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Genzyme Corporation v. Cobrek Pharmaceuticals

February 17, 2011

GENZYME CORPORATION, PLAINTIFF,
v.
COBREK PHARMACEUTICALS, INC., . DEFENDANT.



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

MEMORANDUM OPINION AND ORDER

This matter is before the Court on Plaintiff Genzyme Corporation's motion for a stay pending reexamination of U.S. Patent No. 7,148,211 by the U.S. Patent and Trademark Office [55]. Defendant Cobrek Pharmaceuticals opposes the motion. For the reasons stated below, the Court grants Plaintiff's motion and stays this action.*fn1 In view of the stay, the Court also grants Plaintiff's motions for an extension of time for service of final contentions [72] and to postpone service of final contentions [82].

I. Background

Plaintiff Genzyme Corporation ("Plaintiff") is the owner of U.S. Patent Nos. 7,148,211 ("the '211 patent') and 5,602,116 ("the '116 patent") for the pharmaceutical drug Hectorol. Defendant Cobrek Pharmaceuticals ("Defendant") seeks to release a generic version of Hectorol. Accordingly, Defendant filed an Abbreviated New Drug Application ("ANDA") with the Food and Drug Administration ("FDA"), which included assertions that the '211 and '116 patents are invalid. Such assertions are considered to be acts of infringement (see 35 U.S.C. § 271(e)(2)). The FDA has not yet approved Defendant's ANDA, and the ANDA remains pending.

On October 13, 2009, Defendant filed with the U.S. Patent and Trademark Office ("PTO") a request for reexamination of the '211 patent, seeking a decision by the PTO invalidating the claims in the '211 patent. On November 25, 2009, the PTO issued a communication finding all of the claims in the '211 patent to be invalid. Plaintiff has filed amendments seeking to overcome the PTO's rejection of the claims. The reexamination process remains pending. Ultimately, the reexamination will result in cancellation, amendment, or affirmance of the claims.

II. Legal Standard

A district court has "inherent power to manage [its] dockets and stay proceedings, including the authority to order a stay pending conclusion of a PTO reexamination." Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988) (citing Landis v. North Am. Co., 299 U.S. 248, 254 (1936)). In deciding a stay motion, courts consider whether a stay will (1) unduly prejudice or tactically disadvantage the non-moving party, (2) simplify the issues in question and streamline the trial, and (3) reduce the burden of litigation on the parties and on the court. See Tap Pharm. Prods., Inc. v. Atrix Labs., Inc., 2004 WL 422697, at *1 (N.D. Ill. Mar. 3, 2004).

III. Analysis

Sections 302 and 303 of Title 35 of the U.S. Code permit any person to request that the PTO re-examine the validity of an unexpired U.S. patent when prior art patents or publications raise "a substantial new question of patentability." See 35 U.S.C. §§ 302-303. Once the PTO grants the reexamination request, a patent examiner must conduct the reexamination "with special dispatch." 37 C.F.R. §§ 1.525, 1.550(a). The Federal Circuit has explained that "'special dispatch' envisions some type of unique, extraordinary, or accelerated movement." Ethicon, 849 F.2d at 1428. A party may appeal the PTO's determination of validity to the Board of Patent Appeals and Interferences.

In enacting the reexamination procedure, Congress sought to create an inexpensive, expedient means of determining patent validity to which courts could defer in patent infringement cases.*fn2 See H.R. Rep. 96-1307(I) (Sept. 9, 1980); see also Ingro v. Tyco Indust., Inc., 227 U.S.P.Q. 69, 70 (N.D. Ill. 1985). Courts have cautioned that parties may not "abuse the process by applying for reexamination after protracted, expensive discovery or trial preparation." Ingro, 227 U.S.P.Q. at 70 (quoting Digital Magenetic Systs., Inc. v. Ansley, 213 U.S.P.Q. (BNA) 290 (W.D. Okla. 1982)). However, when a case has not proceeded past the initial stages of litigation, "the reexamination procedure should be utilized." Id. Indeed, the reexamination procedure may be beneficial to both the parties and the court in a patent infringement dispute, as "[o]ne purpose of the reexamination procedure is to eliminate trial of that issue (when the claim is canceled) or facilitate trial of that issue by providing the district court with the expert view of the PTO (when a claim survives the reexamination proceedings)." Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir. 1983).

When the PTO grants a request for reexamination, the PTO may not stay the reexamination pending the outcome of any parallel proceedings in federal court. See generally Ethicon, 849 F.2d 1422. However, a court, in the exercise of its discretion, may stay the litigation pending the outcome of the reexamination proceedings. Indeed, as noted above, Congress appears to have recognized that discretionary stays of litigation may be warranted to allow reexaminations to proceed as an "alternative for challengers and for patent owners to test the validity of United States patents in an efficient and relatively inexpensive manner." H.R. Rep. 96-1307(I) (Sept. 9, 1980); see also Emhart Indust., Inc. v. Sankyo Seiki Mfg. Co., Ltd., 1987 WL 6314, at *1 (N.D. Ill. Feb. 2, 1987) (observing that "a stay operates to shift to the PTO a significant issue, patent claim validity, involved in the dispute before the Court"). With this in mind, the Court turns to the parties' arguments concerning the request for a stay of this litigation.

A. Length of Reexamination Proceedings

Defendant argues that the request for stay should be denied because the reexamination proceedings may be quite lengthy and could exceed the time that it would take to resolve the litigation. Defendant relies upon a Delaware case for the proposition that when trial is likely to be completed before the reexamination proceedings, that factor weighs against granting a stay. See Cognex Corp. v. Nat'l Instruments Corp., 2001 WL 34368283, at *3 (D. Del. Jun. 29, 2001). The parties in Cognex had conducted extended discovery, scheduled experts, made trial support accommodations, and were scheduled to begin trial six months after the motion for stay was filed. Id. Here, by contrast, only limited discovery has been conducted, no depositions have been taken, and no trial date has been set. Given that the litigation in Cognex had advanced much further than in this case, the Court finds Cognex readily distinguishable.

Moreover, although Defendant cites cases noting that the reexamination proceedings can last more than six years (see Sunbeam Prods. v. Hamilton Beach Brands, Inc., 2010 WL 1946262, at *3 (E.D. Va. May 10, 2010)), Plaintiff asserts, and Defendant does not dispute, that the median duration of a reexamination request is 32 months, including appeals to the Board of Patent Appeals and Interferences. This litigation may take at least as long (indeed, the parties' companion suit pertaining to the '116 patent has been pending for nearly three years). It may be shorter (especially if the disposition of the companion '116 litigation has any ...


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