Federal Circuit to Decide Hatch-Waxman Declaratory Judgment Jurisdiction After MedImmune

We reported last month on a new declaratory judgment action that Apotex filed against GlaxoSmithKline in the Eastern District of Virginia.  In its complaint, Apotex alleged that Glaxo's listing of a patent on Zantac Syrup in the Orange Book gave rise to a justiciable controversy sufficient to support declaratory judgment jurisdiction.  The Federal Circuit has rejected similar claims before, most notably in Teva v. Pfizer.  Apotex may have filed its new complaint hoping that the Supreme Court's recent decision in MedImmune v. Genentech would force a different outcome this time around.

It appears the Federal Circuit will decide whether listing a patent in the Orange Book creates declaratory judgment jurisdiction in a case currently pending before the court, long before the Apotex action reaches it.  The case is Teva v. Novartis, No. 06-1181, concerning Teva's attempt to market a generic version of Novartis's herpes treatment Famvir (famciclovir).  Teva, the appellant, presented the following issue for review:

Whether there is an "actual controversy" sufficient to support subject matter jurisdiction over Teva's claim for a declaration that certain patents were invalid, unenforceable or not infringed where: (i) appellee listed the patents in the Orange Book with respect to its Famvir product, thus representing that an infringement action under those patents "could reasonably be asserted" against any generic formulation of that drug; (ii) Teva committed a statutory act of infringing those patents under 35 USC 271(e)(2) by submitting an Abbreviated New Drug Application (ANDA) to market a generic formulation of Famvir before the expiration of the patents; (iii) Novartis sued Teva to prevent Teva from launching its generic formulation of Famvir alleging that Teva's ANDA infringed another patent listed in the Orange Book with respect to Famvir; (iv) appellee has consistently and aggressively enforced its pharmaceutical patents against Teva and other generic drug companies; and (v) appellee has refused to give any assurance that it would not sue Teva for infringement of the patents.

The case was fully briefed last Spring and oral arguments were heard in October.  Then, on January 9th of this year, the Supreme Court released its decision in MedImmune and on the same day counsel for Teva sent notice of the decision to the Federal Circuit.  In a citation of supplemental authority, Teva argued that that Supreme Court had essentially overruled Teva v. Pfizer:

[T]he Supreme Court established [in MedImmune] that Article III does not require a declaratory judgment plaintiff to prove that it faces a reasonable apprehension of imminent suit by the patentee, as this Court had required.  Slip op. at 13 n.11 (reasonable apprehension of suit test conflicts with Supreme Court precedent).  . . .  Since the district court in this case relied on the reasonable apprehension requirement to dismiss appellant's claim for declaratory relief, MedImmune requires the vacation of the dismissal.

Generic drug companies are hoping that MedImmune will finally solve a "bottleneck problem," where second and later ANDA filers are blocked from marketing their generic drugs when the first ANDA filer (and 180-day exclusivity holder) delays launching its own generic drug product and the innovator refuses to sue the subsequent ANDA filers.  Congress attempted to address this problem in amendments to the Hatch-Waxman Act passed as part of the Medicare Modernization Act of 2003, but in Teva v. Pfizer the Federal Circuit ruled that those amendments did not affect the Federal Circuit's "reasonable apprehension of suit" test for declaratory judgment jurisdiction.  It appears that MedImmune has now forced the Federal Circuit to revisit that ruling.

Links to the briefs filed in Teva v. Novartis are provided below, courtesy of the attorneys who argued the case.

LINKS TO APPEAL BRIEFS:

• Teva's Opening Brief
• Novartis's Opposition Brief
• Teva's Reply Brief

Comments

[anon]

Perhaps, after Medimmune, "reasonable apprehension" is probably not the right way to phrase the test.

I think the new test for the Fed. Cir. should be somewhere along the lines of "real controversy" v. "speculative controversy".

Medimmune involved a "real controversy", where one company was actually losing money, because it was being denied DJ relief.

But in the Teva and Apotex cases, it's mere speculation whether or not they are going to be sued. This is a case by case issue. The mere fact that a patent is listed in the OB, does not mean that it will be asserted. After all, the generic may have very well designed a wrok around (like in the Apotex case).

[DePaul3L]

I think that it really comes down to the fact that Medimmune is readily distinguishable from any of these HW-ANDA suits. Medimmune, as much as you want to talk about how it involved patents, really was a contracts case.

The Court has applied the DJA to contracts for around 70-80 years and when a term or condition arising out of the contract needs to be interpreted, it's proper for the Court to do so.

I think that the problem with the way that the CAFC has been handling its Art. III justiciability questions is that they have applied a test that is pretty good when you're talking about a vanilla infringement case, but it's horrible under a scheme like Hatch-Waxman which provides all sorts of benefits and loopholes for those who are not first in line. Whether that is a cognizable injury is a question that the court really has to decide.

But I don't know, I'm still a law student.