resolution of a parallel action filed in the Eastern District of Pennsylvania. For the reasons set forth below, KVK's motion to dismiss the claims against it is considered as a motion for summary judgment and denied, and the Court grants defendants the alternative relief sought in their transfer motion, staying this action, which defers consideration of, and a hearing on, Varam's motion to dismiss for lack of personal jurisdiction.


As discussed in more detail below, KVK's motion to dismiss for lack of subject matter jurisdiction is more properly considered as alleging that plaintiffs fail to state a claim. Because that Rule 12(b)(6) motion relies on matters outside the pleadings, the Court must consider it as a motion for summary judgment. See Fed. R. Civ. P. 12(d). Accordingly, the following facts are drawn from the testimony and documentary evidence that accompanies the parties' submissions.

A. The Parties

1.Plaintiffs Plaintiffs are three partnerships and a corporation, each of which jointly owns some of the patents that are allegedly essential to OxyContin and to the generic product at issue in the ANDA.

2.KVK-Tech, Inc.

KVK researches, develops, manufactures, distributes, and sells generic pharmaceuticals. (Compl. ¶¶ 8, 11-14; Dep. of Frank Ripp, Jr., dated Oct. 27, 2010 ("Ripp Dep.") at 91:14-92:5, Ex. 2 to Decl. of Thomas Wang dated Jan. 10, 2011 ("Wang Decl."), Dkt. No. 36.) The company has developed at its Pennsylvania facilities approximately ten different generic pharmaceuticals (Ripp Dep. 92:6-21), including a generic immediate-release oxycodone pill (id. at 94:17-24). KVK itself manufactures some of the products it has developed, and has distributed and sold all of them throughout the United States. (Id. at 95:10-20, 101:3-16.) Frank Ripp, Jr. is KVK's President and Treasurer, overseeing its staff of approximately seventy-five people, largely out of facilities in Newtown, Pennsylvania. (Id. at 18:22-19-6, 54:17-22.)

3.Varam, Inc.

Varam's sole shareholder, director, officer and employee, Frank Nekoranik, incorporated the company in Pennsylvania in early February 2010. (Compl. ¶ 6; Dep. of Frank Nekoranik dated Oct. 25, 2010 ("Nekoranik Dep.") at13:12-24-15:6, Ex. 1 to Wang Decl.) Nekoranik created Varam in order to own the extended release oxycodone ANDA (Nekoranik Dep. 87:25-88:5), which he had received from KVK about one week earlier (Wang Decl. Ex. 8). Varam has no other business activity aside from pursuing, through KVK, FDA approval of the ANDA. (Nekoranik Dep. 167:12-16.)

Varam does business at three different addresses: KVK's Newtown offices as its registered address with the Pennsylvania Department of State (Wang Decl. Ex. 3); shared space in the Lahaska, Pennsylvania, offices of Biz-Visors, Inc., a company Ripp owns (Decl. of Frank Nekoranik dated Sept. 2, 2010 at ΒΆ 5, Dkt. No. 13; Ripp Dep. 28:24-29:3); and Nekoranik's home in Pennsylvania (Nekoranik Dep. at 161:11-164:20). Varam does not ...

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