Free Reply to Response to Motion - District Court of Delaware - Delaware

Case 1:07-cv-00156-JJF

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Filed 08/21/2008

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE PDL BIOPHARMA, INC., Plaintiff, v. ALEXION PHARMACEUTICALS, INC., Defendant. ) ) ) ) ) ) ) ) )

C.A. No. 07-156 (JJF)

PDL'S REPLY TO ALEXION'S "RESPONSE" TO PDL'S LOCAL RULE 7.1.2(B) SUBMISSION SUPPORTING PDL'S MOTION TO DISMISS DECLARATORY JUDGMENT COUNTERCLAIMS AS TO UNASSERTED CLAIMS The Federal Circuit's just-decided Prasco opinion affirmed a District Court's conclusion that declaratory judgment of non-infringement or invalidity was absent Prasco, LLC v. Medicis Pharmaceutical Corp., 2008 U.S. App. LEXIS 17329 (Fed. Cir. Aug. 15, 2008). In its "response" (DI 160) to PDL's D. Del. LR 7.1.2(b) submission (DI 156) about Prasco's effect on PDL's pending motion to dismiss defendant's declaratory judgment counterclaims (DI 69 [brief] & 86 [transcript]), defendant makes three principal arguments ­ and ignores Prasco's main holding. First, it argues that Prasco is not `on all fours' with the facts of this case. (DI 160 at 2.) That misses the point; Prasco need not be `on all fours' to be relevant or persuasive. The principles that Prasco confirmed in affirming dismissal are relevant to defendant's arguments opposing dismissal. (DI 156 [passim].) Second, defendant's response attempts to avoid Prasco's rationale by constructing an argument based on the premise that defendant "counterclaimed that the

Case 1:07-cv-00156-JJF

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patents that PDL asserted against it are invalid." (DI 160 at 2 [emphasis supplied].) Not so. In fact, defendant counterclaimed only that PDL's asserted claims were invalid:

(DI 160 at 13.) Alexion's answering brief (DI 77) on PDL's motion to dismiss conceded that PDL is not asserting the claims that Alexion's declaratory judgment counterclaim seeks to pursue: "PDL has selectively chosen--so far--to pursue against Alexion only certain claims," i.e., the homology claims. (DI 77 at 11.) Third, defendant's response argues in effect that a patentee has an obligation to sign a covenant not to sue. (DI 160 at 4 ["PDL remains unwilling to provide Alexion with a comprehensive covenant not to sue for infringement of these claims"].) Prasco flatly rejects that notion: "A patentee has no obligation to spend the time and money to test a competitors' product nor to make a definitive determination, at the time and place of the competitors' choosing, that it will never bring an infringement suit." Prasco, 2008 U.S. App. LEXIS at * 25-26 (emphasis supplied). Finally, defendant's response ignores Prasco's main teaching. Prasco affirmed "the bedrock rule that a case or controversy must be based on a real and immediate injury or threat of future injury that is caused by the [opposing party]."

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Prasco, 2008 U.S. App. LEXIS at * 15 (emphasis in original). Defendant's response ignores this law. And it fails to point to any injury or threat thereof that is real or immediate. To the contrary, defendant's response effectively admits that its position is based on defendant's speculation and subjective fear that PDL might ­ at some unspecified future time ­ assert the unasserted claims. In particular, defendant admits that its rationale for declaratory judgment is that PDL might assert the unasserted claims "against Alexion at a later day, if Alexion makes any modifications whatsoever to its current labeling or indications." (DI 160 at 4 [emphasis supplied].) That claimed

concern is the type of "threat of future injury" that Prasco confirmed does "not me[e]t this threshold burden of proving an immediate and real controversy" sufficient to create declaratory judgment jurisdiction. Prasco, 2008 U.S. App. LEXIS at * 18-19 (brackets and emphasis supplied). It is, instead, the kind of "speculative fear of future harm" that Prasco teaches fails to meet the "objective standard" of "real and immediate" injury or future threat thereof. Id. at * 15 (emphasis in original). Prasco supports this Court's dismissal of Alexion's declaratory judgment counterclaims. PDL respectfully asks that the Court do so. MORRIS, NICHOLS, ARSHT & TUNNELL LLP /s/ Karen Jacobs Louden Jack B. Blumenfeld (#1014) Karen Jacobs Louden (#2881) 1201 N. Market Street P.O. Box 1347 Wilmington, Delaware 19899 (302) 658-9200 [email protected] Attorneys for Plaintiff and CounterDefendant PDL BioPharma, Inc.

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OF COUNSEL: Matthew D. Powers Vernon M. Winters WEIL, GOTSHAL & MANGES LLP Silicon Valley Office 201 Redwood Shores Parkway Redwood Shores, CA 94065 (650) 802-3000 Jennifer H. Wu Rebecca E. Fett New York Office WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 (212) 310-8000 August 21, 2008
2457500

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CERTIFICATE OF SERVICE I, the undersigned, hereby certify that on August 21, 2008, I electronically filed the foregoing with the Clerk of the Court using CM/ECF, which will send notification of such filing(s) to the following: Josy W. Ingersoll I also certify that copies were caused to be served on August 21, 2008, upon the following in the manner indicated: BY HAND Josy W. Ingersoll Andrew A. Lundgren Young, Conaway, Stargatt & Taylor, LLP The Brandywine Building 1000 West Street, 17th Flr. Wilmington, DE 19801 BY EMAIL John M. Desmarais Gerald J. Flattmann, Jr. Christine Willgoos Gregory A. Morris Kirkland & Ellis 153 East 53rd Street New York, NY 10022-4611 /s/ Karen Jacobs Louden ________________________________ Karen Jacobs Louden (#2881)