Allegedly false statements insufficient to warrant setting aside judgment under Rule 60(b)(3)

November 17, 2007
Post by Blog Staff

In a decision yesterday, the Federal Circuit affirmed a district court's decision denying a motion to set aside a judgment under Rule 60(b)(3) on charges of fraud. In an earlier litigation, a patent was invalidated under § 102(g) as previously invented by another. That decision was affirmed on appeal.More than a year later, new evidence came to light that some statements made during the original litigation may have been false. The court held that this did not cause a "material subversion of the legal process," which requires "rigorous proof," and includes such activities as bribery of judges or jurors, rather than just fraud between the parties, such as fraudulent documents, false statements, or perjury. The conduct here was also arguably explainable, and did not rise to the necessary level to warrant setting aside the previous judgment.More detail of Apotex Corp. v. Merck & Co. after the jump.

In 1996, Apotex filed suit against Merck, alleging that Merck's process for producing and formulating enalapril (brand name Vasotec®) infringed two patents. In 2000, the district court held that the patents were invalid under 35 U.S.C. § 102(g), on the basis that Merck had invented and used the process prior to Apotex making the invention. The district court's decision was affirmed by the Federal Circuit. Both the district court and the Federal Circuit rejected Apotex's argument that Merck had suppressed or concealed its invention. The Federal Circuit in particular found that a narrated videotape describing Merck's process and presented during a lawsuit between Merck's Canadian subsidiary and Apotex's Canadian affiliate constituted a public disclosure of Merck's invention, and therefore there was no suppression or concealment.More than a year later, Apotex moved to set aside the judgment under Rule 60(b)(3). Apotex alleged that the district court's ruling had been obtained by fraud, allegedly because Merck falsely stated in "its response to a discovery request, that 'the entire process was publicly disclosed in open court by Brian McLeod during the Canadian litigation.'" Apotex further alleged that Merck's statements that the process could be reverse-engineered from the narrated videotape process and that it did not suppress or conceal the process were fraudulent, and that Merck had later admitted its statements were false on the basis that a key Merck witness "testified to the contrary in a different case in which he was an expert witness." The district court was unpersuaded, and granted summary judgment in favor of Merck. The Federal Circuit initially noted that "[f]raud upon the court requires that there was a material subversion of the legal process such as could not have been exposed within the one-year window" and "is typically limited to egregious events such as bribery of a judge or juror or improper influence exerted on the court, affecting the integrity of the court and its ability to function impartially." Behavior that is just fraud "between the parties," such as "fraudulent documents, false statements or perjury," is not sufficient as it does not implicate the "impartial functions of the court."The Federal Circuit held that no error had been shown in the district court's finding that Merck's statements were not sufficiently fraudulent to meet the Rule 60(b)(3) standard. The Federal Circuit additionally noted that Merck's processing details, which Apotex asserted Merck did not disclose during the Canadian litigation, "are not asserted to be invented by Apotex, did not warrant detailed disclosure, and that the presentation of the Merck process did not establish fraud on the court."To read the full decision in Apotex Corp. v. Merck & Co., click here.

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