Patent Baristas

In Janssen Pharma v. Apotex (08-1062), Apotex tried to get the federal circuit to grant a do-over of the dismissal of its declaratory judgment action for noninfringement against Janssen.

Janssen holds an approved NDA for its drug Risperdal® Oral Solution for which the Orange Book listed U.S. Patent Nos. 4,804,663, 5,453,425 and 5,616,587.  The ’663 patent has been the subject of prior litigation where it was found to be infringed, valid, and enforceable.  While Apotex was not a party to that trial, Apotex stipulated to infringement, validity, and enforceability of the ’663 patent based on the Federal Circuit opinion.

Prior to September 2002, Teva Pharma filed an ANDA to make a generic version of risperidone oral solution.  In filing its ANDA, Teva respected the validity of the ’663 patent by filing a Paragraph III Certification on that patent.  Teva was the first ANDA applicant to file a Paragraph IV Certification on the ’425 and ’587 patents.  As such, Teva is entitled to 180 days of generic market exclusivity.

Since Teva filed a Paragraph III Certification with respect to the ’663 patent, the FDA will not approve Teva’s generic product before the expiration of the ’663 patent.  Because Janssen did not sue Teva for infringing the ’425 and ’587 patents, the FDA will be able to approve Teva’s generic version of risperidone oral solution upon the expiration of the ’663 patent.

Teva will be able to commercially market its generic product immediately upon receiving FDA approval.   Then, Apotex submitted an ANDA application to the FDA seeking approval to market its generic version of risperidone oral solution, in which Apotex also filed Paragraph IV Certifications on the ’425 and ’587 patents.  Later, Apotex amended its ANDA and provided Janssen with an additional Paragraph IV Certification directed to the ’663 patent.

Janssen sued Apotex for infringing the ’663 patent but not on the ’425 and ’587 patents (collectively, the unasserted patents).  Apotex then asked for declaratory judgment of noninfringement of the two unasserted patents.

Janssen provided Apotex with a covenant-not-to-sue with respect to the ’425 and ’587 patents and the district court granted Janssen’s motion to dismiss Apotex’s counterclaims for lack of subject matter jurisdiction.  The district court found “no case or controversy” regarding the ’425 and ’527 patents.

Congress directed federal courts to exercise jurisdiction over ANDA Paragraph IV declaratory judgment actions “to the extent consistent with the Constitution.”  The relevant text of the Declaratory Judgment Act reads:

In a case of actual controversy within its jurisdiction . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.

In MedImmune, the Supreme Court emphasized that the dispute must be:

“definite and concrete, touching the legal relations of parties having adverse legal interests;” and that it be “real and substantial” and “admi[t] 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.”

Apotex argues that it is suffering three actual and continuing injuries which create a substantial controversy of sufficient immediacy to warrant the issuance of a declaratory judgment.  Specifically, Apotex argues that (1) it is unable to promptly launch its generic risperidone product and compete in the market immediately upon the expiration of the ’663 patent; (2) its approval of its noninfringing generic risperidone product is being indefinitely delayed; and (3) its affiliates, suppliers, and downstream customers face patent uncertainty because Janssen’s covenant-not-to-sue does not cover them.

Apotex argued that its inability to immediately launch their product on expiration of the ‘663 patent created a substantial controversy of sufficient immediacy to warrant the issuance of a declaratory judgment.  Without a declaratory judgment, Teva’s 180-day exclusivity period will commence when it commercially launches its generic risperidone product after the expiration of the ’663 patent.  Therefore, the earliest Apotex will be able to enter the market is 181 days after the expiration of the ’663 patent.

Note, if Apotex was successful on its declaratory judgment action, Teva’s 180-day exclusivity period would be triggered at a time that Teva will be unable to launch its generic product.  In spy-vs-spy fashion, one generic (Apotex) was trying to trip up the another generic’s (Teva’s) 180-day exclusivity period by having it exhausted prior to the expiration of the ’663 patent.  Therefore, Apotex would be able to enter the market immediately upon the expiration of the ’663 patent.

Apotex tried to rely on Caraco v. Forest Labs, in which the federal circuit held that despite the existence of a covenant-not-to-sue, a declaratory judgment claim brought under the Hatch-Waxman Act presents a justiciable Article III controversy.

The CAFC said Nay:

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 ’663 patent.  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 ’663 patent.  Even if Apotex successfully invalidates the ‘425 and ‘527 patents, it cannot obtain FDA approval until the expiration of the ‘663 patent because of its stipulations with respect to that patent.  Instead, the harm to Apotex that has continuously existed is its exclusion from selling its alleged noninfringing product during Teva’s statutorily entitled 180-day exclusivity period.  Apotex is being excluded from the market by Teva’s 180-day exclusivity period—a period which Teva is entitled to under the Hatch-Waxman Act.  This is a different injury than that alleged in Caraco.

Affirmed