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Pfizer Inc. v. Apotex Inc.

June 12, 2009

PFIZER INC., PFIZER IRELAND PHARMACEUTICALS, WARNER LAMBERT COMPANY, AND WARNER-LAMBERT COMPANY LLC, PLAINTIFFS,
v.
APOTEX INC. AND APOTEX CORP., DEFENDANTS.



The opinion of the court was delivered by: Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

Plaintiffs Pfizer Inc., Pfizer Ireland Pharmaceuticals, Warner-Lambert Company, Warner-Lambert Company LLC (collectively "Pfizer") have moved to stay proceedings in this case pending a Delaware District Court' s decision addressing personal jurisdiction over Apotex Inc. in a related case [43]. The parties have fully briefed the motion to stay [45, 65, 80]. Having given full consideration to the arguments presented in the briefs, the Court grants the motion [43] and enters a stay of this litigation pending the resolution of the jurisdictional dispute in Delaware.

I. Background

On November 4, 2008, Defendants Apotex Inc. and Apotex Corp. (collectively "Apotex") notified Pfizer that they had filed an Abbreviated New Drug Application ("ANDA") with the FDA to market a generic version of Pfizer' s cholesterol-lowering drug Lipitor(r). Under the Hatch-Waxman Act of 1984, Pfizer was required to file suit against Apotex within 45 days of receiving that notice in order to obtain a statutorily mandated 30-month stay of FDA approval of Apotex' s ANDA. See 21 U.S.C. § 355(j)(5)(B)(iii). On December 17, 2008, Pfizer filed suit against Apotex in the Delaware District Court alleging that Apotex' s ANDA infringed Pfizer' s ' 995 patent. Pfizer correctly anticipated that one of the Apotex defendants --Apotex Inc. -- would challenge personal jurisdiction in Delaware. Therefore, Pfizer filed an identical patent infringement suit in this Court just hours after filing the Delaware action. Pfizer asserts that it filed the action in this Court only to protect itself in the event that it loses the jurisdictional fight in Delaware after the 45 day filing period has expired. Pfizer now seeks to stay this action pending the outcome of the jurisdictional dispute in Delaware. If the Delaware court determines it has personal jurisdiction over the Defendants, Pfizer will move to transfer this case to Delaware.

II. Legal Standard

A. Motion To Stay

"[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. North American Co., 299 U.S. 248, 254 (1936). In deciding whether to enter such a stay, courts consider the following factors: (i) whether a stay will unduly prejudice or tactically disadvantage the non-moving party, (ii) whether a stay will simplify the issues in question and streamline the trial, and (iii) whether a stay will reduce the burden of litigation on the parties and on the court. Tap Pharmaceutical Prods., Inc. v. Atrix Laboratories, Inc., 2004 WL 422697, at *1 (N.D. Ill. Mar. 3, 2004). "[I]f there is even a fair possibility that the stay * * * will work damage to some one else," the party seeking the stay "must make out a clear case of hardship or inequity in being required to go forward." Landis, 299 U.S. at 255.

Courts in this district have recognized that when two related cases are pending in separate federal courts, either of those courts may exercise that inherent power to stay the proceedings before it in deference to the related action. See GE Business Financial Services Inc. v. Spratt, 2009 WL 1064608, at *1 (N.D. Ill. Apr. 20, 2009); Whirlpool Fin. Corp. v. Metropolis Capital Group, 1991 WL 212112, at *3 (N.D. Ill. Oct. 7, 1991). Indeed, this Court has a "duty * * * to avoid duplicative litigation in more than one federal court." Whirlpool Fin. Corp., 1991 WL 212112, at *3 (citing Colorado River Water Conservation District v. United States, 424 U.S. 800, 817 (1976)). Therefore, the Seventh Circuit not surprisingly has advised that "[a] district court has ' an ample degree of discretion' in deferring to another federal proceeding involving the same parties and issues to avoid duplicative litigation." Trippe Mfg. Co. v. American Power Conversion Corp., 46 F.3d 624, 629 (7th Cir. 1995).

B. The "First To File"Rule

When duplicative actions are filed in different federal courts, "the general rule favors the forum of the first-filed suit." Schwarz v. Nat'l Van Lines, Inc., 317 F.Supp.2d 829, 832 (N.D. Ill. 2004). "[D]istrict courts normally stay or transfer a federal suit for reasons of wise judicial administration whenever it is duplicative of a parallel action already pending in another federal court." GE Business Financial Services Inc., 2009 WL 1064608, at *2 n.1.

However, the presumption in favor of the first-filed suit is "not absolute." MLR, LLC v. U.S. Robotics Corp., 2003 WL 685504, at *1 (N.D. Ill. Feb. 26, 2003); Trippe Mfg. Co., 46 F.3d at 629 ("[t]his circuit does not rigidly adhere to a 'first-to-file'rule"); Electronics for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1347 (Fed. Cir. 2005) (stating that exceptions to the first-filed rule are not rare). As the Seventh Circuit has explained, "[n]o mechanical rule governs the handling of overlapping cases," and therefore "the judge hearing the second-filed case may conclude that it is a superior vehicle and may press forward."Blair v. Equifax Check Services, Inc., 181 F.3d 832, 838 (7th Cir. 1999). Nevertheless, where deference to the first-filed action is consistent with "considerations of judicial and litigant economy, and the just and effective disposition of disputes," the first to file rule provides courts seeking to avoid duplicative litigation with some guidance. MLR, LLC, 2003 WL 685504, at *1 (quoting Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931, 937 (Fed.Cir.1993)); see also Serlin v. Arthur Andersen & Co., 3 F.3d 221, 223 (7th Cir. 1993) (favoring first-filed action is appropriate where doing so constitutes "wise judicial administration").

III. Discussion

Turning first to the three factors that courts consider in deciding whether to enter a stay, the Court concludes that those factors weigh in favor of granting a stay in this case. First, the Court considers whether a stay will unduly prejudice the non-moving party. Apotex contends that it will be prejudiced by a stay because any delay in this litigation will delay FDA approval of its ANDA, which currently is stayed pending the resolution of this action (or 30 months, whichever is shorter). Apotex is correct in asserting that resolution of this case on the merits will be delayed by some months if this action is stayed and the Delaware court determines that it does not have jurisdiction over all parties in the related case. However, the Court cannot conclude that a delay of limited duration to resolve a jurisdictional motion filed by Apotex itself would cause Apotex undue prejudice.

Second, the Court is persuaded that a stay very well may simplify the litigation. Indeed, staying this action in favor of the Delaware action may eliminate entirely the need for ...


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