Case 1:18-cv-00202-IMK Document 39 Filed 01/28/19 Page 1 of 10 PageID #: 1315
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
`
`
`
`
`
`Civil Action No. 1:18-cv-00202-IMK
`
`ANACOR PHARMACEUTICALS, INC.,
`
`
`Plaintiff,
`
`
`v.
`
`
`
`
`MYLAN PHARMACEUTICALS INC. and
`MYLAN INC.,
`
`Defendants.
`
`
`
`MEMORANDUM IN SUPPORT OF THE MYLAN DEFENDANTS’ RESPONSE
`TO ANACOR’S MOTION TO STAY CASE
`
`
`
`
`

`

`Case 1:18-cv-00202-IMK Document 39 Filed 01/28/19 Page 2 of 10 PageID #: 1316
`
`I.
`
`INTRODUCTION
`
`Defendants Mylan Pharmaceuticals Inc. (“MPI”) and Mylan Inc., (collectively, “the
`
`Mylan Defendants”) herein respectfully respond to Anacor Pharmaceuticals, Inc.’s (“Anacor”)
`
`Motion to Stay (Dkt. No. 25).
`
`The Mylan Defendants are ready and able to immediately proceed with the present
`
`litigation. However, in the interest of compromise and preservation of judicial resources, the
`
`Mylan Defendants are amenable to a brief stay of the litigation until the Patent Trial and Appeal
`
`Board (“PTAB”) issues Final Written Decisions in the ongoing inter partes reviews (“IPR”) of
`
`the four patents-in-suit so long as such a stay does not result in an extension of the regulatory
`
`stay of approval of MPI’s accused ANDA product or delay resolution of the Mylan Defendants’
`
`Fed. R. Civ. P. 12 motion in the parallel litigation pending in the District of Delaware. The
`
`Mylan Defendants understand that Anacor is amendable to these conditions, and that the parties
`
`disagree only with respect to when the stay of this litigation should end.
`
`Specifically, in an attempt to leverage a competitive advantage from a stay of this
`
`litigation, Anacor requests that (1) if the Final Written Decision finds some claim(s) patentable,
`
`the stay lift, allowing litigation of those claims, and (2) if the Final Written Decision finds all
`
`claims unpatentable, the stay remain in place (preserving the stay of FDA approval of MPI’s
`
`ANDA product, and thus postponing generic competition for Anacor’s brand product) while
`
`Anacor seeks an appeal. This is not acceptable, and would impose a severe prejudice on the
`
`Mylan Defendants and grant Anacor an unjustified competitive advantage.
`
`Finally, staying this matter while the JPML decides Anacor’s motion to transfer this
`
`matter to Delaware is unwarranted. The Mylan Defendants intend to oppose Anacor’s request
`
`that the JPML transfer this case to pending parallel litigation that Anacor filed against the Mylan
`
`1
`
`

`

`Case 1:18-cv-00202-IMK Document 39 Filed 01/28/19 Page 3 of 10 PageID #: 1317
`
`Defendants in the a forum where venue is improper, and likewise oppose delaying this litigation
`
`in view of that transparent attempt at forum shopping.
`
`As a practical matter, this Court should stay this matter until the Final Written Decisions
`
`are issued in the IPRs of the patents-in-suit. At that time, the Court and the parties can address
`
`the appropriate manner in which to proceed.
`
`II.
`
`BACKGROUND
`
`A.
`
`Northern District of West Virginia and District of Delaware Litigations
`
`This action is one of two nearly identical matters arising out of MPI’s filing of an ANDA
`
`with FDA seeking approval for a tavaborole topical solution, 5%. Dkt. No. 1 at ¶ 1; Anacor
`
`Pharmaceuticals, Inc. v. Mylan Pharmaceuticals Inc., Case No. 18-cv-1699-RGA (D. Del.).
`
`Anacor filed suit against the Mylan Defendants in the District of Delaware on October 29, 20181
`
`and in the present Court on October 30, 2018. Anacor filed nearly identical patent infringement
`
`suits against fourteen defendant groups, each alleging that the filing of an ANDA infringed U.S.
`
`Patent Nos. 9,549,938; 9,566,289; 9,566,290; and 9,572,823 (“patents-in-suit”). Notably, in the
`
`District of Delaware, while Anacor combined its claims against the other thirteen defendants in
`
`only two complaints, Anacor filed a separate complaint against MPI and Mylan Inc., likely
`
`anticipating a venue objection and challenge. On December 21, 2018, in the District of
`
`Delaware action, the Mylan Defendants filed a Motion to Dismiss for Improper Venue and
`
`Failure to State a Claim detailing why venue is improper in that district for both MPI and Mylan
`
`Inc., and why Mylan Inc. (which did not file the accused ANDA) is not a proper party to the
`
`litigation. Briefing is not yet complete on that motion. No Fed. R. Civ. Pro. 16 conference is
`
`scheduled in the District of Delaware matter.
`
`1 Anacor’s complaint was filed in the District of Delaware nearly two weeks after that court
`found that venue was not proper with respect to MPI in that district. Bristol-Myers Squibb Co. v.
`Mylan Pham., No. 17-374, 2018 WL 5109836, at *5 (D. Del. Oct. 18, 2018).
`
`2
`
`

`

`Case 1:18-cv-00202-IMK Document 39 Filed 01/28/19 Page 4 of 10 PageID #: 1318
`
`In the present case, the Mylan Defendants filed their Answer and Counterclaims on
`
`December 14, 2018, and Anacor filed its Answer to those Counterclaims on January 4, 2019. A
`
`Fed. R. Civ. P. 16 scheduling conference is set for March 28, 2019. On January 17, 2019,
`
`Anacor moved to continue that conference and related deadlines until resolution of the present
`
`motion. Dkt. No. 37. Finding no good cause for the requested continuance, the Court denied
`
`that motion on January 18, 2019. Dkt. No. 38.
`
`B.
`
`IPRs of the Patents-In-Suit
`
`The four patents-in-suit are presently the subject of IPRs. Those IPRs have been pending
`
`since November 2017, and oral argument is scheduled to occur on March 1, 2019. Final Written
`
`Decisions are due to issue no later than June 8, 2019 (U.S. Patent Nos. 9,549,938 and 9,566,289)
`
`and June 14, 2019 (U.S. Patent Nos. 9,566,290 and 9,572,823). MPI is a co-petitioner in all four
`
`IPRs.
`
`III. LEGAL STANDARDS
`
`It is within the court’s discretion to grant or deny a request to stay litigation pending IPR.
`
`454 Life Scis. Corp. v. Ion Torrent Sys., Inc., Case No. 15-595-LPS, 2016 WL 6594083, at *2
`
`(D. Del. Nov. 7, 2016); Alcon Labs., Inc. v. Akorn, Inc., Case No. 15-285-RMB, 2016 WL
`
`99201, at *1 (D.N.J. Jan. 8, 2016) (“[S]taying a patent case in which an IPR request has been
`
`granted is within the discretion of the Court.”). “Typically, courts consider three factors in
`
`deciding how to exercise this discretion: (1) whether a stay will simplify the issues for trial;
`
`(2) the status of the litigation, particularly whether discovery is complete and a trial date has
`
`been set; and (3) whether a stay would cause the non-movant to suffer undue prejudice from any
`
`delay or allow the movant to gain a clear tactical advantage.” 454 Life Scis. Corp., 2016 WL
`
`6594083, at *2.
`
`3
`
`

`

`Case 1:18-cv-00202-IMK Document 39 Filed 01/28/19 Page 5 of 10 PageID #: 1319
`
`IV. ARGUMENT
`
`A.
`
`Any Stay of This Litigation Should Expire Upon Issuance of the IPR Final
`Written Decisions
`
`In the interest of judicial economy and compromise, the Mylan Defendants are amenable
`
`to staying this litigation until issuance of the PTAB’s IPR Final Written Decisions so long as the
`
`stay: (i) expires upon issuance of the IPR Final Written Decisions, (ii) does not serve as a basis
`
`for extension of the regulatory stay of approval of MPI’s ANDA product; and (iii) does not delay
`
`resolution of the Mylan Defendants’ Fed. R. Civ. P. 12 motion pending in the District of
`
`Delaware.2 The Mylan Defendants understand that Anacor has agreed to the latter two
`
`conditions, leaving in dispute only the timing of the expiration of Anacor’s requested stay.
`
`Any stay of this litigation should expire upon issuance of the IPR Final Written
`
`Decisions. First, regardless of the outcome of the IPRs, the Mylan Defendants should be
`
`permitted to litigate all available defenses in the District Court in a timely manner, including,
`
`inter alia, non-infringement and non-prior art based invalidity.
`
`Second, Anacor’s request that the stay remain in place pending appeal should the IPRs
`
`result in a finding that all of the claims of the patents-in-suit are unpatentable is unjustifiably
`
`prejudicial to the Mylan Defendants. Anacor initiated this litigation, triggering a regulatory stay
`
`of approval of MPI’s ANDA. In order to terminate that regulatory stay of approval, MPI must
`
`obtain a court order—a Final Written Decision from the PTAB will not suffice. 21 C.F.R.
`
`§ 314.107(b)(3).3 Maintaining a stay of the litigation through appeal would severely prejudice
`
`
`2 The Mylan Defendants agree that the IPR Final Written Decisions have the potential to
`simplify the issues to be litigated, and that the present litigation, which is in the very early stages,
`has not proceeded to an extent that would warrant denial of a stay pending issuance of the IPR
`Final Written Decisions.
`3 The decision cited by Anacor, Novartis AG v. Noven Pharma. Inc., 853 F.3d 1289, 1294 (Fed.
`Cir. 2017) is inapplicable to the present facts. Dkt. No. 26 at 8. In Novartis, the Federal Circuit
`noted that the PTAB’s findings that patent claims would have been obvious in view of prior art
`
`4
`
`

`

`Case 1:18-cv-00202-IMK Document 39 Filed 01/28/19 Page 6 of 10 PageID #: 1320
`
`the Mylan Defendants by preventing them from obtaining a court order and terminating the
`
`regulatory stay of approval.
`
`Essentially, Anacor requests that—should the PTAB find that its patents never should
`
`have issued—this Court artificially extend Anacor’s monopoly over the tavaborole marketplace
`
`by denying MPI the ability to end the regulatory stay of approval of its ANDA product. Such an
`
`artificial extension of Anacor’s monopoly based on patents deemed unpatentable is a tactical
`
`advantage to which Anacor is not entitled and should not receive.
`
`B.
`
`A Stay Pending Resolution of Anacor’s JPML Transfer Motion Is
`Inappropriate
`
`As a practical matter, given that the parties agree that a stay of litigation is appropriate
`
`until the issuance of the Final Written Decisions in the IPRs of the patents-in-suit (which is
`
`expected to happen in June 2019), a stay pending resolution of Anacor’s JPML transfer motion is
`
`unnecessary. Once those Final Written Decisions issue, the Court and the parties may assess the
`
`status of the transfer motion as part of the discussion regarding how to proceed with the case at
`
`that time.
`
`On its own, Anacor’s JPML transfer motion does not warrant grant of a stay. The
`
`pendency of a motion to transfer under 28 U.S.C. § 1407 does not automatically entitle a party to
`
`a stay of a case as to which transfer is sought. Terkel v. AT&T Inc., No. 06-cv-2837, 2006 WL
`
`1663456, at *1 (N.D. Ill. June 9, 2006). In deciding whether to exercise its inherent
`
`discretionary power to control the disposition of cases by staying a case, courts consider the
`
`following factors: (1) whether judicial economy favors a stay; (2) potential prejudice to the
`
`
`were supported by substantial evidence and that the PTAB was not bound by prior Federal
`Circuit and District Court decisions of nonobviousness. Novartis AG, 853 F. 3d at 1294. That
`the PTAB is not bound by a prior District Court decision is irrelevant here.
`
`5
`
`

`

`Case 1:18-cv-00202-IMK Document 39 Filed 01/28/19 Page 7 of 10 PageID #: 1321
`
`Mylan Defendants if a stay is granted; and (3) hardship to Anacor if a stay is denied. Id. None
`
`of these factors favor stay of the present litigation.
`
`First, any judicial economy interests to be served by a stay pending resolution of
`
`Anacor’s JPML transfer motion are speculative. There is no guarantee that Anacor’s transfer
`
`motion will be granted. Even if transfer were assumed, there is no reason to believe that such
`
`transfer would occur at a time sufficient to allow this matter to proceed in parallel with the
`
`several Delaware matters.
`
`Second, a stay of this litigation pending resolution of Anacor’s JPML motion, to the
`
`extent that continues past issuance of the Final Written Decisions in the IPRs, would severely
`
`prejudice the Mylan Defendants. As shown above, a stay pending resolution of the IPR will
`
`allow potential simplification of the case. An indefinite stay going beyond that ruling will create
`
`delay without justification. As detailed above, Anacor filed suit with knowledge that the District
`
`of Delaware had already determined that Delaware was not a proper venue for MPI, the ANDA
`
`filer at issue in the present dispute. Regardless, Anacor chose to bring suit against MPI and its
`
`parent company in that improper venue, and now Anacor is attempting to use the JPML and this
`
`Court to avoid the venue laws. Such manipulative forum shopping should not be tolerated. The
`
`Mylan Defendants are ready to proceed with this litigation in the Northern District of West
`
`Virginia. Any delay in doing so—and corresponding delay in FDA approval of MPI’s ANDA
`
`product—would be irreparably prejudicial to MPI.4
`
`
`4 None of the case law cited by Anacor is applicable to the present facts, and none are Hatch-
`Waxman matters. City of New Castle v. Purdue Pharma L.P., No. 18-1472, 2018 WL 3438841
`(E.D. Pa. July 16, 2018) (class action involving conditional transfer order issued by Opiate MDL
`Panel); Packer v. Power Balance, LLC, No. 11-802 (WJM), 2011 WL 1099001 (D.N.J. Mar. 22,
`2011) (stay of class action related to agreement to national settlement and related JPML motion
`to consolidate); Young v. Bristol-Myers Squibb Co., No. 17-609-LPS, 2017 WL 2774735 (D.
`Del. June 27, 2017) (denying request to remand to state court and staying pending decision on
`MDL transfer); Pa. Ex rel. Kane v. McGraw-Hill Cos., No. 1:13-cv-605, 2013 WL 1397434
`
`6
`
`

`

`Case 1:18-cv-00202-IMK Document 39 Filed 01/28/19 Page 8 of 10 PageID #: 1322
`
`Third, Anacor has not articulated any hardship or inequity that it would suffer—because
`
`none exists—absent a stay. Indeed, Anacor already filed suit in the District of Delaware; thus,
`
`Anacor would suffer no any hardship as a result of denial of its request to stay the present matter
`
`pending transfer to Delaware.
`
`V.
`
`CONCLUSION
`
`For the aforementioned reasons, the Mylan Defendants do not oppose a stay of the
`
`present litigation until the Final Written Decisions are issued in the IPRs of the four patents-in-
`
`suit, so long as such a stay does not (1) cause a lengthening of the regulatory stay of approval of
`
`MPI’s ANDA product; nor (2) delay resolution of the Mylan Defendants’ Fed. R. Civ. P 12
`
`motion pending in the District of Delaware.
`
`
`
` Dated: January 28, 2019
`
`Respectfully submitted,
`
`
`STEPTOE & JOHNSON PLLC
`
`By:
`
`______
` /s/ William J. O’Brien__
`Gordon H. Copland (WV Bar #828)
`William J. O’Brien (WV Bar #10549)
`400 White Oaks Boulevard
`Bridgeport, WV 26330
`Tel: (304) 933-8000
`
`
`
`(M.D. Pa. Apr. 5, 2013) (staying one of seventeen actions brought by attorneys general against
`credit rating agency pending JPML consolidation); W. Va. ex rel. McGraw v. Countrywide Fin.
`Corp., No. 3:08-1093, 2008 WL 11430010, at *1–*2 (S.D. W. Va. Nov. 5, 2008)(staying matter
`where JPML issued conditional transfer order); Meyers v. Bayer AG, 143 F. Supp. 2d 1044, 1049
`(E.D. Wis. 2001)(staying case that was one of more than thirty cases raising similar claims, of
`which 21 had been transferred to an MDL proceeding); VirtualAgility Inv. V. Salesforce.com,
`Inc., 759 F.3d 1307 (Fed Cir. 2014)(discussing stay of litigation pending covered business
`method post-grant review).
`
`7
`
`

`

`Case 1:18-cv-00202-IMK Document 39 Filed 01/28/19 Page 9 of 10 PageID #: 1323
`
`
`
`
`
`
`
`
`
`
`OF COUNSEL:
`
`T.O. Kong (admitted pro hac vice)
`Wendy L. Devine (admitted pro hac vice)
`Kristina M. Hanson (admitted pro hac vice)
`Anjali Deshmukh (admitted pro hac vice)
`Wilson Sonsini Goodrich & Rosati
`One Market Plaza
`Spear Tower, Suite 3300
`San Francisco, CA 94105
`Tel: (415) 947-2000
`
`Attorneys for Defendants Mylan
`Pharmaceutical Inc. and Mylan Inc.
`
`
`8
`
`

`

`Case 1:18-cv-00202-IMK Document 39 Filed 01/28/19 Page 10 of 10 PageID #: 1324
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`I certify that on this 28th day of January 2019, I electronically filed the foregoing
`
`“Memorandum in Support of the Mylan Defendants’ Response to Anacor’s Motion to Stay
`
`Case” with the Clerk of the Court using the CM/ECF system, which will send notice of the same
`
`to the following counsel of record:
`
`James F. Companion, Esquire
`jfc@schraderlaw.com
`Schrader, Companion Duff & Law, PLLC
`401 Main Street
`Wheeling, WV 26003
`
`Aaron P. Maurer (admitted pro hac vice)
`amaurer@wc.com
`Anthony Sheh (admitted pro hac vice)
`asheh@wc.com
`David I. Berl (admitted pro hac vice)
`dberl@wc.com
`David M. Horniak (admitted pro hac vice)
`dhorniak@wc.com
`Williams & Connolly LLP
`725 12th Street, NW,
`Washington, DC 20005
`
`Attorneys for Plaintiff
`
`
`
` /s/ William J. O’Brien
`
`
`Gordon H. Copland (WVSB No. 828)
` gordon.copland@steptoe-johnson.com
`William J. O’Brien (WVSB No. 10549)
` william.obrien@steptoe-johnson.com
`STEPTOE & JOHNSON PLLC
`400 White Oaks Boulevard
`Bridgeport, WV 26330
`Telephone: (304) 933-8000
`Facsimile: (304) 933-8183
`
`Attorneys for Defendants
`
`
`
`
`
`
`
`8310550
`
`9
`
`