February 26, 2018

Case Name: Leo Pharma A/S v. Actavis Labs. UT, Inc., No. 16-333-JFB-SRF (D. Del Feb. 26, 2018) (Fallon, M.J.)

Drug Product and Patent(s)-in-Suit: Picato®(ingenol mebutate); U.S. Patents Nos. 7,410,656 (“the ’656 patent”), 8,278,292 (“the ’292 patent”), 8,372,827 (“the ’827 patent”), 8,372,828 (“the ’828 patent”), 8,377,919 (“the ’919 patent”), 8,536,163 (“the ’163 patent”), 8,716,271 (“the ’271 patent”), 8,735,375 (“the ’375 patent”), 9,416,084 (“the ’084 patent”), and 9,676,698 (“the ’698 patent”)

Nature of Case and Issue(s) Presented: Actavis filed its answer and counterclaims in this Hatch-Waxman litigation, which included a counterclaim and an affirmative defense that the ’084 and ’698 patents, referred to as the “Process Patents,” were unenforceable for inequitable conduct. Actavis allegation was based on Leo’s purportedly deliberate failure to disclose as prior art U.S. Patent No. 7,378,445 (“the ’445 patent”) to the USPTO during prosecution of the Process Patents. The ’445 patent did not share a common inventor with the Process Patents. In 2011, the assignee of the ’445 patent assigned its entire patent portfolio, including the ’445 patent and U.S. Patent No. 7,449,492 (“the ’492 patent”) to Leo. During prosecution of the Process Patents, Leo disclosed the ’492 patent to the USPTO, but did not disclose the ’445 patent as prior art. Leo moved to dismiss Actavis’s counterclaim for inequitable conduct. The magistrate judge recommended that the court grant Leo’s motion to dismiss without prejudice.

Why Leo Prevailed: Actavis’s inequitable-conduct allegations failed to identify sufficiently the “who” of the misrepresentation because the counterclaim did not name a specific person who made the alleged material omission. Instead, Actavis broadly identified (i) the inventors named on the face of the Process Patents; (ii) attorneys or agents preparing or prosecuting the Process Patents;, and/or (iii) Leo employees substantively involved in the preparation or prosecution of the Process Patents. The magistrate judge found that these generalized allegations left open the possibility that the counterclaim implicates all or none of the individuals who had dealings with the PTO during prosecution of the Process Patents.

Actavis’s failure to identify a specific individual with knowledge of the ’445 patent was fatal to its efforts to plead the requisite scienter prong of an inequitable-conduct claim. Therefore, the magistrate judge recommended that the court grant Leo’s motion to dismiss.