Opinion ID: 615508
Heading Depth: 1
Heading Rank: 5

Heading: Apotex's Supplemental Answer

Text: Although a court should freely give leave [to amend] when justice so requires, Fed.R.Civ.P. 15(a), in the Second Circuit it is within the sound discretion of the district court to grant or deny leave to amend. Green v. Mattingly, 585 F.3d 97, 104 (2d Cir.2009). The Second Circuit reviews the denial of a motion to amend the pleadings for an abuse of discretion. Id. A district court abuses its discretion if it bases its ruling on an erroneous view of the law or a clearly erroneous assessment of the evidence. Id. A district court should grant leave to amend [i]n the absence of any apparent or declared reasonsuch as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment. . . . See Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); see also McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir.2007) (A district court has discretion to deny leave for good reason, including futility, bad faith, undue delay, or undue prejudice to the opposing party.). To the extent the district court bases the denial of leave to amend upon a legal interpretation, the Second Circuit reviews the denial de novo. Spiegel v. Schulmann, 604 F.3d 72, 78 (2d Cir.2010). Apotex argues that the district court abused its discretion by denying Apotex's leave to amend to add an affirmative defense of patent misuse and a counterclaim for breach of contract. We disagree. Apotex's allegations regarding patent misuse arise entirely from BMS's conduct surrounding its failure to disclose the existence of the oral agreement regarding an authorized generic to the FTC and the consortium of state attorneys general. Apotex contends that under both Federal law and the FTC's prior judgments, BMS had a duty to inform the FTC of its oral promise not to launch an authorized generic. Apotex argues that BMS's failure to disclose the oral agreement, despite this affirmative duty to disclose, rises to the level of patent misuse that rendered the '265 patent unenforceable during the entire period Apotex sold its generic product. The district court properly rejected Apotex's patent misuse defense as futile. See Acito v. IMCERA Grp., Inc., 47 F.3d 47, 55 (2d Cir.1995) (One good reason to deny leave to amend is when such leave would be futile.). In Princo, 616 F.3d at 1328, we held that the key inquiry under the patent misuse doctrine is whether . . . the patentee has impermissibly broadened the physical or temporal scope of the patent grant and has done so in a manner that has anticompetitive effects. BMS's failure to disclose the oral side deal with Apotex, and its false certification to the FTC regarding the same, in no way broadened the scope of the '265 patent grant. Although it is perhaps plausible that the scope of the '265 patent grant could have been broadened if the FTC failed to discover BMS's nefarious conduct, such a hypothetical is irrelevant herethe FTC quickly discovered the existence of the oral agreement and BMS's false certification prior to either the FTC or the state attorneys general giving approval to the May 2006 agreement. Apotex contends that our decision in Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1021-22 n. 8 (Fed.Cir.2008), supports its argument that a patent may be held unenforceable for the failure to comply with a statutory obligation to disclose information relating to a patent license and settlement agreement. Qualcomm is not, however, a case regarding patent misuse, but instead concerns whether a patentee waived its rights to enforce its patents due to its failure to disclose their existence to a standard-setting organization. Id. at 1008. Qualcomm, therefore, provides no basis for distinguishing our later en banc decision in Princo. As we expressly held in Princo, the defense of patent misuse is not available to a presumptive infringer simply because a patentee engages in some kind of wrongful commercial conduct, even conduct that may have anticompetitive effects. 616 F.3d at 1329. As reprehensible as BMS's actions may be, they do not constitute patent misuse: Where the patentee has not leveraged its patent beyond the scope of rights grant by the Patent Act, misuse has not been found. Id. at 1328. Next we turn to the district court's decision to deny Apotex's motion to add a counterclaim for breach of contract. Apotex's counterclaim alleges that Sanofi breached the May 2006 agreement by failing to disclose the oral side agreement to the FTC. Specifically, Apotex contends that BMS's failure to disclose the oral agreement breached paragraph 13 of the May 2006 agreement's requirement that both parties use reasonable efforts to obtain FTC approval. The district court denied Apotex's motion to add the counterclaim, determining that it would both delay disposition of this litigation and . . . prejudice Sanofi by requiring it to address an additional area of discovery. J.A. 2.11. Apotex contends that the district court abused its discretion because the judge could have reopened discovery into the contract claim. Apotex notes that seventeen months passed between the time Apotex moved for leave to amend and the district court granted summary judgment on the issue of damages. A court may deny a motion to amend where it would significantly delay the resolution of the dispute. Block v. First Blood Assocs., 988 F.2d 344, 350 (2d Cir.1993). When the district court denied Apotex's motion, the litigation had spanned nearly eight years. In fact, a full trial and appeal on the issue of liability for the patent claims had already occurred. See Gussack Realty Co. v. Xerox Corp., 224 F.3d 85, 94 (2d Cir.2000) (Generally, introducing new claims for liability on the last day of trial will prejudice the defendant.). Therefore, we cannot say that the district court abused its discretion when it determined that adding the counterclaim would delay the resolution of the underlying patent dispute. Furthermore, the denial in no way prejudiced Apotex who has brought a claim against Sanofi for breach of contract in Florida state court. See Apotex Inc. v. Sanofi-Aventis, Civ. A. No. CACE11001243 (Fla. Broward County Ct.2011).