Reply Brief — Implax Laboratories, Inc. v. Astrazeneca AB (No. 05-1583)

AGL 7 BRAY

“—Ae gush t

rae

2

No. 05-1583

In the

Supreme Court of the Anited States

IMPAX LABORATORIES, INC.,

Petitioner,

Vv.

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

REPLY BRIEF OF PETITIONER

Jerrrey J Toney

Counsel of Record

Joun L. Nortu

WILLIAM F. Lonc

SUTHERLAND AssiL_ & 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

i

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.

a

ii

TABLE OF CONTENTS

Page

I. THE PRESENT CASE PRESENTS A BETTER

CASE FOR SUPREME COURT REVIEW THAN

TECHNOLOGY LICENSING 2... cic ccesees l

Ili. THE TECHNOLOGY LICENSING OPINION DID

NOT ELIMINATE CONFUSION ............ 4

IV.THE TEGAL CASE DID NOT INVOLVE A

DECLARATORY JUDGMENT COUNTERCLAIM

V. RESPONDENT DOES NOT DISPUTE THAT THE

ONLY 18TH CENTURY CIVIL PROCEEDING

THAT COULD INVALIDATE A PATENT WAS

THE COMMON LAW WRIT OF SCIRE FACIAS . 6

VI. CONCLUSION

ill

TABLE OF AUTHORITIES

Cases

Beacon Theatres, Inc. v. Westover,

ee Rae ee D3 peso hon ig G36 wa oO we 3,9

Cardinal Chemical Co. v. Morton Int'l, Inc.,

ai PE ck ae wee ha a ae ees 8

Dairy Queen, Inc. v. Wood,

Pe a EE i a oe Oe ew 3

In re Evangelist,

ep Poke Ls BR. | Rear ebe pee ere at 5

First National Bank of Boston v. Bellotti,

ee ee a en na 6 obi a bo Ke 3

Fort James Corp. v. Solo Cup Co.,

G52 Fe bee Oe. CO. Be) oe ee ne oes 8

Glaxo Group Ltd. v. Apotex, Inc.,

No. 00 C 5791, 2001 WL 1246628

ee a es ED 8k oe 4S Eo RS 2

Hildebrand v. Board of Trustees,

f » & 2 Fe ay... Sepa eae eee eee 5

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

Civ. No. 95-3673 (DRD), 1996 WL 468593

Ca weey I ty SOR 0.5 sah 8 oS Ceres wk 2

King v. Arkwright,

EN Waa ae Rly POM oy 6 da wk he oo Wee 7

iv

King v. Else,

1 Carp. P.C. 103, Dav. Pat. Cas. 144 (K.B. 1785) . 7

La Buy v. Howes Leather Co.,

Oe A Oe CATE. aR we CRO 4

In re Lockwood,

50 F360 906. (Fed, Cit. 1995) 06s ewes 4,5, 6

Meyer v. Grant,

SOR a, SLOTS) hv ns 6 Me koe eee 3

O2 Micro International Ltd. v. Monolithic Power Systems,

399 F. Supp. 2d 1064 (N.D. Cal. 2005) ........ 5

Pernell v. Southall Reality,

WEE is OP AITTED Ca ele wees eee Ree 10

| Pfizer Inc. v. Novopharm Lid.,

No. 00 C 1475, 2001 WL 477163

Nc a PO, SOOEE eee beer 2

Ross v. Bernhard,

SE RG A PE ok a0 wo ee 9

Sanofi-Synthelabo v. Apotex Inc..,

No. 02- Civ. 2255 RWS,

2002 WL 1917871 (S.D.N.Y. Aug. 20, 2002) .... 2

Schlagenhauf v. Holder,

SEF a PEATE hoe oe 6 Co a ieee ees 4

In re Simons,

ye | i. Gy a) Gt | ERR Pa Rar ammE mete etarMera cra Sores att 3

v

Super Sack Manufacturing Corp. v. Chase Packaging Corp.,

DT ee BOOT re, Ce OO) kes Cote ae ewes 9

In re Technology Licensing,

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

Tegal v. Tokyo Electron America, Inc.,

Eat Pid Bee es Cle BOE 8s oes ele wae 5, 6

Tull v. United States,

ee ee REED 5 Slieia.0- 4k 6 eRe ones 9,10

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

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

2001 WL 8&#3232 (D.N.J. March 30, 2001) ...... 2

Statute

te PE es bia Spee ba eae wees 2,3

Other Authorities

1 J. Oldham, The Mansfield Manuscripts and the

Growth of English Law in the 18th Century (1992) ... 7-8

P. Devlin, Jury Trial of Complex Cases: English

Practice at the Time of the Seventh Amendment,

a Re ee Us SO RUUD 6 oc verwceuteaweaes 8

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

Waxman Act: Legislative Changes In The 108th

Congress Affecting Pharmaceutical Patents,

Reem CONE TL Sao ss CIUOD) vc icscccidecwern 2

1

The present case presents a better case for Supreme Court

review than the recent petition of Technology Licensing. In

Technology Licensing, the Federal Circuit held that the

plaintiff had voluntarily waived the right to a jury. No waiver

exists in the present case. Moreover, the outcome of the

present case will affect the rights of generic pharmaceutical

companies to get their competing products to market. The

petition is not moot, as it presents an issue “capable of

repetition, yet evading review.”

Rather than eliminate confusion, the Technology Licensing

opinion will cause more confusion because it could not and

did not overrule prior inconsistent Federal Circuit caselaw,

and contrary to Astra’s argument, has put the Federal Circuit

in conflict with the other circuits.

Astra does not dispute that the only 18" Century judicial

proceeding that could invalidate a patent was the writ of scire

facias. Astra’s other arguments are irrelevant under this

Court’s historical analysis. In sum, Astra has provided no

sound reason for denying Impax’s petition.

I. THE PRESENT CASE PRESENTS A BETTER

CASE FOR SUPREME COURT REVIEW THAN

TECHNOLOGY LICENSING

The present case presents a significantly better case for

this Court’s review than /n re Technology Licensing, 423 F.3d

1286 (Fed. Cir. 2005), cert. denied, 2006 WL 1519374,

(U.S. Jun 05, 2006) because the Technology Licensing facts

were clouded by an issue of waiver. The Federal Circuit

found that Technology Licensing had “voluntariiy abandoned”

its right to a jury trial. /d. at 1289-90.

The Federal Circuit and the District Court are attempting

to extend the Technology Licensing holding to the facts of

present case, notwithstanding that the present case includes no

issue of waiver. The District Court expressly found that

2

Impax had not waived its right to a jury, 12a-13a and the

Federal Circuit agreed: “Impax timely asserted a demand for

a jury trial.” 6a.

The present case presents a better case for the Court’s

review than Technology Licensing for the additional reason

that it involves the right of generic pharmaceutical companies

to get competing products to market under the Hatch-Waxman

Act. Protecting the rights of generic drug companies presents

an issue that is of exceptional importance to the well-being of

this nation. See generally Wendy H. Schacht & John R.

Thomas, The Hatch-Waxman Act: Legislative Changes In The

108th Congress Affecting Pharmaceutical Patents, CRS

Report RL 32377 (2004). Moreover, unlike other patent

cases, generic drug cases filed initially under 35 U.S.C.

§ 271(e) present a class of cases in which this precise issue

arises with frequency because the patentee will frequently

have the option of amending its initial complaint (which

contains no damages claim) with a subsequent claim for

damages, as was the situation in the present case. 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); Pfizer Inc. v. Novopharm Ltd., No. 00 C 1475,

2001 WL 477163 (N.D. Ill. May 3, 2001); Glaxo Group Ltd.

v, Apotex, Inc., No. 00 C 5791, 2001 WL 1246628 (N.D. Ill.

Oct. 16, 2001).

Il. |THE PETITION IS NOT MOOT

Contrary to Astra’s argument, Astra’s Brief in Opposition

(“Astra Opp.”) at 2, 26-27, the petition is not moot, as no

final judgment has been entered below. Moreover, if and

3

when entered, final judgment will not moot the issue, as this

case presents the precise situation which is “capable of

repetition yet evading review.” First National Bank of Boston

v. Bellotti, 435 U.S. 765, 774 (1978). A case is not mooted

when (1) the challenged action was in its duration too short to

be fully litigated prior to its cessation nor expiration, and (2)

there is a reasonable expectation that the same complaining

party will be subjected to the same action again. /d. at 774-

775; Meyer v. Grant, 486 U.S. 414, 417 n.2 (1988). Both

elements are satisfied in the present case.

The challenged action is the wrongful striking of

Petitioner’s jury demand. Petitioner followed the preferred

procedure for challenging that action, namely, filing a petition

for a writ of mandamus. See Beacon Theatres, Inc. v.

Westover, 359 U.S. 500, 511 (1959); Dairy Queen, Inc. v.

Wood, 369 U.S. 469, 472 (1962). This Court has repeatedly

approved the use of mandamus as the appropriate vehicle for

correcting a wrongfully stricken demand for a jury, because

waiting until after a final judgment cannot undo the harm to

the requesting party. /n re Simons, 247 U.S. 231, 239-240

(1918). When the district court and court of appeals refuse to

stay the trial pending this Court’s review - and the

Technology Licensing opinion now provides a strong

disincentive for a district court to stay a trial pending review

- a proceeding seeking a writ »f mandamus provides

insufficient time for this Court to cunsider the issue.

More than a reasonable expectation exists that Impax will

be subjected to the wrongful denial of a right to a jury trial

again. Impax is a generic drug company. Hence, practically

every time it files an Abbreviated New Drug Application, it

will be sued for infringement by the name-brand drug

manufacturer under 35 U.S.C. § 271(e). The initial suit

cannot include a claim for damages, but as is typically the

case, Impax will receive approval to market its drug before

4

the infringement suit has been adjudicated. Impax and its

customers will be faced with the threat of a damages suit, and

the name-brand pharmaceutical company can exercise the

same tactics as Astra in the present case by, for example,

suing to recover damages from Impax’s customers but seeking

only injunctive relief directly from Impax, and thereby

wrongfully denying Impax a jury.

Contrary to the implication of Astra’s arguments, a

petition requesting review of an order denying a writ of

mandamus does not impose a higher standard of review. See,

e.g., Schlagenhauf v. Holder, 379 U.S. 104 (1964)

(reviewing denial of mandamus); see also La Buy v. Howes

Leather Co., 352 U.S. 249 (1957) (reviewing grant of

mandamus). This Court should consider and decide the issue

now.

Ill. THE TECHNOLOGY LICENSING OPINION DID

NOT ELIMINATE CONFUSION

Astra’s position is, in essence, that the Technology

Licensing opinion has eliminated the confusion caused by the

Federal Circuit’s conflicting opinions. See, e.g., Astra’s Opp.

at 10-11. That argument might carry some weight if

Technology Licensing had overruled Jn re Lockwood, 50 F.3d

966 (Fed. Cir. 1995) (patentee entitled to jury trial on

counterclaim of invalidity notwithstanding that damages claim

had been dismissed) and the other Federal Circuit opinions

inconsistent with Technology Licensing. But the Technology

Licensing panel did not even have the power to overrule

Lockwood, and in any event, expressly approved Lockwood.

Technology Licensing, 423 F.3d at 1288 n.1.

District courts now will be required to sort out the Federal

Circuit’s inconsistent opinions, which is certain to result in

misapplication of this Court’s Seventh Amendment case law.

As noted in Impax’s Petition, the Technology Licensing

5

court’s attempt to reconcile its opinion with Lockwood puts

the Federal Circuit in direct conflict with the other circuits on

whether a dismissed claim is relevant to determining the right

to a jury trial, a conflict which Astra refuses even to

acknowledge. Astra Opp. at 8. Technology Licensing is

certain to cause only more confusion rather than resolving any

confusion.

For example, the district court in O2 Micro International

Lid. v. Monolithic Power Systems, 399 F. Supp. 2d 1064,

1087-88 (N.D. Cal. 2005) found that a jury could not be

treated as merely advisory on a counterclaim of invalidity

when a party demanded a jury, notwithstanding that the

patentee’s damages claim had been dismissed via summary

judgment. The O2 Micro court believed that, under

Technology Licensing, the dismissed damages claim (as

opposed to the counterclaim of invalidity) gave rise to a right

of jury trial. Compare with 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); Hildebrand v.

Board of Trustees, 607 F.2d 705, 710 (6" Cir. 1979)

(accord). Astra’s arguments that Technology Licensing has

resolved any district court confusion and that the opinion does

not conflict with the other circuits are meritless.

IV. THE TEGAL CASE DID NOT INVOLVE A

DECLARATORY JUDGMENT

COUNTERCLAIM

Astra’s reliance upon Tegal v. Tokyo Electron America,

Inc., 257 F.3d 1331 (Fed. Cir. 2001) is misplaced. Astra

Opp. at 13-14. The accused infringer in Tegal filed only an

affirmative defense of invalidity; it did not file a counterclaim

seeking a declaratory judgment of invalidity. Tegal, 257 F.3d

at 1338, 1339.

6

Nevertheless, Tegal further undermines Astra’s argument

that Technology Licensing resolved any confusion existing in

Federal Circuit Seventh Amendment jurisprudence. The

Tegal court emphasized that Lockwood’s holding (i.e., that

the accused infringer’s counterclaim of invalidity was triable

to a jury notwithstanding that the patentee’s damages claim

had been dismissed before trial) did not apply when the

accused infringer asserted only affirmative defenses and no

counterclaim. The Tegal court was careful to distinguish the

situation in which the accused infringer had asserted no

counterclaim: “this court holds that 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.” /d.

at 1341 (emphasis supplied).

V. RESPONDENT DOES NOT DISPUTE THAT THE

ONLY 18™ CENTURY CIVIL PROCEEDING THAT

COULD INVALIDATE A PATENT WAS THE

COMMON LAW WRIT OF SCIRE FACIAS

Astra does not dispute that the writ of scire facias was the

only 18" century English judicial proceeding that could be

used by an accused infringer to invalidate a patent. Astra does

not Jeny that the relief sought in the modern counterclaim is

identical to the relief sought in the 18" century writ of scire

facias. Instead, Astra attempts to raise other arguments that

are irrelevant under this Court’s historical analysis.

A. Astra requests the Court to compare a modern

reexamination proceeding before the PTO, a non-judicial

proceeding, with the writ of scire facias. Astra Opp. at 22-

23. Astra’s proposed comparison is entirely irrelevant. The

fact that a modern reexamination proceeding and the 18”

century writ of scire facias both could be used to invalidate a

patent does not change the fact that writ of scire facias is the

7

best analog to the modern declaratory judgment action of

invalidity.’ This Court’s historical test requires identifying

the closest 18” century analog with the claim and relief

requested in the case at issue, not with some other proceeding

not even at issue in the case.

B. Astra’s argument that the standing requirement under

the 18" century writ of scire facias was broader than the

modern declaratory judgment counterclaim, Astra Opp. at 24-

25, even if true, is similarly irrelevant. Astra tacitly admits

that an 18" century competitor threatened with an

infringement suit could initiate a writ of scire facias

proceeding. Hence, the nature of the writ of scire facias

encompassed precisely the nature of the modern declaratory

judgment action to invalidate a patent. Whether the writ of

scire facias was available to a broader class of litigants than

the modern action is not relevant. The important point is that

scire facias provided a cause of action to at least the same

class of litigants as the modern declaratory judgment action to

invalidate a patent.

C. Astra suggests incorrectly that all writs of scire facias

were tried in courts of chancery. Astra Opp. at 21. In fact,

scire facias proceedings to invalidate patents were ultimately

tried in common law courts. See, e.g., King v. Else, 1 Carp.

P.C. 103, Dav. Pat. Cas. 144 (K.B. 1785), and King v.

Arkwright, 1 Carp. P.C. 53 (K.B. 1785). Both Else and

Arkwright were tried before the King’s Bench, an English

common law court. The Arkwright case was tried before

Judge Mansfield, one of the most famous common law judges

of the late 18" century. See, generally, 1 J. Oldham, The

' Of course, the modern declaratory judgment counterclaim is much more

similar to the writ of scire facias, because, for example, both are judicial

proceedings.

8

Mansfield Manuscripts and the Growth of English Law in the

18" Century (1992). Indeed, a “writ” was the procedure to

initiate an action at law, as opposed to a “bill” which was the

procedure to initiate a proceeding in equity. P. Devlin, Jury

Trial of Complex Cases: English Practice at the Time of the

Seventh Amendment, 80 Colum. L. Rev. 43, 57, 58 (1980).

It is true that the chancery courts had great power, and the

jurisdiction of the common law courts has been described as

“any suit which the Lord Chancellor ... would permit to be

tried in the [common law courts].” /d. at 45. Some legal

causes of action would be filed with the court of chancery, but

if the court deemed it a legal cause of action rather than an

equitable cause, it would refer the action to the common law

courts, and if necessary, invent a new writ to provide the

plaintiff with a means to proceed before a court of law. /d.

at 49. The only mode of trial available to a common law court

was a trial by jury. /d. at 44.

D. Astra denies the independent nature of a counterclaim

seeking a declaratory judgment of patent invalidity. Astra

Opp. at 18-19, 25 n.6. Contrary to Astra’s argument, the

fact that such a claim may not be asserted unless there is at

least a threat of suit by a patentee does not diminish the

independent nature of the declaratory judgment action seeking

invalidity. Cardinal Chemical Co. v. Morton Int'l, Inc., 508

U.S. 83, 96 (1993). Such a declaratory judgment claim may

be asserted without regard to whether the patentee actually

files suit, and the court would retain jurisdiction to adjudicate

the claim even if the patentee did not file a counterclaim of

infringement or if the patentee’s claim of infringement is

dismissed. See Fort James Corp. v. Solo Cup Co., 412 F.3d

1340, (Fed. Cir. 2005) (court maintains jurisdiction of

declaratory judgment counterclaim to invalidate a patent

unless patentee covenants not to sue for past, present and

future infringement). Astra’s argument that the accused

9

infringer loses its standing to litigate a counterclaim of

invalidity if the patentee withdraws its infringement

allegations is false, except in the circumstance (not present in

this case) when the patentee covenants not to sue for past,

present or future infringement. /d.; accord Super Sack

Manufacturing Corp. v. Chase Packaging Corp., 57 F.3d

1054, 1059-60 (Fed. Cir. 1995).

E. Astra’s argument based upon modern pleading rules

that require the joinder in one suit of any infringement claim

with a declaratory judgment claim of invalidity is also without

merit. Astra Opp. at 25. Indeed, this argument has already

been considered and rejected by this Court. See Ross v.

Bernhard, 396 U.S. 531, 538 (1970) (the “Seventh

Amendment question depends on the nature of the issue to be

tried rather than the character of the overall action”); Beacon

Theatres, 359 U.S. at 510 (“the availability of declaratory

judgment or joinder in one suit of legal and equitable causes”

cannot be used as a basis to deny the right of jury trial on

legal issues). The fact that a suit for infringement is a

compulsory counterclaim under modern pleading procedures

does not affect the nature of the analysis: whether the

declaratory judgment counterclaim asserts legal rather than

equitable relief.

Even if the modern counterclaim seeking to have a patent

invalidated can be properly characterized as “sui generis,” it

would not diminish the parties right to a jury trial. “The

[Seventh] Amendment requires trial by jury in actions

unheard of at common law.” Tull v. United States, 481 U.S.

412, 420 (1987).

F. Astra also implies, incorrectly, that the remedy of

damages is always the test for a right to a jury. Astra Opp.

at 13. To be sure, if damages are sought, then a right to a

jury attaches. But this Court has emphasized that if the

10

remedy sought, whether it be damages or some other remedy,

was available in the late 18” century England only in a court

of law, then the parties are entitled to a jury trial on demand.

Tull v. United States, 481 U.S. 412, 421-422 (1987) (because

a civil penalty was a type of remedy at common law that

could only be enforced in courts of law, the parties were

entitled to a jury trial on demand). Although the existence of

damages in a case clearly gives right to a jury, the lack of a

demand for damages hardly proves that no jury right exists.

Numerous legal causes of action exist that entitle the parties

to a jury that do not involve a demand for damages. See,

e.g., Pernell v. Southall Reality, 416 U.S. 363, (1974) (action

to recover possession of real property entitled to a jury trial

because it was a common law remedy under 18" century

procedure). In Pernell, the relief requested constituted a

demand for legal relief, and the parties were therefore entitled

to a jury on demand. Petitioner’s demand to invalidate

Respondent’s patent constitutes a demand for legal relief, and

therefore entitles the parties to a jury. The absence of a

demand for damages is not relevant given the legal nature of

Petitioner’s demand.

CONCLUSION

The right to a jury trial is one of the most important rights

guaranteed by our Constitution. Astra has provided no

argument to rebut the reasons for granting certiorari outlined

in Impax’s Petition. Impax respectfully submits that the

Court should grant Impax’s petition for a writ of certiorari.

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.