Memorandum (District of Delaware): Jul. 06, 2020
Civil Action No.: 17-1154
Plaintiffs: Cephalon, Inc. et al.
Defendants: Slayback Pharma Limited et al.
On Apr. 27, 2020 court issued an opinion in a Hatch-Waxman litigation & found asserted patents not invalid & infringed by ANDA filers. The decision summary can be “read here” on this blog. The issue here is related to dispute regarding proposed order of final judgment. The parties were unable to agree on a proposed final judgment order because they dispute which claims should be included in the judgment. Defendants argued that the judgment should be limited to the 11 claims asserted at trial. Plaintiffs proposed a judgment that covers those 11 claims plus 86 claims they had asserted earlier in the litigation.
Court said that the resolution depends on the meaning of two paragraphs in two stipulated orders which reads:
“The parties stipulate that a determination as to non-infringement and/or invalidity of the asserted claims at trial will result in a final judgment as to each Defendant of all patents that have been asserted by Plaintiffs in this case as to each such Defendant, respectively, with the exception of U.S. Patent No. 8,791,270, which has been resolved by the granting of covenants not to sue and/or consent judgments.”
Paragraph 4 of the second Stipulation and Order reads:
“Plaintiffs and Slay back stipulate that a determination as to invalidity of the asserted claim at trial will result in a final judgment as to Slay back of all claims of the patent that has been asserted by Slayback in this case, with the exception of U.S. Patent No. 8,791,270, which has been resolved by the granting of a consent judgment.”
Defendants argued that the stipulations apply “only to a situation in which Defendants won”-i.e., a situation in which the court found that the asserted claims were invalid and/or not infringed-because the stipulations apply only to a “determination as to non-infringement and/or invalidity.” Plaintiffs countered that “Defendants misread the stipulations to apply only to determinations of non-infringement or invalidity-not as they actually provide, to determinations “as to non-infringement and/or invalidity.” Court said that the phrase (as to) is typically used as “a passable shorthand form of regarding, with regard to, or on the question of, and it “is also (minimally) defensible when used for about.” It is equally clear that the stipulations do not apply only to “a situation in which Defendants won.” Court’s determination that Plaintiffs had established that the Defendants’ proposed products infringe the asserted claims necessarily entailed a determination that Defendants had failed to prevail on their claim that the proposed products were noninfringing. Defendants’ contention that a “determination as to non-infringement” differs from a “determination as to infringement” makes no sense in a case like this one where Plaintiffs seek a declaratory judgment of infringement and Defendants seek a declaratory judgment of noninfringement. The accused products in such a case either infringe the asserted patents or don’t infringe the asserted patents.
In the same vein, “invalid” and “not invalid” are inseparable concepts in a patent case. Court’s determination that the asserted claims were not invalid constitutes a determination on the question of invalidity. Defendants argued that the stipulated orders apply only to findings of “invalidity” as opposed to findings of”validity.” Court said that but it is not the role of the court (or jury) to declare a patent valid. Because under 35 U.S.C. § 282, “[a] patent shall be presumed valid.” When a patent’s validity is challenged, the court ( or jury) is tasked with deciding if the challenger has proven that the patent is invalid. The “determination” to be made in such cases is whether the patent is invalid or not invalid.
Because the stipulated orders apply to determinations that the asserted claims are infringed and not invalid, the judgment in this case should extend to all the claims of all the patents that were asserted in the case by Plaintiffs except for U.S. Patent No. 8,791,270. The phrase “all patents/claims that have been asserted by Plaintiffs in this case” is unambiguous. It clearly covers every claim of every patent asserted by Plaintiffs at any time in the case before the date of the Stipulation and Order. Therefore, the stipulation covers all claims of the asserted patents & not only the 11 claims which were asserted at trial.
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