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Ferring B.V. v. Serenity Pharmaceuticals, LLC

United States District Court, S.D. New York

December 27, 2019

FERRING B.V., FERRING INTERNATIONAL CENTER S.A., and FERRING PHARMACEUTICALS INC., Plaintiffs and Counter-Defendants,
v.
SERENITY PHARMACEUTICALS, LLC, REPRISE BIOPHARMACEUT1CS, LLC, AVADEL SPECIALTY PHARMACEUTICALS, LLC, Defendants and Counterclaimants.

          MEMORANDUM DECISION AND ORDER DENYING DEFENDANTS' MOTIONS FOR RELIEF UNDER FEDERAL RULE OF CIVIL PROCEDURE 60(B)

          MCMAHON, C.J.

         Counterclaim defendants Ferring Pharmaceuticals Inc., Ferring B.V., and Ferring International Center S. A. ("Ferring") move to vacate this Court's Collateral Estoppel order, (Dkt. No. 517), under Federal Rule of Civil Procedure 60(b). Ferring alleges that certain findings of fact made by my colleague The Hon. P. Kevin Castel in the action in which my late colleague Judge Sweet originally entered an equitable estoppel order - later relied on by this court to preclude Ferring from asserting certain affirmative claims - renders Judge Sweet's original order erroneous and should cause this Court to vacate the Collateral Estoppel order.

         Ferring's motion is DENIED.

         BACKGROUND

         The facts and prior proceedings underlying this action were previously set forth in Ferring B.V. v. Serenity Pharmaceuticals, LLC, 391 F.Supp.3d 265 (S.D.N.Y. 2019). Familiarity with the general background of this case is assumed.

         Two separate lawsuits, involving four patents directed to pharmaceutical formulations of the drug desmopressin, are relevant to this motion.

         Two of the patents - U.S. Patent Nos. 7, 405, 203, (the '"203 patent") and 7, 579, 321, (the "'321 patent") - are held by Dr. Seymour Fein as the named inventor (collectively, the "Fein Patents").

         The other two - U.S. Patent Nos. 7, 560, 429 (the '"429 patent") and 7, 947, 654 (the '"654 patent") - are held by Ferring (collectively, the "Ferring Patents").

         The first action (the 2012 Action) was brought by Ferring on April 5, 2012. That suit sought to have Ferring replace Fein as the inventor on the Fein Patents. Serenity and Reprise counterclaimed for a declaration that Dr. Fein was in fact the inventor of the Ferring Patents. The case was originally pending before The Hon. Robert W. Sweet; it was transferred to The Hon. P. Kevin Castel on April 8, 2019, following Judge Sweet's death.

         One order and one judgement from the 2012 Action are relevant to this motion: (1) Judge Sweet's September 22, 2015 opinion in which he held that Ferring was equitably estopped to assert its claim to have it replace Fein as the named inventor on the Fein Patents, Ferring B. V. v. Allergan, Inc., 253 F.Supp.3d 708 (S.D.N.Y. 2015), 12-cv-2650, Dkt. No. 190 (the "Equitable Estoppel Opinion")) and (2) Judge Castel's September 27, 2019 Findings of Fact and Conclusions of Law, entered after the completion of the trial on the Serenity/Repose counterclaims. (12-cv-2650, Dkt. No. 453 ("Findings of Fact")).

         A second lawsuit (The 2017 Action, which is this case) was filed in the District of Delaware on April 28, 2017, again by Fencing. This time Ferring sought a declaration that the Fein Patents (which were no longer being litigated in Action #1) were invalid and unenforceable on various grounds. The case was transferred to this District on December 20, 2017, assigned to Judge Sweet on January 11, 2018, and reassigned to me on April 8, 2019, again after Judge Sweet's death.

         One order from this action is relevant to this motion: this Court's June 12, 2019 opinion holding that, under the doctrine of collateral estoppel, Judge Sweet's Equitable Estoppel opinion barred Ferring from asserting an affirmative claim that it, rather than Fein, was the actual inventor on the Fein Patents. (Dkt. No. 5l7.) ("Collateral Estoppel Opinion").

         A. The 2012 Action

         In 2012, Ferring brought an action for correction of patent inventorship under 35 U.S, C. § 256 against Serenity and Reprise, (12-cv-2650, Dkt. No. 1 ("the 2012 Action").)

         Ferring sought a declaration that it - and not Dr. Fein - was the inventor of Fein's '203 and '321 patents related to the low dosage application of desmopressin. Ferring therefore sought to have the PTO correct the patent by listing Ferring and two Ferring employees, rather than Fein, as the inventor on the Fein Patents.

         Serenity and Reprise asserted counterclaims against Ferring, alleging that Dr. Fein was the actual inventor, or at least a co-inventor, of the inventions in Ferring's '429 and '654 patents, I. The Equitable Estoppel Opinion

         On April 17, 2015, Serenity and Reprise - the defendants in the 2012 Action - moved for summary judgment dismissing Ferring's inventorship claims. (12 civ. 2650 Dkt. No. 132.) They move on the ground that Ferring was equitably estopped from claiming that it was the true inventor of the '203 and '321 patents, because Ferring had unduly "delayed advancing [its] claims in [the] litigation in order to impose the risks and costs of drug development on [Dr. Fein and his codefendants] and then to obtain patent correction in [its] favor." Ferring B. V. v. Alkrgcm, Inc., 253 F.Supp.3d 708, 710. They argued that it would be unfair for Ferring to claim that it was the true inventor on the Fein patents after it sat on the sidelines for seven years while Dr. Fein, relying on Ferring's acquiescence, invested millions in developing his desmopressin products.

         On September 22, 2015, Judge Sweet granted the motion by Serenity and Reprise and dismissed Ferring's claim for correction of patent inventorship on the '203 Patent and the 321 patents - not on the merits, but on the ground of equitable estoppel. (Ferring B. V. v. Allergan, Inc., 253 F.Supp.3d 708 (S.D.N, Y. 2015), 12-cv-2650, Dkt. No. 190 (the "Equitable Estoppel Opinion")).

         Judge Sweet found that Ferring was equitably estopped from bringing a claim to obtain patent correction in its favor because despite extensive correspondence spanning several years between Ferring and Dr. Fein concerning Dr. Fein's inventorship "Ferring made no response and took no further action for over seven years, while Defendants expended significant resources prosecuting, developing, and commercializing Dr. Fein's patents." Id. at 717. Crucially, Ferring's litigation position that its employees should be the named inventors of the Fein Patents contradicted its representation to Fein that the low-dosage formulation that was the subject of the patents "was not patentable at all." Id. at 719. Judge Sweet dismissed Ferring's inventorship claims because of Defendants' reliance on Ferring's representations and its delay in taking any action against Fein, despite knowing that he had obtained patents on these supposedly "unpatentable" inventions, and then - having obtained the patents - developing products utilizing the patented inventions.

         Ferring's appeal from Judge Sweet's Equitable Estoppel Opinion is presently pending in the Federal Circuit. (CAFC Appeal No. 202-1098).

         Following the entry of summary judgment and the dismissal of Ferring's claims, Judge Sweet began a trial on Serenity and Reprise's counterclaims. However, on September 14, 2018, the trial was interrupted, and further proceedings were stayed, pending the outcome of an interlocutory appeal filed by Ferring with the Federal Circuit, Felling's petition was finally denied by the Federal Circuit on March 8, 2019 (2012 Action, Dkt. No. 359). But before the trial could resume, Judge Sweet unexpectedly died.

         The 2012 Case was then transferred to my colleague, The Hon. P. Kevin Castel, On May 10, 2019, Ferring filed a motion for relief under Rule 60(b), seeking to vacate Judge Sweet's Equitable Estoppel Opinion. Ferring argued that certain claim construction rulings made by Judge Sweet in the 2017 Case (17-cv-9922, Dkt. No. 421) "negated" the foundation of that decision. (2012 Action, Dkt. No. 374 at 1.)

         On July 18, 2019, Judge Castel denied Ferring's 60(b) motion, holding that "no exceptional circumstances" warranted the vacatur of the Equitable Estoppel opinion. Ferring B. V. el al v. Allergan, Inc. et al, 2019 WL 3239007, *3 (S.D.N.Y. July 1 8, 2019).

         2. Judge Castel's Findings of Fad and Conclusions of Law in the 2012 Action

         Judge Castel then resumed the bench trial in the 2012 Action that had been interrupted by Ferring's interlocutory appeal. What remained to be tried were Serenity's and Reprise's counterclaim for correction of inventorship of Ferring's patents - the '429 and '654 patents.[1]

         On September 27, 2019, following a five-day bench trial, Judge Castel issued his Findings of Fact and Conclusions of Law in the 2012 Action. (2012 Action, Dkt No. 453, the "Findings of Fact.") Judge Castel concluded that Serenity and Reprise had failed to prove, by clear and convincing evidence, that Dr. Fein was the actual inventor of the inventions claimed in the '429 and '654 patents. Specifically, Judge Castel concluded that Serenity and Reprise did not prove by clear and convincing evidence that Dr. Fein "conceived of the general use of lower doses of desmopressin" or "that Fein contributed 'to the conception of the subject matter' of claims of the patents-in-suit in any manner that was not insignificant in quality." (Id. at 35) (citation omitted).

         An appeal was filed from Judge Castel's decision but was later withdrawn. It is my understanding that the only issue presently on appeal in the Federal Circuit in connection with the 2012 Action is the Equitable Estoppel Opinion.

         B. The Present Litigation

         In 2017, Ferring filed a declaratory judgment lawsuit against Serenity and Reprise in the District of Delaware, seeking a declaration that the two Fein patents - the '203 and '321 patents -were unenforceable because of Dr. Fein's allegedly inequitable conduct before the Patent Office. The complaint also sought a declaration that the Fein patents were invalid for four separate reasons: (1) invalidity under 35 U, SC § 102(f) on the grounds that Dr. Fein did not actually invent the subject matter claimed in the Patents in suit (because Ferring did); (2) invalidity under 35 U, SC § 112 for lack of enablement; (3) ...


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