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`Proposed Hearing Date and Time: July 23, 2020, at 2:00 p.m. (prevailing Eastern Time)
`Proposed Objection Date and Time: July 23, 2020, at 2:00 p.m. (prevailing Eastern Time)
`ROBINS KAPLAN LLP
`Scott F. Gautier (pro hac vice pending)
`2049 Century Park East, Suite 3400
`Los Angeles, CA 90067
`Telephone: (310) 552-0130
`Facsimile: (310) 229-5800
`Emails:
`sgautier@robinskaplan.com
`
`Counsel to Collegium Pharmaceutical, Inc.
`
`UNITED STATES BANKRUPTCY COURT
`SOUTHERN DISTRICT OF NEW YORK
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`- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X
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`In re:
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`PURDUE PHARMA L.P., et al.,
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`Debtors.
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`:
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`:
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`Chapter 11
`
`Case No. 19-23649 (RDD)
`
`(Jointly Administered)
`
`MOTION OF COLLEGIUM PHARMACEUTICAL, INC. FOR RELIEF
` FROM THE AUTOMATIC STAY
`
`90809451.1
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`TABLE OF CONTENTS
`
`Page
`JURISDICTION AND VENUE .............................................................................................. 1
`FACTUAL BACKGROUND .............................................................................................. 1
`RELIEF REQUESTED ........................................................................................................ 3
`ARGUMENT ....................................................................................................................... 3
`CONCLUSION .................................................................................................................... 6
`
`I.
`II.
`III.
`IV.
`V.
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`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Collegium Pharm., Inc. v. Purdue Pharma, L.P. et al.,
`Case No. PGR2018-00048 .........................................................................................................5
`
`In re 2300 Xtra Wholesalers, Inc., 445 B.R. 113 (S.D.N.Y. 2011) .................................................7
`
`In re Sonnax Industries, Inc.,
`907 F.2d 1280 (2d Cir. 1990).....................................................................................................7
`
`In re Touloumis,
`170 B.R. 825 (Bankr. S.D.N.Y. 1994) .......................................................................................7
`
`Personalweb Technologies, LLC v. Google Inc.,
`No. 5:13–CV–01317–EJD, 2014 WL 4100743 (N.D. Cal. Aug. 20, 2014) ..............................8
`
`Purdue Pharma, L.P., et al. v. Collegium Pharm., Inc.,
`Case No. 1:15-cv-13099-FDS ....................................................................................................4
`
`Statutes
`
`35 U.S.C. § 326(a)(11) .....................................................................................................................5
`
`Rules
`
`Fed. R. Bankr. P. § 4001 ..................................................................................................................4
`
`Loc. Bankr. R. § 4001-1...............................................................................................................4, 6
`
`Other Authorities
`
`37 C.F.R. § 42.200(c)...................................................................................................................5, 6
`
`U.S. Patent No. 9,693,961................................................................................................4, 5, 6, 8, 9
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`Collegium Pharmaceutical, Inc. (“Collegium”) hereby files this motion (the “Motion”)
`for relief from the automatic stay to allow certain pending actions, as described below, to
`proceed.
`
`JURISDICTION AND VENUE
`I.
`The above-referenced court (the “Court”) has jurisdiction over this matter
`1.
`pursuant to 28 U.S.C. §§ 157 and 1334. Collegium confirms its consent to the entry of a final
`order by the Court in connection with this Motion to the extent that it is later determined that the
`Court, absent consent of the parties, cannot enter final orders or judgments in connection
`herewith consistent with Article III of the United States Constitution.
`Venue is proper before the Court pursuant to 28 U.S.C. §§ 1408 and 1409.
`2.
`3.
`The statutory and legal predicates for the relief requested herein are sections 362
`and 553 of title 11 of the United States Code (the “Bankruptcy Code”), Rule 4001 of the
`Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rule 4001-1 of the
`Local Bankruptcy Rules for the Southern District of New York (the “Local Rules”).
`II.
`FACTUAL BACKGROUND
`On September 21, 2017, debtors Purdue Phama, L.P., Purdue Pharmaceuticals,
`4.
`L.P., and P.F. Laboratories, Inc. filed a complaint in the United States District Court for the
`District of Massachusetts (the “District Court”), alleging that Collegium’s New Drug
`Application for its Xtampza® ER product (“Xtampza”) product infringed on the Debtors’
`patents, including U.S. Patent No. 9,693,961 (“the ’961 Patent”), thereby commencing patent
`infringement lawsuits against Collegium (the “Infringement Action”).
`On December 13, 2017, the District Court consolidated the Infringement Action
`5.
`into the lead action where the Debtors had asserted other patents-in-suit against the Collegium.
`The consolidated action is styled Purdue Pharma, L.P., et al. v. Collegium Pharm., Inc., Case
`No. 1:15-cv-13099-FDS.
`On March 13, 2018, Collegium filed a petition for Post Grant Review of the ’961
`6.
`Patent before the Patent Trial and Appeal Board (the “PTAB”), seeking a determination that
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`the ’961 Patent was invalid (the “PTAB Action”). The PTAB Action is styled Collegium
`Pharm., Inc. v. Purdue Pharma, L.P. et al., Case No. PGR2018-00048.
`7.
`On October 3, 2018, Collegium moved to stay the Infringement Action in view of
`the related PTAB proceedings related to the ’961 patent. The court took no further action with
`respect to the ’961 patent and did not set any schedule for proceedings on the ’961 patent
`following Collegium’s motion, allowing the PTAB to complete the trial of the validity of
`the ’961 Patent.
`8.
`On October 4, 2018, the PTAB issued its decision finding that the ’961 Patent is
`eligible for post-grant review, and that Collegium had demonstrated that the ’961 Patent was
`likely unpatentable based on the lack of written description and anticipation grounds set forth in
`the Petition (the “Oct. 4 Decision”).
`9.
`Pursuant to 35 U.S.C. § 326(a)(11), the Oct. 4 Decision triggered a one-year
`deadline for the PTAB to issue its Final Written Decision (i.e. October 4, 2019), which deadline
`may not be extended by the Chief Administrative Patent Judge for more than six months (i.e.,
`April 4, 2020), pursuant to 37 C.F.R. § 42.200(c) (the “Statutory Deadline”).
`10.
`On September 15, 2019, the Debtors filed a voluntary petition for relief under
`chapter 11 of the Bankruptcy Code, thereby commencing the Bankruptcy Cases.
`11.
`On September 24, 2019, the Debtors filed a Notice of Bankruptcy and Imposition
`of Automatic Stay in the PTAB Action alerting the PTAB that the PTAB Action was stayed
`pursuant to section 362(a) of the Bankruptcy Code (the “PTAB Stay Notice”).
`12.
`On October 2, 2019—two days before the PTAB was required under 35 U.S.C. §
`326(a)(11) to render its decision as to the validity of the ’961 Patent—the PTAB entered its
`Order recognizing that the PTAB Action was subject to the automatic stay (the “PTAB Stay
`Order”).
`On July 2, 2020, the Debtors filed their motion seeking relief from the automatic
`13.
`stay to permit the Infringement Action (but not the PTAB Action) to proceed (the “Debtors’
`Relief From Stay Motion”). The hearing on the Debtors’ Relief from Stay Motion is scheduled
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`for July 23, 2020, at 2:00 p.m. (prevailing Eastern Time). Concurrently herewith, Collegium
`filed its application requesting that the hearing on its Motion take place on the same date and
`time as the Debtors’ Relief from Stay Motion.
`14.
`In an effort to avoid filing a motion to lift the stay as to the PTAB Action, or
`respond to the Debtor’s motion, Collegium contacted the Debtors to request that they stipulate to
`lifting the automatic stay as to the PTAB Action in addition to the Infringement Action.
`15.
`The Debtors indicated that they are not opposed to Collegium’s request, but want
`to preserve the argument, that they raised for the first time, that the PTAB action “no longer
`exists” because the PTAB observed the Automatic Stay and did not issue a final written decision
`as to the validity of the ’961 Patent within what would have been, but for the automatic stay, the
`Statutory Deadline.
`
`RELIEF REQUESTED
`III.
`By this Motion, pursuant to Bankruptcy Code sections 362 and 553, Bankruptcy
`16.
`Rule 4001, and Local Rule 4001-1, Collegium requests that the Court lift the automatic stay to
`permit Collegium to permit the PTAB action to proceed. A proposed form of order granting the
`relief requested herein is attached hereto as Exhibit A.
`17.
`As of the filing of this Motion, Collegium does not intend to seek a hearing and
`relief within the time periods required under Bankruptcy Code section 362(e)(1). The relief
`sought in this Motion, is closely intertwined with the Debtors’ Motion for Order Modifying the
`Automatic Stay to Permit the Debtors to Prosecute Certain Pending Patent Litigation, and
`Collegium requests that this Motion be heard concurrently with the Debtors’ motion.
`IV.
`ARGUMENT
`The automatic stay may be lifted or modified for cause pursuant to section
`18.
`362(d)(1) of the Bankruptcy Code. In re 2300 Xtra Wholesalers, Inc., 445 B.R. 113, 118
`(S.D.N.Y. 2011)
`19.
`In Sonnax, the Second Circuit adopted twelve factors, which are weighed to
`determine whether to modify the automatic stay to permit an action to proceed in another forum.
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`In re Sonnax Industries, Inc., 907 F.2d 1280, 1286 (2d Cir. 1990). The twelve Sonnax factors are
`as follows:
`
`(1) whether relief would result in a partial or complete resolution of the issues;
`(2) lack of any connection with or interference with the bankruptcy case;
`(3) whether the other proceeding involves the debtor as a fiduciary;
`(4) whether a specialized tribunal with the necessary expertise has been
`established to hear the cause of action;
`(5) whether the debtor's insurer has assumed full responsibility for defending it;
`(6) whether the action primarily involves third parties;
`(7) whether litigation in another forum would prejudice the interests of other
`creditors;
`(8) whether the judgment claim arising from the other action is subject to
`equitable subordination;
`(9) whether movant's success in the other proceeding would result in a judicial
`lien avoidable by the debtor;
`10) the interests of judicial economy and the expeditious and economical
`resolution of litigation;
`(11) whether the parties are ready for trial in the other proceeding; and
`(12) impact of the stay on the parties and the balance of harms.
`Sonnax, 907 F.2d at 1286.
`20.
`A movant need not satisfy every one of the twelve factors. In re Touloumis, 170
`B.R. 825, 828 (Bankr. S.D.N.Y. 1994) (“Only those factors relevant to a particular case need be
`considered... and the Court need not assign them equal weight.”).
`21.
`Here, the first, second, seventh, tenth, eleventh, and twelfth factors are relevant to
`the Motion, and all six weigh in favor of the relief sought herein.
`Judicial Economy and the Complete Resolution of the Issues. The first factor weighs
`heavily in favor of lifting the stay to permit the PTAB Action to proceed. As discussed above,
`allowing the PTAB Action to proceed will facilitate the complete resolution of disputed matters
`in the Infringement Action. On the Petition Date, the PTAB Action was fully briefed and heard,
`and only days away from the deadline by which the PTAB was scheduled to submit its final
`decision as to the validity of the ’961 Patent. We expect that the PTAB’s determination will be
`rendered soon after the stay is lifted (unlike the Infringement Action, which is still in its early
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`discovery stages), and will resolve the critical issue of whether the ’961 Patent is valid—which
`may render much of the Infringement Action moot. Accordingly, interests of judicial economy
`and the complete resolution of the Parties’ dispute are served by lifting the stay as to the PTAB
`Action. Conversely, not lifting the stay to permit the PTAB Action to proceed, while allowing
`the Infringement Action to proceed, will unduly delay the resolution of a key issue and will
`result in greater expense to the Debtors’ Estates as well as Collegium.
`22.
`Interference with Bankruptcy Case. The second factor also weighs in favor of
`lifting the stay as the PTAB Action. As noted above, the PTAB’s decision, which is expected to
`be released soon after the stay is lifted, will resolve the critical issue of whether the ’961 Patent is
`valid—thus narrowing the disputed issues in the Infringement Action. Accordingly, rather than
`interfering with the Bankruptcy Cases, lifting the stay to permit the PTAB Action to proceed will
`promote the efficient use of the Debtors’ limited assets.
`23.
`Prejudice. The seventh factor weighs in favor of the relief requested herein.
`Proceeding in the PTAB Action will not prejudice the interests of other creditors. In fact, lifting
`the stay to permit the PTAB Action to proceed will conserve the Estates’ resources, serve
`judicial economy, and facilitate the complete resolution of the parties’ disputes, thus benefitting
`all creditors. District courts often stay patent infringement litigation on their own when there is a
`PTAB proceeding pending, in the interests of judicial economy. Personalweb Technologies, LLC
`v. Google Inc., No. 5:13–CV–01317–EJD, 2014 WL 4100743, at *5 (N.D. Cal. Aug. 20, 2014)
`(“Indeed, allowing these invalidity arguments to be determined once, employing the specialized
`expertise of the PTAB, produces the exact results—avoiding duplicative costs and efforts and
`averting the possibility of inconsistent judgments—intended by the AIA and previous
`procedures.”). Conversely, not lifting the stay to permit the PTAB Action to proceed, while
`allowing the Infringement Action to proceed, will unduly delay the resolution of a key issue in
`the matter—the validity of the ’961 Patent—and may result in significantly greater expense to
`the Debtors and Collegium.
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`Readiness for Trial. The eleventh factor weighs in favor of the relief requested
`24.
`herein. As mentioned above, the PTAB Action is fully briefed, and the parties are simply waiting
`for the PTAB to render its decision—which is expected to occur shortly after the stay is lifted.
`Balance of Harm. Based on the above, the “balance of harm” favors lifting the
`25.
`stay to permit the PTAB Action to proceed. Lifting the stay as to only the Infringement Action
`will be inefficient and expensive to the Estates, their creditors, and Collegium. Conversely,
`lifting the stay as to the PTAB Action will benefit the Debtors and Collegium with a decision
`that will narrow the issues of the Infringement Action.
`In sum, the application of the Sonnax factors overwhelmingly supports relief from
`26.
`the automatic stay to permit the PTAB Action to proceed, and the PTAB to quickly render its
`decision.
`
`CONCLUSION
`V.
`WHEREFORE, Collegium respectfully requests that the Court enter an Order,
`substantially in the form attached hereto as Exhibit A, granting the relief requested herein, and
`such other and further relief as may be just and proper.
`
`
`Dated:
`
`
`July 20, 2020
`Los Angeles, California
`
`ROBINS KAPLAN LLP
`
`
`
`By: /s/ Scott F. Gautier
`
`Scott F. Gautier (pro hac vice pending)
`
`2049 Century Park East, Suite 3400
`
`Los Angeles, CA 90067
`
`Telephone: (310) 552-0130
`
`Facsimile: (310) 229-5800
`
`
`
`Counsel to Collegium Pharmaceutical, Inc.
`
`
`
`
`
`
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`Exhibit A – Proposed Order
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`UNITED STATES BANKRUPTCY COURT
`SOUTHERN DISTRICT OF NEW YORK
`
`- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X
`
`:
`In re:
`
`
`:
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`PURDUE PHARMA L.P., et al.,
`:
`
`:
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`
`Debtors.
`
`
`
`Chapter 11
`
`Case No. 19-23649 (RDD)
`
`(Jointly Administered)
`
`
`
`ORDER GRANTING COLLEGIUM PHARMACEUTICAL INC.’S MOTION FOR
`RELIEF FROM THE AUTOMATIC STAY
`
`Upon the motion (the “Motion”)1 of Collegium Pharmaceutical, Inc. (“Collegium”) for
`entry of an order, pursuant to sections 105(a) and 362(d)(1) of the Bankruptcy Code modifying
`the automatic stay to permit the PTAB Action to proceed, as more fully described in the Motion;
`and the Court having jurisdiction to consider the Motion and the relief requested therein pursuant
`to 28 U.S.C. §§ 157 and 1334; and consideration of the Motion and the relief requested therein
`being a core proceeding under 28 U.S.C. § 157(b); and venue being proper before the Court
`pursuant to 28 U.S.C. §§ 1408 and 1409; and due and proper notice of the Motion having been
`provided to the Notice Parties, and it appearing that no other or further notice need be provided;
`and the Court having reviewed the Motion and held a hearing to consider the relief requested in
`the Motion (the “Hearing”); and the Court having determined that the legal and factual bases set
`forth in the Motion and at the Hearing establish just cause for the relief granted herein; and the
`Court having determined that the relief requested is in the best interests of the Debtors, their
`estates, their creditors, and all parties in interest; and upon all of the proceedings had before the
`Court and after due deliberation and sufficient cause appearing therefor;
`IT IS HEREBY ORDERED THAT
`The Motion is hereby granted as set forth herein.
`1.
`
`
`1 Unless otherwise defined herein, each capitalized term shall have the meaning ascribed to such term in the Motion.
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`The automatic stay is lifted for the purpose of allowing the PTAB Action to
`
`2.
`proceed.
`Any Bankruptcy Rule (including, but not limited to, Bankruptcy Rules 4001(a)(3)
`3.
`or 6004(h)) or Local Rule that might otherwise delay the effectiveness of this Order is hereby
`waived, and the terms and conditions of this Order shall be effective immediately and
`enforceable upon its entry.
`The contents of the Motion and the notice procedures set forth therein are good
`4.
`and sufficient notice and satisfy the Bankruptcy Rules and the Local Rules, and no other or
`further notice of the Motion or the entry of this Order shall be required.
`The Debtors are authorized to take all actions necessary to effectuate the relief
`5.
`granted in this Order in accordance with the Motion.
`The Court shall retain jurisdiction to hear and determine all matters arising from or
`6.
`related to the implementation, interpretation and enforcement of this Order.
`
`
`New York, New York
`Dated: _______, 2020
`
`
`
`
`
`
`
`
`
`THE HONORABLE ROBERT D. DRAIN
`UNITED STATES BANKRUPTCY JUDGE
`
`
`
`
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