UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

____________________________________

:

:

TARO PHARMACEUTICALS NORTH :

AMERICA INC., et al., :

:

Plaintiffs, : Civil Action No. 11-2452 (JAP)

:

v. :

: OPINION

SUVEN LIFE SCIENCES, LTD, :

et al. :

: 

Defendants. :

____________________________________:

PISANO, District Judge.

I. INTRODUCTION

 This is a patent infringement action brought by plaintiffs Taro Pharmaceuticals North 

America, Inc., and Taro Pharmaceutical U.S.A. (together, “Taro” or “Plaintiffs”), Inc. against 

defendants Suven Life Sciences, Ltd. and Suven Life Sciences USA, LLC (“Suven USA” or 

“Defendant”).1 Presently before the Court is Taro’s motion pursuant to Federal Rules of Civil 

Procedure 12(b)(6) and 12(f) to dismiss Suven USA’s inequitable conduct counterclaims

(Counterclaims V and VI) and strike Suven USA’s inequitable conduct affirmative defenses

(fifth and sixth affirmative defenses). The Court decides the motion without oral argument 

pursuant to Federal Rule of Civil Procedure 78. For the reasons below, Taro’s motion is 

granted.

 

1 To date, only Suven USA has appeared in this action. 

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II. BACKGROUND

Taro holds approved New Drug Application (“NDA”) No. 18-613 for malathion 

lotion, 0.5%, a pharmaceutical topical preparation which is marketed under the brand name 

Ovide. Ovide is approved by the Food and Drug Administration for the treatment of head 

lice. In early 2011, Suven USA submitted to the United States Food and Drug Administration 

(“FDA”) abbreviated new drug application (“ANDA”) No. 091559 seeking approval to 

engage in the commercial manufacture, use, or sale of a generic malathion lotion, 0.5%.

Taro brings the instant suit alleging that by filing its ANDA, Suven USA has infringed 

two of Taro’s patents, United States Patent No. 7,560,445 (the “‘445 patent”) and United 

States Patent No. 7,977,324 (the “‘324 patent”), both of which are entitled “Process for 

Preparing Malathion for Pharmaceutical Use.” See Amended Complaint (“Compl”)., Ex. A 

and Ex. B. The ‘445 patent covers methods of making highly pure malathion, and the ‘324 

covers the purified formulation of malathion. Highly pure malathion is desirable because 

malathion’s impurities are highly toxic to humans. Counterclaim ¶ 12. 

In this action, Suven USA has asserted, inter alia, counterclaims and affirmative 

defenses alleging that the patents-in-suit are unenforceable based on inequitable conduct. 

Specifically, Suven USA alleges that Taro concealed and/or misrepresented material 

information in submissions to the Patent Office during prosecution.

A. Malathion

According to Suven USA’s counterclaim, malathion was first used as a pesticide in the 

1950s. Counterclaim ¶ 8. In 1982, the FDA approved malathion for use in topical 

pharmaceutical compositions for the treatment of lice infestations. Id. ¶ 9. Since then, 

various companies have sold malathion lotion 0.5% under the brand name Ovide. Id. ¶ 10. 

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Taro obtained the exclusive right to market Ovide in 2003 from Medicis Pharmaceutical 

Corporation (“Medicis”). Id. ¶ 11. 

Malathion’s impurities, particularly isomalathion, are highly toxic. Consequently,

even non-pharmaceutical grade malathion used in pesticides is 96% pure. Id. ¶ 14. 

Pharmaceutical-grade malathion, such as that found in Ovide, have a much higher purity. Id. 

Taro, and Medicis before it, obtained the malathion active pharmaceutical ingredient used in 

Ovide products from Cheminova A/S (“Cheminova”). Id. ¶ 12. According to Certificates of 

Analysis from Cheminova, stability test results, and product specifications contained in the 

prosecution history for the ‘445 patent (and submitted in the ‘324 patent prosecution history), 

the malathion produced by Cheminova and used in Ovide beginning in the late 1990s was of 

very high purity. Id. at ¶ 15, 16. 

B. Prosecution of the ‘445 and ‘324 Patents

In 2006, U.S. Patent Application No. 11/427,863 (the “‘863 application”) was filed, 

which later issued as the ‘445 patent. Id. ¶ 17. In 2009, U.S. Patent Application No. 

12/353,691 (the “‘691 application”) was filed as a continuation of the ‘863 application. The 

‘691 application later issued as the ‘324 patent. Id. ¶ 62.

As noted above, the ‘445 patent covers methods of making highly pure malathion, and 

the ‘324 covers the purified formulation of malathion. In support of the patentability of the 

methods and compositions claimed, the applicants made the following statements in the ‘863 

application:

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The malathion prepared by the methods of this invention has significantly 

lower levels of toxic impurities such as isomalathion when compared with 

other, commercially available malathion preparations that are currently used 

for pharmaceutical purposes.

* * * 

When compared with malathion from Cheminova, malathion prepared by the 

methods of the present invention has less isomalathion, <0.02% (w/w) versus 

0.2% (w/w) isomalathion from Cheminova.

Id. at ¶ 20-21. However, Suven USA alleges that such statements are false, and that at the 

time they were made the applicants had in their possession documents showing that highly 

pure malathion was present in the prior art. Id. ¶ 24-26. Specifically, it it alleged that the 

applicants possessed Certificates of Analysis showing that malathion made in 1999 had a 

purity as high as 99.9% and extremely low levels of isomalathion. Id. The applicants also 

had in their possession specification for Ovide lotion dated almost two years prior to the filing 

of the ‘863 application showing that the Ovide released for sale in the United States contained 

less than 0.1% (w/w) isomalathion. Id. ¶ 23. Suven USA argues that if these documents 

would have been “accurately disclosed” to the Patent Office, several claims in the ‘445 patent 

and one claim in the ‘324 patent would have been barred as anticipated. These documents 

were submitted to the patent examiner in March 2009 with an amendment to the ‘863 

application. Id. At the time of their submission, the applicant noted as follows: “Submitted 

herewith is an IDS citing additional material identified during review of Applicants’ files. 

This material is submitted for completeness, although it is believed to be cumulative of 

reference already of record.” Id. ¶ 52.

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C. Data Presented in Table III

The ‘863 application contained a table comparing the purity of malathion prepared by 

the process of the invention with prior-art malathion. Id. ¶ 29. As described in the 

application, when compared with the prior-art malathion samples tested, the malathion

prepared by the process of the invention had fewer impurities such as isomalathion. Id.; see 

also ‘863 application attached as Ex. A to Catenacci Decl. These results are set forth in Table 

III of the application. The table shows, for example, that malathion prepared by the claimed 

method contained <0.02% (w/w) isomalathion while the samples from Cheminova contained 

0.2% (w/w) isomalathion. 

Suven USA asserts that the data in Table III is “false and misleading.” Def. Brf. at 6. 

It alleges that the isomalathion content in all of the Cheminova samples analyzed were 

inconsistent with the Certificates of Analysis and the Ovide product specifications in 

possession of the applicants. Suven USA notes that this discrepancy may be explained by the 

fact that the Cheminova samples were at least one year old, and that malathion degrades over 

time, which would result in a higher level of impurities. Counterclaim ¶ 31, 36. Indeed, 

Table III contains a footnote, designated by three asterisks, alerting the reader that the 

Cheminova samples were “stored for at least 1 year under proper storage conditions prior to 

analysis.” Id. ¶ 31. According to Suven USA, the samples made by the claimed process, 

however, were fresh. Id. ¶ 30. Thus, Suven USA asserts that the comparison in Table III is 

misleading because it used fresh samples on the one hand and at least one-year-old samples 

on the other. 

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III. ANALYSIS

A. Legal Standard Under Rule 12(b)(6)

Under Federal Rule of Civil Procedure 12(b)(6), a court may grant a motion to dismiss 

if the complaint fails to state a claim upon which relief can be granted. The Supreme Court 

explained the standard for addressing a motion to dismiss under Rule 12(b)(6) in Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 562, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The 

Twombly Court stated that, “[w]hile a complaint attacked by a Rule 12(b)(6) motion to 

dismiss does not need detailed factual allegations, ... a plaintiff’s obligation to provide the 

grounds of his entitle[ment] to relief requires more than labels and conclusions, and a 

formulaic recitation of the elements of a cause of action will not do[.]” Id. at 555 (internal 

citations omitted); see also Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007) (stating 

that standard of review for motion to dismiss does not require courts to accept as true 

“unsupported conclusions and unwarranted inferences” or “legal conclusion[s] couched as 

factual allegation[s].” (internal quotation marks omitted)). Therefore, for a complaint to 

withstand a motion to dismiss under Rule 12(b)(6), the “[f]actual allegations must be enough 

to raise a right to relief above the speculative level, ... on the assumption that all the 

allegations in the complaint are true (even if doubtful in fact) ...” Twombly, 550 U.S. at 555 

(internal citations and footnote omitted).

The Supreme Court has emphasized that, when assessing the sufficiency of a civil 

complaint, a court must distinguish factual contentions and “[t]hreadbare recitals of the 

elements of a cause of action, supported by mere conclusory statements.” Ashcroft v. Iqbal, 

556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). When evaluating a motion 

to dismiss for failure to state a claim, district courts conduct a three-part analysis. 

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First, the court must “tak[e] note of the elements a plaintiff must plead to state 

a claim.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1947 (2009). Second, the court 

should identify allegations that, “because they are no more than conclusions, 

are not entitled to the assumption of truth.” Id. at 1950. Third, “whe[n] there 

are well-pleaded factual allegations, a court should assume their veracity and 

then determine whether they plausibly give rise to an entitlement for relief.” 

Id. This means that our inquiry is normally broken into three parts: (1) 

identifying the elements of the claim, (2) reviewing the complaint to strike 

conclusory allegations, and then (3) looking at the well-pleaded components of 

the complaint and evaluating whether all of the elements identified in part one 

of the inquiry are sufficiently alleged.

Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). A complaint will be dismissed unless it 

“contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is 

plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). This 

“plausibility” determination will be “a context-specific task that requires the reviewing court 

to draw on its judicial experience and common sense.” Fowler, 578 F.3d at 211 (citations 

omitted). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for 

more than a sheer possibility that a defendant has acted unlawfully;” mere consistency with 

liability is insufficient. Iqbal, 556 U.S. at 678. A plaintiff may not required to plead every 

element of a prima facie case, but he must at least make “allegations that raise a reasonable 

expectation that discovery will reveal evidence of the necessary element.” Fowler, 578 F.3d 

at 213 (3d Cir. 2009).

B. Legal Standard Under Rule 12(f)

Federal Rule of Civil Procedure 12(f) provides that a court “may strike from a 

pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous 

matter.” An affirmative defense is insufficient if “it is not recognized as a defense to the 

cause of action.” FTC v. Hope Now Modifications, LLC, 2011 WL 883202 (D.N.J. March 10, 

2011) (quoting Tonka Corp. v. Rose Art Indus., Inc., 836 F.Supp. 200, 217 (D.N.J.1993)). 

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“[A]n affirmative defense can be stricken only if the defense asserted could not possibly 

prevent recovery under any pleaded or inferable set of facts.” Id. at *2 (quoting Tonka Corp., 

836 F.Supp. at 217).

C. Inequitable Conduct Claims and Affirmative Defenses

 Suven USA alleges that the facts described above, as set forth in their counterclaim, 

state a claim for inequitable conduct. Suven USA’s claim, in essence, is based upon 

allegations the applicants had in their possession documentation that showed their invention 

was anticipated under the prior art, the applicants falsely stated that the alleged invention has 

less isomalathion than the prior art; and the applicants submitted false and misleading test 

data in Table III as a result of comparing fresh samples to old samples. 

“Inequitable conduct is an equitable defense to patent infringement that, if proved, 

bars enforcement of a patent.” Therasense, Inc. v. Beckton, Dickinson and Co., 649 F.3d 

1276, 1285 (Fed.Cir.2011) (en banc). Applicants are required to prosecute their patents with 

candor, good faith and honesty, and breach of this duty, including acts such as “affirmative 

misrepresentation of material fact, failure to disclose material information, or submission of 

false information, coupled with an intent to deceive,” constitutes inequitable conduct. Molins 

PLC v. Textron, Inc., 48 F.3d 1172, 1178 (Fed. Cir. 1995). The Federal Circuit has described 

the remedy of inequitable conduct as the “atomic bomb” of patent law. Id. at 1288. While 

validity defenses, for example, are claim specific, a finding of inequitable conduct as to any 

single claim renders the entire patent unenforceable. Id. Inequitable conduct “cannot be 

cured by reissue ... or reexamination ... [and] can render unenforceable other related patents 

and applications in the same technology family.” Id. Because of these and other far-reaching 

consequences, the Federal Circuit has noted that “charging inequitable conduct has become a 

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common litigation tactic,” and has referred to inequitable conduct claims as a “plague[],” 

claims that are “overplayed” and often brought on “the slenderest of grounds.” Id. at 1289. 

Finding that “the inequitable conduct doctrine has plagued not only the courts but also 

the entire patent system,” the court in Therasense tightened the standards for proving 

inequitable conduct. There are two essential elements to a claim of inequitable conduct, and 

these must be shown by clear and convincing evidence. The first is intent to deceive, which, 

when sought to be proven by circumstantial evidence, must be “the single most reasonable 

inference able to be drawn from the evidence.” Id. at 1287, 1290. The second element is

materiality, and the materiality required to establish inequitable conduct is “but-for” 

materiality. Id. at 1291. 

While Therasense established a more stringent standard for proving inequitable 

conduct, the decision did not address whether Therasense’s more stringent standards (e.g., 

whether intent to deceive must be the single most reasonable inference able to be drawn) 

should apply at the pleading stage. It appears that it should not. In a post-Therasense

decision, the Federal Circuit applied the pleading standard as set forth in Exergen v. Wal–

Mart Stores, Inc., 575 F.3d 1312, 1318, 1330 (Fed. Cir. 2009), noting that a “charge of 

inequitable conduct based on a failure to disclose will survive a motion to dismiss only if the 

plaintiff's complaint recites facts from which the court may reasonably infer that a specific 

individual both knew of invalidating information that was withheld from the PTO and 

withheld that information with a specific intent to deceive the PTO.” See Delano Farms Co. 

v. Ca. Table Grape Comm'n, 655 F.3d 1337, 1350 (Fed. Cir. 2011) (emphasis supplied)

(citing Exergen and Therasense). 

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A claim for inequitable conduct must be pled with particularity pursuant to Federal 

Rule of Civil Procedure 9(b). Ferguson Beauregard/Logic Controls, Div. of Dover 

Resources, Inc. v. Mega Sys., LLC, 350 F.3d 1327, 1344 (Fed. Cir. 2003). As summarized in

Exergen, in order to survive a motion to dismiss,

the pleading must identify the specific who, what, when, where, and how of the 

material misrepresentation or omission committed before the [Patent Office]. 

Moreover, although “knowledge” and “intent” may be averred generally, a 

pleading of inequitable conduct under Rule 9(b) must include sufficient 

allegations of underlying facts from which a court may reasonably infer that a 

specific individual (1) knew of the withheld material information or of the 

falsity of the material misrepresentation, and (2) withheld or misrepresented 

this information with a specific intent to deceive the [Patent Office].

575 F.3d at 1328-29.

In the present case, with respect to the heightened pleading requirement of Rule 9(b), 

Taro does not seriously contend that Suven has failed to plead the relevant facts with the 

requisite specificity. Rather, Suven USA contends that the facts pled do not state a claim for 

inequitable conduct. The Court agrees that they do not.

Suven USA’s counterclaim is centered on two sets of items that are contained in the 

file histories of the patents-in-suit: (1) the data in Table III of the ’863 application; and (2) 

Cheminova’s certificates of analysis and Ovide’s product specifications. With respect to 

Table III, which summarized the analysis of the impurities in malathion produced by Taro’s 

process and malathion made by Cheminova, Suven USA alleges that Taro made a misleading 

comparison because Cheminova samples were old and Taro’s samples were fresh. However, 

the table specifically directs the reader to a footnote (designated with three asterisks -- “***”) 

that clearly and unequivocally states that the Cheminova samples were at least one year old. 

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The footnote notes that the Cheminova samples “were stored for at least 1 year under proper 

storage conditions prior to analysis.” Counterclaim ¶ 31. 

Suven USA also alleges that Table III is false apparently because its data allegedly 

differs from the Cheminova Certificates of Analysis and the Ovide product specifications. 

However, the applicant told the Patent Office that impurity levels in malathion increase over 

time. See ‘445 patent, col. 2, lines 2-3 (“Some of the impurities are formed as breakdown 

products during storage”); lines 8-10 (“[D]uring storage, malathion can convert to 

isomalathion ...”); lines 28-29 (“malathion breaks down into toxic by-products during 

storage”). The unambiguous footnote as well as these clear representations to the Patent 

Office undercut Suven USA’s claim that the applicants’ materially mislead the Patent Office

and, given such facts, the Court cannot reasonably draw an inference that the applicants had 

the requisite intent to deceive the Patent Office. 

The Court likewise finds that Suven USA’s inequitable conduct claim finds no support 

in the allegations that the applicants made statements to the Patent Office that, although 

consistent with the data in Table III, were allegedly at odds with the data in the Certificates of 

Analysis and Ovide product specification. The applicants submitted Certificates of Analysis 

and product specification to the Patent Office during prosecution, and these documents were 

considered by the examiner. See Catennacci Decl. Ex. D. The facts simply do not support the 

inference that Suven USA would have the Court draw that the applicants tried to mislead the 

Patent Office by “dump[ing]” a “mass of technical data” (i.e., the Certificates of Analysis and 

product specification) on the Patent Office at the “eleventh hour.” Def. Brf. at 7, 11. Rather, 

the documents in question comprised a mere 12 pages of not-particularly-dense data, see

Catennacci Decl. Exs. B, E, and no other references were submitted along with these 12 

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pages, id. Ex. D. The examiner had all of the relevant materials before him, expressly

considered them, and the office granted the patent. 

The decision in Rohm & Haas Co. v. Crystal Chemical Co., 722 F.2d 1556 (Fed. Cir. 

1983), a case relied upon by Suven USA, is factually distinguishable and does nothing to alter 

the Court’s conclusion that Suven USA’s inequitable conduct claims and defenses fail. In 

Rohm & Haas, the patentee submitted affidavits that falsified data and failed to accurately 

represent the experimental conditions used in studies submitted to the Patent Office. Id. at 

1570–71. The court held that such material misrepresentations were not cured by the 

patentee’s presentation to the patent examiner of “a mountain of largely irrelevant data from 

which he [was] presumed to have been able, with his expertise and with adequate time, to 

have found the critical data.” Id. at 1573. Under such circumstances, the Federal Circuit 

found it to be “unrealistic” that the patent examiner would be “fully informed” of all material 

factors relevant to patentability. Id. Here, there is no allegation that Taro falsified any data, 

and the experimental conditions underlying the data in Table III were clearly disclosed to the

examiner. Furthermore, rather than a “mountain” of over 3,700 pages of data as was 

produced in Rohm & Haas a decade after the original application was filed and prosecution 

had been completed, Taro submitted a mere 12 pages of data during prosecution that the 

examiner clearly considered.

Suven USA further argues that the portions of its fifth and sixth affirmative defenses 

and Counterclaims V and VI that allege unclean hands should survive as an alternative basis 

for asserting that the patents-in-suit are unenforceable because the applicants engaged in 

“egregious misconduct.” While “as a general matter, the materiality required to establish 

inequitable conduct is but-for materiality,” the Therasense court recognized an exception to 

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this general rule in “cases of affirmative egregious misconduct.” Therasense, 649 F.3d at 

1291-92. Such cases do not require a showing of materiality because where a party engaged 

in a “deliberately planned and carefully executed scheme,” materiality is assumed. Id. Thus, 

the exception essentially retains the unclean hands defense from which the inequitable 

conduct doctrine originated. Id. at 1293. 

Here, the Court finds that Suven USA’s counterclaims are devoid of factual 

allegations that could be characterized “affirmative egregious misconduct.” As the 

Therasense court noted, acts that may constitute affirmative egregious misconduct involve 

“deliberately planned and carefully executed scheme[s] to defraud.” Id. at 1292. Early 

unclean hands cases that dealt with egregious misconduct involved perjury, the suppression of 

evidence, the manufacture of evidence, and bribery. Therasense, 649 F.3d at 1292-93 (citing 

the following as examples of egregious misconduct: Precision Instrument Manufacturing Co. 

v. Automotive Maintenance Machinery Co., 324 U.S. 806, 65 S.Ct. 993, 89 L.Ed. 1381 (1945) 

(perjury and suppression of evidence); Hazel–Atlas Glass Co. v. Hartford–Empire Co., 322 

U.S. 238, 64 S.Ct. 997, 88 L.Ed. 1250 (1944) (manufacture and suppression of evidence), 

overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17, 97 S.Ct. 31, 50 

L.Ed.2d 21 (1976); Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 54 S.Ct. 

146, 78 L.Ed. 293 (1933) (bribery and suppression of evidence). Suven USA’s claims simply 

do not allege facts that involve conduct of the quality and character that would be required to 

fall into Therasense’s materiality exception. As such, Suven USA’s inequitable conduct 

counterclaims are dismissed in their entirety, and Suven USA’s inequitable conduct defenses 

are similarly stricken.

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IV. CONCLUSION

For the reasons above, Taro’s motion to dismiss Suven USA’s counterclaims V and VI 

and to strike the fifth and sixth affirmative defenses is granted. An appropriate Order 

accompanies this Opinion.

 

/s/ JOEL A. PISANO 

United States District Judge

Dated: June 28, 2012

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