Petition for Writ of Certiorari — Implax Laboratories, Inc. v. Astrazeneca AB (No. 05-1583)

INS VOU, U.S. one oe

Bins TILED

(\\ 051583 JUN 2 - 2006

No. OFFICE OF THE CLERK

In the

Supreme Court of the Anited States

IMPAX LABORATORIES, INC:,

Petitioner,

Ws

ASTRAZENECA AB, AKTIEBOLAGET HASSLE,

KBI-E INC., KBI INC. and ASTRAZENECA LP,

Respondent.

On Petition for a Writ of Certiorari to the United

States Court of Appeals for the Federal Circuit

PETITION FOR WRIT GF CERTIORARI

JEFFREY J. TONEY

Counsel of Record

Joun L. Nortu

WILLIAM F. LonGc

SUTHERLAND ASBILL & BRENNAN LLP

999 PEACHTREE STREET

ATLANTA, GA 30309

(404) 853-8000

Counsel for Petitioner

Impax Laboratories, Inc.

Becker Gallagher Legal Publishing, Inc. 800.890.5001

¢ ‘

j

QUESTION PRESENTED

In a patent infringement action, does the Seventh

Amendment of the United States Constitution guarantee a jury

trial on factual issues relating to a counterclaim seeking to

have the patent declared invalid?

ii

LIST OF PARTIES TO THE PROCEEDING

PURSUANT TO RULES 14.1(b) AND 29.6

Petitioner Impax Laboratories, Inc. certifies that the

names of all parties to this proceeding appear in the caption

of this Petition for Writ of Certiorari.

Petitioner has no parent corporation, and no publicly held

company owns 10% or more of its stock.

ili

TABLE OF CONTENTS

TE ad os en oho hy igo pee he oes 1

STATEMENT OF JURISDICTION ............. J

CONSTITUTIONAL PROVISION .... : Saat asa 2

DEAS EEEITE SIO BIO A oe a ke oe ee 2

Pics RU so ee ee aa ws ss Okara ys

BD, PROCES AI on ee bs ere in wo 5

SUMMARY OF ARGUMENT ........:-.-.20+¢. 7

REASONS FOR GRANTING THE WRIT ........ -, 1

A. THE FEDERAL CIRCUIT HAS FAILED TO

ADHERE TO THIS COURT’S SEVENTH

AMENDMENT PRECEDENT ........2.64:. 10

1. The Federal Circuit failed to consider whether

a counterclaim seeking a declaratory judgment

of invalidity raises a legal (rather than

equitable) issue as an independent claim, apart

from other issues that may exist including

whether the patentee seeks damages .... . 10

2. Acounterclaim seeking a declaratory judgment

of invalidity must be evaluated under this

Court’s historical test to ascertain whether the

Seventh Amendment guarantees a jury trial . 13

iV

3. The 18th century common law writ of scire

facias is the best historical analog to the

modern declaratory judgment claim to

invalidate a patent and, pursuant to this

analog, the Seventh Amendment guarantees

evies a: WY el ke 6 be

B. THE FEDERAL CIRCUIT’S SEVENTH

AMENDMENT JURISPRUDENCE IS

INCONSISTENT AND FLAWED, WILL

CONTINUE TO CONFUSE THE DISTRICT

COURTS, AND HAS PUT THE FEDERAL

CIRCUIT IN A POSITION OF CONFLICT

WITH THE OTHER CIRCUITS ..........

5s PEPE es 6 eee Fe SS

2. In re SGS-Thomson Microelectronics, Inc. . .

STOO Ga Oe EG

4. Inconsistent application of the Lockwood

opinion has caused district court confusion .

5. In re Technology Licensing’s interpretation of

Lockwood puts the Federal Circuit in direct

conflict with the law of other circuits and will

cause further confusion in the district courts

* s- 2.0.8 & 6 4 2 Oe 6-8. 6 OO. pO GE: O28 28: 4 Se BSR ee

a ey a, ee et ee ee eee ee a i ee te a A ey ee

ee ee ee ae oe he ee eo a ee Se a oe ae oe ee et a Oe ee Pe Oe eS

a

Vv

C. THE CASE PRESENTS AN ISSUE OF

EXTRAORDINARY NATIONAL IMPORTANCE

THAT THE LOWER COURTS WILL NOT

ek es ee ea eee ae 27

COPIA x kon 0 bide a hg a ele a oa ne tee 29

APPENDIX

Appendix A

Appendix B

Appendix C

Appendix D

Appendix E

vi

TABLE OF AUTHORITIES

Cases

American Airlines, Inc. v. Lockwood,

SED tis SEAR SIO oN 6 ok he 3, 8, 20

American Airlines, Inc. v. Lockwood,

DED las SEA es ek aes 3, 8, 20

Arkwright v. Nightingale,

ce, Wes a Se ee Bee os eA eee 20

Armco, Inc. v. Armco Burglar Alarm Co., Inc.,

O75 Fae Tis CGM. FO) es eek eee eo 25

Attorney General ex rel. Hecker v. Rumford Chemical Works,

We hs OE ces PE he eee eee ee GS 17

Baltimore & Carolina Line v. Redman,

DP As EE Le eG ee ee eee ee 19

Beacon Theatres, Inc. v. Westover,

SP ie ee 5b ee Ek eee 10

Blonder-Tongue Labs., Inc. v. University of Illinois Found..,

is REL R21. Lc} Se ee goer nreny uracrane- 27

Cardinal Chemical Co. v. Morton International,

Te Ge, ee ok a ee eee 11, 27, 28

Curtis v. Loether,

WES UD OP ot od ccs abepewneees

Dairy Queen, *. . v. Wood,

ny Aw RR 6 bib do oes kk 8 10, 12

Dimick v. Schiedt,

ee re ee ee ov oka ee chase ee PA

Ex parte Wood & Brundage,

Se Ths Oe Os hb ee been a eA eee 14

Glaxo Group Lid. v. Apotex, Inc., No. 00 C 5791,

2001 WL 1246628 (N.D. Ill. Oct. 16,2001) ..... 23

Glaxo, Inc. v. Novopharm, Ltd. ,

L1G P30 1562 Gee, CO Ts os oe Sa ROW 5 5

Hildebrand v. Board of Trustees,

OG? F208 70s CO Oe. LIS a ok a 25

Hoechst Marion Roussel, Inc. v. Par Pharmaceutical, Inc.,

Civ. No. 95-3673 (DRD),

1996 WL 468593 (D.N.J. March 14, 1996) ...... 22

In re Apotex,

49 Fed. Appx. 902 (Fed. Cir. 2002) ..... 21, 23, 26

In re Evangelist,

FOF 2G 2? CAGE Te 2 eee ee 25

In re Lockwood,

SO F.3d 966 (Fed: Cir. 1995) ............ passim

In re SGS-Thomson Microelectronics, Inc.,

1995 WL 258370 (Fed. Cir. April 25, 1995) . . passim

Vill

In re Technology Licensing Corp. .,

423 F.3d 1286 (Fed. Cir. 2005) ........... passim

Jacob v. City of New York,

BE SOD ooo ce a 6 vib pve ewe ve Vee bos 27

King v. Arkwright,

WE BiNis ORR, POOP ec cee ete eee 15, 18

King v. Else,

1 Carp. P.C. 103,

cue, eee. Gee: 96 CB. 76D)... oe ee 15, 18

Maldonado v. Flynn,

ee ee Fa tee Gls BOOED osc 6 wee oe eee Se 7

Markman v. Westview Instruments, Inc. .,

es POO ck cic weap ee 13, 14, 15

Mowry v. Whitney,

ee a kee wees 18

Parsons v. Bedford, Breedlove & Robeson,

Oe Re By 8 ot |) es 1]

Pernell v. Southall Realty,

I kd org wee wie wba 13

Pfizer Inc. v. Novopharm Ltd..,

No. 00 C 1475,

2001 WL 477163 (N.D. Til. May 3, 2001) ....... 23

Ross v. Bernhard,

De CE EPO 6 iw Soe Biclc de ew aeses 11, 12

ix ibe i

Sanofi-Synthelabo v. Apotex Inc.,

No. 02- Civ. 2255 RWS,

2002 WL 1917871 (S.D.N.Y. Aug. 20, 2002) ....22

Shubin v. United States Dist. Court,

SAF Fae ee. SPD kad dees 540 SS

Tull v. United States,

EN Si. WEE CRE i 0.6 xe a Ae ee ce passim

Warner-Lambert Co. v. Purepac Pharmaceutical Co. ,

No. Civ. A. 98-2749 (JCL),

2001 WL 883232 (D.N.J. March 30, 2001) ...... 22

Statutes

Pe is 8 IR 8 eo 5 REA DERE RCE ]

BE Stas 6 AAO Vike obese ce tae eee es 28

De ec BASE 8 ee eis kee REE Ke I

Be atthe BR ied ork wie a eee 1

BO Wi OME 6S re eee es beens l

Pe TE: Pees eeu Cae Meese 5, 6, 22, 23

Other Authorities

1 J. Oldham, The Mansfield Manuscripts and the

Growth of English Law in the 18th century

CRO iw as Mk WERE Lee 15, 18

3 William Blackstone,

Commentaries on the Laws of England ...... 14, 17

D.S. Davies, The Early History of the Patent Specification,

ae ho eas NOTE 5 5. 6x 09 ES Gin we ee 17

E. W. Hulme, Privy Council Law and Practice of

Letters Patent For Invention From the Restoration

to 1794, 33 Law.Q.Rev 180 (1917) ........... 18

C. MacLeod, Inventing the Industrial Revolution-The

English Patent System, 1660-1800 (1988) ....... 18

Wendy H. Schacht & John R. Thomas, The Hatch-

Waxman Act: Legislative Changes In The 108th

Congress Affecting Pharmaceutical Patents,

See OE TL Dene CO bi ks Se ee es 27

]

Petitioner Impax Laboratories, Inc. (“Impax”) respectfully

petitions this Court for writ of certiorari to review the order

of the Court of Appeals for the Federal Circuit denying

Impax’s petition for a writ of mandamus to reinstate Impax’s

wrongfully stricken demand for a jury trial on Impax’s

counterclaim seeking a declaration that two patents are

invalid.

OPINIONS BELOW

The opinion of the Federal Circuit is reported at 2006

U.S. App. LEXIS 6931 and reproduced in Petitioner’s

Appendix (“App”) at 5a. The order denying panel rehearing

was not reported but is reproduced in App. at 3a. The order

denying rehearing en banc is reported at 2006 U.S. App.

LEXIS 10771 and is reproduced in App. at La.

STATEMENT OF JURISDICTION

Impax seeks review of an order of the Court of Appeals

for the Federal Circuit issued on March 2, 2006 denying

Impax’s Petition for a Writ of Mandamus to reinstate Impax’s

demand for a jury trial in the District Court. App. at 5a. The

Court of Appeals issued orders denying a panel rehearing and

a rehearing en banc on March 16 and April 13, 2006,

respectively. App. at 3a, la.

This Court has jurisdiction under 28 U.S.C. § 1254(1) to

review the Court of Appeals’ decision by writ of certiorari.

The Court of Appeals had jurisdiction to consider Impax’s

petition for a writ of mandamus under 28 U.S.C. § 1651.

The District Court has jurisdiction over this case under 28

U.S.C. § 1338 and-28 U.S.C. § 1407(a).

2

CONSTITUTIONAL PROVISION

The Seventh Amendment of the Constitution provides:

In Suits at common law, where the value in

controversy shall exceed twenty dollars, the right to

trial by jury shall be preserved, and no fact tried by

a jury, shall be otherwise re-examined in any Court of

the United States, than according to the rules of the

common law.

STATEMENT OF THE CASE

A. INTRODUCTION

This case presents the question whether the Seventh

Amendment guarantees a jury trial on disputed issues raised

in an independent declaratory judgment counterclaim seeking

to invalidate a patent. The Federal Circuit held that the issue

is governed by Technology Licensing Corp., 423 F.3d 1286

(Fed. Cir. 2005), in which it previously held, erroneously,

that the right to a jury trial on such a counterclaim against the

patentee depends entirely upon whether the patentee is

seeking to recover damages from the accused infringer at the

time of trial. Jd. at 1290-91.

Technology Licensing Corporation has petitioned this

Court for a writ of certiorari to review the Federal Circuit’s

Technology Licensing opinion. See Technology Licensing

Corp. v. United States Dist. Court, Misc. Docket No. 765,

docketed March 30, 2006. Technology Licensing

Corporation’s petition presents the same question as the

present case. Impax respectfully submits that the Court

should consolidate Technology Licensing Corporation’s

petition with the present one and consider them together.

3

The Supreme Court previously recognized the importance

of the issue presented in this Petition and agreed to decide it

in American Airlines, Inc. v. Lockwood, 515 U.S. 1121

(1995). The jury demand was withdrawn, however, before

the Court issued a decision, thereby mooting the issue.

American Airlines, Inc. v. Lockwood, 515 U.S. 1182 (1995).

In the present case, Petitioner Impax, the accused

infringer below, timely demanded a jury trial on its

counterclaims seeking a declaratory judgment of

noninfringement, invalidity and unenforceability, and antitrust

counterclaims. In a remarkable strategic ploy on the eve of

trial, the patentee offered to dismiss its damages claim against

Impax (but not its damages claim against Impax’s distributor,

Teva Pharmaceuticals USA, Inc. (“Teva”)) if the district

court would sever Impax’s antitrust counterclaims and strike

Impax’s jury demand on its remaining counterclaims of non-

infringement, invalidity, and unenforceability. The district

court accepted the patentee’s offer, severed Impax’s antitrust

counterclaims and struck Impax’s jury demand. The patentee

then voluntarily dismissed its claim for damages. Impax

seeks review of the order of the Federal Circuit Court of

Appeals denying Impax’s petition for a writ of mandamus to

compel the district court to reinstate the Impax’s jury demand.

As previously noted, the Federal Circuit ruled that this

case is governed by /n re Technology Licensing Corp., 423

F.3d 1286 (Fed. Cir. 2005). The Technology Licensing court

improperly decided that there was no right to a jury trial on

an accused infringer’s declaratory judgment counterclaim

seeking to invalidate a patent unless the patentee was seeking

to recover damages. The Federal] Circuit opinion failed to

take into account the critical fact that a counterclaim seeking

a declaratory judgment of invalidity raises a legal (as opposed

4

to equitable) issue and demands independent legal relief: a

judgment against the patentee that the patent is invalid.

The modern counterclaim seeking a declaration of

invalidity is closely analogous to the 18" century English writ

of scire facias, a common law action asserted against the

patentee to invalidate his patent, a proceeding that was tried

before a jury. The Federal Circuit’s ruling therefore conflicts

with this Court’s numerous decisions holding that the Seventh

Amendment preserves the right to a jury in cases analogous

to an 18" century common law proceeding. See, e.g., Tull v.

United States, 481 U.S. 412 (1987). Because the invalidity

issue asserted in an independent action against the patentee

would have been tried to a jury in a common law court at the

time the Seventh Amendment was adopted in 1791, the issue

must be tried to a jury today, without regard to whether other

legal issues have been raised in the case (including whether or

not the patent holder is seeking damages). See Tull, 481 U.S.

at 425-426.

The Technology Licensing opinion also directly conflicts

with two of the Federal Circuit’s prior opinions: In re

Lockwood, 50 F.3d 966 (Fed. Cir. 1995), cert. granted, 515

U.S. 1121, vacated, 515 U.S. 1182, and Jn re SGS-Thomson

Microelectronics, Inc. , 1995 WL 258370 (Fed. Cir. April25, _

_ 1995), cert. denied, sub nom., Int’l Rectifier Corp. v. SGS-

Thomson Microelectronics, Inc., 516 U.S. 931 (1995)

(nonprecedential). The Lockwood court held that a

counterclaim of invalidity gave rise to a right of trial by jury

even though the patentee’s damages claim had been dismissed

pursuant to summary judgment. Lockwood, 50 F.3d at 969,

981. The SGS-Thomson court held that a right to a jury trial

existed on a counterclaim seeking a declaratory judgment of

invalidity notwithstanding that the patentee was seeking only

injunctive relief and had never sought to recover damages.

5

SGS-Thomson, 1995 WL 258370, at *2. The Federal

Circuit’s attempt to harmonize its Technology Licensing

opinion with its Lockwood opinion also has put the Federal

Circuit’s Seventh Amendment jurisprudence in direct conflict

with other circuits. Moreover, the Federal Circuit’s opinion

in Technology Licensing unfairly placed the right to a jury

trial in a patent case entirely within the strategic control of the

patentee.

Impax therefore requests this Court to review the Federal

Circuit’s decision.

B. PROCEEDINGS BELOW

Petioner Impax is a generic pharmaceutical company.

Plaintiff AstraZeneca and three related companies

(collectively, “Astra”) sued Impax in May 2000, initially

asserting “artificial” infringement under 35 U.S.C.

- § 271(e)(2)(A) by virtue of Impax’s Abbreviated New Drug

Application (“ANDA”) to the Food and Drug Administration

(“FDA”). See Appendix in Support of Impax’s Petition for

a Writ of Mandamus (“PMApp.”) at A46; see Glaxo, Inc. v.

Novopharm, Ltd., 110 F.3d 1562, 1569 (Fed. Cir. 1997).

Impax had not yet received FDA approval to manufacture or

market the accused pharmaceutical products, so Astra could

not sue under 35 U.S.C. § 271(a)-(c) and could not seek to

recover damages. See 35 U.S.C. §§ 271(a) and (e)(4)(C).

After the action was underway, Impax received FDA

approval and began to manufacture and market the accused

products in September 2004. PMApp. at A160. Astra

responded by filing a Second Amended Complaint that added

allegations of actual infringement under 35 U.S.C. § 271(a)-

(c) and sought recovery of damages. App. at 39a. Astra

contemporaneously filed a separate. infringement action

6

seeking to recover damages from Impax’s distributor, Teva.

PMApp. at A354. In response to Astra’s Second Amended

Complaint, Impax timely asserted counterclaims seeking

declarations of invalidity, noninfringement under 35 U.S.C.

§§ 271(a)-(c) and (e) and unenforceability and seeking to

recover damages based on antitrust counterclaims under

Walker Process and “sham litigation” theories. PMApp. at

A166. Impax timely demanded a jury. App. at 6a.

Astra did not raise any issue concerning Impax’s right to

a jury until after the close of discovery. In December 2005,

without filing any motion and without any explanation about

why it delayed so long before raising the issue, Astra

expressed during an evidentiary hearing a desire to include

Impax as part of a planned consolidated multi-month bench

trial involving several other non-related defendants. PMApp.

at A461. The bench trial was then scheduled to start only a

few weeks later. /d. Astra “proposed” to the District Court

that it would dismiss its damages claim against Impax (but

indicating an intent to recover the “full measure” of its

damages instead from Impax’s distributor, Teva) if the

District Court would sever Impax’s antitrust counterclaims

and strike Impax’s jury demand. PMApp. at A476-A477.

Astra’s unusual proposal was accepted by the District

Court, which entered an order severing Impax’s antitrust

counterclaims and conditionally striking Impax’s jury demand

subject to Astra’s dismissal of its damages claims against

Impax. App. at 44a-45a. Astra then filed a dismissal of its

damages claim with prejudice, which the District Court

immediately signed. PMApp. at All. The District Court

denied Impax’s motion for reconsideration. App. at 9a, 37a.

Impax petitioned the Court of Appeals for the Federal

Circuit for a writ of mandamus to compel the district court to

7

reinstate Impax’s jury demand. Withom? orai argument, a

panel of the Federal Circuit issued an order on March 2,

2006, denying Impax’s petition. App. at Sa. On March 16

and April 13, 2006, respectively, the Court of Appeals issued

orders denying Impax’s petition for a panel rehearing and a

rehearing en banc. App. at 3a, la.

Meanwhile, the consolidated bench trial commenced on

April 3, 2006, and is continuing into June 2006, with post-

trial submissions thereafter. The commencement of the trial

has not mooted the issue raised herein and this Court now

should review the question presented. Were Impax to fail to

pursue its petition with this Court, Astra may argue that

Impax’s petition for mandamus provided Impax’s only

opportunity to challenge the improperly stricken jury demand.

See Maldonado v. Flynn, 671 F.2d 729 (2d Cir. 1982). If

Astra’s argument prevails, then Impax may be denied further

opportunity to raise the issue after final judgment and the

Federal Circuit’s decision in this case forever would escape

this Court’s review.

SUMMARY OF ARGUMENT

The Federal Circuit erred by holding that the right to a

jury trial on an accused infringer’s independent counterclaim

of invalidity depends entirely upon whether the patentee

asserts a claim for damages in the same suit. See App. at 6a-

7a (following Jn re Technology Licersirg Corp., 423 F.3d

1286 (Fed. Cir. 2005)). The Feu. ! Circuit failed to

evaluate whether the independent relief requested by the

accused infringer’s counterclaim - namely, to invalidate the

patent - asserts legal relief rather than equitable relief. See

Tull v. United States, 481 U.S. 412 (1987).

8

The Federal Circuit’s flawed holding resulted from

improper application of this Court’s “historical test” to

determine whether the relief sought by a counterclaim of

invalidity - namely, an affirmative judgment against the

patentee that the patent is invalid - would have been tried in

an 18" century common law court. The 18" century writ of

scire facias to mvalidate a patent, an action filed against the

patentee and requesting a judgment of invalidity, is closely

analogous to and serves as the best historical analog to the

modern declaratory judgment counterclaim to invalidate a

patent. The writ of scire facias was a common law action

tried to a jury. The Seventh Amendment’s guarantee of a

jury trial therefore extends to a counterclaim seeking a

declaratory judgment of invalidity, without regard to whether

the patentee has asserted a damages claim.

A decade ago, the Federal Circuit wrongly decided that

the writ of scire facias was not the best 18" century analog.

Lockwood, 50 F.3d at 974 n.9.' Nevertheless, the Lockwood

court determined that a declaratory judgment counterclaim of

invalidity “is not purely an equitable issue” and therefore is

guaranteed a right to a jury trial under the Seventh

Amendment. /d. at 980. The patentee in Lockwood had

sought to recover damages, but his claims had been dismissed

as a result of an adverse summary judgment ruling. /d. at

969. The Lockwood court emphasized that the right to a jury

trial could not depend upon the patentee’s claims that had

been dismissed. /d.

' As previously noted, this Court agreed to review this opinion but the

issue was mooted before the Court issued a decision. American Airlines

v. Lockwood, 515 U.S. 1121 (1995); American Airlines v. Lockwood, 515

U.S. 1182 (1995).

9

In a subsequent opinion, the Federal Circuit again held

that a counterclaim to invalidate a patent was guaranteed a

right of trial by jury, notwithstanding that that patentee was

seeking only equitable relief. In re SGS-Thomson

Microelectronics, Inc. , 1995 WL 258370 (Fed. Cir. April 25,

1995), cert. denied, sub nom., Int’l Rectifier Corp. v. SGS-

Thomson Microelectronics, Inc., 516 U.S. 931 (1995)

(nonprecedential). The SGS-Thomson court relied upon

Lockwood’s holding that a claim seeking a declaratory

judgment of invalidity was a legal claim, and therefore, that

either party was entitled to a jury trial on demand. /d. at *2.

In the recent Technology Licensing opinion, the Federal

Circuit expressed that Lockwood was still binding law, but

reached a decision that is incompatible with the reasoning and

holdings of Lockwood and SGS-Thomson. Technology

Licensing conducted no further analysis of whether a

counterclaim seeking a declaratory judgment of invalidity

constituted legal relief. See Technology Licensing, 423 F.3d

at 1289-91. Yet, it concluded that the right to a jury

depended solely upon whether the plaintiff was seeking

damages at the time of trial. Jd. at 1290-91.

This case presents the convergence of two issues of great

importance: the right to a jury trial, and the issue of patent

validity. The issue will arise frequently in pharmaceutical

cases filed under the Hatch-Waxman Act, which are initially

filed with no damages claim but which often provide the

patentee an opportunity to amend with a claim for damages.

This Court previously agreed to resolve the issue, the Federal

Circuit repeatedly has refused to consider the question en

banc despite vigorous dissents, and it appears unlikely that the

lower courts will evaluate this issue further. Impax

respectfully submits that this Court should decide the issue

now.

10

REASONS FOR GRANTING THE WRIT

A. THE FEDERAL CIRCUIT HAS FAILED TO

ADHERE TO THIS COURT’S SEVENTH

AMENDMENT PRECEDENT

1. The Federal Circuit failed to consider whether a

counterclaim seeking a declaratory judgment of

invalidity raises a legal (rather than equitable) issue

as ah independent claim, apart from other issues

that may exist including whether the patentee seeks

damages.

In evaluating the right to a jury trial on a counterclaim of

invalidity, the Federal Circuit erred by disregarding as

irrelevant the legal (as opposed to equitable) nature of the

counterclaim. The Federal Circuit mistakenly held (by

following Technology Licensing) that “the accused infringer

or declaratory judgment counterclaimant is entitled to a jury

trial only if the infringement claim, as asserted by the

patentee, would give rise to a jury trial.” See App. at 7a; In

re Technology Licensing Corp., 423 F.3d 1286, 1290 (Fed.

Cir. 2005).

Contrary to the Federal Circuit’s reasoning, an invalidity

counterclaim raises a legal issue and seeks legal relief. The

Seventh Amendment therefore guarantees a right to have that

issue tried to a jury, without regard to whether other equitable

claims or issues have been joined in the action. See Tull v.

United States, 481 U.S. 412, 425 (1987) (“if a legal claim is

joined with an equitable claim, the right to a jury trial on the

legal claim, including all issues common to both claims,

remains intact”); accord Dairy Queen, Inc. v. Wood, 369

U.S. 469, 479 (1962); Beacon Theatres, Inc. v. Westover,

359 U.S. 500, 504 (1959). The Seventh Amendment’s

1]

guarantee of a right to a jury trial on a legal claim does not

depend upon the procedural posture in which the claim is

asserted. See Ross v. Bernhard, 396 U.S. 531, 533 (1970)

(the Seventh Amendment preserves the right to a jury trial in

any suits in which legal rights were determined “in

contradistinction to those where equitable rights alone were

recognized, and equitable remedies were administered ...

[and] may well be construed to embrace all suits, which are

not of equity and admiralty jurisdiction, *“hatever may be the

peculiar form which they may assume to settle legal rights”

(quoting Parsons v. Bedford, Breedlove & Robeson, 3 Pet.

433, 447, 7 L.Ed. 732 (1830))); see also Tull, 481 U.S. at

417.

The Federal Circuit erroneously reasoned that whether a

counterclaim of invalidity is legal or equitable in nature is

dependent upon the plaintiff patentee’s requested relief. The

Federal Circuit failed to recognize that a declaratory judgment

claim seeking to invalidate a patent “presents a claim

independent of the patentee’s charge of infringement,” even

when it is asserted as a counterclaim to a patentee’s claim of

infringement. See Cardinal Chemical Co. v. Morton

International, 508 U.S. 83, 96 (1993) (emphasis supplied).

In Cardinal Chemical, this Court noted the “criticalf{]”

difference between the mere affirmative defense of invalidity

and a claim seeking a declaratory judgment of invalidity; the

former may be mooted by a finding of noninfringement, while

the latter is not. /d. at 93. The Federal Circuit’s Technology

Licensing opinion improperly reasoned that no difference

existed between the affirmative defense of invalidity and a

claim seeking a declaratory judgment of invalidity.

Technology Licensing, 423 F.3d at 1289. Rather than

analyzing the independent remedy sought by the counterclaim,

the Federal Circuit erroneously looked upon it as constituting

12

a claim purely dependent on the patentee’s election of

remedies.

Whether the patentee seeks damages or only an injunction

is entirely irrelevant to whether the independent relief

requested by the accused infringer constitutes a legal remedy.

This Court repeatedly has held that the Seventh Amendment

guarantees a right to a jury trial on a legal claim even when

it is asserted as part of an otherwise equitable proceeding.

Ross, 396 U.S. at 538 (“legal claims are not magically

converted into equitabie issues by their presentation to a court

of equity”); Dairy Queen, 396 at473 n.8 (“It would make no

difference if the equitable cause clearly outweighed the legal

cause so that the basic issue of the case taken as a whole is

equitable. As long as any legal cause is involved the jury

rights it creates control.”).

The Federal Circuit therefore failed to conduct the

appropriate analysis. Whether the patentee is seeking to

recover damages might be relevant to whether a right to a

jury existed on the patentee’s claims, but it should not impact

whether a right to a jury exists on the accused infringer’s

independent counterclaim.

The correct analysis requires a determination of whether

a declaratory judgment claim to invalidate a patent itself

constitutes a legal action rather than a purely equitable one.

If the counterclaim to invalidate a patent constitutes a legal

action, then the Seventh Amendment guarantees a right to a

jury without regard to the patentee’s claim for relief.

13

2. A counterclaim seeking a declaratory judgment of

invalidity must be evaluated under this Court’s

historical test to ascertain whether the Seventh

Amendment guarantees a jury trial.

When not otherwise required by statute, the common law

as it existed at ratification of the Seventh Amendment in 1791

determines whether an action presents a legal issue giving rise

to a right of trial by jury. See Markman v. Westview

Instruments, Inc., 517 U.S. 370, 377 (1996). Under this

“historical test,” either party is entitled to a jury trial in those

actions that are analogous to late 18" century “suits at

common law.” Tull v. United States, 481 U.S. 412, 417-18

(1987).

When applying this test, the court must compare the claim

asserted to the single, closest 18" century analog. See id. at

417 n.6. More importantly, the court must examine the

remedy sought to determine whether it is legal or equitable in

nature. See id. The remedy need not match precisely the

remedy provided under the historical analog. See Tull, 481

U.S. at 420 (the Seventh Amendment requires jury trials “in

actions unheard of at common law”); see also Pernell v.

Southall Realty, 416 U.S. 363, 376 (1974) (statutory action at

issue included right to a jury trial because it could fairly be

characterized as a “substitute” for an 18" century common

law ejectment action); see Curtis v. Loether, 415 U.S. 189,

195 (1974) (right to a jury existed because statutory cause of

action was “analogous to a number of tort actions recognized

at common law”). If the “nature of the relief authorized by

{the modern action] was traditionally available only in a court

of law, petitioner in this present action is entitled to a jury

trial on demand.” Tull, 481 U.S. at 423.

14

3. The 18" century common law writ of scire facias is

the best historical analog to the modern declaratory

judgment claim to invalidate a patent and,

pursuant to this analog, the Seventh Amendment

guarantees the right to a jury trial.

The writ of scire facias, an 18" century common law

proceeding to repeal a patent, provides the best historical

analog to the modern declaratory judgment claim to invalidate

a patent. Like the modern declaratory judgment counterclaim

to invalidate a patent, the writ of scire facias was an

independent action brought against the patentee, not by the

patentee. See Lockwood, 50 F.3d at 974 n.9. More

significantly, the remedy provided under the writ - which this

Court has emphasized is the more important part of the

historical analysis — was exactly the same as in a counterclaim

of invalidity: an affirmative judgment against the patentee

that the patent is invalid. See Tull, 481 U.S. at 421.

The writ of scire facias was a legal proceeding in a

common law court tried before a jury. 3 William Blackstone,

Commentaries on the Laws of England, 48 (14" Ed.); see also

In re Technology Licensing Corp., 423 F.3d 1286, 1292-93

(Fed. Cir. 2005) (Newman, J., dissenting) and authorities

cited therein; see ex parte Wood & Brundage, 22 U.S. 603,

613-615 (1824) (under the Patent Act of 1793, a scire facias

common law proceeding before a jury was the proper way to

challenge the validity a patent).?_ This Court’s Markman

? The 18" century writ of scire facias sometimes was conducted in English

chancery courts, which exercised both equitable jurisdiction and common

law jurisdiction. When proceeding under a writ of scire facias to adjudicate

the validity of patent, the chancery court was exercising its common law

jurisdiction, and the issue of validity would be tried to a jury. 3 William

Blackstone, Commentaries on the Law of England 47-48.

15

opinion cited an example of a writ of scire facias invalidating

a patent solely because “there was no new invention described

in the specification.” King v. Else, 1 Carp. P.C. 103, Dav.

Pat. Cas. 144 (K.B. 1785) (cited by Markman, 517 U.S. at

1391). The court in Else directed a jury verdict: “the jury

must find for the crown.” Jd. Even when the issue of

novelty was combined with an issue of fraud - which is

precisely the situation in the present case - the issues were

tried to a jury under 18" century English procedure. See

e.g., King v. Arkwright, 1 Carp. P.C. 53 (K.B. 1785) (the

issues submitted to the jury included “1. Whether the

invention is new? 2. If it be new, whether it was invented by

the defendant? And 3. Whether the invention is sufficiently

described by his specification?”). Another example of an 18"

century Scire facias proceeding tried before a jury is King v.

Jacob described in 1 J. Oldham, The Mansfield Manuscripts

and the Growth of English Law in the 18" century, 767-68

(1992).

A declaratory judgment counterclaim to invalidate a patent

presents a legal issue because the writ of scire facias

proceeding is the best analog to Impax’s declaratory judgment

counterclaim for invalidity and because it was a common law

proceeding that tried the issue of validity to a jury. Impax

therefore is entitled to a jury on its counterclaim of invalidity.

16

B. THE FEDERAL CIRCUIT’S SEVENTH

AMENDMENT JURISPRUDENCE IS

INCONSISTENT AND FLAWED, WILL CONTINUE

TO CONFUSE THE DISTRICT COURTS, AND HAS

PUT THE FEDERAL CIRCUIT IN A POSITION OF

CONFLICT WITH THE OTHER CIRCUITS.

The Federal Circuit opinions addressing the right to a jury

trial with respect to an accused infringer’s declaratory

judgment counterclaim of invalidity have been inconsistent

and analytically flawed, will continue to confuse the district

courts, and has put the Federal Circuit in a position of conflict

with the other circuits. The earliest opinion, /n re Lockwood,

50 F.3d 966 (Fed. Cir. 1995), cert. granted, 515 U.S. 1121,

vacated, 515 U.S. 1182,° held that a right to a jury exists on

a declaratory judgment counterclaim of invalidity, but it did

so under a flawed historical analysis in an opinion that has

caused confusion in the district courts. The recent

Technology Licensing opinion has added even more confusion

because it superficially approved the reasoning of Lockwood

but in reality cannot be reconciled with Lockwood. The

Federal Circuit’s attempt to harmonize its Technology

Licensing opinion with Lockwood has resulted in a view

directly contrary to the law of numerous other circuits.

1. In re Lockwood

The seminal Lockwood opinion held that the Seventh

Amendment guarantees a right to a jury trial on a

counterclaim of invalidity, but it reached that conclusion by

> The issue became moot after the petition for certiorari was granted but

before the Court decided the issue, because the patentee withdrew its jury

demand.

17

misapplication of the historical test. The Lockwood court

acknowledged the compelling similarity between the 18"

century writ of scire facias and the modern declaratory

judgment claim to invalidate a patent. Lockwood, 50 F.3d at

974 n.9. Nevertheless, the Lockwood court expressed two

concerns that made it reluctant to identify the writ of scire

facias as the best historical analog to a counterclaim seeking

to invalidate a patent.

First, the Lockwood court noted that a scire facias action

was filed in the name of the king rather than an aggrieved

person. /d. at 975 n.9. The court’s concern was unfounded

because, although the action nominally was asserted in the

name of the king, the action was intended to benefit a specific

person or company. Eighteenth century procedure enabled an

aggrieved subject to petition the king to initiate the

proceeding, and, if so petitioned, the king was required to file

a writ of scire facias. Attorney General v. Rumford Chem.

Works, 32 F. 608, 618 (C.C.D.R.I. 1876) (“The action of

_Scire facias not only was a remedy provided by law for the

crown in behalf of the public, but also for any subject of the

crown who could show that a void or illegal patent operated

to his prejudice”); see also 3 William Blackstone,

Commentaries on the Law of England, 260-61.

Second, the Lockwood court wrongly concluded that the

writ of scire facias could invalidate a patent only for fraud

and not for mere invalidity (e.g., lack of novelty).

Lockwood, 50 F.3d at 975 n.9. In fact, 18 century English

patents included “revocation” clauses that entitled the king to

revoke the patent if it became “generally inconvenient.” D.S.

Davies, The Early History of the Patent Specification, 50

L.Q.R. 86, 100-106 (1934). One of the most frequent

reasons to invalidate a patent under this clause was lack of

novelty. /d. at 104. If the suggestion of novelty made in the

ed

18

application later proved to be false, even if no fraud was

alleged, the patent could be repealed for such “false

suggestion” through a writ of scire facias. Id. at 106; see,

e.g., Else, 1 Carp. P.C. 103; see Arkwright, 1 Carp. P.C.

53; see Mowry v. Whitney, 81 U.S. 434, 439-440 (187:); see

also E. W. Hulme, Privy Council Law and Practice of Letters

Patent For Invention From the Restoration to 1794, 33

Law.Q.Rev 180 (1917);* see also Lockwood, 50 F.3d at 985

(a scire facias could issue for either fraud (inequitable

conduct) or an unlawful grant (invalidity)) (Nies, J.,

dissenting); see also Technology Licensing, 423 F.3d at 1292-

93 (Newman, J., dissenting) and authorities cited therein.

The Lockwood court was concerned overly about finding

a perfect historical analog, contrary to the doctrine of this

Court. Tull, 481 U.S. at 421 (“characterizing the relief sought

is ‘{mJore important’ than finding a precisely analogous

common-law cause of action in determining whether the

_Seventh Amendment guarantees a jury trial”; quoting Curtis

v. Loether, 415 U.S. 189, 196 (1974)). Yet, the Lockwood

court tacitly acknowledged that the writ of scire facias

provides the only historical action against the patentee with

the remedy of an affirmative judgment invalidating his patent.

The identical nature of the remedy is far more significant thay’

whether some difference existed in the basis for invalidating

. Up until about 1750, the jurisdiction to repeal a patent rested solely with

the Privy Counsel. In about 1750, the Privy Counsel divested its

jurisdiction to repeal patents to the common law courts. See 1 J. Oldham,

The Mansfield Manuscripts and the Growth of English law in the

Eighteenth Century, 730-31 (1992); C. MacLeod, Inventing the Industrial

Revolution-The English Patent System, 1660-1800, 59 (1988); E.W.

Hulme, Privy Council Law and Practice of Letters Patent For Invention

From the Restoration to 1794, 33 Law.Q.Rev. 180, at 189-91, 193-4

(1917).

19

a patent under scire facias — the identified difference did not

in fact exist - or whether the king was nominally required to

initiate such an action. See Tull, 481 U.S. at 421

(characterizing the remedy is the more important part of the

analysis).

The purpose of the Seventh Amendment “is to preserve

the substance of the common-law right of trial by jury, as

distinguished from mere matters of form or procedure, and

particularly to retain the common-law distinction between the

province of the court and that of the jury....” Baltimore &

Carolina Line v. Redman, 295 U.S. 654, 657 (1935). The

18" century writ of scire facias makes clear that a claim

requesting an affirmative judgment of patent invalidity against

the patentee firmly was within the province of the jury.

Nevertheless, the Lockwood court erroneously concluded

that the best historical analog was the traditional 18" century

patent suit in which the patentee sued the accused infringer

and the accused infringer asserted invalidity as a defense.

Lockwood, 50 F.3d at 974-75. The court observed that

whether invalidity was tried to a jury in the 18” century

depended upon whether the patentee sought damages. /d. at

976. The patentee, unable to obtain both damages and an

injunction, would have to choose common law damages or an

equitable injunction, which would determine whether the

patentee’s invalidity defense would be tried to a jury. Jd.

Because the patentee had the option of whether his claim was

tried to a jury in an 18" century patent suit, the Lockwood

court decided that it should not deny the patentee that same

option today. /d.

Lockwood failed to realize that in an 18" century patent

infringement suit, a finding that the patent was invalid

provided an accused infringer a defense only for that

20

particular case. It did not prevent the patentee from suing in

subsequent suits on the same patent. See, e.g., Arkwright v.

Nightingale, Dav. Pat. Cas. 37 (C.P. 1785) (an example of a

successful suit on a patent that had been adjudicated invalid in

a prior trial four years earlier). The patentee could sue again

on the patent, and the next defendant would be required to

prove again that the patent was invalid. /d. The remedy

provided by a writ of scire facias — to repeal the patent - was

more similar to the modern counterclaim of invalidity because

it prevented the patentee from ever suing again on the same

patent.

Although Lockwood misapplied the historical test, it still

reached the correct result, holding that “patent validity is not

purely an equitable issue,” and therefore, that a right to a jury

trial exists on an accused infringer’s counterclaim of

invalidity. Lockwood, 50 F.3d at 980. Lockwood focused not

on whether damages were actually asserted, but rather

whether damages “could” have been asserted. Jd. at 977.

Whether damages were actually asserted, much less whether

they were asserted and later dismissed, was not relevant: “the

particulars of the [patentee’s claim] can play no part in our

determination whether he enjoys a Seventh Amendment right

to a jury trial as to validity in [the accused] infringer’s action

for a declaratory judgment.” /d. at 969.

The Federal Circuit refused to consider the issue en banc.

Id. at 980. This Court recognized the importance of the issue

and granted the defendant’s petition for a writ of certiorari,

American Airlines, Inc. v. Lockwood, 515 U.S. 1121 (1995),

but the jury demand was withdrawn and the issue mooted

before this Court issued a decision. American Airlines, Inc.

v. Lockwood, 515 U.S. 1182 (1995).

21

2. In re SGS-Thomson Microelectronics, Inc.

In a subsequent opinion, the Federal Circuit again held

that the Seventh Amendment guarantees a right to a jury trial

on an accused infringer’s counterclaim of invalidity. Jn re

SGS-Thomson Microelectronics, Inc. , 1995 WL 258370 (Fed.

Cir. April 25, 1995), cert. denied, sub nom., Int’l Rectifier

Corp. v. SGS-Thomson Microelectronics, Inc., 516 U.S. 931

(1995) (nonprecedential). The SGS-Thomson court construed

Lockwood as entitling either party to a jury trial on a

counterclaim seeking a declaratory judgment of invalidity,

notwithstanding that the patentee was seeking only injunctive

relief and had never asserted a claim for damages. /d. at *2.

The court reiterated that whether the patentee actually seeks

to recover damages is irrelevant. /d. The SGS-Thomson

court noted that Lockwood had based its decision on “the legal

nature of the declaratory judgment action, not the nature of

the patentee’s claim.” Jd.

The Federal Circuit again refused to consider the issue en

banc. In re SGS-Thomson Microelectronics, Inc. , 1995 WL

258370 (Fed. Cir. 1995).

3. In re Apotex

In a later opinion, the Federal Circuit distinguished the

situation in which damages could not be alleged because no

actual infringement had occurred, as in a case filed under the

Hatch-Waxman Act. Jn re Apotex, 49 Fed. Appx. 902, 903

(Fed. Cir. 2002) (nonprecedential) (“We agree with the

district court that under the unusual circumstances of this

case, involving only possible future infringement, and in

which there can be no damages because no infringing

products have been marketed, the only relief that is before the

district court is equitable in nature.”). The Apotex court was

22

apparently persuaded by Lockwood ’s distinguishing Shubin v.

United States Dist. Court, 313 F.2d 250 (9" Cir. 1963), cert.

denied, 373 U.S. 936 (1963), which held that the patentee did

not have a right to a jury trial on the accused infringer’s

counterclaim seeking a declaratory judgment of invalidity.

The Lockwood court noted that the patentee in Shubin sought

only an injunction against threatened infringement, not actual

infringement. Lockwood indicated that the proper focus was

on the remedy that the “patentee could have brought” rather

than whether a damages claim was actually filed. Lockwood,

50 F3d at 977 (emphasis supplied).°

4. Inconsistent application of the Lockwood opinion

has caused district court confusion.

Although Lockwood reached the right result, the opinion

confused the lower courts, resulting in inconsistent

application. Some courts interpreted Lockwood and SGS-

Thompson to hold that a right to a jury trial existed on a

counterclaim seeking a declaratory judgment of invalidity,

without regard to whether the patentee could or did file a

claim for damages in the same action. See, e.g., Sanofi-

Synthelabo v. Apotex Inc., No. 02- Civ. 2255 RWS, 2002

WL 1917871 (S.D.N.Y. Aug. 20, 2002); Warner-Lambert

Co. v. Purepac Pharmaceutical Co., No. Civ. A. 98-2749

(JCL), 2001 WL 883232 (D.N.J. March 30, 2001); Hoechst

Marion Roussel, Inc. v. Par Pharmaceutical, Inc., Civ. No.

95-3673 (DRD), 1996 WL 468593 (D.N.J. March 14, 1996).

> The supposed distinction relied upon in Apotex is not relevant in the

present case because Astra has alleged actual infringement under 35

U.S.C. §271(a).

23

Other district courts distinguished the situation in which

no damages could have been asserted by the patentee, such as

was initially asserted in the present case,° when only

“artificial” infringement is asserted under 35 U.S.C. § 271(e)

based on the accused infringer’s filing of an ANDA. See,

e.g. Pfizer Inc. v. Novopharm Ltd., No. 00 C 1475, 2001 WL

477163 (N.D. Ill. May 3, 2001); Glaxo Group Lid. v. Apotex,

Inc., No. 00 C 5791, 2001 WL 1246628 (N.D. Ill. Oct. 16,

2001). As noted above, this was the apparent reasoning of

the Federal Circuit’s Apotex opinion.

5. In re Technology Licensing’s interpretation of

Lockwood puts the Federal Circuit in direct conflict

with the law of other circuits and will cause further

confusion in the district courts.

In the recent Technology Licensing opinion, the Federal

Circuit issued a per curiam opinion that cannot be reconciled

with Lockwood, SGS-Thomson, or Apotex. As _ noted,

Lockwood and SGS-Thomson held that a declaratory judgment

counterclaim seeking to invalidate a patent was legal in nature

and therefore entitled the counterclaimant to a right to trial by

jury under the Seventh Amendment. Apotex held that a

counterclaim + invalidity was a legal claim if there was

actual infringement giving rise to a claim for damages

(whether or not the patentee sought to recover damages). The

Technology Licensing court disagreed with the reasoning of

all of these opinions, holding that whether a counterclaim to

invalidate a patent gives rise to a right of jury trial depends

entirely upon whether patentee is seeking to recover damages

® Astra initially sued Impax only for artificial infringement under 35

U.S.C. § 271(e), but later added a claim for damages and injunctive relief

under 35 U.S.C. § 271(a)-(c).

24

at the time of trial. Technology Licensing, 423 F.3d at 1290-

91. The Technology Licensing court did not conduct its own

historical analysis, but merely accepted at face value the

Lockwood court’s prior (and faulty) dicta that a writ of scire

facias was not the appropriate historical analog. Technology

Licensing, 423 F.3d at 1290 n.2.

Superficially approving Lockwood, id. at 1288 n.1 (“the

court’s analysis in Lockwood has been neither supplanted nor

questioned and we find its reasoning pertinent”), the

Technology Licensing court attempted to distinguish

Lockwood. The Technology Licensing patentee had

voluntarily withdrawn its damages claim, whereas the

Lockwood patentee’s damages claim was dismissed because of

an adverse summary judgment ruling on infringement.

Technology Licensing, 423 F.3d at 1289-90. The Technology

Licensing court attempted to use this distinction to harmonize

its opinion with Lockwood by suggesting that the voluntary

withdrawal of patentee’s damages claim was a waiver of the

right to a jury on the accused infringer’s counterclaim. /d.

Despite the Technology Licensing court’s efforts to

harmonize its opinion with Lockwood, the two opinions are in

direct conflict. Lockwood held that whether the plaintiff had

sought to recover damages was not relevant to whether a right

to a jury trial exists in a declaratory judgment counterclaim of

invalidity. Under Lockwood, the patentee should have been

free to dismiss voluntarily its damages claim without risking

loss of its right to a jury trial on the accused infringer’s

declaratory judgment counterclaim of invalidity.

Technology Licensing’s interpretation of Lockwood puts

the Federal Circuit jurisprudence in direct conflict with the

law of other circuits. Technology Licensing holds that a

patentee’s damages claim provides entitlement to a jury trial

25

if the damages claim is dismissed because of an adverse

summary judgment, but not if the patentee voluntarily

dismisses the damages claim. Appellate courts in other

circuits have uniformly held that a claim dismissed - whether

by summary judgment or voluntarily - bears no relevance in

determining whether the remaining claims are entitled to a

jury trial. See, e.g., In re Evangelist, 760 F.2d 27, 32 (1*

Cir. 1985) (claim for damages dismissed on summary

judgment not relevant when determining party’s asserted

Seventh Amendment right to a trial by jury on remaining

claims even though the claim might be reinstated);

Hildebrand v. Board of Trustees, 607 F.2d 705, 710 (6" Cir.

1979) (accord); Armco, Inc. v. Armco Burglar Alarm Co.,

Inc., 693 F.2d 1155, 1158 (5 Cir. 1982) (voluntarily

dismissed claims cannot support a right to a jury trial).

Technology Licensing reflects the same discredited

reasoning in an initial nonprecedential opinion that the

Lockwood court withdrew and replaced with the reported,

precedential opinion. Compare In re Lockwood, 30

U.S.P.Q.2d 1292, 1295 (Fed. Cir. March 10, 1994)

(withdrawn) with Lockwood, 50 F.3d at 969. The Lockwood

court’s withdrawn opinion held that the patentee was entitled

to a jury trial because he had initially claimed damages. Jn re

Lockwood, 30 U.S.P.Q.2d at 1295 (“The claim for

infringement damages and any asserted defenses still exist in

the case even though the district court granted a partial

summary judgment on the ground that there was no

infringement”). But the Lockwood court realized the

fundamental error of that reasoning and replaced the

nonprecedential opinion with a precedential opinion: “the

[patentee’s dismissed] damages claim exists no more ... [and]

the particulars of [the patentee’s] dismissed claim can play no

part in our determination whether he enjoys a Seventh

Amendment right to a jury trial as to validity in [the accused

26

infringer’s] action for a declaratory judgment.” Lockwood,

50 F.3d at 969.

The conflicting Technology Licensing and Lockwood

decisions places the Federal Circuit in conflict with other

Circuits and will continue to confuse the district courts.

Although the Technology Licensing opinion included a

vigorous dissent, the Federal Circuit again refused to consider

the issue en banc. In re Technology Licensing Corp., 2005

U.S. App. LEXIS 26690 (Fed. Cir., Nov. 18, 2005).

6. The present case

In the present case, the Federal Circuit panel issued a one

sentence statement, with no analysis, that the issue was

governed by Jechnology Licensing. App. at 7a. The Panel

did not refer to the Lockwood, SGS-Thomson or Apotex

opinions. The Federal Circuit once again refused to consider

the issue en banc. App. at la.

7. Summary

The Federal Circuit never has properly performed the

historical analysis mandated by this Court. The two

precedential opinions that have been issued by the Federal

Circuit cannot be reconciled with each other or with the

precedent of this Court, have put the Federal Circuit in

conflict with other circuits, and will cause further confusion

in the district courts. The Federal Circuit repeatedly has

refused to consider the issue en banc. This Court previously

granted certiorari on this issue but it was later mooted by the

parties. Impax respectfully submits that this Court should

consider this important issue now.

27

C. THE CASE PRESENTS AN _ ISSUE OF

EXTRAORDINARY NATIONAL IMPORTANCE

THAT THE LOWER COURTS WILL NOT

FURTHER ANALYZE

This case concerns the overlap of two issues of

extraordinary importance: the right to a jury trial and patent

invalidity. The fundamental importance of the right to a jury

trial cannot be overstated. It is a “sacred” right that must be

“jealously guarded by the courts.” Jacob v. City of New

York, 315 U.S. 752, 752-753 (1942). “[A]ny seeming

curtailment of the right to a jury trial should be scrutinized

with the utmost care.” Dimick v. Schiedt, 293 U.S. 474, 486

(1935). And this Court has repeatedly recognized the national

importance of resolving questions of patent invalidity.

Cardinal Chemical Co. v. Morton Int’l, Inc., 508 U.S. 83,

100 (1993) (citing Blonder-Tongue Labs., Inc. v. University

of Illinois Found. , 402 U.S. 313, 336 (1971)).

The Federal Circuit’s unconstitutional restriction on the

right to a jury will greatly impact pharmaceutical cases filed

under the Hatch-Waxman Act, such as the present case. The

Hatch-Waxman Act is of immense importance to the well-

being of the United States. By carefully balancing the rights

among patentees, generic drug companies, and the public, the

Act has enhanced the ability of generic pharmaceutical

companies to get their competing drugs to the marketplace,

and dramatically lowered the price of life-saving prescription

drugs. Wendy H. Schacht & John R. Thomas, The Hatch-

Waxman Act: Legislative Changes In The 108th Congress

Affecting Pharmaceutical Patents, CRS Report RL 32377, at

1 (2004).

The Federal Circuit’s Seventh Amendment

jurisprudence unfairly favors patentees in all patent actions,

28

but especially in Hatch-Waxman litigation. Such actions do

not include a claim for damages when they are filed but can

be amended to assert a damages claim if the accused generic

drug company receives FDA approval and begins marketing

its generic product before resolution of the case. According

to the Federal Circuit precedent, the patentee can amend its

initial complaint with a damages claim, then dismiss the

damages claim immediately before trial should a jury trial

become strategically less desirable. After obtaining injunctive

relief against the generic drug company, the patentee can file

damages suits against the generic drug company’s distributors

(which is Astra’s precise strategy in the present case). The

Federal Circuit’s simplistic Seventh Amendment “damages”

reasoning holds as irrelevant that the generic drug company

potentially is still being subjected to damages liability from

the generic drug company’s distributors’ claims of indemnity.

The Seventh Amendment should not be construed to permit

such remarkable gamesmanship.

Unless corrected by this Court, the gamesmanship

exhibited by Astra in the present case undoubtedly will be

implemented by patentees not only in Hatch-Waxman cases,

but in many other patent cases. The issue therefore will

continue to arise with frequency. Because the Federal Circuit

has near-exclusive jurisdiction over patent appeals from all

districts, 28 U.S.C. § 1295(a)(1), this case presents “a matter

of special importance to the entire Nation.” Cardinal

Chemical, 508 U.S. at 89.

The Federal Circuit’s repeated refusal to address the issue

en banc makes clear that it is not likely to analyze the issue

further. Other circuits also are unlikely to consider the issue

because the vast majority of patent cases will be appealed to

the Federal Circuit. In the unlikely event that the issue is

presented to some other circuit, that circuit is likely to defer

29

to the Federal Circuit’s faulty Technology Licensing opinion.

Awaiting further consideration of the issue in the lower courts

therefore will not further crystallize the issue. This Court

should resolve this issue now.

CONCLUSION

Impax respectfully submits that the Court should grant

Impax’s petition for a writ of certiorari.

DATED: June 2, 2006 Respectfully submitted,

Jeffrey J. Toney

Counsel of Record

John L. North

William F. Long

Sutherland Asbill &

Brennan LLP

999 Peachtree Street

Atlanta, Georgia 30309

(404) 853-8000

Attorneys for Petitioner

Impax Laboratories, Inc.

la

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

MISCELLANEOUS DOCKET NO. 815

[Filed April 13, 2006]

IN RE )

IMPAX LABORATORIES, INC., )

Petitioner. )

)

ORDER

A combined petition for panel rehearing’ and for

rehearing en banc having been filed by the Petitioner, and a

response thereto having been invited by the court and filed by

the Respondent, and the petition for rehearing and response,

having been referred to the panel that heard the appeal, and

thereafter the petition for rehearing en banc and response

having been referred to the circuit judges who are in regular

active service,

UPON CONSIDERATION THEREOF, it is

" The petition for panel rehearing was denied in the order

issued on March 16, 2006.

2a

ORDERED that the petition for rehearing en banc be, and the

same hereby is, DENIED.

FOR THE COURT,

/s/

Jan Horbaly

Clerk

Dated: 04/13/2006

3a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

MISCELLANEOUS DOCKET NO. 815

[Filed March 16, 2006]

IN RE

IMPAX LABORATORIES, INC.,

Petitioner.

Nee ee Nee Nee”

Before MICHEL, Chief Judge, LOURIE and GAJARSA,

Circuit Judges.

ON PETITION FOR WRIT OF MANDAMUS

LOURIE, Circuit Judge.

ORDER

Impax Laboratories, Inc. petitions for rehearing of this

court’s order denying its petition for a writ of mandamus to

direct the United States District Court for the Southern

District of New York to vacate its order that struck Impax’s

jury trial demand, Impax also moves to stay trial court

proceedings.

4a

Upon consideration thereof,

IT IS ORDERED THAT:

The petition for rehearing and the motion to stay trial

court proceedings are denied by the panel. The petition for

rehearing en banc and the motion shall be circulated to the

court.

FOR THE COURT

Date: Mar 16 2006 /s/

Alan D. Lourie

Circuit Judge

5a

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

MISCELLANEOUS DOCKET NO. 815

[Filed March 2, 2006]

IN RE )

IMPAX LABORATORIES, INC., )

Petitioner. )

)

ON PETITION FOR WRIT OF MANDAMUS

Before MICHEL, Chief Judge, LOURIE and GAJARSA,

Circuit Judges.

LOURIE, Circuit Judge.

ORDER

Impax Laboratories, Inc. petitions for a writ of mandamus

to direct the United States District Court for the Southern

District of New York to vacate its order that struck Impax's

jury trial demand. AstraZeneca AB, Aktiebolaget Hassle,

KBI-E, Inc., KBI Inc. and AstraZeneca, LP (AstraZeneca)

oppose.

AstraZeneca sued Impax for infringement of its patents.

Impax's counterclaims sought declaratory judgments of

6a

noninfringement, invalidity, and unenforceability and alleged

antitrust violations. Impax timely asserted a demand for a jury

trial. By agreement of the parties, the patent issues were to be

tried first.

After the pre-trial proceedings in the patent case were

completed, AstraZeneca indicated that it would withdraw its

request for damages. The district court ruled that Impax thus

had no right to a jury trial for the patent issues. Impax moved

for reconsideration, which the district court denied.

The remedy of mandamus is available only in

extraordinary situations to correct a clear abuse of discretion

or usurpation of judicial power. In re Calmar, Inc., 854 F.2d

461, 464 (Fed. Cir. 1988). A party seeking a writ bears the

burden of proving that it has no other means of attaining the

relief desired, Mallard v. United States Dist. Court for

Southern Dist., 490 U.S. 296, 309, 109 S. Ct. 1814, 104 L.

Ed. 2d 318 (1989), and that the right to issuance of the writ

is “clear and indisputable,” Allied Chemical Corp. v. Daiflon,

Inc., 449 U.S. 33, 35, 101 S. Ct. 188, 66 L. Ed. 2d 193

(1980).

Impax argues that it is entitled to a jury trial,

notwithstanding the withdrawal of AstraZeneca's request for

damages, based on our case law. Impax also argues that it is

entitled to a jury trial because its antitrust counterclaims and

patent counterclaims may share factual issues common to

both.

The district court, relying on our decision in Jn re

Technology Licensing Corp. , 423 F.3d 1286 (Fed. Cir. 2005)

(no right to jury trial on declaratory judgment counterclaims

if the patentee is not seeking damages), held that Impax was

not entitled to a jury trial on the patent issues because the only

7a

requested relief was equitable in nature. Regarding the

argument that there were issues common to both the antitrust

and patent counterclaims, the district court stated that “Impax

has failed to cite or allege a single question of fact common

to both its severed antitrust counterclaims and the remainder

of its claims.” The district court further stated that in its

opinion, there were no questions of fact common to both

proceedings and that any claim construction issues that might

arise in both the patent case and the antitrust counterclaims

were not issues that would be decided by the jury.

We agree that our decision in /n re Technology Licensing

Corp. supports the district court's determination that Impax

was not entitled to a jury trial on its counterclaims regarding

the patents. Regarding issues that might be common to the

antitrust counterclaims and the patent case, Impax for the first

time in this mandamus petition asserts one issue that might be

common to both cases. However, because Impax failed to

timely raise that issue before the district court, we decline to

consider it here. Thus, Impax had not met its burden of

showing that its right to issuance of mandamus is clear and

indisputable.

Accordingly,

IT IS ORDERED THAT:

The petition for a writ of mandamus is denied.

FOR THE COURT

Mar 2, 2006 /s/

Date Alan D. Lourie

Circuit Judge

8a

APPENDIX D

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

00 Civ. 7597 (BSJ)

01 Civ. 2998 (BSJ)

M-21-81 (BSJ)

MDL Docket No. 1291

[Filed February 24, 2006]

ASTRAZENECA AB, et al.,

Plaintiffs,

V.

IMPAX LABORATORIES, INC.,

Defendant.

ee ee ee ee ee a Se Te

i a ee a ee

~~

In re

OMEPRAZOLE PATENT LITIGATION

ee a

BARBARA S. JONES

UNITED STATES DISTRICT JUDGE

9a

Order

Before the Court is a motion by Defendant Impax

Laboratories, Inc. (“Impax”) for reconsideration of the

Court’s Order of January 13, 2006 striking Impax’s jury

demand or, in the alternative, for certification for

interlocutory appeal (“Pl. Reconsideration Mem.”). In

response to a request for guidance due to the timing of

Impax’s motion and the schedule for the trial of this case, the

Court directed Plaintiffs Astrazeneca AB, Aktiebolaget

Hassle, KBI-E, Inc., KBI Inc., and Astrazeneca, LP

(collectively “Plaintiffs”) not to respond to Impax’s motion

until further notice from the Court. (See February 17 Order).

After careful consideration of Impax’s motion, and for the

reasons stated below, the Court confirms the findings of its

January 13 Order and denies Impax’s request for certification

of this issue for interlocutory appeal pursuant to 28 U.S.C.

§ 1292 (b).

BACKGROUND

Plaintiffs filed their initial complaint against Impax in the

District of Delaware on May 15, 2000. The action was

transferred to the Southern District of New York by the

Multidistrict Litigation (“MDL”) Panel on September 28,

2000 for pre-trial proceedings. On February 1, 2005, the

Court granted Plaintiffs leave to file a Second Amended

Complaint against Impax, in which Plaintiffs added

allegations of direct, contributory, and inducing infringement

under § 271(a)-(c) and demanded damages. (Second Amend.

Compl., Mar. 1, 2005 at 4¢ 19a-20, 31a-32). On February

14, 2005, Impax filed its Answer and Counterclaims to

Plaintiffs’ Second Amended Complaint, wherein Impax

demanded a jury trial on Plaintiffs’ infringement claims and

10a

all of its counterclaims. (Impax’s Answer & Counterclaims at

¢ 235). In their counterclaims, Impax sought declarations of

noninfringement, invalidity, and unenforceability of the ‘S05

and ‘230 patents and also alleged Walker Process fraud and

sham litigation in violation of the Sherman Act 15 U.S.C. § 1

and 2 (the “antitrust counterclaims”). (/d. at {4 172-234).

At the same time, Plaintiffs’ claims for damages and

willful infringement were severed and stayed pending

resolution of the patent liability issues. Plaintiffs and Impax

also agreed to sever and stay the antitrust counterclaims in

2003, and in conformity with that agreement, the parties have

not, to date, taken any discovery on any antitrust issues. (See

Oct. 29, 2003 Letter from Ohly to Taylor; Nov. 6, 2003

Letter from Ohly to Taylor; and Mar. 2, 2004 Letter from

Ohly to Carlin).

On January 18, 2005, Plaintiffs brought a patent

infringement action against Impax’s distributor, Teva

Pharmaceuticals, seeking an injunction and damages, and

Teva raised counterclaims under the Sherman Act and

Declaratory Judgment Act. On June 28, 2005, following a

request from Plaintiffs, the Court directed that the case

against Teva be stayed pending the outcome of the Impax

case. (June 28, 2005 Order; see also June 23, 2005 Letter to

the Court from Errol Taylor)

At a hearing held on December 1, 2005, Plaintiffs

suggested that the Court bifurcate the 35 U.S.C. § 271(a)-(c)

claims of infringement from the solely equitable claims

arising under § 271(e) in order to allow the Court to rule, as

the trier of fact, on the “representativeness” of Impax’s

expired samples and to consolidate this case for a bench trial.

Because the issue was raised at that hearing, the Court

requested simultaneous briefing on the issue of whether Impax

ila

is entitled to a jury trial. The parties’ briefing was submitted

to the Court in December 2005. In Plaintiffs’ submissions,

Plaintiffs stated that they were “prepared to dismiss with

prejudice its request for damages against Impax if it will

permit the Impax case to be tried without a jury at the same

time as the in-district Second Wave cases (Lek, Mylan and

Esteve).” (Pl. Dec. 2005 Mem. at 2).

Upon consideration of all submissions, including

supplemental briefing filed by Impax, the Court denied

Impax’s demand for a jury trial by an Order dated January

13, 2006. Impax moved for reconsideration on February 14,

2006. By letter to the Court dated February 15, 2006,

Plaintiffs “request{ed] that the Court rule without further

briefing that Impax’s untimely request for reconsideration or

certification be denied,” or alternatively, if the Court required

a substantive response, “that the Court postpone the start of

trial for two weeks.” (See February 15, 2006 Letter to the

Court from Errol B. Taylor, at 2). Impax responded to

Plaintiffs’ letter the following day, stating that Impax does not

oppose delaying the trial and requesting expedited

consideration of its motion. (See February 15, 2006 Letter to

the Court from William F. Long and February 15, 2006

Letter to the Court from Michael A. Siem). By Order dated

February 17, 2006, Plaintiffs wre directed that they need not

respond to Impax’s motion wntil further notice from the

Court.

12a

DISCUSSION

I. Standard For Reconsideration Under Local Rule

6.3 Or Federal Rule Of Civil Procedure 54(b)

Local Rule 6.3 provides that:

[a] notice of motion for reconsideration or re-

argument of a court order determining a motion shall

be served within ten (10) days after the entry of the

court’s determination of the original motion, or, in the

case of a court order resulting in a judgment, within

ten (10) days after the entry of the judgment. There

shall be served with the notice of motion a

memorandum setting forth concisely the matters or

controlling decisions which counsel believes the court

has overlooked.

Accordingly, any motion for reconsideration pursuant to

Local Rule 6.3 was due on January 27, 2006, ten business

days after the January 13, 2006 Order. At the latest, if the

time for reconsideration is measured from the Court’s entry

of the Dismissal With Prejudice of Plaintiffs’ Damages

Claims, the deadline under Local Rule 6.3 was January 31,

2006. Under Local Rule 6.3, Impax’s motion is long overdue.

Nevertheless, Impax correctly points out that “a district court

always has discretion to reconsider one of its prior orders to

correct clear error or to prevent manifest injustice.”

(February 15, 2006 Letter to the Court form William F.

Long, citing FED. R. Civ. P. 54(b); In re Crysten/Montenay

Energy Co. , 226 F.3d 160, 165 n.5 (2d Cir. 2000); Official

Comm. of the Unsecured Creditors of Color Tile, Inc. v.

Coopers & Lybrand, 322 F.3d 147, 167 (2d Cir. 2003)).

Federal Rule of Civil Procedure 54 (b) states:

i3a

When more than one claim for relief is presented in an

action, whether as a claim, counterclaim, cross-claim,

or third-party claim, or when multiple parties are

involved, the court may direct the entry of a final

judgment as to one or more but fewer than all of the

claims or parties only upon an express determination

that there is no just reason for delay and upon an

express direction for the entry of judgment. In the

absence of such determination and direction, any

order or other form of decision, however designated,

which adjudicates fewer than all the claims or the

rights and liabilities of fewer than all the parties shall

not terminate the action as to any of the claims or

parties, and the order or other form of decision is

subject to revision at any time before the entry of

judgment adjudicating all the claims and the rights and

liabilities of all the parties.

The Court recognizes that the “[m]aintenance of the jury

as a fact-finding body is of such importance and occupies so

firm a place in our history and jurisprudence that any seeming

curtailment of the right to a jury trial should be scrutinized

with the utmost care.” Dimick v. Schiedt, 293 U.S. 474, 486

(1935); see also Jacob v. City of New York, 315 U.S. 752,

752-53 (1942) (“The right of jury trial in civil cases at

common law is a basic and fundamental feature of our system

of federal jurisprudence which is protected by the Seventh

Amendment.”). Therefore, the Court - in its discretion - has

considered Impax’s motion pursuant to FED. R. Civ. P. 54(b).

Il. Standard For The Seventh Amendment Right To A

Jury Trial

The Seventh Amendment preserves the right to a jury trial

“in suits at common law” and guarantees that “no fact tried

l4a

by a jury, shall be otherwise re-examined in any Court of the

United States, than according to the rules of common law.”

U.S. CONST. AMEND. VII. As the Court stated in its January

13, 2006 Order, a party’s right to a jury is safeguarded only

so far as that right would have existed in 1791, i.e., in courts

of law and not in courts of equity. Dimick v. Schiedt, 293

U.S. 474, 476 (1935); Tegal Corp. v. Tokyo Electron Am. ,

Inc., 257 F.3d 1331, 1339 (Fed. Cir. 2001). With the merger

of courts of law and equity, courts now consider both the

nature of the action involved and the remedy sought to

determine whether a case is “more similar to cases that were

tried in courts of law than the suits tried in courts of equity or

admiralty.” Tull v. U.S., 481 U.S. 412, 417-18 (1987);

Chauffeurs, Teamsters & Helpers, Local No. 391 v. Terry,

494 U.S. 558, 565 (1990). “The Supreme Court has

repeatedly taught that courts must examine both the nature of

the action involved and the remedy sought, and that the nature

of the remedy is more important than that of the action.”

Tegal Corp. v. Tokyo Electron Am., Inc., 257 F.3d 1331,

1339 (Fed. Cir. 2001) (citing Terry, 494 U.S. at 565; Tull,

481 U.S. at 417, 421).

Generally, the right to a jury trial on patent liability issues

depends on the plaintiff's decision to seek damages. See,

e.g., Bioavail Laboratories, Inc. v. Torpharm, Inc., 01 Civ.

9008, 2002 WL 1732372 (N.D. Ill. July 25, 2002) (right to

a jury trial arises when damages may be awarded under

§ 271(e)(4)(C)); Kos Pharmaceuticals, Inc. v. Barr

Laboratories, Inc., 218 F.R.D. 387, 390 (S.D.N.Y. 2003).

Nevertheless, because the right to a jury trial is

determined for each issue, as opposed to the action as a

whole, a court must examine each claim to ascertain whether

equitable or legal relief is sought. Ross v. Bernhard, 396 U.S.

531, 537-38 (1970).

15a

Ill. Impax’s Asserted Right To A Jury Trial Based On

The 18th Century Writ Of Scire Facias

Impax first claims that “[t]he 18th century writ of scire

facias provides a precise analog to a declaratory judgment

action brought by a person accused of infringement” and,

“[bJecause the issue of validity in a writ of scire facias was

tried in a court of law before a jury, the historical test

demonstrates that Impax is entitled to a jury trial on its

invalidity counterclaim under the Seventh Amendment.”

(Impax Reconsideration Mem. at 8).

Impax’s argument attempts to obscure clear precedent that

was cited in this Court’s January 13 Order. The Federal

Circuit has held that declaratory judgment actions for

invalidity or non-infringement do not warrant a Seventh

Amendment right to a jury trial unless “the infringement

claim, as asserted by the patentee, would give rise to a jury

trial.” In re Technology Licensing Corp., 423 F.3d 1286,

1290 (Fed. Cir. Sept. 12, 2005). Because declaratory

judgment actions themselves are said to be “neither legal nor

equitable,” Gulfstream Aerospace Corp. v. Mayacama Corp.,

485 U.S. 271, 284 (1988), “declaratory judgment actions are,

for Seventh Amendment purposes, only as legal or equitable

in nature as the controversies on which they are founded.” Jn

re Lockwood, 50 F.3d 966, 973 (Fed. Cir. 1995); see also

Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959);

Petition of Rosenman & Colin, 850 F.2d 57, 60 (2d Cir.

1988); (American) Lumbermens Mutual Casualty Co. v.

Timms & Howard, Inc., 108 F.2d 497, 499 (2d Cir. 1939):

Owens-Illinois, Inc. v. Lake Shore Land Co., Inc., 610 F.2d

1185, 1189 (3d Cir. 1979); 5 Moore’s Federal Practice

{ 38.29 at 38-230 (2d ed. 1987).

16a

Furthermore, Impax’s attempt to argue that it is entitled

to a jury trial on its invalidity counterclaim is based upon its

blatantly incorrect assertion that “[a]lthough the writ could be

based upon a claim that the patent was obtained fraudulently,

it is clear that the writ could also be based upon, or combined

with, a claim that the patent was invalid for lack of novelty,

independent of any claim of fraud.” (Pl. Reconsideration

Mem. at 7). In fact, in a footnote to its argument, Impax itself

cites to opinions of the Federal Circuit that clearly state just

the opposite - i.e., that the scire facias proceeding was not

analogous to a counterclaim of invalidity. (See Impax

Reconsideration Mem. at 8 n.5). The Federal Circuit stated

in In re Lockwood, 50 F.3d at 975 n.9, that:

{a] scire facias issued at common law to repeal patents

which have been obtained surreptitiously, or upon

false suggestion. The contemporary analog of the writ

is thus an action for a declaration of unenforceability

due to inequitable conduct, not due to invalidity.

(citations and internal quotations omitted).' Just last year, in

In re Technology Licensing Corp., 423 F.3d at 1290 n.2, the

Federal Circuit reiterated its opinion that the writ of scire

facias was not analogous to a counterclaim to invalidate a

patent, citing “Lockwood’s clear ruling that the writ of scire

' The Supreme Court accepted certiorari in Lockwood but

vacated the Federal Circuit’s opinion without comment when the

Petitioner withdrew its jury demand, thereby mooting the issue in

that case. Nevertheless, subsequent Federal Circuit and district

courts have cited Lockwood, many of which this Court relied upon

in its January 13 Order. See, e.g., In re Technology Licensing

Corp., 423 F.3d 1286 (Fed. Cir. 2005); Tegal Corp. v. Tokyo

Electron America Inc., 257 F.3d 1331, 1340-41 (Fed. Cir. 2001).

‘7a

facias (an action by the sovereign to cancel a patent obtained

by fraud) is not analogous to the modern-day ‘action to

invalidate a patent.”

Impax’s attempt to have this Court rely on the dissents to

Lockwood and Technology Licensing are hardly worth

addressing in a motion for reconsideration, which generally

requires that the movant point to “controlling decisions or

factual matters that were put before {the Court] on the

underlying motion and which, had they been considered,

might have reasonably altered the result before the court.”

Cielo Creations, Inc. v. Gao Da Trading Co., 04 Civ. 1952

(BSJ), 2004 WL 1857556, *1 (S.D.N.Y. August 18, 2004)

(emphasis added and citations omitted); see also American

Civil Liberties Union v. Dept. of Defense, 396 F. Supp. 2d

459, 460 (S.D.N.Y. 2005) (reconsideration appropriate when

controlling authority had been overlooked by the court and

should be granted to correct for clear error or to prevent

manifest injustice). As such, this Court simply directs Impax

to the words of the Technology Licensing Court, where it

stated that:

[aJll of the nineteenth century cases cited by the

dissent were infringement actions for damages in

which the defense of patent invalidity was raised.

Because they were actions at least in part for damages,

the parties were entitled to a jury trial on the issue of

patent invalidity, just as they would be today. Those

cases do not address, and certainly do not decide, the

very different issue presented in this case, in which

only equitable relief is sought.

Tech. Licensing, 423 F.3d at 1290 n.2.

18a

Accordingly, this Court finds that the writ of scire facias

does not, by historical analogy, entitle Impax to a jury trial

under the Seventh Amendment on its counterclaim for a

declaratory judgment of invalidity. The Court confirms its

January 13 Order, which found that because Astra’s request

for damages has been dismissed with prejudice, only equitable

relief now is sought, and Impax is not entitled to a jury trial

based on its non-infringement and invalidity declaratory

judgment counterclaims.”

IV. Impax’s Asserted Right To A Jury Trial Under Jn

re Lockwood

Impax also asserts that “Lockwood clearly shows that

Impax is entitled to a jury trial, notwithstanding that Astra

dismissed its damages claims with prejudice.” (Impax

Reconsideration Mem. at 9). Later cases from the Federal

Circuit explicitly state that “Lockwood does not stand for the

proposition that a counterclaim for invalidity always gives rise

? Impax’s counterclaim for a declaration of unenforceability is

based in an allegation that Plaintiffs engaged in “inequitable

conduct.” (See Impax’ Answer & Counterclaims at | 192). The

Federal Circuit has also clearly held that actions based on

inequitable conduct are equitable and do not provide the grounds for

a Seventh Amendment right to a jury trial. Paragon Podiatry Lab.,

Inc. v. KLM Labs, Inc., 984 F.2d 1182, 1190 (Fed. Cir. 1993)

(holding that a party “has no right to a jury trial respecting the

factual element of culpable intent as part of the defense of

inequitable conduct”); Gardco Mfg., Inc. v. Herst Lighting Co.,

820 F.2d 1209, 1212 (Fed. Cir. 1987) (agreeing with district court

that “the defense of inequitable conduct is equitable in nature and

thus does not give rise to the right of trial by jury”). Therefore,

Impax’s counterclaim of patent unenforceability also does not give

rise to a right to a jury trial.

19a

to a right to a jury trial (for either party).” Tech. Licensing,

423 F.3d at 1290. Rather,

[a]fter analyzing the nature of a declaratory judgment

action for patent invalidity and the pertinent historical

background, the court in Lockwood noted that an

action for invalidity could not be brought at common

law, and it held that a patent infringement action with

a counterclaim of invalidity ‘resembles nothing so

much as a suit for patent infringement in which the

affirmative defense of invalidity has been pled.’ The

court noted that in such common law actions, the

patentee could elect whether to proceed at law or in

equity, based on the remedy sought, and the right to

a jury would depend on the patentee’s choice: ‘If the

patentee sought only damages, the patentee brought an

action at law; in such a case, the defense of invalidity

was tried to the jury, assuming that a jury had been

demanded. . . . However, if the patentee facing past

acts of infringement nevertheless sought only to enjoin

future acts of infringement, the patentee could only

bring a suit in equity, and the defense of invalidity

ordinarily would be tried to the bench.’

Technology Licensing, 423 F.3d at 1289 (quoting Lockwood,

50 F.3d at 974, 976) (emphasis in original).

The Technology Licensing Court stated that:

the more accurate reading of Lockwood is that (1) it

preserves to the patentee the right to elect a jury by

seeking damages in an infringement action or

counterclaim, and (2) the accused infringer or

declaratory judgment counterclaimant is entitled to a

jury trial only if the infringement claim, as asserted by

20a

the patentee, would give rise to a jury trial. Thus, if

the patentee seeks only equitable relief, the accused

infringer has no right to a jury trial, regardless of

whether the accused infringer asserts invalidity as a

defense (as in the Tegal case) or as a separate claim

(as in this case).

Tech. Licensing, 423 F.3d at 1290 (citing Tegal Corp. v.

Tokyo Electron America, Inc., 257 F.3d 1331, 1341 (Fed.

Cir. 2001)) (“A defendant, asserting only affirmative defenses

and no counterclaims, does not have a right to a jury trial in

a patent infringement suit if the only remedy sought by the

plaintiff-patentee is an injunction.”)).

Furthermore, in distinguishing the procedural posture of

Lockwood, the Federal Circuit further clarified the reasoning

underlying Lockwood:

In Lockwood, the patentee had not elected to limit

himself to an equitable remedy. Although the issue of

infringement had been removed from the case by

summary judgment, the Lockwood court nonetheless

considered whether the patentee had forfeited his right

to a jury trial by taking any steps that would have

required him, historically, to file his case in equity.

The Lockwood court looked at the declaratory

judgment counterclaim as an inverted action for

infringement in which the patentee had not

surrendered his right to a jury. Therefore, the patentee

retained his right to a jury trial on the counterclaim. In

this case, by contrast, the patentee has voluntarily

abandoned its claim for damages and is proceeding

only on a request for equitable relief. Thus, the

declaratory judgment action in this case is an inverted

form of an infringement action in which the patentee

2la

has sought only an injunction. In the historically

analogous setting of a patent infringement suit with an

invalidity defense, the case would therefore have been

tried in an equity court, where neither party would be

entitled to a jury.

Tech. Licensing, 423 F.3d at 1289.

In sum, Lockwood “is not as broad” as Impax’s

characterization suggests. Tech. Licensing, 423 F.3d at 1289.

Despite Impax’s arguments to the contrary, the procedural

posture of this case clearly more closely resembles that of

Technology Licensing, where “the patentee has voluntarily

abandoned its claim for damages and is proceeding only on a

request for equitable relief.” /d. Accordingly, the Court

confirms its January 13 Order, finding that Impax is not

entitled to a jury trial on its affirmative defenses or

declaratory judgment counterclaims. (January 13 Order at 6-

7).

V. Impax’s Asserted Right To A Jury Trial Based On

Counterclaims That Were Asserted In Response To

Plaintiffs’ Damages Claims

Impax argues that its counterclaims were asserted in

response to Plaintiffs’ claims for actual damages and,

therefore, “Impax is entitled to a jury trial notwithstanding

that Astra dismissed its damages claims.” (PI.

Reconsideration Mem. at 16).

Here, as in Anti-Monopoly, Inc. v. General Mills Fun

Group, 611 F.2d 296, 307 (9th Cir. 1979), Impax “has not

cited any authority for the proposition that, having once

asserted a claim for damages, a party may not withdraw such

a Claim, or that upon such withdrawal a jury trial remains

22a

appropriate although only equitable issues remain in the

case.” Likewise, Impax’s “allegation that pre-trial

maneuvering by [Plaintiffs] in an effort to deprive it of a jury

trial somehow vitiates the equitable.nature of the case is not

persuasive.” Anti-Monopoly, 611 F.2d at 307. See also Tech.

Licensing, 423 F.3d at 1291 (holding “that the patentee’s

decision to seek only equitable relief resulted in the entire

case . . . being triable to the court without a jury.”

In addition, “the Supreme Court has repeatedly taught that

courts must examine both the nature of the action involved

and the remedy sought, and that the nature of the remedy is

more important than that of the action.” Tegal, 257 F.3d at

1339 (citing Terry, 494 U.S. at 565; Tull, 481 U.S. at 417,

421) (emphasis added). Here, the nature of the remedy sought

in Impax’s counterclaims for declaratory judgment of

invalidity and non-infringement is exclusively equitable, not

legal.

Accordingly, the Court’s January 13 Order is confirmed.

VI. Impax’s Asserted Right To A Jury Trial Because

Plaintiffs’ Damages Claim Against Teva Is Still

Pending

Impax also asserts that it “is entitled to a jury trial on it

[sic] counterclaims because Astra’s damages claim against

Teva is still pending.” (Pl. Reconsideration Mem. at 17).

Impax claims that because its declaratory judgment

counterclaims under § 271(a) “arose out of damages claims

against Impax’s distributor, [Teva,] which in turn gives right

to an indemnity claim by Teva against Impax, Impax’s

counterclaims raise legal issues” - thereby entitling Impax to

a jury trial. (Pl. Reconsideration Mem. at 17).

23a

Impax cites no controlling authority for this proposition.

Impax refers to only one district court case, Nippo Electric

Glass Co. Lid. y. Sheldon, 489 F. Supp. 119, 122 (S.D.N_Y.

1980), which held that when a patentee accused a

manufacturer’s customers of direct infringement due to their

use of the manufacturer’s product, the manufacturer had

reason to fear that it could be sued as contributory infringer

and therefore met the “actual controversy” requirement within

the meaning of the Declaratory Judgment Act, 28 U.S.C.

§ 2201. In addition to the fact that the holding in Nippo

speaks to standing and not the right to a jury trial, the Nippo

court relied extensively on the fact that the manufacturer in

that case had “entered into an agreement with [the

distributors] to indemnify them for any liability for

infringement of the subject patents.” Nippo, 489 F.Supp. at

121. Impax does not claim that such an indemnification

agreement exists between Impax and Teva, and alludes only

to its fear of “a potential indemnity claim from Teva.” (PI.

Reconsideration Mem. at 15) (emphasis added).

This Court finds that Impax has failed to provide sufficient

support for its broad and novel theory that a plaintiff's

dam2ges claims against a customer/distributor entitle the

manufacturer to a jury trial in its own, distinct case. Thus,

Impax’s arguments have not persuaded the Court that a

revision of its January 13 Order is necessary.

Vil. Impax’s Asserted Right To A Jury Trial Based On

Its Antitrust Counterclaims

Impax asserts that denying Impax a jury trial conflicts

with the Supreme Court’s holding in Beacon Theatres v.

Westover, 359 U.S. 500 (1959) and the Federal Circuit’s

holding in Cabinet Vision v. Cabinetware, 129 F.3d 595 (Fed.

Cir. 1997). This Court disagrees. Beacon Theatres and

24a

Cabinet Vision are easily distinguished on their facts and

procedural posture, and more recent case law shows that

those distinguishing facts are outcome determinative. See,

e.g., Anti-Monopoly, 611 F.2d at 307-308.

First, in Beacon Theatres a competitor theater had brought

an action against petitioner alleging duress and coercion for

making threats of litigation and treble damage suits. 359 U.S.

at 502. The competitor plaintiff sought (1) a declaratory

judgment to settle some of the key issues that such an antitrust

suit would raise and (2) an injunction of any antitrust suit by

petitioner pending the outcome of the declaratory judgment

litigation. /d. In response, the petitioner filed an answer

which denied the threats and asserted antitrust counterclaims

with treble damages, as well as a cross-claim against an

exhibitor who had intervened. The petitioner also demanded

a jury trial. /d.

The district court viewed the issues raised by the

Complaint for Declaratory Relief as essentially equitable.

Beacon Theatres, 359 U.S. at 503. Acting under Rules 42(b)

and 57 of the Federal Rules of Civil Procedure, the court

determined that it would decide issues common to both

proceedings before trying petitioner’s counterclaim before a

jury. Jd. A common issue of the Complaint for Declaratory

Relief, the counterclaim, and the cross-claim was the

existence of competition between the two theatres. Beacon

Theatres, 359 U.S. at 503-504. The Court of Appeals for the

Ninth Circuit found that the district court had acted within the

proper scope of its discretion and denied petitioner’s

application for a writ of mandamus requiring the district court

to set aside its ruling. Beacon Theatres, 359 U.S. at 501. The

Supreme Court reversed, reasoning that the district court’s

order “would compel [the petitioner] to split his antitrust case,

25a

trying part to a judge and part to a jury.”* Beacon Theatres,

359 U.S. at 508.

That problem does not exist here. The initial complaint

and procedural posture of this case are quite different. Here,

Plaintiffs’ initial complaint was based on patent infringement

not an anticipated antitrust action, which also became the

counterclaims. More significantly, the parties themselves

agreed to sever and stay Impax’s antitrust counterclaims - the

Court did not attempt to “try[{] part to a judge and part to a

jury.” Id.

This Court maintains that the procedural history,

reasoning, and holding of Anti-Monopoly, Inc. v. General

Mills Fun Group, 611 F.2d 296, 307 (9th Cir. 1979), a case

decided more recently than Beacon Theatres, best inform the

jury trial issue in the present action. In Anti-Monopoly, the

plaintiff's original complaint contained two counts for

> The Supreme Court also stated that:

{t]he District Court’s finding that the Complaint for

Declaratory Relief presented basically equitable issues

draws no support from the Declaratory Judgment Act. . .

. That statute, while allowing prospective defendants to sue

to establish their nonliability, specifically preserves the

right to jury trial for both parties. It follows that if [the

petitioner} would have been entitled to a jury trial in a

treble damage suit against [the competitor theater], it

cannot be deprived of that right merely because [the

competitor theater] took advantage of the availability of

declaratory relief to sue [the petitioner] first. Since the

right to trial by jury applies to treble damage suits under

the antitrust laws the Sherman and Clayton Act issues on

which [the competitor theater] sought a declaration were

essentially jury questions.

Beacon Theatres, 359 U.S. at 504.

26a

damages and a count seeking equitable relief, and the

defendant counterclaimed for an accounting and damages.

Anti-Monopoly, 611 F.2d at 307. The defendant later

withdrew this counterclaim, and moved for severance of the

plaintiff's two legal claims. /d. After the legal claims were

severed, the district judge who ultimately heard the case

determined that a jury trial would be inappropriate since only

equitable claims remained to be tried. Jd. The Ninth Circuit

upheld the order denying a jury trial, because “[no} legal

issues remained to be tried in the district court in the matter

now before us.” Anti-Monopoly, 611 F.2d at 308.

As in Anti-Monopoly, Impax “cannot complain about the

severance of its legal claims, for it acquiesced in that action.”

Anti-Monopoly, 611 F.2d at 307. Long before the court issued

its order severing and staying Impax’s antitrust counterclaims

pursuant to FED. R. Civ. P. 42(b), the parties had made such

an agreement among themselves and had not engaged in any

discovery on the antitrust issues. (See Oct. 29, 2003 Letter

from Ohly to Taylor; Nov. 6, 2003 Letter from Ohly to

Taylor; and Mar. 2, 2004 Letter from Ohly to Carlin).

With respect to the second case that Impax relies upon,

Cabinet Vision, the holding of the Federal Circuit is not as

broad as Impax represents. In Cabinet Vision, the appellee

had asserted the affirmative defense of inequitable conduct

and a Walker Process antitrust counterclaim in response to the

appellants’ claim of patent infringement. Cabinet Vision, 129

F.3d at 597. The Federal Circuit vacated the judgment of the

district court and remanded the matter for further action

consistent with its opinion that the district court erred in

holding that the jury’s factual findings on inequitable conduct

were advisory. The court stated that:

By conceptually separating the fact finding common to

27a

both causes of action, the district court misled itself

into believing that the jury’s fact findings could be

merely advisory as to the inequitable conduct, and that

the counterclaim could be dismissed because the

verdict was not binding on the counterclaim and the

jury did not address the antitrust issue. But given the

design of these jury instructions, the jury did not fail

to address questions 8 through 13 related to the

Walker Process counterclaim. It resolved the factual

dispute by way of its answer to question 7, [which

resolved in the negative at least one of the questions of

fact necessary to both the Walker Process

counterclaim and the defense of inequitable conduct].

These errors cannot be excused, even if [the appellee]

failed to ‘advise the court on how to separate and

manage those issues that were for the court and those

that were for the jury.’ Interpretation of the law is the

responsibility of the court.

Cabinet Vision, 129 F.3d at 600-601.

Impax argues that “‘conceptual separating’ is precisely the

result of the January 13 Order” and asserts that “{t}he court

is not entitled conceptually to separate the factual issues

common to both the antitrust counterclaim and Impax’s other

defenses.” (Pl. Reconsideration Mem. at 19). Yet, Impax has

failed to cite or allege a single question of fact common to

both its severed antitrust counterclaims and the remainder of

its case scheduled for trial. To the contrary, Impax’s

argument is entirely speculative. (See Pl. Reconsideration

Mem. at 19 (stating that “[t]o the extent that factual issues

remain in the case that overlap with the antitrust

counterclaims, Impax remains entitled to a jury trial.”)).

In the Court’s opinion, the only potential “material issue

28a

of fact common to both the equitable claim[s] and the

{antitrust} counterclaim{s]” are issues regarding claim

construction. Beacon Theatres, 359 U.S. at 514 n.4 (Stewart,

J., dissenting). It is well-established that the interpretation of

patent claims through claim construction is a determination

made as a matter of law - by the court. Markman v. Westview

Instruments, Inc. , 52 F.3d 967, 976 (Fed. Cir. 1995); Graco,

Inc. v. Binks Mfg. Co., 60 F.3d 785, 791 (Fed. Cir. 1995);

see also Astra Aktiebolag v. Andrx Pharmaceuticals, Inc. , 222

F. Supp. 2d 423 (S.D.N.Y. 2002) (the “First Wave

Litigation”). Because Impax’s counterclaims depend on issues

of claim construction that have been or will be decided by the

court under Markman, 52 F.3d at 976, it is this Court’s

conclusion that no questions of fact common to both its

severed antitrust counterclaims and the remainder of its case

that would be decided by a jury remain.

More specifically, the first antitrust counterclaim asserted

by Impax is based on an allegation of Walker Process fraud.

(See Impax’s Answer and Counterclaims to Plaintiffs’

Amended Complaint, 44 202-220). Under Walker Process

Equipment, Inc. v. Food Machinery & Chemical Corp. , 382

U.S. 172 (1965), the enforcement of a patent procured by

fraud on the Patent and Trademark Office (“PTO”) may

violate the Sherman Act provision concerning

monopolization, provided that the other elements necessary

for a violation are present. Common law or Walker Process

fraud:

is generally held not to exist unless the following

indispensable elements are found to be present: (1) a

representation of a material fact, (2) the falsity of that

representation, (3) the intent to deceive or, at least, a

state of mind so reckless as to the consequences that

it is held to be the equivalent of intent (scienter), (4)

29a

a justifiable reliance upon the misrepresentation by the

party deceived which induces him to act thereon, and

(5S) injury to the party deceived as a result of his

reliance on the misrepresentation.

In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 807

(Fed. Cir. 2000) (citing Nobelpharma AB v. Implant

Innovations, Inc., 141 F.3d 1059, 1069-70 (Fed. Cir. 1998)).

Impax’s Walker Process counterclaim fundamentally

depends on issues of claim construction to show that Plaintiffs

engaged in a misrepresentation of a material fact - the first

element required in a claim of Walker Process fraud. With

respect to the ‘505 patent, Impax alleges that:

[t]he claims of the ‘S05 patent require that each core

of the claimed formulation contain an ‘effective

amount’ of omeprazole, a requirement not met by

Plaintiffs’ PRILOSEC® product.

(Impax’s Answer and Counterclaims, ¢ 211) (emphasis

added).

However, this Court has already ruled that it “intend[s] to

adhere . . . to [its] prior claim construction in the first wave

as to ‘effective amount,’ as to ‘alkaline reacting compound,’

as to ‘inert subcoating,’ as to ‘disposed on,’ as to ‘acid labile

compound,’ as to “except omeprazole,’ and as to ‘alkaline

core.’” (Transcript of November 22, 2005 Conference before

Judge Jones at 5, lines 9-15, referencing Astra v. Andrx, 222

F. Supp. 2d at 447-85 (S.D.N.Y. 2002) (construing the above

claim terms); see also January 12, 2006 Order (denying the

Second Wave Defendants’ summary judgment motions based,

in part, on adherence to prior claim construction)). In the

First Wave Litigation, the Court specifically construed the

30a

claim term “effective amount” in a manner such that

Plaintiffs’ PRILOSEC® product meets the patent’s

requirement. Astra v. Andrx, 222 F. Supp. 2d at 462-64. The

Court reiterated that construction in its January 12 Order

resolving the Second Wave Defendants’ summary judgment

motions, stating that:

{aJs the Court held in the First Wave Litigation,

*““effective amount” . . . requires an amount of each

substance such that the combination of omeprazole

plus the ARC meets the stated goal of stabilizing the

omeprazole.’

(January 12, 2006 Order at 9, citing Astra v. Andrx, 222 F.

Supp. 2d at 463).* Moreover, Impax makes no argument that

term “effective amount,” as already construed by this Court,

would not include Plaintiffs’ PRILOSEC® product.

With regard to the ‘230 patent, Impax alleges that:

[t]he ‘230 patent expressly excludes omeprazole from

the patent: ‘The object of the present invention is thus

an enteric coated dosage form of acid labile

compounds with the general formula I defined above

except the compound omeprazole . . . .” (‘230 patent,

* Furthermore, the Court found that:

the addition of the term ‘effective amount’ ‘did nothing

more than make express what had been implicit in the claim

as Originally worded,” . . . which the Federal Circuit

declared does not constitute an amendment ‘made for “a

substantial reason related to patentability” and thus does not

create prosecution history estoppel.’

(Id. at 12, citing Interactive Pictures v. Infinite Pictures, 274 F.3d

1371, 1377 (Fed. Cir. 2001)).

3la

Col. 7, lines 51-54). As a result, Plaintiffs’

PRILOSEC® product is expressly excluded from the

‘230 patent.

(Impax’s Answer and Counterclaims, 4211). To the contrary,

this Court already has held, as a matter of claim construction,

that the ‘230 patent does not exclude omeprazole. Astra v.

Andrx, 222 F. Supp. 2d at 483-85. As the Court stated in its

January 12 Order:

The Court previously held that the term ‘acid labile

pharmaceutically active substance’ (or ‘acid labile

compound’) includes substances that ‘are transformed

into biologically active compounds by a rapid

degeneration or transformation in acid media’ -

including omeprazole. The Court found that the

statement ‘except omeprazole’ ‘is discussing

compounds of the general formula I, clearly relates to

claim 2 and does not limit the scope of claim 1.’

. ... The Court has not been persuaded of a need to

deviate from its previous finding that an ‘acid labile

pharmaceutically active substance’ or ‘acid labile

compound’ includes omeprazole.

(January 12, 2006 Order at 16-17, citing Astra v. Andrx, 222

F. Supp. 2d at 483-85) (emphasis added).

Thus, because (1) Impax’s Walker Process counterclaim

depends on claim construction to show that Plaintiffs

misrepresented a material fact to the PTO (the first required

element), and (2) the Court has already construed those terms

in a manner that does not support Impax’s claims of

misrepresentation and will construe any additional disputed

claim terms, as it must under Markman, 52 F.3d at 976, there

are simply no questions of fact common to Impax’s Walker

32a

Process counterclaim and the rest of the case that would be

decided by a jury.

Impax’s second antitrust counterclaim is based on an

allegation of “Sham Litigation.” In Professional Real Estate

Investors, Inc. v. Columbia Pictures Industries, Inc., 508

U.S. 49, 60-61 (1993), the Supreme Court outlined the

following two-part definition of “sham” litigation: First, the

lawsuit must be objectively baseless in the sense that no

reasonable litigant could realistically expect success on the

merits. If an objective litigant could conclude that the suit is

reasonably calculated to elicit a favorable outcome, an

antitrust claim premised on the sham exception must fail.

Only if challenged litigation is objectively baseless may a

court examine the litigant’s subjective motivation. Under this

second part of the test, a court focuses on whether the

baseless lawsuit conceals “an attempt to interfere directly with

the business relationships of a competitor,” E. R.R.

Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S.

127, 144 (1961), through the “use [of] the governmental

process - as opposed to the outcome of that process - as an

anticompetitive weapon,” City of Columbia v. Omni Outdoor

Advertising, Inc., 499 U.S. 365, 380 (1991) (emphasis in

original). See alse Q-Pharma, Inc. v. Andrew Jergens Co..,

360 F.3d 1295, 1305 (Fed. Cir. 2004).

Impax’s Sham Litigation counterclaim also depends on

issues of clair construction, which must be decided by the

court, to show that Plaintiffs’ lawsuit is “objectively

baseless.” Specifically, Impax alleges that:

although plaintiffs knew that the ‘505 and ‘230 patents

were unenforceable and otherwise invalid, that they

[sic] ‘SOS and ‘230 patents were improperly listed in

the Orange Book and that Plaintiffs were estopped

33a

from asserting the ‘505 and ‘230 patents against a

formulation having a subcoating in situ and that this

action was baseless, the plaintiffs commenced and

continued to prosecute the present action in an attempt

to enforce the ‘50S and ‘230 patents against

Impax... .

(Id. at { 225).

Whether the claims of the Plaintiffs’ patents are construed

to include or exclude subcoatings formed in situ is a matter

for the Court to decide, as it did in the First Wave Litigation.

See Astra v. Andrx, 222 F. Supp. 2d at 464-70 (finding that

the “subcoating” called for in Plaintiffs’ patent was a layer

that was physically on and conformed to the contours of the

core and was underneath another layer or coating, but did not

include gelatine capsules, could be made of one or more

materials, and could contain imperfections). As the Court

stated in its January 12 Order:

In construing the term ‘subcoating,’ this Court

determined in the First Wave Litigation that a

subcoating is ‘disposed on’ the core region by virtue

of its position relative to the core but that “does not

require that the subcoating be applied using any

particular process’ and ‘the subcoatiag need not

necessarily be ‘physically applied to’ the core in a

separate processing step.”... .

The Court is not persuaded that deviation from that

construction or finding is merited here, which leaves

disputed issues of fact as to whether Apotex’ ANDA

Product infringes by use of an in situ subcoating.

(January 12, 2006 Order at 27-28, citing Astra v. Andrx, 222

34a

F. Supp. 2d at 470).

Thus again, because (1) Impax’s Sham Litigation

counterclaim depends on claim construction to show that

Plaintiffs’ suit against Impax is “objectively baseless” (the

first required element), and (2) the Court has already

construed those claim terms in a manner that does not support

Impax’s allegation that the suit is “objectively baseless” and

will construe any additional disputed claim terms, as it must

under Markman, 52 F.3d at 976, there are simply no

questions of fact common to Impax’s Sham Litigation

counterclaim and the rest of the case that would be decided by

a jury.

Accordingly, for the reasons stated above, the January 13

Order is confirmed.

VIII. Impax’s Asserted Right To A Jury Trial Based On

The Court’s Lack Of Discretion To Strike Impax’s

Jury Demand

Impax next argues that “this court does not have

discretion to advance equitable issues to a bench trial to the

detriment of Impax’s right to a jury trial.” (PI.

Reconsideration Mem. at 21). For the reasons stated above

and in its January 13 Order, it is the Court’s considered

judgment that Impax does not have a right to a jury trial based

on the claims am: defenses remaining in the action.

Therefore, the Court is not acting to the detriment of any

right by seeking to hold a consolidated trial of the Second

Wave Defendants, including Impax, in this Multi-district

Litigation.

35a

The Court did properly exercise its discretion - in the

interest of judicial economy and in a manner consistent with

the parties’ prior agreement and actions to date - when it

ordered that Impax’s “antitrust counterclaims be severed and

stayed pending resolution of the remainder of the patent

infringement action.” (January 13 Order at 7-8). “Under Rule

42(b), a district court has broad discretion in separating issues

and claims for trial as part of its wide discretion in trial

management.” Gardco Mfg., Inc. v. Herst Lighting Co. , 820

F.2d 1209, 1212 (Fed. Cir. 1987); Fep R. Civ. P. 42(b).

Although Impax does not dispute the Court’s authority under

Rule 42(b), to the extent that Impax’s motion for

reconsideration confuses or misrepresents the Court’s exercise

of discretion, the motion is denied and the January 13 Order

is confirmed.

IX. Impax’s Request For Certification For

Interlocutory Appeal

In the alternative, “Impax has requested the Court certify

this issue for an immediate appeal under 28 U.S.C.

§ 1292(b).” (Pl. Reconsideration Mem. at 23). 28 U.S.C.

§ 1292(b) states, in pertinent part, that:

{wjhen a district judge, in making in a civil action an

order not otherwise appealable under this section,

shall be of the opinion that such order involves a

controlling question of law as to which there is

substantial ground for difference of opinion and that

an immediate appeal from the order may materially

advance the ultimate termination of the litigation, he

shall so state in writing in such order. The Court of

Appeals which would have jurisdiction of an appeal of

such action may thereupon, in its discretion, permit an

appeal to be taken from such order, if application is

36a

made to it within ten days after the entry of the

order... .

An interlocutory appeal under § 1292(b) is to be used, or

applied, only in exceptional cases, where an intermediate

appeal may avoid protracted or expensive litigation. See, e.g.,

Campbell v. DiGuglielmo, 115 F. Supp. 2d 452, 454

(S.D.N.Y. 2000) (stating that the court of appeals determines

whether exceptional circumstances justify a departure from

the basic policy of postponing appellate review until after

entry of final judgment); /n re Buspirone Patent Litigation,

210 F.R.D. 43, 49 (S.D.N.Y. 2002); Gulino v. Board of

Educ. of City School Dist. of City of New York, 234 F. Supp.

2d 324 (S.D.N.Y. 2002). The provision, therefore, is used

sparingly and construed strictly by the court of appeals. See

Wausau Business Ins. Co. v. Turner Const. Co., 151 F. Supp.

2d 488 (S.D.N.Y. 2001); Campbell, 115 F. Supp. 2d at 454.

The fact that a case involves an important legal question,

without more, is generally insufficient to justify the

application of the provision. Bobolakis v. Compania

Panamena Maritima San Gerassimo, S.A., 168 F.Supp. 236,

239-40 (S.D.N.Y. 1958).

In this Court’s considered judgment, the issue of Impax’s

entitlement to a jury does not present “a controlling question

of law as to which there is substantial ground for differences

of opinion.” 28 U.S.C. § 1292(b). Moreover, Impax has not

shown any reason why this is an “exceptional case” that

warrants abandoning “the policy in the ordinary case of

discouraging piecemeal appeals.” /n re Heddendorf, 263 F.2d

887, 889 (Ist Cir. 1959); 36 C.J.S. Federal Courts § 428.

In addition, the form of alternative relief sought by Impax

is not procedurally correct. To the extent a party disputes a

district court’s denial of its jury demand in a patent litigation,

37a

the common procedural mechanism is to petition the Federal

Circuit for a writ of mandamus, under 28 U.S.C. § 1651, to

compel the district court to grant its request for a jury trial.

See, e.g., Beacon Theatres, 359 U.S. at 511; Lockwood, 50

F.3d at 970; Tech. Licensing, 423 F.3d at 1288. As the

Supreme Court noted in Dairy Queen, Inc. v. Wood, 269

U.S. 469, 472 (1962), it is “the responsibility of the Federal

Courts of Appeals to grant mandamus where necessary to

protect the constitutional right to trial by jury.”

Therefore, Impax’s request for certification for

interlocutory appeal is denied.

CONCLUSION

Accordingly, the Court’s January 13 Order is confirmed

and Impax’s request for certification for interlocutory appeal

is denied.

SO ORDERED.

/s/

BARBARA S. JONES

UNITED STATES DISTRICT JUDGE

Dated: New York, New York

February 24, 2006

38a

APPENDIX E

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

M-21-81 (BSJ)

MDL Docket No. 1291

[Filed January 13, 2006]

In re )

OMEPRAZOLE PATENT LITIGATION )

)

BARBARA 5S. JONES

UNITED STATES DISTRICT JUDGE

ORDER

At the request of the Court at a hearing on December 1,

2005, Plaintiffs Astrazeneca AB, Aktiebolaget Hassle, KBI-E,

Inc., KBI Inc., and Astrazeneca, LP (collectively “Plaintiffs” )

and Defendant Impax Laboratories, Inc. (“Impax”) have

submitted briefing on the issue of whether Impax is entitled to

a jury trial.

For the reasons below, the Court finds that, under the

circumstances of the case and in the interest of judicial

economy, Impax does not have a right to a jury trial.

39a

BACKGROUND

Plaintiffs Astrazeneca AB, Aktiebolaget Hassle, KBI-E,

Inc., KBI Inc., and Astrazeneca, LP (collectively “Plaintiffs” )

filed their initial complaint against Impax in the District of

Delaware on May 15, 2000. The action was transferred to

the Southern District of New York by MDL Panel on

September 28, 2000 for pre-trial proceedings. On February

1, 2005, the Court granted Plaintiffs leave to file a Second

Amended Complaint against Impax, in which Plaintiffs added

allegations of direct, contributory and inducing infringement

under § 271(a)-(c) and demanded damages. (Second Amend.

Compl., Mar. 1, 2005 at 44 19a-20, 31a-32 (Declaration of

Emily Jane Kunz in Support of Astra’s Memorandum of Law

Concerning Impax’ Right to a Jury Trial (“Kunz Decl.”), Ex.

C)). On February 14, 2005, Impax filed its Answer and

Counterclaims to Plaintiffs’ Second Amended Complaint,

wherein Impax demanded a jury trial on Plaintiffs’

infringement claims and all its counterclaims. (Impax’

Answer & Counterclaims at 4 235). In their counterclaims,

Impax sought declarations of noninfringement, invalidity, and

unenforceability of the ‘SOS and ‘230 patents and made

Walker-Process and sham litigation antitrust counterclaims.

(Id. at ¢4 172-234).

At the same time, Plaintiffs’ claims for damages and

willful infringement were severed and stayed pending

resolution of the patent liability issues. (Order Granting Leave

to File Second Amended Complaint and Severing and Staying

Discovery and Trial on Willful Infringement and Damages

(Kunz Decl., Ex. B)). Plaintiffs and Impax also agreed to

sever and stay the antitrust counterclaims in 2003, and in

conformity with that agreement, the parties have taken no

discovery to date on any antitrust issues. (See Oct. 29, 2003

Letter from Ohly to Taylor; Nov. 6, 2003 Letter from Ohly

40a

to Taylor; and Mar. 2, 2004 Letter from Ohly to Carlin

(Kunz Decl. Exs. E, F, & G, respectively)).

At the December | , 2005 hearing, Plaintiffs suggested that

the Court bifurcate the 35 U.S.C. § 271(a)-(c) claims of

infringement from the solely equitable claims arising under

§ 271(e) in order to allow the Court to rule, as the trier of

fact, on the “representativeness” of Impax’ expired samples

and to consolidate this case for a bench trial.

DISCUSSION

I. The Seventh Amendment Right to a Jury Trial

The Seventh Amendment preserves the right to a jury trial

“in suits at common law” and guarantees that “no fact tried

by a jury shall be otherwise re-examined in any Court of the

United States” other than according to the rules of common

law.” U.S. Const. Amend. VII. A party’s right to a jury is

a safeguarded only so far as that right would have existed in

1791, i.e., in courts of law and not in courts of equity.

Dimick v. Schiedt, 293 U.S. 474, 476 (1935); Tegal Corp. v.

Tokyo Electron Am., Inc., 257 F.3d 1331, 1339 (Fed. Cir.

2001). With the merger of courts of law and equity, courts

now consider both the nature of the action involved and the

remedy sought to determine whether a case is “more similar

to cases that were tried in courts of law than the suit tried in

courts of equity or admiralty.” Tull v. U.S., 481 U.S. 412,

417-18 (1987); Chauffeurs, Teamsters & Helpers, Local No.

391 v. Terry, 494 U.S. 558, 565 (1990).

Generally, the right to a jury trial on patent liability issues

depends on the plaintiff's decision to seek damages. See,

e.g., Bioavail Laboratories, Inc. v. Torpharm, Inc., 2002 WL

1732372 (July 25, 2002, No. 01C 9008) (right to a jury trial

4la

arises when damages may be awarded under § 271(e)(4)(C)).

Here, after Impax began commercial sales, Plaintiffs amended

their complaint to seek both equitable and legal relief under

§ 271(a)-(c) and 271(e). Considering the efficiency of a

consolidated trial of all Second Wave defendants, Plaintiffs

now are “prepared to dismiss with prejudice its request for

damages against Impax if it will permit the Impax case to be

tried without a jury at the same time as the in-district Second

Wave cases (Lek, Mylan and Esteve).” (Pl. Mem. at 2).

Nevertheless, because the right to a jury trial is determined

for each issue, as opposed to the action as a whole, the Court

examines each claim to ascertain whether equitable or legal

relief is sought. Ross v. Bernhard, 396 U.S. 221 (1970).

Il. Plaintiffs’ Claims

Plaintiffs’ claims of infringement under § 271(a)-(c) are a

legal action but are considered purely equitable if damages are

not sought. Tegal, 257 F.3d at 1338-1340 (holding that even

though the plaintiff initially sued for both damages and

injunctive relief, when the damages were dropped, the nature

of the action was no longer legal). As the court in Tegal

explained, where a plaintiff is seeking only “an injunction, it

is clear that [the plaintiff] would have need[ed] . . . to bring

its case in a court of equity.” /d. at 1331. Therefore,

because Plaintiffs have agreed to dismiss with prejudice their

claims for damages, the claims of infringement and relief

sought under § 271(a)-(c) are equitable in nature.

As to Plaintiffs’ claims of infringement under § 271(e)(2),

they are purely equitable and do not give rise to a jury trial

right. See Sanofi-Synthelabo v. Apotex, No. 02 Civ, 2255,

2002 WL 1917871, at2 (S.D.N.Y. Aug. 20, 2002)(“There is

no question that Sanofi has no right to a jury trial on its

claims pursuant to § 271(e)(2).”); Glaxo Group Ltd. v.

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Apotex, Inc., 2001 WL 1256628, at *15 (N.D. Ill. Oct. 16,

2001), aff'd, Jn re Apotex, No 690, 2002 WL 31388364 (Fed.

Cir. Oct. 9, 2002). Likewise, requests for attorney’s fees and

costs cannot alter the fundamental nature of an equitable

action and are therefore themselves equitable, not legal,

claims. Emmpresa Cubana Del Tobacco v. Culbro Corp.,

123 F. Supp. 2d 203, 211 (S.D.N.Y. 2000); Northgate

Homes, Inc. v. City of Dayton, 126 F.3d 1095, 1099 (8th Cir.

1997).

As set forth above, the Court finds that upon dismissal of

Plaintiffs’ claims for damages, the balance of Plaintiffs’

claims are purely equitable and, therefore, do not support a

right to a jury trial under the Seventh Amendment.

Ill. Impax’ Affirmative Defenses and Counterclaims

A. Impax’ Affirmative Defenses

Historically “legal” affirmative defenses do not create a

right to a jury trial because the Seventh Amendment has been

“understood to protect claims, and not defenses which assert

no claim for relief.” Burlington N. R.R. Co. v. Neb. Pub.

Power Dist. , 931 F. Supp. 1470, 1481 (D. Neb. 1996). As

the Federal Circuit explained, “a defendant, asserting only

affirmative defenses and no counterclaims, does not have a

right to a jury trial in a patent infringement suit if the only

remedy sought by the plaintiff-patentee is an injunction.”

Tegal, 257 F.3d at 1341. Thus, Impax’ affirmative defenses

alone do not alter the Seventh Amendment analysis of Impax’

right to a jury trial because they do not alter the equitable

nature of the claims at issue.

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B. Impax’ Non-infringement and _ Invalidity

Declaratory Judgment Counterclaims

The Federal Circuit recently held that declaratory

judgment actious for invalidity or non-infringement do not

warrant a Seventh Amendment right to a jury trial unless “the

infringement claim, as asserted by the patentee, would give

rise to a jury trial.” Jn re Tech. Licensing Corp., 423 F.3d

1286, 1290 (Fed. Cir. Sept. 12, 2005). Declaratory judgment

themselves are “neither legal nor equitable.” Gulfstream

Aerospace Corp. v. Mayacama Corp., 485 U.S. 271, 284

(1988). Rather, “the nature of the underlying dispute

determines whether a jury trial is available.” Petition of

Rosenman & Colin, 850 F.2d 57, 60 (2d Cir. 1988). Here,

once Astra dismisses with prejudice its request for damages,

Impax is not entitled to a jury trial based on its non-

infringement and invalidity declaratory judgment

counterclaims.

C. Impax’ Unenforceability Counterclaim

Impax’ counterclaim for a declaration of unenforceability

is based in an allegation that Plaintiffs engaged in “inequitable

conduct.” (See Impax’ Answer & Counterclaims at 4 192).

The Federal Circuit has held that inequitable conduct defenses

are equitable and no not provide the grounds for a Seventh

Amendment right to a jury trial. Paragon Podiatry Lab., Inc.

v. KLM Labs, Inc., 984 F.2d 1182, 1190 (Fed. Cir. 1993);

Gardco Mfg., Inc. v. Herst Lighting Co., 820 F.2d 1209,

1212 (Fed. Cir. 1987)(agreeing with district court that “the

defense of inequitable conduct is equitable in nature and thus

does not give rise to the right of trial by jury”). Therefore,

Impax’ counterclaim of patent unenforceability also does not

give rise to a right to a jury trial.

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D. Impax’ Antitrust Counterclaims

Plaintiffs and Impax agreed to sever and stay Impax’

antitrust counterclaims in 2003, and in conformity with that

agreement, the parties have taken no discovery to date on any

antitrust issues. (See Oct. 29, 2003 Letter from Ohly to

Taylor; Nov. 6, 2003 Letter from Ohly to Taylor; and Mr. 2,

2004 Letter from Ohly to Carlin (Kunz Decl., Exs. E, F, &

G, respectively)). Legal claims that are severed and stayed

do not factor into the Seventh Amendment analysis on liability

issues. See, Anti-Monopoly, Inc. v. Gen. Mills Fun Group,

611 F.2d 296, 307-08 (9th Cir. 1979)(affirming that where

legal antitrust claims were severed from plaintiff's trademark

infringement claims, a jury trial was improper because no

legal issues remained in the matter before the district court,

even though legal issues remained in the severed antitrust

action).

“Under Rule 42(b), a district court has broad discretion in

separating issues and claims for trial as part of its wide

discretion in trial management.” Gardco Mfg., 820 F.2d at

1212. Because the parties here, as in Anti-Monopoly, have

agreed to sever and stay the antitrust claims, and because

severance of antitrust claims is common in patent litigation,

see, €.g., ASM Am., Inc. v. Genus, Inc., No. 01-2190 EDL,

2002 24444, at *6 (N.D. Cal. Jan. 9, 2002), this Court

hereby orders that Impax’ antitrust counterclaims be severed

and stayed pending resolution of the remainder of the patent

infringement action. As such, the severed antitrust claims do

not support a right to a jury trial.

CONCLUSION

Accordingly, Impax’ antitrust counterclaims are severed

and stayed pending resolution of the patent infringement

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action. Plaintiffs’ shall submit a voluntary dismissal with

prejudice of its claims for damages, and upon entry of the

dismissal, Impax’ request for a jury trial is denied.

SO ORDERED.

/s/

BARBARA S. JONES

UNITED STATES DISTRICT JUDGE

Dated: New York, New York

January 13, 2006