YOUNG CONAWAY STARGATT & TAYLOR, LLP
THE Bamovwrne Buuomo
1000 WEST STREET, 17TH Froon
Josvw. Iwcexsou. (N0. 1088) \VILMINGTON,DEL,A\\’ARE 19801 (3021571-6600
Dimscr DIAL: 302-571-6672 (302) 571-1253 FAX
DIRECT mx: 302-576-3301 P.O. Box 391 (800) 253-2234 (DE ONLY)
jl1'1g€[email protected] \\/H_M;NG]·()N, DELA\\7ARE 19399-039] WWW.yOu11,
BY E-FILING
The Honorable Sue L. Robinson
United States District Court
844 King Street
Wilmington, DE 19801
Re: Ferring B. V v. Teva Pharmaceuticals USA, [nc., et al.
Civil Action No. 04-884-SLR
Dear Chief Judge Robinson:
On behalf of Teva, we write in response to Ferring’s letter of November 6, 2006,
which attached a dismissal of class action antitrust complaints against Ferring. The class action
plaintiffs could not sustain their causes of action because they could not show fraud. Ferring’s
allegation that this decision is "highly relevant" to Teva’s attorney’s fees motion misunderstands
the basis of Teva’s motion and the purpose of the law of 35 U.S.C. § 285 relating to exceptional
cases (which is stated in case law cited by Fening in its letter).
Teva’s motion was based on Feriing’s clear inequitable conduct during the
prosecution of the ‘398 patent. (D1. #62, pp. 7-8.) As noted in Teva’s opening brief, this
inequitable conduct, standing alone, provides a sufficient basis to support an exceptional case
finding. See A.B. Chance Co. v. RTE Corp., 854 F.2d 1307, 1312 (Fed. Cir. 1988) ("inequitable
conduct ... either alone or in conjunction with trial conduct, may constitute the basis for an
award of attorneys’ fees under 35 U.S.C. § 285.") ln AB. Chance, the Federal Circuit remanded
` a denial of attorney’s fees because the district court had not determined the inequitable conduct
issue. Id. at 1312-13. Inequitable conduct, with no finding of fraud, supports an exceptional
case finding and an award of attorney’s fees. See Bruno Independent Living Aids, [nc. v. Acorn
Mobility Services, Ltd., 394 F.3d 1348, 1355 (Fed. Cir. 2005).
Fraud and inequitable conduct simply are not the same thing, a point which Judge
Brieant made clear in the decision attached by Ferring: "Fraud requires a higher threshold of
both intent and materiality than does a finding of inequitable conduct and must be based on
independent and clear evidence of deceptive intent together with a clear showing of reliance."
(Ex. A to Ferring letter, p. 8.) Teva did not file antitrust counterclaims in this case. The Federal
Circuit has never stated that fraud must be shown to support an exceptional case finding under 35
U.S.C. § 285, and any suggestion or implication to the contrary in Ferring’s letter should be
rejected.
oa01;22309s0.1 0589561012
Case 1:04-cv-00884-SLR Document 83 Filed 11/O9/2006 Page 2 of 3
Yourio CoNAwAY STARGATT & TAYLOR, LLP
The Honorable Sue L. Robinson
November 9, 2006
Page 2
The cases cited by Ferring in its letter simply stand for the uncontroversial
proposition that "[a]lthough a finding of inequitable conduct may justify an award of attorney’s
fees, not every case of inequitable conduct is an exceptional case within the meaning of Section
285." National Diamond Syndicate, Inc. v. Flanders Diamond USA, Inc., 2003 U.S. Dist. LEXIS
12083 at *19-21 (N.D. lll. July 14, 2003) (citing Gardco M]fg’g, Inc. v. Herst Lighting Co., 820
F.2d 1209, 1215 (Fed. Cir. 1987). None of this means that fraud must be shown.
In fact, the cases cited by Ferring support an exceptional case finding here.
National Diamond expressly states that the purpose of Section 285 is "to deter ‘clearly
unwarranted suits on obviously invalid or unenforceable patents.’†National Diamond at *17-18
(quoting Mathis v. Spears, 857 F.2d 749, 754 (Fed. Cir. 1988). Thus, the proper focus here is not
whether Ferring committed fraud, but whether Ferring brought suit on a patent it should have
known was unenforceable. The judgment of Judge Brieant, affirmed the Federal Circuit with
certiorari denied by the Supreme Court, was that no reasonable jury could fail to find that the
‘398 patent was unenforceable. In other words, the ‘398 patent clearly and objectively was
unenforceable. Thus, the purpose of Section 285 would be best served by awarding Teva the
fees it has incurred defending this unnecessary lawsuit.
The final argument in Ferring’s letter is that Judge Brieant failed to find
subjective bad faith in Ferring and Aventis’s suit against Barr, which Ferring alleges "directly
undermines" Teva’s second (and independent) basis for seeking attorney’s fees against Feriing.
As noted above, evidence of bad faith is not necessary to support an award of attorney’s fees; a
finding of clear inequitable conduct suffices. Moreover, Ferring’s argument here again
misconstrues Teva’s argument. Teva did not allege that Ferring brought suit against Barr in bad
faith. That suit surely was brought as "a standard response to Hatch-Waxman" as Judge Brieant
described it. (Ex. A to Ferring letter, p. 13.) Ferring’s bad faith came in bringing litigation
against Teva ajler it was aware of all the facts — undisputed facts — tlzat supported a summary
judgment of inequitable conduct. As Teva stated in its initial briefing on this issue:
Ferring and its counsel have been aware of all of the evidence
proving Ferring’s inequitable conduct during the ‘398 prosecution
since the outset of the present litigation. When it filed this case on
July 21, 2004, the inequitable conduct summary judgment motion
in the Barr litigation had already been briefed and argued and it
knew that it could not dispute the facts relied upon by Barr.
(D.I. #62, p. 9.)
Judge Brieant’s finding that Ferring did not exhibit subjective bad faith in
bringing suit against Barr prior to the revelation of the facts supporting inequitable conduct does
not mean that Fencing did not exhibit bad faith when it later brought suit against Teva on a patent
that no reasonable jury could have found to be enforceable. The result of that suit has been to
expend judicial resources and force Teva to defend this 80—docket—entry case for nearly two—and—
DB0l:2230980.l 0ss9s6.r012
Case 1:04-cv-00884-SLR Document 83 Filed 11/O9/2006 Page 3 of 3
Youuo CoNAwAv STARGATT & TAYLOR, LLP
The Honorable Sue L. Robinson
November 9, 2006
Page 3
a-half years. It is fair and in keeping with the purposes of Section 285 to require Ferring to
compensate Teva for its attorney’s fees and costs.
Respectfully submitted,
Josy W. Ingersoll (No. 1088)
JWI:cg
cc: Clerk ofthe Court (by e—filing and hand delivery)
Francis DiGiovanni, Esquire (by e-tiling and hand delivery)
Dennis J. Mondolino, Esquire (by e—mail)
Christine A. Pepe, Esquire (by e-mail)
William F. Long, Esquire (by e-mail)
DB0l:2230980.l osssssioiz
United States Free Forms
Canada Free Forms
United Kingdom Free Forms
Australia Free Forms