Celgene’s Otezla Drug Patent Dispute Swells N.J. Court Docket

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By Malathi Nayak

A surge in patent infringement lawsuits by Celgene Corp. against generic drug makers catapulted a New Jersey federal court to the top tier of patent litigation venues for the month of June.

The Summit, N.J.-based pharmaceutical company filed 18 patent infringement lawsuits in the U.S. District Court for the District of New Jersey, which saw a total of 25 such cases filed last month, a Bloomberg Law data analysis shows. The court’s June patent docket more than doubled from May, when it had 12 new patent complaints.

New Jersey, home to many drug companies, is a battleground venue for disputes related to the Hatch-Waxman Act. The 1984 law established a framework for generic drug market approval and related patent fights. Investors keep a close watch on how patent fights shape the fortunes of drug companies such as Celgene.

Celgene sued last month to block companies, including Teva Pharmaceuticals USA Inc. and Sandoz Inc., from marketing a generic version of its drug Otezla, which treats arthritis associated with the skin condition psoriasis.

The New Jersey federal court was a popular venue last month, behind only the U.S. District Court for the District of Delaware, which saw 53 patent infringement complaints, and the U.S. District Court for the Northern District of California, with 37 complaints.

Patent Challenges Drop

The U.S. District Court for the Eastern District of Texas, a long-popular patent venue, ranked fourth with 18 infringement complaints, down from 51 complaints in May. The drop likely reflects further shakeout from the U.S. Supreme Court’s May 2017 ruling in TC Heartland LLC v. Kraft Foods Group Brands LLC , in which the court said plaintiffs must file lawsuits where a defendant resides or is incorporated, not just where it makes a sale.

Intellectual property attorneys and academics predicted less activity in courts with patentee-friendly reputations, such as the Eastern District of Texas, and ballooning dockets in Delaware, where most U.S. companies are incorporated, after the ruling.

Administrative patent review filings dropped in June after a 25 percent spike in May, after the U.S. Supreme Court upheld the Patent and Trademark Office’s validity review process, Bloomberg Law data show. Accused infringers filed 137 petitions challenging the validity of patents in June, down from 160 in May, the data show.

May filings were the highest since the patent office received 195 petitions in June 2017, when the Supreme Court agreed to hear Oil States Energy Services., LLC v. Greene’s Energy Group, LLC. The case concerned whether the patent office’s review board improperly wielded authority of the courts. The high court ruled April 24 that the board’s review system was constitutional.

Copyright Lawsuits Jump

Copyright lawsuit filings hit a four-year high in June, fueled by filings from Strike 3 Holdings LLC and Malibu Media LLC — adult entertainment producers with a penchant for online film piracy lawsuits. Total copyright lawsuits filed in U.S. federal courts surged 78 percent from May to 717 in June, the highest since 2015, according to Bloomberg Law data.

Strike 3’s June filings shot up to 335 from 89 in May, continuing an enforcement campaign that began in late 2017. Malibu, which has been filing complaints since 2012, kept up its enforcement streak by handing in 161 filings in June, compared with 68 in May.

Entertainment companies typically sue for infringement over peer-to-peer file-sharing networks. They serve lawsuits to unidentified defendants, called “John Does,” after identifying users through internet protocol addresses.

Trademark complaints totaled 289 in June, up 15 percent from May and 7 percent from June 2017. Sream Inc., the U.S. licensee of Roor, a German maker of glass smoking pipes, U.S. real estate company Homevestors of America Inc. and French luxury goods brand Chanel Inc. were among the top filers.

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