Case 1:12-cv-00848-GMS Document 35 Filed 02/11/13 Page 1 of 3 PageID #: 202

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

)

ENDO PHARMACEUTICALS INC., TEIKOKU PHARMA USA, INC., and TEIKOKU SEIYAKU CO., LTD., Plaintiffs,

) ) )
)

)
)

v.
TWI PHARMACEUTICALS, INC. and SENG PHARMACEUTICAL MFG. CO., LTD., Defendants.

)
)

Civil Action No. 12-848-GMS

) )
)

ORDER

WHEREAS presently before the court are the defendants' Motion to Dismiss (D.I. 18) and the plaintiffs' Motion to Strike Defendants' Reply Arguments (D.I. 30); an.d WHEREAS the court has considered the parties' submissions, gtatements made during the Scheduling Conference held this same date, as well as the applicable law; IT IS HEREBY ORDERED THAT:

1.

The defendants' Motion to Dismiss (D.I. 18) 1s DENIED IN PART and

GRANTED IN PART; 1

Rule 12(b)(6) of the Federal Rules of Civil Procedure allows the court to dismiss an action where a plaintiff fails to state a claim upon which relief may be granted. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Accent Packaging, Inc. v. Leggett & Platt, Inc., No. 2012-1011,2013 WL 407363, at *10 (Fed. Cir. Feb. 4, 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation omitted)). In considering a motion pursuant Rule 12(b)(6), the court accepts all well-pleaded allegations in the complaint as true and views them in the light most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005). Generally, the court may consider only those facts alleged in the pleadings, the documents attached thereto as exhibits, and matters of judicial notice. El-Hewie v. Bergen Cnty., 348 F. App'x 790, 794 (3d Cir. 2009); Southern Cross Overseas Agencies, Inc. v. Kwong Shipping Grp. Ltd., 181 F.3d 410, 426 (3d Cir. 1999). It may also consider, however, "an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiffs claims are based on the document." Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). If the

Case 1:12-cv-00848-GMS Document 35 Filed 02/11/13 Page 2 of 3 PageID #: 203

2. 3.

Counts II and III ofthe Complaint (D.I. 1) are DISMISSED; and The plaintiffs' Motion to Strike Defendants' Reply Arguments (D.I. 30) 1s

DENIED AS MOOT.

court looks to other external sources of evidence, the Rule 12(b)(6) motion will be treated as a summary judgment motion under the standards governing Rule 56. Fed. R. Civ. P. 12(b). Here, the defendants contend that the court's prior construction of certain claims of U.S. Patent No. 5,827,529 (the '"529 Patent"), taken together with undisputed facts contained in TWi Pharmaceuticals, Inc.'s ("TWi's") ANDA, render it "beyond dispute that ... TWi does not infringe the '529 [P]atent." (D.I. 19 at 4.) Specifically, the defendants note that the court, in Endo Pharm., Inc., eta/. v. Watson Labs. Inc., No. 10-138-GMS, construed the term "a water-retaining agent selected from the group consisting of ethylene glycol, diethylene glycol, polyethylene glycol, glycerin, sorbitol, martitol, propylene glycol and 1,3-butylene glycol" to mean "one and only one water-retaining agent selected from the specified list." (D.I. 19 at 1; D.l. 20, Ex. A.) Defendants further rely on TWi's ANDA, which shows that its proposed ANDA product contains both glycerin and sorbitol. (D.I. 19 at 3.) Arguing that the plaintiffs are bound by the court's prior claim construction, the defendants maintain that TWi's proposed product cannot possibly infringe the '529 Patent given the "one and only one" language employed by the court. (Jd at 4.) Assuming that this motion is properly characterized as a motion to dismiss and not one for summary judgment, the court fmds that the plaintiffs' infringement claim is facially plausible for at least three reasons. First, it is not clear that the court is bound to follow its previous claim construction ruling in this case. The Federal Circuit has held that ''the law of the regional circuit applies to the issue of coUateral estoppel," RF Del., Inc. v. Pac. Keystone Techs., Inc., 326 F.3d 1255, 1261 (Fed. Cir. 2003), and the Third Circuit has outlined four elements of issue preclusion: (1) the issue decided in the prior adjudication was identical with the one presented in the later action; (2) there was ajinaljudgment on the merits; (3) the party against whom the plea is asserted was a party or in privity with a party to the prior adjudication; and (4) the party against whom it is asserted has had a full and fair opportunity to litigate the issue in question in a prior action. Russo v. City of Phi/a., 459 F. App'x 176, 178-79 (3d Cir. 2012) (emphasis added). In Endo Pharm., Inc., eta/. v. Watson Labs. Inc., there was no final judgment on the merits, as the parties reached a settlement before the court could issue a decision. (D.I. 25 at 2-3.) Of course, this fact is not dispositive as to the estoppel issue-the RF Del., Inc. court itself, applying Eleventh Circuit law, recognized that "[f]or purposes of issue preclusion ... 'final judgment' includes any prior adjudication of an issue in another action that is determined to be sufficiently firm to be accorded conclusive effect." RF Del., Inc., 326 F.3d at 126. It is unclear, however, whether the Third Circuit also accepts this "limited standard of finality" and whether the court's prior claim construction would even meet that standard. As such, there is at least some doubt as to the preclusive effect of the court's earlier Markman order. Moreover, even should the court adopt its prior ruling, the ANDA product could infringe the '529 Patent under the doctrine of equivalents. As the plaintiffs point out, this fact question, "at the very least, cannot be decided before any discovery is even taken." (D.I. 25 at 8.) FinaUy, even under the court's prior construction, the issue of literal infringement is not necessarily foreclosed to the plaintiffs. The "water retaining agent" limitation at issue here is preceded by the transitional phrase "consisting essentiaUy of," which at least opens the door to the possibility that the "adhesive gel base" claimed could contain more than one of the Markush group members. At this early stage, the court simply cannot find that the plaintiff's claim for infringement of the '529 Patent is without merit or facially implausible and therefore must deny the defendants' Rule 12(b)(6) motion.

Case 1:12-cv-00848-GMS Document 35 Filed 02/11/13 Page 3 of 3 PageID #: 204

Dated: February

JL, 20l 3