On Mar 12, 2019 Delaware court denied Orexo’s motion for summary judgment as it failed to meet its burden to establish the requirements for issue preclusion.
In February 2017, Orexo filed this action. Orexo alleges in its complaint that Actavis Elizabeth’s manufacturing and Actavis Pharma’ s distribution of generic versions of Suboxone® and Subutex® infringe the US 8,454,996 patent. In their answer to the complaint, Defendants asserted as an affirmative defense and counterclaim that “one or more claims of the #996 patent are invalid under one or more provisions of 35 U.S.C. §§ 101, 102, 103, and/or 112. Defendants, however, now seek only to assert that the #996 patent is invalid under§§ 103 and 112. Orexo filed motion for summary judgment based on issue preclusion in previous Zubsolv® case.
In an earlier case filed in this court, Orexo sued Actavis alleging, among other things, that Actavis generic versions of Zubsolv® infringe the #996 patent. In response to Orexo’s complaint in the Zubsolv litigation, Actavis Elizabeth and Actavis, Inc. asserted as an affirmative defense and in a counterclaim that claims of the #996 patent are “invalid under one or more provisions of 35 U.S.C. §§ 101, 102, 103, and/or 112.” However, at trial Actavis presented only theory of invalidity based on obviousness. In an opinion issued on November 15, 2016, Judge Robinson held that the asserted claims of the #996 patent “are not invalid as obvious” and that Actavis Elizabeth infringed the asserted claims. Actavis Elizabeth did not appeal this ruling.
“The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Orexo argues in its summary judgment motion that “validity is a single issue” as a matter of law and that, therefore, the doctrine of issue preclusion bars Defendants from challenging the validity of the #996 patent in this action. Defendants disagree that validity is a single issue, but they do not dispute that if validity is deemed to be a single issue then the Actavis entities are precluded from challenging the #996 patent’s validity in this action. In their papers filed in opposition to Orexo’ s motion, Defendants asserted as a factual matter that “[t]he identical issue of the [#]996 patent’s validity was not previously litigated” in the Zubsolv litigation. In support of this assertion, Defendants stated that§ 112 defenses they intend to assert in this action and certain prior art references they intend to offer as part of an obviousness defense under§ 103 in this action were not presented in the Zubsolv litigation. Orexo does not dispute that § 112 and the prior art references cited by Defendants were not presented or adjudicated in the Zubsolv litigation. Orexo simply contends that Defendants are precluded from asserting these invalidity defenses in this action because validity is a single issue and “validity under § 103 was actually litigated, adjudicated, and necessary to the judgment [in the Zubsolv litigation.
Court said that in a patent case, Third Circuit law governs the application of issue preclusion generally, and Federal Circuit law governs those aspects of issue preclusion “that may have special or unique application to patent cases.” The doctrine of issue preclusion, sometimes called collateral estoppel, bars “‘ successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment,’ even if the issue recurs in the context of a different claim.” Taylor v. Sturgell, 553 U.S. 880, 892 (2008) (quoting New Hampshire v. Maine, 532 U.S. 742, 748-49 (2001)). Parties dispute whether the identical issue was previously litigated and adjudicated in the Zubsolv litigation (requirements 1 and 2) and whether Teva was fully represented in the Zubsolv litigation (requirement 4). Resolution of the parties’ dispute with respect to the first and second requirements of issue preclusion hinges on the question of whether, as a matter of law, invalidity is a single issue for purposes of issue preclusion. Court further said that neither the Third Circuit nor the Federal Circuit has addressed whether validity is a single issue for estoppel purposes. But at least 12 courts in other districts have confronted the question; each court treated validity as a single issue. But in this case Judge Connolly of Delaware court declined Orexo’s invitation to adopt a per se rule that validity is a single issue for purposes of issue preclusion. His decision was largely informed by authorities not cited by the parties: Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313 (1971). He also found that treating validity as a single issue as a matter of law conflicts with important policies underlying the issue preclusion doctrine and the federal patent laws.
Blonder-Tongue : In Blonder-Tongue, the Supreme Court abandoned the requirement of mutuality of parties for issue preclusion and explicitly overruled Triplett. The Court’s analysis in Blonder-Tongue makes clear that it understood invalidity to encompass multiple issues for purposes of issue preclusion. The Court’s references to “all issues concerning patent validity” and “relitigating validity issues”, and its comparison of nonobviousness to “other questions on which patentability depends,” demonstrate that the Court deemed nonobviousness an issue separate from (albeit within) the broader subject of invalidity. If validity were a single issue, then there would be no reason for the district court to make a “determination that the issue in both actions was identical” where the patent was found to be invalid in the first action. That district courts are required to make that determination when a defendant seeks to preclude a plaintiff from relitigating the validity of a patent previously held to be invalid necessarily means that validity is not a single issue.
Third Circuit and Federal Circuit Case Law: The legal rules that govern the invalidity defenses available to defendants sued for infringement vary significantly. A patent is invalid under§ 101, 102, 103 or 112 and each defense requires different legal standard. There is, in short, no uniformity among the rules that govern the invalidity defenses afforded to an accused infringer. Accordingly, applying Third Circuit and Federal Circuit precedent, court found that validity should not, as a matter of law, be treated as a single issue for estoppel purposes.
Also public policiesunderlying the patent laws and the doctrine of issue preclusion counsel against adopting a per se rule that validity is a single issue. Treating validity as a single issue conflicts with the “well-established policy of freely allowing challenges to the validity of claimed intellectual property protection.” Nasalok, 522 F.3d at 1327.
Because validity is not a single issue for estoppel purposes and because Orexo does not challenge Defendants’ factual assertion that the invalidity defense presented in the Zubsolv litigation is not identical to the invalidity defense Defendants seek to present in this action, Orexo has failed to meet its burden to establish the first two requirements for issue preclusion to apply. Therefore court denied Orexo’s motion for summary judgment.