Merck Sharp & Dohme Corp. v. Teva Pharms. USA, Inc.

Case Name: Merck Sharp & Dohme Corp. v. Teva Pharms. USA, Inc., Civ. No. 14-874-SLR-SRF, 2015 U.S. Dist. LEXIS 85279 (D. Del. July 1, 2015) (Fallon, M.J.) 

Drug Product and Patent(s)-in-Suit: Nasonex^® (mometasone furoate monohydrate); U.S. Patent No. 6,127,353 ("the '353 patent") 

Nature of the Case and Issue(s) Presented: The issue here concerns whether the factors supporting the plaintiff’s choice of forum were sufficient to survive the defendant’s motion to transfer venue. Additionally, the court also considered whether the plaintiff’s complaint was properly pled in light of the Iqbal and Twombly standards.

Merck is the assignee of the '353 patent, which claims novel forms of mometasone furoate monohydrate, the active ingredient in Merck’s popular nasal spray marketed commercially as Nasonex. Before the ‘353 patent expired, Teva filed an ANDA, including a Paragraph IV Certification, with the FDA seeking approval to make and sell generic Nasonex. Merck sued Teva alleging direct and contributory infringement. Merck’s theory of infringement was premised on the fact that even if Teva’s generic version contained only anhydrous mometasone furoate, at least some of that compound would eventually convert to the infringing monohydrate form during the proposed shelf life of the product.

After the suit was filed, Teva informed Merck that it intended to file a motion seeking to transfer the case to New Jersey, based on the fact that Merck had recently asserted the same patent against Apotex in that District. The court in Apotex’s case held that Apotex’s product would not infringe the ’353 patent. Teva also filed motions seeking to dismiss Merck’s complaint for failure to state a claim, and for judgment on the pleadings. The court denied Teva’s motion to transfer and denied Teva’s motion on the pleadings as moot.

Why Merck Prevailed: Regarding its motion to transfer, Teva argued that transfer was proper because Merck engaged in forum shopping by filing suit in a state other than the state of Merck’s incorporation, New Jersey. Merck countered by noting that it filed the suit in Delaware, which is where Teva was incorporated. The court agreed with Merck that Teva’s accusation of forum shopping was not well-supported, noting that Teva was engaging in essentially the same conduct—choosing a venue that it believed to be more favorable to its claims. Teva next addressed the issue of judicial economy. According to Teva, selecting New Jersey as the litigation forum would serve this interest because Merck had recently been involved in a lawsuit there where it had asserted the ’353 patent against Apotex. Therefore, Teva argued, the New Jersey courts would be more familiar with the highly technical factual issues addressed in the case. Merck responded by noting that judicial economy generally had no bearing on federal patent cases. Additionally, Merck noted, the Apotex case involved an accused product that was not sufficiently similar to Teva’s accused product. Merck also noted that judicial economy would not be served because the decision in the Apotex case had been decided more than two years prior. Again, the court sided with Merck. The court pointed to the fact that the Apotex litigation was not co-pending with the instant matter. The case also involved different defendants and accused products. The court found that Teva failed to carry its burden of persuading the court that transfer was proper, and denied its motion.

Next, the court addressed Teva’s motions to dismiss for failure to state a claim and for judgment on the pleadings. Teva argued that Merck’s contributory infringement claim was facially deficient. A claim for contributory infringement must include (i) an offer to sell, sale, or import; (ii) a component or material for use in a patented process constituting a material part of the invention; (iii) knowledge by the defendant that the component is especially made or especially adapted for use in an infringement of such patents; and (iv) the component is not a staple or article suitable for substantial noninfringing use. Teva argued that Merck failed to specifically reference or make factual allegations regarding materiality. Merck had relied on an earlier, five pronged test which did not include a materiality requirement. The court noted that more recent case law, as well as the text of 35 U.S.C. § 271(c), specified that the allegedly infringing component must constitute a material part of the invention. The court found that this deficiency was fatal and dismissed Merck’s complaint. But the court did provide Merck with leave to amend the complaint to cure the deficiency.

Teva also argued that Merck’s contributory infringement allegations failed as a matter of law because the complaint did not contain facts that created a plausible inference that anhydrous mometasone furoate in Teva’s proposed generic would convert to mometasone furoate monohydrate over the course of its shelf life. Merck countered that it was not required to plead specific factual details of its conversion theory at such an early stage of the proceeding. The court agreed with Merck, stating that although Merck did not expressly identify the specific details of its conversion theory in its complaint, the allegations, taken as true, were plausible. To find otherwise would have required the court to engage in detailed fact-finding at the pleading stage, which it declined to do. Teva also argued that Merck’s complaint was deficient because using the product before it converted into the infringing version of the compound would have constituted a substantial non-infringing use. Merck responded that Teva’s argument was premised on its assertion that its product does not directly infringe. Essentially, Teva was improperly asking the court to accept this scenario as fact. The court accepted Merck’s argument, stating that Merck had sufficiently alleged the absence of a substantial non-infringing use by affirmatively pleading the existence of no substantial non-infringing uses.