Orange Book Blog

Case or Controversy Exists Where Generic Manufacturer Seeks Declaratory Judgment of Non-Infringement of Orange Book-Listed Patent Disclaimed by Brand Manufacturer

Apotex Inc. v. Daiichi Sankyo, Inc., Nos. 2014-1282, 2014-1291 (Fed. Cir. Mar. 31, 2015)

    by Dunstan H. Barnes

Apotex, Inc. sued Daiichi Sankyo Co., Ltd. and Daiichi Sankyo, Inc. in the United States District Court for the Northern District of Illinois for a declaratory judgment of non-infringement of a Daiichi-owned, but Daiichi-disclaimed, patent, if Apotex were to manufacture or sell a generic drug bioequivalent of Daiichi’s Benicar®. On March 31, 2015, a three-judge Federal Circuit panel unanimously reversed the district court’s dismissal for lack of case of controversy. The Federal Circuit found that Apotex has a concrete, potentially high-value stake in obtaining a declaratory judgment, and that both Daiichi and generic manufacturer Mylan Pharmaceuticals, Inc. have a concrete, potentially high-value stake in denying Apotex that judgment and thereby delaying Apotex’s market entry.

The factual background is key to understanding the debate. Daiichi listed two patents covering Benicar® in the Orange Book. The first, U.S. Patent No. 5,616,599, covers the active ingredient of the drug, and expires on April 25, 2016. Because Daiichi provided the FDA with pediatric test results, the FDA must wait a further six months, until October 25, 2016, to approve a generic version of the drug. The second, U.S. Patent No. 6,878,703, covers methods of treatment, and expires on November 19, 2021.

In April 2006, Mylan filed an ANDA with a paragraph IV certification that both the ’599 and ’703 patents were invalid or not infringed by Mylan’s proposed generic drug. In July 2006, for reasons that remain unexplained, Daiichi disclaimed all claims of the ’703 patent, as permitted under 35 U.S.C. § 253. Daiichi then sued Mylan for infringing the ’599 patent. Only validity was disputed in the case, and after trial, the court upheld the validity of the ’599 patent and entered judgment of infringement against Mylan. With the validity of the ’599 patent intact, Mylan’s earliest date for market entry is October 26, 2016, six months after the ’599 patent expires. Note that as a result of the court’s decision, Mylan did not have a lawfully-maintained paragraph IV certification with respect to the ’599 patent.

In June 2012, Apotex filed its own ANDA with a paragraph III certification stating that the ’599 patent is valid and a paragraph IV certification that Apotex would not infringe the now-disclaimed ’703 patent. Essentially, Apotex sought approval to enter the market for generic versions of Benicar® at the same time as Mylan—on October 26, 2016.

The wrinkle is that Daiichi did not sue Apotex for infringing the disclaimed ’703 patent, and the FDA has not removed the ’703 patent from the Orange Book. Under § 355(j)(5)(B)(iv), because Mylan was the first ANDA filer and Mylan has lawfully maintained a paragraph IV certification regarding the ’703 patent, Mylan is presumptively entitled to 180 days’ exclusivity before facing competition from another generic manufacturer. Thus, if Mylan were to enter the market for generic version of Benicar® on October 26, 2016, it would presumptively be entitled to exclusivity until April 23, 2017.

By filing its declaratory judgment action, Apotex sought to enforce a provision provided in § 355(j)(5)(D)(i)(I)(bb)(AA) for forfeiture of Mylan’s 180-day exclusivity period if Mylan has not marketed its generic drug 75 days after a court has entered a final decision from which no appeal (certiorari aside) has been or can be taken that the ’703 patent is invalid or not infringed.

The parties did not dispute that allowing Apotex to enter the market earlier would likely transfer sales from Daiichi and Mylan to Apotex. But Daiichi maintained that there was no case or controversy because it could not assert its disclaimed ’703 patent against Apotex, and Mylan additionally argued that Apotex lacks a “tentative approval” from the FDA for its ANDA and thus any delayed-market-entry injury is unduly speculative.

The Federal Circuit found, in contrast to the district court, that a case or controversy did exist, because the drug sales over a potential six-month period of exclusivity are concrete and substantial. The court contrasted the present parties’ substantial, concrete stakes in a judgment of non-infringement with cases in which a case or controversy was missing because the plaintiffs had generalized or bystander interest in others’ compliance with law.

The Federal Circuit also provided a common sense reasoning regarding the fact that the now-disclaimed ’703 patent is the only barrier to Apotex entering the market at the same time as Mylan. Had Daiichi never listed the ’703 patent in the Orange Book, Mylan would not be eligible for an exclusivity period. Thus, Apotex seeks through its declaratory judgment action to eliminate the entry barrier created by Daiichi’s listing of the ’703 patent that Daiichi subsequently disclaimed.

Janssen Files Motion to Dismiss Celltrion's DJ Complaint, Claiming Celltrion is Trying to "Side-Step" the BPCIA

Celltrion Healthcare v. Janssen Biotech, No. 14-11613 (D. Mass.)

    by Sandra A. Frantzen

As we previously reported, Celltrion filed a Complaint for Declaratory Judgment against Janssen Biotech on March 31, seeking a declaration of invalidity and unenforceability of three Janssen patents.  In its complaint, Celltrion alleged that Remsima®, a biosimilar version of Janssen's Remicade® (infliximab), "will become the first biosimilar of an antibody drug ever approved in the United States."  Celltrion's DJ complaint, filed before its biosimilar application, states that Celltrion intends to apply for marketing approval of Remsima® during the first half of 2014 and expects FDA approval by early 2015.  Celltrion alleges that because "it expects to face infringement allegations from Janssen, Celltrion wants to start the adjudicative process regarding the invalidity and unenforceability of Janssen's patents."

Last Friday, May 23, Janssen Biotech filed a motion to dismiss Celltrion’s complaint, alleging that subject matter jurisdiction does not exist under the Declaratory Judgment Act because Celltrion "has not established a real and immediate injury or threat of injury."  Janssen claims that Celltrion "is still in negotiations over the content of its application and that the FDA has already required additional clinical testing of Remsima."  Janssen further argues that "there is no way to know when, if ever, Remsima® will be approved for a use that could potentially infringe" one of its patents, claiming that Health Canada "refused to approve Remsima® for treatment of Crohn's disease."  Janssen also argues that the court should exercise its discretionary authority to decline jurisdiction because "the BPCIA [Biologics Price Competition and Innovation Act] is the appropriate way to resolve any future patent disputes between Janssen and Celltrion."

The BPCIA created an abbreviated regulatory pathway (the "subsection (k) pathway") for the approval of biosimilar drugs.  Under the BPCIA, a company developing a biosimilar version of a licensed biologic product (or "reference product") may file a subsection (k) application with the FDA for licensure.  Once the FDA notifies the company that its application has been accepted for review, the applicant must then provide certain information about its product and manufacturing process to the reference product sponsor.  Under the BPCIA, the parties then engage in a patent information exchange process which may culminate in a patent lawsuit.  As part of this exchange process, the BPCIA provides limitations on declaratory judgment filings under certain circumstances.

In its motion to dismiss, Janssen argues that Celltrion should not be permitted "to claim there is jurisdiction for this suit based on Celltrion's status as a future 262(k) applicant just so Celltrion can skirt the express limits on declaratory judgment actions Congress deemed appropriate for 262(k) applicants."  Janssen alleged that "[i]f Celltrion is allowed to side-step the patent dispute procedures of the BPCIA, then every prospective biosimilar applicant will be able to evade the statutory regime by filing a declaratory judgment action immediately before filings its biosimilar application with the FDA."  According to Janssen, "[t]his would clearly frustrate the intent of the BPCIA provisions."

As noted in our prior posting, Celltrion was the second biosimilar company to file a declaratory judgment action in advance of its biosimilar application.  In the first case, Sandoz v. Amgen, the district court dismissed Sandoz's DJ action on jurisdictional grounds.  An appeal is pending at the Federal Circuit and Amgen recently filed its opposition brief.  Celltrion also filed a DJ complaint relating to Remsima® against Kennedy Trust on March 31.  Kennedy's response is due in July.

District of New Jersey Allows ANDA Filer's Declaratory Judgment Action to Proceed Despite Covenant Not to Sue

Purdue Pharm. Products v. TWI Pharms., No. 12-5311 (D.N.J.)

    by Alex Menchaca

In an opinion last week, the U.S. District Court for the District of New Jersey stymied what appears to be an attempt by Purdue Pharma to prevent TWi Pharmaceuticals from obtaining a final judgment of noninfringement of all four Orange Book-listed patents on Intermezzo® (zolpidem tartrate).  A final judgment could trigger the marketing requirement of the first ANDA filer.  If the first filer does not market its product within 75 days of a final judgment, it will forfeit its 180-day exclusivity.

Purdue holds the NDA for Intermezzo®, a drug used to treat middle-of-the-night insomnia.  Four patents are listed in the Orange Book in connection with the NDA.  By the time TWi filed its ANDA, four other ANDAs had already been filed and presumably at least one of those is entitled to 180-day exclusivity.  Purdue sued TWi on only two of the patents, and granted TWi a covenant not to sue on the other two.  TWi filed a DJ counterclaim for noninfringement of all four Orange Book-listed patents.

As simplified by the court, TWi's DJ counterclaim is important because it "could potentially trigger the first ANDA filer's 180-day exclusivity period.  This would have the effect of expediting TWi's ability to market its generic version of Intermezzo®."

Purdue filed a motion to dismiss TWi's counterclaim, presenting three arguments that no case or controversy exists and therefore the court lacks jurisdiction: (1) the "covenant not to sue rendered moot any such controversy," (2) "the Court cannot redress TWi's alleged injury," and (3) "the dispute is not ripe in light of TWi's inability to obtain tentative approval."

In response to Purdue's mootness argument, the court stated, "[t]here is ample authority supporting the proposition that a later ANDA filer's declaratory judgment claims involving patents for which the patent holder has given a covenant not to sue are justiciable."  The court therefore held that "the binding principles the Federal Circuit set forth in Dey and Caraco compel this Court to conclude that Plaintiffs' covenant not to sue TWi on the '945 and '628 patents does not moot TWi's counterclaims seeking declaratory judgment that these patents are not infringed."

With regard to whether TWi's injury is redressable, Purdue argued that "a judgment favorable to TWi on the '945 and '628 patents will not redress any injury arising from delay in TWi's ability to market its generic version of Intermezzo® because such a judgment would not independently trigger the first ANDA filer's exclusivity period as TWi has not received tentative approval from the FDA to market its generic product."  In other words, Purdue argued that because "an applicant in TWi's position cannot trigger the first applicant's exclusivity period through a declaratory judgment action unless it has first received tentative approval," the court cannot redress TWi's purported injury.

The court noted that the Federal Circuit has not addressed whether a subsequent ANDA filer must first have tentative approval to maintain a declaratory judgment action like TWi's.  Nevertheless, it rejected Purdue's argument based largely on Judge Dow's decision in Seattle Children's Hospital v. Akorn (N.D. Ill. 2011).  The Akorn court recognized that the Hatch-Waxman Act "created a civil action to obtain patent certainty ("CAPC") that could be brought by an ANDA applicant at a time when it likely would not have tentative approval," indicating that other DJ actions similarly do not require that the ANDA filer must have tentative approval.  Following Akorn, the court held that tentative approval is not required for TWi to maintain its DJ counterclaim.

Finally, the court held that the case is indeed ripe, noting that "delaying judicial consideration of TWi's counterclaims could result in depriving TWi of the ability to trigger the first ANDA filer's 180-day exclusivity period, thus causing TWi to lose profits during the period of time it is excluded from the market.  Accordingly, the court found that "delay in resolving TWi's counterclaims will have an immediate and substantial impact on TWi."

Although not settled until the Federal Circuit weighs in, based on this case and Akorn it appears that the courts will permit ANDA filers to assert DJ counterclaims even before receiving tentative approval from the FDA and despite having a covenant not to sue from the patent owner.

First-Ever Judicial Interpretation of Biosimilar Patent Litigation Statute Results in Dismissal of DJ Action

Sandoz v. Amgen and Hoffman-La Roche, No. 13-204 (N.D. Cal.)

    by Aaron F. Barkoff

In what appears to be the first court decision interpreting the patent litigation provisions of the BPCIA (the "Biosimilar Act"), the U.S. District Court for the Northern District of California granted Amgen's motion to dismiss Sandoz's declaratory judgment complaint concerning patents protecting Enbrel (etanercept).  In its order dismissing the case, the court stated that "neither a reference product sponsor, such as Amgen, nor [a biosimilar] applicant, such as Sandoz, may file a lawsuit unless and until they have engaged in a series of statutorily-mandated exchanges of information."

Sandoz filed its complaint in June, alleging that it is conducting clinical trials on a "biologic drug containing etanercept" and that it "intends to file an FDA application for licensure of its etanercept product as biosimilar to Enbrel" upon completion of the clinical trials.  Sandoz sought a declaration that its biosimilar product does not infringe either U.S. Patent No. 8,063,182 or 8,163,522 and that the two patents are invalid and unenforceable.

Amgen responded by filing a motion to dismiss for lack of subject matter jurisdiction, arguing that the complaint was premature for two reasons: (1) a district court lacks statutory authority to consider a patent dispute involving a biosimilar product until after such time as an application for FDA approval of the biosimilar product has been filed, and (2) as a factual matter, a cognizable case or controversy does not presently exist.

Sandoz argued in its opposition brief that the Biosimilar Act "provides [declaratory judgment] actions can be filed by either party upon the biosimilar manufacturer's notice of commercial marketing, which Sandoz has given here."  But the court disagreed:

First, as set forth in the section on which Sandoz relies, a "notice of commercial marketing" is required to be given by the applicant to the reference product sponsor "not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k)."  Here, Sandoz cannot, as a matter of law, have provided a "notice of commercial marketing" because, as discussed above, its etanercept product is not "licensed under subsection (k)."  Second, even after an applicant provides a "notice of commercial marketing," it cannot bring an action for declaratory relief until, at a minimum, it has complied with its obligations under § 262(l)(2)(A).

In addition, the court determined that Sandoz failed to establish a "case or controversy" as required by Article III of the Constitution.  Here, the court found that Amgen never threatened to sue Sandoz and that Sandoz did not submit "evidence demonstrating [Amgen], by some means other than an express threat to sue, subjected Sandoz to an 'immediate' threat of injury."  Further, citing two Federal Circuit cases in support, the court found that "Sandoz's allegation that it intends in the future to file an application with the FDA is insufficient to create a case or controversy."

Ever since the Biosimilar Act was passed in 2010, litigators have studied the patent litigation provisions of the Act and debated which strategies to pursue.  The court's interpretation of the Act in this case is significant--particularly since it is the first.  If other district courts interpret the Act in the same way, certain litigation strategies will be off the table.

District of Delaware: Paragraph IV Certification Not Required for Jurisdiction Under Section 271(e)(2) or Declaratory Judgment Act

Cephalon v. Sandoz, No. 11-821-SLR (D. Del.)

In January 2010, Sandoz sent a Paragraph IV notice letter to Cephalon in connection with its ANDA for a generic version of Cephalon's FENTORA (fentanyl citrate) buccal tablets.  Cephalon responded by filing suit against Sandoz under 35 USC § 271(e)(2), alleging infringement of U.S. Patent Nos. 6,200,604 and 6,974,590 based on Sandoz's Paragraph IV certifications on the two patents.

On January 4, 2011, U.S. Patent Nos. 7,862,832 and 7,862,833 were issued.  On April 25, 2011, Cephalon submitted the '832 and '833 patents for listing in the Orange Book with respect to FENTORA.  But because Cephalon did not submit the '832 and '833 patents for listing within 30 days of issuance, Sandoz was not required to (and did not) file an amended patent certification with respect to the two patents in its ANDA.  See 21 CFR § 314.94(a)(12)(vi):

(vi)Late submission of patent information. If a patent on the listed drug is issued and the holder of the approved application for the listed drug does not submit the required information on the patent within 30 days of issuance of the patent, an applicant who submitted an abbreviated new drug application for that drug that contained an appropriate patent certification before the submission of the patent information is not required to submit an amended certification.

Notwithstanding that Sandoz did not file a Paragraph IV (or any) certification with respect to the '832 and '833 patents, on September 15, 2011, Cephalon filed suit against Sandoz alleging infringement of the patents under § 271(e)(2).  Cephalon also included claims under the Declaratory Judgment Act in its complaint.  Sandoz responded by filing a motion to dismiss the complaint for lack of subject matter jursidiction and failure to state a claim.

In an Order today, the district court denied Sandoz's motion.  According to the court, "Sandoz, relying primarily on the opinion issued in Eisai v. Mutual (D.N.J. 2007), argues that the court's authority to exert subject matter jurisdiction over the instant dispute is narrowly limited . . . put more simply, no Paragraph IV certification, no jurisdiction."  The Delaware court distinguished Eisai, stating that in that case, "the patent holder's conduct was so egregious that its ability to take advantage of § 271(e)(2) was forfeited."  Further, the Eisai court "went on to hold that the patentee could not maintain an infringement action pursuant to the Declaratory Judgment Act because '§ 271(e)(2) provides the jurisdictional peg for infringement actions brought prior to ANDA approval and, in the absence of the jurisdictional hook, jurisdiction is lacking.'"

The Delaware court stated:

I respectfully disagree with the sweeping conclusion that the absence of a Paragraph IV certification limits, as a matter of law, the court's subject matter jurisdiction under both 35 USC § 271(e)(2) and [the Declaratory Judgment Act].  With respect to § 271(e)(2), the sole purpose of the Paragraph IV certification in the artificial world of the Hatch-Waxman Act is to provide notice of what patents may be implicated by the ANDA, in order to trigger suit.  In reality, however, the inquiry truly begins because the ANDA filer seeks approval to market a patented drug prior to the expiration of the relevant patent.

The court held:

Where, as here, the jurisdictional trigger was properly pulled by the filing of an ANDA and the initial Paragraph IV certification by Sandoz, the court's jurisdiction should not be confined simply because Sandoz was not required to file an amended Paragraph IV certification.  Clearly, Sandoz was put on notice of the '832 and '833 patents.  It would be ironic, indeed, if the absence of an amended Paragraph IV certification precluded suit, when the certification provisions exist for the benefit of the patentee.

Finally, the court concluded that there is no connection between § 271(e)(2) and the Declaratory Judgment Act:  "so long as there is an actual controversy, that is, there is a 'sufficient allegation of immediacy and reality,' 'the exercise of jurisdiction over such an action is within the discretion of the district court.'"

Federal Circuit Allows Par's Appeal of ASACOL Declaratory Judgment Decision to Proceed

Medeva Pharma Suisse v. Par Pharmaceutical, No. 2011–1391 (Fed. Cir. 2011)

In an Order issued today, the Federal Circuit denied Medeva's motion to dismiss Par's appeal of a decision from the U.S. District Court for the District of New Jersey that dismissed Par's declaratory judgment claim in paragraph IV litigation involving ASACOL (mesalamine).  Medeva had filed suit against Par for infringement of only one of two Orange Book-listed patents.  Par counterclaimed for a declaratory judgment of invalidity as to the other patent, seeking to trigger forfeiture of the first ANDA filer's 180–day exclusivity.  Medeva then offered a covenant not to sue, after which the district court dismissed Par's declaratory judgment claim.  Click here for FDA Law Blog's excellent summary of the district court's decision.

After dismissing Par's declaratory judgment claim, the district court entered judgment under Rule 54(b), allowing Par immediately to appeal the decision.  According to the district court, if the decision were to be reversed on appeal, then the court could possibly try the claims on both patents at the same time, because the issues involving the first patent were still in discovery.

Rule 54(b) permits a district court “to direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.”  In today's Order, the Federal Circuit stated that its task was “only to assess whether the movant can establish the district court abused its discretion in finding the final claim should be heard now as opposed to waiting until all claims against all parties have been entered.”  The court concluded:

Medeva cannot meet this standard.  The trial court appears to have considered both parties' arguments, and provided a thorough explanation for why judicial resources could be conserved if judgment was entered pursuant to Rule 54(b).  Because the court cannot say the district court abused its discretion, we deny the motion to dismiss.

Accordingly, Par's appeal will go forward, and the Federal Circuit will consider whether the district court properly dismissed Par's declaratory judgment claim against Medeva.

Supreme Court Vacates Federal Circuit Opinion on Declaratory Judgment Jurisdiction

Eisai v. Teva Pharms. USA, No. 10-1070 (U.S. 2011)

In a little-noticed decision two weeks ago, the Supreme Court vacated the Federal Circuit's decision in Teva v. Eisai and remanded the case with instructions to dismiss it as moot.  The Court's decision (found on the Order List of June 13) is significant in that it vacates a precedential decision of the Federal Circuit that arguably expanded declaratory judgment jurisdiction for subsequent ANDA filers.

As we explained in a post back in October, when Teva v. Eisai was decided, it appeared that the Federal Circuit found--for the first time--that the possible delay of a first Paragraph IV ANDA filer in launching its product was a sufficient injury to subsequent Paragraph IV ANDA filers so as to create a justiciable case or controversy.  The Federal Circuit thus held that Teva (a subsequent filer in this case) had established declaratory judgment jurisdiction.

Following that decision, Eisai timely filed a petition for rehearing or rehearing en banc.  While the petition was pending, the first filer (Ranbaxy) launched its ANDA product, thereby triggering its 180-day exclusivity period--which was the sole objective of Teva's declaratory judgment suit in the first place.  Accordingly, Teva and Eisai informed the Federal Circuit that the case was moot, and Eisai requested that the Federal Circuit vacate its opinion and judgment in light of mootness.  The Federal Circuit, however, refused to vacate its opinion, leading Eisai to appeal to the Supreme Court.

According to Eisai's cert petition,

The Federal Circuit's denial of vacatur is directly contrary to the line of this Court's precedents beginning with United States v. Munsingwear, Inc. that hold that courts should vacate judgments in a case that becomes moot unless the moving party's actions make vacatur inequitable.  Eisai is unfairly saddled with a preclusive judgment of suspect merit in an important area of federal jurisprudence even though mootness prevents further review by this Court.

A commentator on SCOTUSblog noted that Teva initially declined to file a response to Eisai's petition (perhaps trying to signal to the Court, "move along, there's nothing to see here"), but the Court asked Teva for a response and twice relisted the case for consideration at its weekly conference, indicating its interest in Eisai's petition.  According to the commentator, "the GVR and mootness dismissal in Eisai is somewhat akin to a summary reversal."

Thus, district courts in future cases will need to evaluate whether declaratory judgment jurisdiction exists without reference to Teva v. Eisai.

BRIEFS:

• Eisai Cert Petition
• Teva Opposition Brief
• Eisai Reply Brief

Declaratory Judgment Jurisdiction for Subsequent Paragraph IV Filers

Teva Pharms. USA v. Eisai et al., No. 2009-1593 (Fed. Cir. 2010)

In a 3-0 decision last week, the Federal Circuit held that Teva has standing to challenge four of Eisai's Orange Book-listed patents on Aricept (donepezil)--notwithstanding that Eisai statutorily disclaimed two of the patents and granted Teva covenants not to sue on the others.  The Federal Circuit essentially decided that the facts of this case were more like those in Caraco v. Forest, where the court determined there was declaratory judgment jurisdiction for a subsequent Paragraph IV filer, than those in Janssen v. Apotex, where the court determined there was not.

All of these cases involve at least two Orange Book-listed patents, an earlier-expiring patent ("EEP") and a later-expiring patent ("LEP"), and a first Paragraph IV ("P.IV") filer who has earned 180-day exclusivity by virtue of not being sued on the LEP.  A subsequent P.IV filer then comes along and, seeking to trigger the first filer's exclusivity, files a declaratory judgment claim that the LEP is invalid or not infringed.  The patent owner grants the subsequent filer a covenant not to sue on the LEP and moves to dismiss the DJ claim (arguing, "we granted a covenant not to sue, so there's no threat of a lawsuit, and therefore no case or controversy").

In Caraco, the first filer, Ivax, filed P.IV certifications on the EEP and LEP.  The patent owner, Forest Labs, sued Ivax on the EEP but not the LEP.  The Federal Circuit found the EEP valid and infringed by Ivax.  Thus, Ivax couldn't lauch (and its 180-day exclusivity couldn't start) until the EEP expired.  The subsequent filer, Caraco, filed P.IV certifications on both the EEP and LEP and, like the first filer, was sued on the EEP but not on the LEP.  Thus, in order to trigger Ivax's 180-day exclusivity, Caraco filed a DJ action on the LEP and sought a declaration of noninfringement.

Finding that Caraco had standing to pursue its DJ action on the LEP, the Federal Circuit stated, "Caraco alleges that it has been restrained from the free exploitation of non-infringing goods.  This is exactly the type of injury-in-fact that is sufficient to establish Article III standing under our caselaw."  More specifically, according to the court, "the injury upon which Caraco's suit is premised is the delay in triggering Ivax's exclusivity period between now and when the [EEP] expires in 2012, not any delay in triggering Ivax's exclusivity period after the [EEP] expires."  To cure the injury, it wasn't enough that Caraco could obtain a judgment that the EEP was invalid; in order to trigger Ivax's exclusivity and market its noninfringing goods, Caraco also needed to obtain a judgment of invalidity or noninfringement on the LEP.  Moreover, the court found that Caraco's injury was "fairly traceable" to Forest because if Forest hadn't listed the LEP in the Orange Book, Caraco would not have been blocked from the market.

In Janssen, the first filer, Teva, filed a Paragraph III (P.III) certification on the EEP and a P.IV on the LEP (actually two LEPs, but the number doesn't matter).  The patent owner, Janssen, declined to sue Teva.  Due to Teva's P.III certification, Teva couldn't launch (and its 180-day exclusivity couldn't start) until the EEP expired.  The subsequent filer, Apotex, filed P.IV certifications on both the EEP and LEP but, like the subsequent filer in Caraco, was sued only on the EEP.  Thus, in order to trigger Teva's 180-day exclusivity, Apotex filed a DJ action on the LEP.  But while its DJ claim was pending, Apotex stipulated to the validity of the EEP.  This fact--the only essential difference between Janssen and Caraco--turned out to be dispositive.

Finding that Apotex lacked standing to pursue its DJ action on the LEP, the Federal Circuit stated, "The key difference between Caraco and this case is that the harm that gave rise to the jurisdiction over the declaratory judgment claim in Caraco ceased to exist once Apotex stipulated to the validity, infringement, and enforceability of the [EEP].  Therefore, unlike Caraco, Apotex cannot claim that at the time of the district court's dismissal it was being excluded from selling a noninfringing product by an invalid patent--it stipulated to the validity of the [EEP]."  In other words, any delay in triggering the first filer's exclusivity before expiration of the EEP was self-inflicted (due to Apotex's stipulation), and not "fairly traceable" to the patent owner.

Which brings us to last week's case.  In Teva v. Eisai, the first filer, Ranbaxy, filed a P.III certification on the EEP and a P.IV on the LEP (actually four LEPs; again, the number doesn't matter).  Janssen declined to sue Ranbaxy.  Due to its P.III certification, Ranbaxy couldn't launch until the EEP expired.  The subsequent filer, Teva in this case, filed P.IV certifications on both the EEP and LEP but, like the subsequent filers in Caraco and Janssen, was sued only on the EEP.  Thus, like the subsequent filers in the two prior cases, Teva filed a DJ action on the LEP in order to trigger the first filer's 180-day exclusivity.  The wrinkle in this case is that Eisai obtained a preliminary injunction on the EEP against Teva.  Eisai argued that the preliminary injunction was like Apotex's stipulation in the Janssen case.  The district court agreed and dismissed Teva's DJ action.  But the Federal Circuit reversed.

Finding that Teva had standing to pursue its DJ action on the LEP, the Federal Circuit stated:

Eisai is correct that Teva [has] been subject to a preliminary injunction arising out of the separate [EEP] patent litigation. . . .  As the name itself admits, however, that injunction was "preliminary."  Indeed, the underlying litigation was still ongoing; there had been no final determination as to the validity, infringement, or enforceability of the '841 patent.  Thus, unlike the generic drug company in Janssen which stipulated to the validity, enforceability and infringement of an Orange Book patent, there was no equivalent final judgment regarding the [EEP].  Indeed, Teva would not necessarily remain subject to an injunction, depending on the outcome of the [EEP] patent infringement litigation.

In other words, since the injunction on the EEP was only preliminary, it was not like Apotex's stipulation, and there was still a risk that the subsequent filer's drug product, which allegedly did not infringe the LEP, was being blocked from the market by an invalid EEP.

There's only one problem with this reasoning: the parties had stipulated in July that the preliminary injunction would remain in effect until the EEP expires on November 25, 2010.  The court addressed this fact in a footnote: "This stipulation does not change our analysis in this case for two reasons.  First, it does not affect jurisdiction at the outset of this appeal.  Second, given that the stipulation is only relevant, if at all, until the expiration of the [EEP] patent on November 25, after that date the DJ patents would bar Teva from obtaining FDA approval earlier and marketing" its generic drug product.

As to the court's first reason, however, the court has confirmed--including as recently as the Janssen case--that jurisdiction over a declaratory judgment action must be present "at all stages of review."  And as to the court's second reason, any delay in marketing after expiration of the EEP is a different injury than the one upon which the Caraco decision was based (delay before expiration of the EEP).

In fact, indefinite delay is an injury that the Federal Circuit previously found to be insufficient to give rise to declaratory judgment jurisdiction.  In the Janssen case, Apotex argued that "absent a declaratory judgment action, its approval of its noninfringing generic risperidone product will be indefinitely delayed until Teva's 180-day exclusivity period is triggered."  In response, the Janssen court explained:

In Caraco, this court considered the same harm that Apotex alleges and concluded that it was insufficient to create a justiciable Article III case or controversy.  See Caraco (noting possible delay of the first Paragraph IV ANDA filer launching after the expiration of a patent is too speculative to create a justiciable Article III case or controversy).  Our decision in Caraco is supported by Supreme Court precedent which has emphasized that the dispute must be "definite and concrete" and be "real and substantial" in order to give rise to justiciable Article III case or controversy.  Therefore, we hold that a possible delay in the future of a first Paragraph IV ANDA filer in launching its generic product does not give rise to declaratory judgment jurisdiction.

Thus, the Federal Circuit's stated rationale for finding declaratory judgment jurisdiction in Teva v. Eisai is inconsistent with its holdings in Caraco and Janssen.  There may be some other, unstated, way of reconciling the outcomes.  But if the court is changing course--and holding that indefinite delay after expiration of an EEP is a legally cognizable injury--it would be a significant expansion of declaratory judgment jurisdiction.

Apotex Establishes Declaratory Judgment Jurisdiction in Lipitor Patent Challenge, Threatening the Pfizer-Ranbaxy Settlement, but Pfizer Reloads

Pfizer Inc. et al. v. Apotex Inc. et al., No. 08-7231 (N.D. Ill. 2010)

The litigation between Pfizer and Apotex over Apotex's ANDA for a generic version of Lipitor (atorvastatin calcium) presents the fairly typical scenario of a later ANDA filer (Apotex) trying to trigger the 180-day exclusivity of the first filer (in this case, Ranbaxy).

Pfizer and Ranbaxy settled their Lipitor ANDA litigation in 2008, agreeing that Ranbaxy would not market its generic version of Lipitor until November 30, 2011.  Later ANDA filers like Apotex, therefore, must wait until at least mid-2012 to launch their own generic Lipitor--unless one of them triggers Ranbaxy's exclusivity earlier.  In order to do so, the later filer must obtain a final decision of noninfringement or invalidity of the Lipitor patents.  But this isn't easy to do if the patent owner doesn't sue the later filer:  the later filer must obtain a declaratory judgment, which requires establishing declaratory judgement jurisdiction.

In this case, Pfizer listed six patents in the Orange Book for Lipitor.  Apotex filed a Paragraph III certification on U.S. Patent No. 4,681,893 (expiring March 2010) and Paragraph IV certifications on the other five.  Pfizer sued Apotex on only two of the five challenged patents.  In its Answer, Apotex filed declaratory judgment counterclaims of noninfringement and invalidity of all five challenged patents, as it must have in order to trigger Ranbaxy's exclusivity.  Pfizer then filed a motion to dismiss Apotex's counterclaims with respect to the three patents that Pfizer did not assert against Apotex (the "Unasserted Patents"), on the grounds that they did not present a "case" or "controversy" as required by Article III of the Constitution.  In an Opinion and Order filed June 30, the district court denied Pfizer's motion, allowing Apotex's declaratory judgment counterclaims--and its attempt to trigger Ranbaxy's exclusivity--to proceed.

In its motion to dismiss, Pfizer argued that Apotex lacked standing to assert its counterclaims.  To establish standing, a plaintiff must demonstrate (1) an injury-in-fact, (2) that is fairly traceable to the defendant's conduct, and (3) that can be redressed by the court.  Apotex alleged two injuries-in-fact:  first, by not suing on the Unasserted Patents while reserving the right to do so in the future, Pfizer created uncertainty as to Apotex's legal rights under its ANDA; second, by refusing to litigate all of its patents and settling its litigation with Ranbaxy, Pfizer erected a barrier to FDA approval of Apotex's product, thereby barring Apotex from entering the market.  Pfizer countered that Apotex's alleged injuries were "not sufficiently imminent in light of Apotex's Paragraph III certification to the '893 patent, which prevents the FDA from approving Apotex's ANDA until the '893 patent expires."

Siding with Apotex, the court found that the facts of this case were more like those in Teva v. Novartis (where the Federal Circuit held that the "threat of litigation" on unasserted patents and the "legal undertainty" caused when a patent holder sues an ANDA filer on some but not all of Orange Book-listed patents create a justiciable controversy) and Caraco v. Forest (where the Federal Circuit held that blocking a generic drug company from selling a noninfringing product presents a justiciable controversy) than in Janssen v. Apotex (in which the Federal Circuit found no justiciable controversy because Apotex had stipulated to infringement and validity of one of the Orange Book-listed patents).

On July 14, Pfizer filed a motion for reconsideration of the district court's June 30 decision.  In addition, today Pfizer filed a second motion to dismiss, arguing that the circumstances have changed in two important ways since the court's June 30 decision:  first, "in light of the Court's decision Pfizer has now given Apotex a covenant not to sue on the Formulation Patents [two of the three Unasserted Patents] and thus there is no possibility of a future lawsuit on these patents"; and second, "also in light of the Court's decision, Pfizer has brought a counter-counterclaim against Apotex on [the third Unasserted Patent, U.S. Patent No. 5,969,156], which expires, including pediatric exclusivity, in January 2017, after the expiration of the Formulation Patents and after the November 30, 2011 date that Ranbaxy may enter the market under its settlement with Pfizer."

According to Pfizer, "the earlier-expiring Formulation Patents and the Ranbaxy settlement with its November 30, 2011 license date cannot prevent Apotex from overcoming Ranbaxy's 180-day exclusivity rights unless and until Apotex prevails on the '156 patent."  Thus, Pfizer argues that any alleged injury to Apotex is "based solely on the possibility that the '156 patent is not infringed or is invalid" and "such a speculative injury is 'conjectural' and 'hypothetical', and does not rise the level of 'concrete and actual or imminent'," as required to be justiciable.

Of course, the longer the case lasts, the less likely Apotex is to obtain the declaratory judgment that it seeks, get the judgment affirmed by the Federal Circuit, and trigger Ranbaxy's exclusivity.  Pfizer might simply run out the clock.

RELATED READING:

• The American Lawyer

Federal Circuit Affirms Dismissal of Declaratory Judgment Counterclaims in Trusopt/Cosopt Case

Merck & Co. v. Apotex, No. 2008-1133 (Fed. Cir. 2008)

In 2005, Hi-Tech Pharmacal became the first company to file a paragraph IV certification relating to Merck's glaucoma drugs Trusopt and Cosopt.  Hi-Tech filed paragraph IV certifications with respect to all three of the Orange Book-listed patents for these drugs:  U.S. Patent Nos. 4,797,413; 6,248,735; and 6,316,443.

In response, Merck sued Hi-Tech for infringing the '413 patent.  Merck did not assert the '735 and '443 patents against Hi-Tech, but instead disclaimed the patents under 35 U.S.C. § 253.  Last year (as reported here), the Federal Circuit affirmed a district court decision in favor of Merck and against Hi-Tech, causing Hi-Tech to be enjoined from marketing its generic versions of Trusopt and Cosopt until October 28, 2008, when the '413 patent (plus six months of pediatric exclusivity) will expire.  Although Hi-Tech lost the case, it retained its 180-day exclusivity on Trusopt and Cosopt due to its paragraph IV certifications against the '735 and '443 patents.

In 2006, Apotex filed its own ANDA for generic versions of Trusopt and Cosopt.  Like Hi-Tech, Apotex included paragraph IV certifications against all three Orange Book-listed patents.  Merck sued Apotex for infringing the '413 patent and Apotex counterclaimed for a declaratory judgment of noninfringement and invalidity of the '735 and '443 patents (notwithstanding that Merck had disclaimed them).  Apotex agreed to be bound by the results of Hi-Tech's appeal to the Federal Circuit on the '413 infringement issue, and thus, like Hi-Tech, became enjoined until October 28, 2008.  On November 15, 2007 (as reported here), the district court dismissed Apotex's counterclaims relating to the '735 and '443 patents for lack of subject matter jurisdiction.  Recently, in an opinion released August 21st, the Federal Circuit affirmed the dismissal.

The Federal Circuit observed that Apotex pursued its counterclaims under the "theory that if it can obtain a final judgment in its favor (invalidity or non-infringement) on these patents, such a judgment would act as a forfeiture trigger should Hi-Tech fail to market its generic version of Cosopt within 75 days of the date of Apotex's final judgment."  According to the court, "since Hi-Tech is enjoined from marketing its generics any time before October 28, 2008, Apotex asserts that a final judgment of invalidity or noninfringement as to the '735 and '443 patents obtained on or before August 14, 2008 would create a forfeiture of exclusivity for Hi-Tech and would allow Apotex to market its competing generic immediately upon final approval of its ANDA."

The Federal Circuit applied the standard for declaratory judgment jurisdiction enunciated in MedImmune:  the dispute must be "definite and concrete, touching the legal relations of parties having adverse legal interests; . . . real and substantial, and admit of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts."  Here, the court found that as a practical matter, it could not provide any realistic relief:  "Even with prompt action by this panel, the final judgment sought by Apotex cannot be provided in time to be meaningful."  Accordingly, the court concluded, "the dispute presented does not 'admit of specific relief through a decree of a conclusive character' and, thus, does not present a justiciable case or controversy."