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Judge Burke recommends granting plaintiff’s motion to substitute, granting defendant’s motion to transfer, denying parties’ motions to dismiss in ANDA litigation

Recently, in Abbott Laboratories v. Roxane Laboratories, Inc., C.A. No. 12-457-RGA-CJB (D. Del. May 28, 2013), Magistrate Judge Christopher J. Burke issued a report and recommendation with respect to four motions pending before the Court in this ANDA litigation, providing the following recommendations: (1) granting Abbott Laboratories’ (“Abbott”) motion to substitute AbbVie, Inc. (“AbbVie”) as plaintiff in the action; (2) denying Roxane Laboratories, Inc.’s (“Roxane”) motion to dismiss Abbott’s complaint for lack of subject matter jurisdiction; (3) granting Roxane’s motion to transfer venue to the U.S. District Court for the Southern District of Ohio; (4) denying Abbott’s motion to dismiss “all claims and counterclaims related to the two asserted patents without prejudice” as moot. Id. at 1.

In October 2011, Abbott had announced that it would be undergoing a significant reorganization. Id. at 2. Pursuant to the reorganization, Abbott split into two publicly traded companies, one which focuses on developing pharmaceuticals and another which focuses on developing “diversified medical products.” Id. AbbVie is the pharmaceutical-focused company and is a Delaware corporation. Id. The medical product company retained the Abbott name and is an Illinois corporation. Id. Abbott’s headquarters are in Abbott Park, Illinois. Id.

On April 10, 2012, following an amendment to its ANDA, Roxane filed suit in the Southern District of Ohio seeking a declaratory judgment that Abbott’s U.S. Patent Nos. 7,148,359 and 7,364,752 are invalid and/or not infringed. Id. at 4. That same day, Abbott filed suit in the District of Delaware alleging infringement of the patents in the Ohio action in addition to U.S. Patent No. 5,648,497. Id. On April 11, 2012, Abbott filed an amended complaint asserting additional infringement claims with respect to U.S. Patent Nos. 6,037,157 and 6,703,40. Id. In view of its reorganization, Abbott assigned all its Delaware patents-in-suit to AbbVie on August 1, 2012. Id. at 5. Then, on August 29, 2012, Roxane filed it motion to dismiss with its motion to transfer pending. Id. at 5-6. That same day, following Roxane’s filing, Abbott filed its motion to substitute. Id. at 6.

Judge Burke first addressed Abbott’s motion to substitute AbbVie, and Roxane’s motion to dismiss for lack of subject matter jurisdiction, as both motions implicated the issue of “how . . . Abbott’s assignment of the patents-in-suit to AbbVie impact this litigation.” Id. at 6. Judge Burke explained “it is undisputed that when the original Complaint was filed, Abbott was the owner of the patents-in-suit and that it had standing to sue.” Id. at 10. Abbott argued that “pursuant to [Fed. R. Civ. P. 25(c)], its motion to substitute AbbVie as plaintiff in this action ‘was timely and the correct mechanism for bringing AbbVie into the case in Abbott’s stead.’” Id. at 12. On the other hand, Roxane argued that the “standing issue should be judged at the moment there is a challenge to subject matter jurisdiction.” Id. It was thus Roxane’s position that because Abbott “relinquish[ed] its rights to the patent during the pendency of the litigation,” the dispute became moot and there was “no justiciable dispute between Abbott and Roxane [such that the Amended Complaint]” must be dismissed. Id. at 11-12.

First, Judge Burke found that the timing of Abbott’ motion to substitute was not dispositive, and that Abbott’s filing of its motion “mere hours after the filing of Roxane’s Motion to Dismiss . . . militates that the case be dismissed.” Id. at 19. Specifically, Judge Burke explained that “‘[i]n circumstances where dismissal for lack of initial standing is not required, the Supreme Court [has] held that jurisdictional defects can be cured before judgment,’” and that “the temporary loss of standing during patent litigation can be cured before judgment.” Id. at 19. Second, Judge Burke found that “Rule 25(c) may be used to cure a lack of standing incurred after the filing of the complaint as long as the claims survived assignment.” Id. at 25. In light of these findings, Judge Burke recommended that Abbott’s motion to substitute be granted and Roxane’s related motion to dismiss be denied. Id. at 25-26.

With respect to its motion to transfer, Roxane argued that transfer was warranted pursuant to the first-filed rule because “the Ohio Action was filed prior the Delaware Action, and because the Ohio Action involved the same parties and subject matter as the Delaware Action.” Id. at 27. Judge Burke explained that “the first-filed rule is meant to identify cases that, if not mirror images of each other, are so indistinguishable that, in essence, they can be said to arise from the ‘same set of facts.’” Id. at 31. Judge Burke found that “although there will be significant commonalities of fact and law among the two suits, the subject matter of the suits are different enough to render the first-filed rule inapplicable.” Id. at 28. As Judge Burke explained, not only were there three patents in the Delaware action that were not asserted in the Ohio action, there also existed substantive differences among those patents, including differences in subject matter, inventors, and the scope of potentially invalidating prior art. Id. at 28-31.

Despite Judge Burke’s recommendation that first-filed rule did not apply, he was nevertheless required to address whether the case should be transferred pursuant to the traditional 28 U.S.C. § 1404(a) analysis. Id. at 32. Judge Burke found that “this is a case where Delaware has no ties to Abbott or Roxane, while the proposed transferee forum not only has ties to both parties and to the underlying dispute, but is also the forum in which litigation regarding the same ANDA is already ongoing.” Id. at 52. Judge Burke further noted that “[a]lthough Abbott’s choice of forum is entitled to considerable deference . . . the balance of the Jumara factors weigh strongly in favor of transfer.” Id. at 53. Accordingly, Judge Burke ultimately recommended that the Court transfer the Delaware action to the Southern District of Ohio, and that the Court deny Abbott’s motion to dismiss as moot in view of that transfer recommendation. Id. at 52-53.

Abbott Laboratories v. Roxane Laboratories, Inc., C.A. No. 12-457-RGA-CJB (D. Del. May 28, 2013)

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