Free Letter - District Court of Delaware - Delaware

Case 1 :04-cv-00968-G MS Document 80 Filed 05/23/2005 Page 1 of 4
YOUNG CONAWAY STARGATT & TAYLOR, LLP
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BRUCE L. SILVEIBTEIN MICPLAEL R. NESTOR EDWARD J. KOSMOWSRJ CHRISTIAN DOUGLAS WRIGHT
\VlLLlA\l W. BowsER MAUREEN D. LUKE JOTLN C. KUFFEL SRARON M. Z1EG
LARRY J. TARAE1cos ROLTN P. BISSELL TIMOTHY E. LENGKEEK
R1cH.ARD A DTLTEERTO, JR. ScoTT.A. HOLT ~———
MELAN1E K. SPLARP JOHN T. DOJGEY ——?
CASSANDRA F. ROBERTS M. BLAKE CLEARY JOHN D. MCLAUGHLIN. JR.
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May 23, CLPDCDDNSEL M A SP&I,A1_COUNSEL
BY ELECTRONIC FILING
The Honorable Gregory’M. Sleet
United States District Court
844 North King Street
Wilmington, DE 19801 "
Re: Allergan, Inc., etal. v. Alcon, Inc., etal., C.A. No. 04-968 GMS · - —
Dear Judge Sleet:
Pursuant to paragraph 13 ofthe Scheduling Order (DI. 30), Alcon submits this letter brief in
further support of its motion to strike Allergan’s jury demand (D.I. 63).
I. INTRODUCTION
Allergan bases its purported right to a jury trial on the existence of some hypothetical action
for patent infringement that, but for the Hatch—Waxman Act, it would have tiled against Alcon.
Since, in 18th century England, this hypothetical infringement action would supposedly have been
tried to a jury, Allergan argues that the Seventh Amendment warrants the same fact finder for the
present action.
Allergan’ s purported constitutional right to a jury trial rests entirely on whether this particular
action, which was instituted under the Hatch·Waxman Act, could have been tried to a jury under the
applicable law when the Seventh Amendment was adopted. The law clearly holds that this action,
which is based in equity, was g amenable to a jury trial in 18th century England and that the pas-
sage of the Hatoh—Waxman Act does not affect that result. For example, Circuit Judge Posner, sit-
ting by designation in Abbott Laboratories, Inc. v. Torpharm, Inc., 309 F. Supp.2d 1043 (N .D. Ill.
2004), has recognized that in a Hatch—Waxman action, the patentee (eg., Allergan) "carmot seek
damages because [the defendant (eg., Alcon)] has not yet begun to market its generic substitute
.... °’ Under these circumstances, a a bench trial is mandated because the patentee "is seeking only
equitable relief.” The result would have been the same in 18th century England. See Tegal Corp. v.
Tokyo Electron Am., Inc., 257 E.3d 1331, 1340 (Fed. Cir. 2001) (The Federal Circuit held that in
18th century England, a patentee that instituted an infringement action which requested only
equitable relief "would have needed . . . to bring its case in a court of equity.") Q at 1340. That the
Hatch—Waxman Act expressly precludes a claim for damages only serves to confirm the equitable
nature of the present suit.
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Case 1:04-cv—00968-G|\/IS Document 80 Filed 05/23/2005 Page 2 of 4
Youuc CoNAwAY STARGATT & TAYLOR, LLP
The Honorable Gregory M. Sleet
May 23, 2005
Page 2
II. ARGUMENT
A. There Is No Right To A Jurv Trial In Hatch-Waxman Actions
Allergan contends that the Hatch—Waxman Act somehow "altered” the legal framework as it
affects the right to a jury trial} But, as indicated by the cases cited in Alcon’s opening brief, the
Hatch-Waxman Act did not change the established jurisprudence holding that the right to a jury trial
requires a demand for legal- not equitable — relief. Thus, actions under section 27l(e)(2) of the
Hatch-Waxman Act are subject to the same analysis as typical patent infringement actions. For
example, in a traditional patent action, the Ninth Circuit Court of Appeals held in Shubin v. United
States District Court, 313 F.2d 250, 251 (9th Cir. 1963), that where a patentee only seeks an injunc-
tion against "threatened infringement,” a “legal issue” is not presented and the "only remedy would
be in equity." (emphasis added).2 Like the patentee in Shubin, Allergan does not seek monetary
damages, but only an injunction against "tlrreatened" infringement. Accordingly, its only remedy is
— and has always been — in a court of equity, where no right to a jury trial exists. gz; Bayer AG v.
Schein Pharm., Inc., No. 99-2181 (GEB), 2000 U.S. Dist. LEXIS 20718 at *7 (D.N.J. Feb. 23, 2000)
("[i]n cases seeking to enjoin future infringement . . . the patentee has no right to a jury trial").
B. Contrary To Allergan’s Assertion, Alcon’s - _ _
Seventh Amendment Analvsis Is Not "Faulty”
Although Allergan is correct that the two prongs ("nature of the action" and “requested
relief") converge in Hatch-Waxman actions, this case does not satisfy either prong ofthe mandated
test for determining the right to a jury trial under the Seventh Amendment. See Alcon Opening Br.
at 2-4. The present action is not "legal" in nature because no damages are sought. Therefore, the
case would have been brought in equity in 18th century England. E Tegal, 257 F.3d at 1340
("[G]iven Tegal’s interest only in an injunction, it is clear that Tegal would have needed, in
eighteenth century England, to bring its case in a court of equity."). Moreover, relying on Tegal, the
Federal Circuit stated in ln re Apotex, Inc., 49 Fed. Appx. 902, 2002 WL 31388364 (Fed. Cir. Oct.
9, 2002) — a Hatch-Waxman case —that "[b]ecause the nature of the underlying controversy is entire-
ly equitable, there can be no right to a jury trial." LL at 903. Although the decision is designated
non—precedential, it is the clearest expression of the Federal Circuit’s position on the very issue
facing this Court.3
C. Allergan Is Not Entitled To A Jury Trial On
Alcon’s Declaratorv Judgment Counterclaims
Allergan argues that the law on its entitlement to a jury trial on Alcon’s counterclaims is far
from settled. (Allergan Br. at 3). That may have been true at one time. But after the Federal
I Allergan Br. at l. Allergan also argues that the statute does not mention an intent to limit the
patentee to only a bench trial (Allergan Br. at 2). But 35 U.S.C. § 27 1 (e)(4) explicitly states that the
remedies available in a Hatch-Waxman action may be granted by a "court."
2 _S_e_e agg Beaunit Mills, Inc. v. Eday Fabric Sales Cogp., 124 F.2d 563, 565 (2d Cir. 1942)
("[O]n issues of patent infringement a jury trial may be had under a claim for damages only, as
distinguished from a claim for injunction and accounting of profits?) (citations omitted).
3 It is not surprising that the Glaxo case was designated non-precedential because, after the
Federal Circuit’s decision in Tegal, it "did not add [ ] significantly to the [existing] body of law,"
which is the standard used by the Federal Circuit in deciding whether a particular decision is “non-
precedential." Fed. Cir. R. 47.6(b).
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Case 1:04-cv—00968-G|\/IS Document 80 Filed 05/23/2005 Page 3 of 4
YOUNG CONAWAY STARGATT & TAYLOR, LLP
The Honorable Gregory M. Sleet
May 23, 2005
Page 3
Circuit’s decision in Tegal, no court has held that a declaratory judgment counterclaim provides a
jury trial right in gy patent infringement action, including actions instituted under the Hatch-
Waxman Act. In fact, the district court decisions (Warner-Lambert, Hoechst, and Zeneca) and the
Federal Circuit decisions (Lockwood and SGS-Thompson) Allergan cites were all decided before
Tegal. The precedential importance of Tegal decision to the present analysis cannot be ignored.
See, eygg Kao Corp. v. Unilever U.S., Inc., No. Civ. 01-680-SLR, 2003 WL 1905635 at *3 (D. Del.
April 17, 2003) (citing Tegal, Chief Judge Robinson held that counterclaims for invalidity and non-
infringement do not entitle either party to a jury trial.).
Indeed, the precedential value of Tegal is seen again in Chief Judge Robinson’s decision in
Rhenalu v. Alcoa, Inc., No. Civ. A 99—301—SLR, 2000 WL 1868178 (D. Del. Dec. 14, 2000). As
relevant here, plaintiff Rhenalu filed a declaratory judgment action seeking a judgment of invalidity
and non-infringement of defendant Alcoa’s patent. Alcoa filed a counterclaim for infringement and
requested damages and an injunction. Q at *1. The parties later stipulated that "no monetary relief
(including damages) will be sought in this litigation.” LQ at *1 n. 1. The case was tried to a jury, and
the patent was held valid and infringed. Based upon the then recently—decided Tegal case, Rhenalu
moved to vacate the judgment because a jury trial was not authorized. Judge Robinson granted the
motion and stated: "Pursuant to the Federal Circuit’s decision in Tegal Corp. v. Tokyo Electon l sic]
Am., Inc., . . . given that defendant-patentee voluntarily withdrew its claim for damages, it also
waived its right to a jury trial.”4 Thus, without a claim for damages, Allergan has no right to a jury
trial, even where counterclaims for declaratory judgments of invalidity and non—infringement are
asserted.
Accordingly, any uncertainty that might have previously existed on this particular issue has
been resolved in Alcon’s favor. S3, eygy, Glaxo Wellcome Inc. v. Geneva Pharms., Inc., 45
U.S .P.Q.2d 1702, 1703 (D.N.J. 1997) (Defendants’ counterclaim for non-infringement was "analog—
ous to a traditional equitable remedy ..... Such an action does not provide any Seventh Amend-
ment right to a jury trial and cannot sustain plaintiffs’ jury demand.") (internal citation omitted);
Sanofi-Syrgthelabo v. Apotex, Inc., 64 U.S.PQ.2d 1684, 1689 (S.D.N.Y. 2002) (no right to a jury
trial on declaratory judgment counterclaims in Hatch-Waxman actions in the absence of actual
damages).
III. CONCLUSION
For the reasons stated herein and in its opening letter brief, Alcon respectfully requests that
the Court grant its motion to strike Allergan’s demand for a trial by jury.
Respectfully submitted,
&
Jo W. Shaw
JWS/prt
cc: Clerk of the Court (by hand delivery)
Jonathan E. Singer, Esquire (by facsimile)
4 Order, dated September 28, 2001 (citation omitted), a copy of which is armexed hereto as
Exhibit 1.
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Case 1:04-cv-00968—G|\/IS Document 80 Filed 05/23/2005 Page 4 of 4
YOUNG CoNAwAY STARGATT & TAYLOR, LLP
The Honorable Gregory M. Sleet
May 23, 2005
Page 4
William J. Marsden, Esquire (by electronic Hling & hand delivery)
Daniel J. Thomasch, Esquire (by facsimile)
Brian D. Coggio, Esquire (by facsimile)
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