Takeda Pharmaceutical Co., Ltd. et al v. Mylan Inc. et al

Filing 84

Order by Hon. Lucy H. Koh in case 5:13-cv-04001-LHK; granting (12) Motion to Dismiss in case 5:14-cv-00314-LHK.Associated Cases: 5:14-cv-00314-LHK, 5:13-cv-04001-LHK, 5:13-cv-04002-LHK(lhklc5S, COURT STAFF) (Filed on 8/1/2014)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA United States District Court For the Northern District of California 10 SAN JOSE DIVISION 11 12 13 TAKEDA PHARMACEUTICAL CO., LTD., TAKEDA PHARMACEUTICALS U.S.A., INC., AND TAKEDA PHARMACEUTICALS AMERICA, INC., 14 Plaintiff, 15 16 17 v. MYLAN INC. AND MYLAN PHARMACEUTICALS INC., 18 19 Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No.: 14-CV-00314-LHK Consolidated and Related Cases: 13-CV-04001-LHK 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 20 21 22 23 24 25 26 27 28 Plaintiffs Takeda Pharmaceutical Co. Ltd., Takeda Pharmaceuticals U.S.A., Inc., and Takeda Pharmaceuticals America, Inc. (collectively, “Takeda”) filed this patent infringement action against Defendants Mylan Pharmaceuticals Inc. and Mylan Inc. (collectively, “Mylan”). See Compl. (ECF No. 1). Takeda’s claims relate to Mylan Pharmaceuticals Inc.’s filing of an Abbreviated New Drug Application (“ANDA”) for a generic form of Takeda’s branded drug Dexilant®, for treatment of gastroesophageal reflux disease. In its Complaint, Takeda pleaded two Counts. Count I is a claim for infringement under the Hatch-Waxman Act pursuant to 35 U.S.C. § 271(e)(2). Id. ¶¶ 29-31. Count II seeks a declaratory judgment of infringement under 28 U.S.C. 1 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 § 2201, “[p]ursuant to 35 U.S.C. § 271(a), (b), or (c).” Id. ¶¶ 32-38. 2 Mylan moves to dismiss Count II under Fed. R. Civ. P. 12(b)(1) for lack of subject matter 3 jurisdiction or, alternatively, for an order terminating the automatic stay of the Food and Drug 4 Administration’s (“FDA”) approval of Mylan’s ANDA. See ECF No. 13 (“Mot.”) at 1. Mylan 5 argues that the Court lacks jurisdiction over Count II under the Declaratory Judgment Act because 6 there is no controversy of “sufficient immediacy and reality.” Id. at 6-10. Additionally, Mylan 7 argues that the Court should not exercise its discretion to hear Count II because it would undermine 8 congressional intent in enacting the Hatch-Waxman Act. Id. at 10-12. On April 14, 2014, Takeda opposed Mylan’s Motion to Dismiss. ECF No. 19-3 (“Opp’n”). 10 United States District Court For the Northern District of California 9 On April 24, 2014, Mylan replied. ECF No. 26-4 (“Reply”). The Court held a hearing on July 31, 11 2014. Having considered the parties’ submissions and the relevant law, the Court GRANTS 12 Mylan’s motion to dismiss Count II. Consequently, Mylan’s alternative request for an order 13 terminating the automatic 30-month stay of the FDA’s approval of ANDA No. 205-205 is 14 DENIED as moot. 15 I. BACKGROUND 16 A. The Hatch-Waxman Act 17 The Hatch-Waxman Act’s framework for generic drugs and resolution of related patent 18 infringement disputes has been explained repeatedly in detail. See generally Caraco Pharm. Labs., 19 Ltd. v. Forest Labs., Ltd., 527 F.3d 1278, 1282-86 (Fed. Cir. 2008) (explaining ANDA procedures 20 and patent infringement claims under the Hatch-Waxman Act). The Court notes only relevant 21 parts of this legal background for purposes of this motion. 22 The Food, Drug, and Cosmetic Act (“FDCA”) requires a drug manufacturer to submit a 23 New Drug Application (“NDA”) to the FDA for approval. 21 U.S.C. § 355(a). In addition to 24 extensive testing and safety information concerning the drug, the manufacturer must also submit 25 the patent number and expiration date of any patent that claims the drug or a method of using the 26 drug with respect to which a claim of patent infringement could reasonably be asserted. Id. 27 § 355(b)(1). Once the NDA is approved, the FDA lists this patent information with the approved 28 drug in its Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known 2 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 as the “Orange Book.” See id. §§ 355(b)(1), 355(j)(7)(A)(i)-(iii). The Orange Book must list 2 “each drug which has been approved for safety and effectiveness” through an NDA. Id. 3 § 355(j)(7)(A)(i)(I). If a patent claiming the drug or method of using the drug issues after the NDA 4 is approved, the NDA holder must submit the patent information to the FDA within 30 days of 5 issuance for publication in the Orange Book. Id. § 355(c)(2). 6 The Hatch-Waxman Act amended the FDCA to provide for the ANDA process, which 7 allows drug manufacturers to obtain FDA approval for generic versions of previously approved 8 drugs without repeating the extensive testing required for an NDA. See id. § 355(j). When 9 submitting an ANDA to the FDA, the generic manufacturer must make one of four certifications United States District Court For the Northern District of California 10 for each patent listed in the Orange Book for the reference-listed drug: (1) that no patent 11 information has been filed, (2) that the patent has expired, (3) that the patent will expire on a 12 specific date, or (4) that the patent “is invalid or will not be infringed by the manufacture, use, or 13 sale of the drug for which the application is submitted” (a “Paragraph IV” certification). Id. 14 § 355(j)(2)(A)(vii). If a generic manufacturer makes a Paragraph IV certification in its ANDA, the 15 Hatch-Waxman Act requires that the applicant give notice to the patent owner, setting forth the 16 factual and legal basis for the applicant’s opinion that the patent is invalid or will not be infringed 17 by the applicant’s proposed generic drug. Id. § 355(j)(2)(B). If the ANDA contains a Paragraph 18 IV certification, the patent owner may sue the generic applicant for infringement under 35 U.S.C. 19 § 271(e)(2) within 45 days after receiving notice, which triggers a 30-month stay of FDA approval 20 of the ANDA. Id. § 355(j)(5)(B)(iii). 1 21 35 U.S.C. § 271(e) defines infringement under the Hatch-Waxman Act with regard to a 22 generic manufacturer’s use of a patent for purposes of developing an ANDA and seeking FDA 23 approval. A generic drug manufacturer enjoys a “safe harbor” from infringement suits for use of 24 the patent during development and submission of an ANDA: “It shall not be an act of infringement 25 to make, use, offer to sell, or sell within the United States or import into the United States a 26 patented invention . . . solely for uses reasonably related to the development and submission of 27 1 28 If the patentee does not sue within 45 days, the generic manufacturer can sue “under section 2201 of title 28 for a declaratory judgment that such patent is invalid or not infringed.” 35 U.S.C. § 271(e)(5). 3 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 information under a Federal law which regulates the manufacture, use, or sale of drugs or 2 veterinary biological products.” § 271(e)(1). In other words, § 271(e)(1) “allows competitors, 3 prior to the expiration of a patent, to engage in otherwise infringing activities necessary to obtain 4 regulatory approval.” Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 671 (1990). 5 Once an ANDA is filed, however, § 271(e)(2) makes such a filing an act of infringement “if 6 the purpose of such submission is to obtain approval under such Act to engage in the commercial 7 manufacture, use, or sale of a drug . . . claimed in a patent or the use of which is claimed in a patent 8 before the expiration of such patent.” Thus, § 271(e)(2) makes the “paper act” of filing an ANDA 9 an act of infringement. This provision, according to the Supreme Court, created “a new (and United States District Court For the Northern District of California 10 somewhat artificial) act of infringement for a very limited and technical purpose that relates only to 11 certain drug applications.” Eli Lilly, 496 U.S. at 676; see also Glaxo Grp. Ltd. v. Apotex, Inc., 376 12 F.3d 1339, 1351 (Fed. Cir. 2004) (“35 U.S.C. § 271(e)(2) is designed to create an artificial act of 13 infringement for purposes of establishing jurisdiction in the federal courts.”). Because § 271(e)(1) 14 exempts generic manufacturers from an infringement suit during ANDA development, § 271(e)(2) 15 “permit[s] patent holders to bring suit against generic companies despite the fact that the generic 16 companies have not yet infringed the patents at issue.” Apotex, 376 F.3d at 1351; see also Bristol- 17 Myers Squibb Co. v. Royce Labs., Inc., 69 F.3d 1130, 1135 (Fed. Cir. 1995) (stating that 18 § 271(e)(2) “makes it possible for a patent owner to have the court determine whether, if a 19 particular drug were put on the market, it would infringe the relevant patent”). 20 The Federal Circuit has held that § 271(e)(2) “is not a jurisdictional statute in the strict 21 sense of the word” because in a suit under § 271(e)(2), district courts have subject matter 22 jurisdiction pursuant to 28 U.S.C. § 1338(a), which provides for original jurisdiction in the district 23 courts for any civil action “arising under any Act of Congress relating to patents.” Allergan, Inc. v. 24 Alcon Labs., Inc., 324 F.3d 1322, 1330 (Fed. Cir. 2003) (quoting 28 U.S.C. § 1338(a)). However, 25 § 271(e)(2) “makes it possible for the district court to exercise its section 1338(a) jurisdiction in the 26 situation in which an ANDA has been filed.” Id. at 1330. Thus, the Federal Circuit has deemed 27 § 271(e)(2) to be “primarily a jurisdictional-conferring statute that establishes a case or controversy 28 in a declaratory judgment action.” Apotex, 376 F.3d at 1351. 4 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 B. Procedural Background 2 Takeda asserts U.S. Patent No. 7,339,064 (the “’064 Patent”), which issued on March 4, 3 2008 and will expire on July 15, 2020. See Compl. ¶¶ 17, 18. The ’064 Patent is entitled 4 “Benzimidazole Compound Crystal” and claims crystalline forms of benzimidazole derivatives in a 5 pharmaceutical composition for treating or preventing digestive ulcers. ’064 Patent col.1 ll.38-59. 6 Takeda asserts that the ’064 Patent claims “hydrate and sesquihydrate crystal forms of 7 dexlansoprazole,” which is the active ingredient in Dexilant®. Opp’n at 3-4. The ’064 Patent is 8 not currently listed in the Orange Book for Dexilant®. Takeda explains that it has not submitted 9 the required data to the FDA showing that the crystal forms claimed in the ’064 Patent are United States District Court For the Northern District of California 10 bioequivalent to the crystal form in Dexilant®. See id. at 4. 11 Mylan Pharmaceuticals Inc. submitted ANDA No. 205-205 to the FDA, seeking approval 12 to market a generic version of Dexilant® in 30 mg and 60 mg dosage forms prior to expiration of 13 the ’064 Patent. See Compl. ¶ 21. In July 2013, Takeda received notice letters from Mylan with a 14 Paragraph IV Certification that certain Takeda Orange Book patents are invalid, unenforceable, 15 and/or not infringed by Mylan’s anticipated generic drug. See id. ¶¶ 23-25. 16 Prior to commencing this suit, on August 28, 2013, Takeda filed two separate infringement 17 cases against Mylan, involving other patents related to Dexilant®. See Takeda Pharm. Co. v. 18 Mylan Inc., No. 13-CV-04001-LHK (N.D. Cal.); Takeda Pharm. Co. v. Mylan Inc., No. 13-CV- 19 04002-LHK (N.D. Cal.). In those two cases, Takeda asserted a total of seven other patents listed in 20 the Orange Book, and Mylan counterclaimed against an eighth Orange Book patent. Under the 21 Hatch-Waxman Act, Takeda’s assertion of the Orange Book patents triggered an automatic 30- 22 month stay against FDA approval of Mylan’s ANDA, which will keep Mylan’s product off the 23 market until January 2016 unless Mylan first prevails in these litigations. See § 355(j)(5)(B)(iii); 24 Opp’n at 12 n.7. On January 21, 2014, Takeda filed this current suit, asserting the ’064 Patent. See 25 Compl. ¶¶ 26-27. On February 7, 2014, the Court consolidated these three cases for all purposes. 26 ECF No. 8. 2 27 2 28 Takeda is also involved in two other sets of lawsuits in this district against other ANDA filers for Dexilant®. E.g., Takeda Pharm. Co. v. Handa Pharms., LLC, No. 11-CV-00840-JCS (N.D. Cal.); Par Pharm., Inc. v. Takeda Pharm. Co., No. 13-CV-01927-LHK (N.D. Cal.). 5 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 In Count I of the current suit, Takeda asserts a claim against Mylan pursuant to § 271(e)(2) 2 for infringement of the ’064 Patent. See Compl. ¶¶ 29-31. In Count II, Takeda seeks a declaration 3 pursuant to 28 U.S.C. § 2201 that Mylan will infringe the ’064 Patent directly or indirectly under 4 35 U.S.C. § 271(a), (b), and/or (c). See id. ¶¶ 32-38. Specifically, Takeda alleges: 5 36. Pursuant to 35 U.S.C. § 271(a), (b), and/or (c), Defendants’ commercial manufacture, use, sale, or offer for sale within the United States or importation into the United States of the ANDA Products would constitute infringement of the ’064 Patent. 37. Plaintiffs are informed and believe, and thereupon allege, that Defendants’ infringing commercial manufacture, use, sale, or offer for sale within the United States or importation into the United States of the ANDA Products complained of herein will begin following FDA approval of ANDA No. 205-205. 6 7 8 9 Id. ¶¶ 36, 37. Thus, Takeda seeks a declaration that Mylan will directly or indirectly infringe the United States District Court For the Northern District of California 10 ’064 Patent when it begins making, using, or selling its generic product in the future, after the FDA 11 approves Mylan’s ANDA. Takeda pleaded similar counts for the seven other patents it asserted in 12 the two consolidated cases, but Mylan has not moved to dismiss any of those counts. In this case, 13 however, Mylan now seeks to dismiss Count II for lack of subject matter jurisdiction, or to 14 terminate the automatic 30-month stay against FDA approval of ANDA No. 205-205. 15 Mylan filed its motion on March 10, 2014. ECF No. 13. On April 14, 2014, Takeda filed 16 an opposition. ECF No. 19-3. On April 24, 2014, Mylan replied. ECF No. 26-4. The Court held 17 a hearing on July 31, 2014. 18 II. LEGAL STANDARDS 19 A. Motion to Dismiss Under Rule 12(b)(1) 20 Generally, dismissal for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) 21 “is a procedural question not unique to patent law,” and is therefore governed by regional circuit 22 law. Toxgon Corp. v. BNFL, Inc., 312 F.3d 1379, 1380 (Fed. Cir. 2002). However, “[w]hether an 23 actual case or controversy exists so that a district court may entertain an action for a declaratory 24 judgment of non-infringement and/or invalidity is governed by Federal Circuit law.” MedImmune, 25 Inc. v. Centocor, Inc., 409 F.3d 1376, 1378 (Fed. Cir. 2005), overruled on other grounds, 549 U.S. 26 118 (2007). 27 A jurisdictional challenge may be facial or factual. See Safe Air for Everyone v. Meyer, 373 28 6 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 F.3d 1035, 1039 (9th Cir. 2004). Where the attack is facial, the court determines whether the 2 complaint’s allegations are sufficient on their face to invoke federal jurisdiction, accepting all 3 material allegations as true and construing them in favor of the party asserting jurisdiction. See 4 Warth v. Seldin, 422 U.S. 490, 501 (1975). Where the attack is factual, “the court need not 5 presume the truthfulness of the plaintiff’s allegations.” Safe Air, 373 F.3d at 1039. In resolving a 6 factual dispute regarding subject matter jurisdiction, a court may review extrinsic evidence beyond 7 the complaint without converting a motion to dismiss into one for summary judgment. See id.; 8 McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988) (holding that a court “may review 9 any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence United States District Court For the Northern District of California 10 of jurisdiction”). Once a party has moved to dismiss for lack of subject matter jurisdiction under 11 Rule 12(b)(1), the opposing party bears the burden of establishing the Court’s jurisdiction. See 12 Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Chandler v. State Farm 13 Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010). 14 Generally, if the Court grants a motion to dismiss, leave to amend will be denied only if 15 amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the 16 moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 17 (9th Cir. 2008); see also Lopez v. Smith, 203 F.3d 1122, 1127-28 (9th Cir. 2000) (leave should be 18 granted unless “the pleading could not possibly be cured by the allegation of other facts”). 19 B. Declaratory Judgment Jurisdiction 20 The Declaratory Judgment Act states: “In a case of actual controversy within its jurisdiction 21 . . . any court of the United States . . . may declare the rights and other legal relations of any 22 interested party seeking such declaration, whether or not further relief is or could be sought.” 28 23 U.S.C. § 2201(a). A party seeking to base subject matter jurisdiction on the Declaratory Judgment 24 Act bears the burden of showing an “actual controversy.” Crossbow Tech., Inc. v. YH Tech., 531 25 F. Supp. 2d 1117, 1120 (N.D. Cal. 2007). Jurisdiction is proper only where “the facts alleged, 26 under all the circumstances, show that there is a substantial controversy, between parties having 27 adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory 28 judgment.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (citing Md. Cas. Co. v. 7 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941)). 2 Under the Supreme Court’s “all the circumstances” test, courts have “unique and 3 substantial discretion in deciding whether to declare the rights of litigants.” Id. at 136 (internal 4 citations omitted). “[D]istrict courts possess discretion in determining whether and when to 5 entertain an action under the Declaratory Judgment Act, even when the suit otherwise satisfies 6 subject matter jurisdictional prerequisites.” Wilton v. Seven Falls Co., 515 U.S. 277, 282 (1995). 7 Courts must act “in accordance with the purposes of the Declaratory Judgment Act and the 8 principles of sound judicial administration” in exercising discretion over jurisdiction in suits for 9 declaratory judgment. Elecs. for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1345 (Fed. Cir. 2005) United States District Court For the Northern District of California 10 (citation omitted). 11 III. 12 DISCUSSION Mylan’s motion raises the issue of whether the owner of a pharmaceutical patent may 13 simultaneously assert a claim for infringement under § 271(e)(2) and a claim pursuant to the 14 Declaratory Judgment Act for infringement under § 271(a)-(c). The Federal Circuit has not 15 resolved this issue. Moreover, the Federal Circuit has not addressed the question of whether 16 district courts may exercise jurisdiction over a claim asserting future infringement of a non-Orange 17 Book patent under the Declaratory Judgment Act when such a claim is based solely on the filing of 18 an ANDA by a generic manufacturer. As discussed below, the legal precedent regarding these 19 questions is unsettled. However, even assuming that a sufficiently immediate and real controversy 20 exists for purposes of Count II, the Court exercises its discretion to decline declaratory judgment 21 jurisdiction because Count II is duplicative of Count I and serves no useful purpose in this case. 22 A. 23 Mylan argues that “As a matter of law, Takeda’s allegations in Count I, preclude Existence of a Controversy 24 declaratory judgment jurisdiction over Count II.” Mot. at 6. Mylan contends that there can be no 25 immediate controversy because the 30-month stay lasts until January 2016, trial is scheduled for 26 November 2015, the FDA has not approved Mylan’s ANDA, and Mylan has not declared its intent 27 to launch its generic product. See id. at 6-7, 9-10. Mylan insists that courts “consistently” dismiss 28 duplicative declaratory judgment claims. Id. at 7. Mylan further notes that Takeda’s Count II 8 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 contains few facts and recites only the bare allegation that Mylan has “made and will continue to 2 make substantial preparation in the United States to manufacture, use, sell, offer to sell, and/or 3 import” its generic product prior to expiration of the ’064 Patent. Compl. ¶¶ 21-28, 32-38. 4 In opposition, Takeda argues it is entitled to maintain a declaratory judgment claim 5 simultaneously with a § 271(e)(2) claim. According to Takeda, current precedent establishes that 6 “filing of an ANDA typically provides a sufficient basis to establish a justiciable controversy.” 7 Opp’n at 8. Takeda also contends that the filing of the ANDA demonstrates that Mylan has made 8 substantial preparations towards infringement, pointing to certain FDA correspondence (not 9 referenced in or attached to the Complaint). See Takahashi Decl. Ex. B (ECF No. 19-4). United States District Court For the Northern District of California 10 Contrary to the parties’ representations about established precedent, the case law does not 11 conclusively resolve this dispute. The Federal Circuit has provided some guidance about the 12 relationship between infringement under § 271(e)(2) and infringement under § 271(a)-(c). “The 13 very act of submitting an ANDA is an act of infringement.” Teva Pharms. USA v. Novartis 14 Pharms. Corp., 482 F.3d 1330, 1342 (Fed. Cir. 2007). Generally, infringement suits under 15 § 271(e)(2) should not be “treated any differently than patent infringement suits under 35 U.S.C. 16 § 271(a).” Abbott Labs. v. Torpharm, Inc., 503 F.3d 1372, 1379 (Fed. Cir. 2007). Additionally, 17 the Federal Circuit has advised that if a controversy exists for purposes of declaratory judgment 18 jurisdiction for one party, it necessarily exists for the opposing party: “It logically follows that if 19 such an action creates a justiciable controversy for one party, the same action should create a 20 justiciable declaratory judgment controversy for the opposing party.” Teva, 482 F.3d at 1342. 21 The Federal Circuit has also analyzed specific circumstances where either the branded or 22 generic manufacturer may bring a declaratory judgment claim to resolve potential infringement. In 23 Teva, the Federal Circuit examined whether a generic manufacturer (Teva) who was sued on only 24 one of five Orange Book patents could pursue claims for declaratory judgment of noninfringement 25 under § 271(e)(5) for the four unasserted patents. Id. at 1335. The court determined that Teva’s 26 ANDA created an immediate controversy under MedImmune for all Orange Book patents, and that 27 the branded manufacturer (Novartis) should not be allowed to insulate some of those patents from 28 litigation by choosing not to assert them. The Federal Circuit noted that “[t]here is no question that 9 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 under 35 U.S.C. § 271(e)(2), Novartis would have an immediate justiciable controversy against 2 Teva as soon as Teva submitted the ANDA; indeed, that is exactly what occurred in this case.” Id. 3 at 1342. Moreover, the court listed a combination of circumstances that necessarily establishes 4 declaratory judgment jurisdiction in a Hatch-Waxman case: 5 A justiciable declaratory judgment controversy arises for an ANDA filer when a patentee lists patents in the Orange Book, the ANDA applicant files its ANDA certifying the listed patents under paragraph IV, and the patentee brings an action against the submitted ANDA on one or more of the patents. The combination of these three circumstances is dispositive in establishing an actual declaratory judgment controversy as to all the paragraph IV certified patents, whether the patentee has sued on all or only some of the paragraph IV certified patents. 6 7 8 9 482 F.3d at 1344. Thus, Teva indicates that the filing of an ANDA with a Paragraph IV United States District Court For the Northern District of California 10 certification and the assertion of an Orange Book patent always create an immediate and real 11 controversy under MedImmune. 12 Other courts have held that the filing of an ANDA also permits the branded manufacturer to 13 file a § 271(e)(2) claim for patents that are not listed in the Orange Book. Indeed, in recent 14 litigation between Takeda and other generic manufacturers regarding Dexilant®, Judge Spero 15 reached this conclusion: “[T]his Court joins a number of other district courts in concluding that 16 there is no requirement under the Hatch-Waxman Act that a patent must be listed in the Orange 17 Book in order for a drug manufacturer to bring an infringement action based on that patent against 18 an ANDA applicant.” Takeda Pharm. Co. v. Handa Pharms., LLC, No. 11-CV-00840-JCS, 2013 19 U.S. Dist. LEXIS 74126, at *63 (N.D. Cal. Apr. 8, 2013) (collecting cases). 3 20 The handful of district courts that have addressed the propriety of asserting both Hatch- 21 Waxman and declaratory judgment claims for infringement have reached varying results. Some 22 courts have permitted a patentee to maintain declaratory judgment infringement claims against a 23 generic manufacturer. For example, in the District of Delaware, Judge Robinson has addressed 24 similar claims on multiple occasions. In Cephalon, Inc. v. Watson Pharmaceuticals, Inc., generic 25 manufacturers moved to dismiss the patentee’s declaratory judgment claims for indirect 26 27 28 3 At the July 31, 2014 hearing, Takeda stated that this ruling is currently on appeal to the Federal Circuit, and that Takeda has maintained Count II in this case partly because an adverse ruling on appeal could foreclose Takeda’s § 271(e)(2) claim on the ’064 Patent, which is not listed in the Orange Book. 10 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 infringement under § 271(b) or (c), where the patentee had also filed § 271(e)(2) claims. 629 F. 2 Supp. 2d 338, 350-51 (D. Del. 2009) (Robinson, J.). The court denied the motions, finding a “real 3 and immediate controversy” because “Defendants have filed the ANDA and have declared their 4 intent to manufacture, market, and sell potentially infringing products in the event that the FDA 5 approves the ANDA.” Id. at 351. 6 The same court later followed Watson in denying a motion to dismiss a patentee’s 7 declaratory judgment infringement claims. See In re Cyclobenzaprine Hydrochloride Extended- 8 Release Capsule Patent Litig., 693 F. Supp. 2d 409, 418-19 (D. Del. 2010) (Robinson, J.). In 9 Cyclobenzaprine, the branded manufacturer filed both § 271(e)(2) and declaratory judgment United States District Court For the Northern District of California 10 infringement counts. Judge Robinson denied the generic manufacturers’ motion to dismiss the 11 declaratory judgment claims without prejudice, finding that the ANDA applicant had concealed its 12 intentions by effectively denying access to confidential information in the ANDA. See id. at 419. 13 Then, in Cephalon, Inc. v. Sandoz, Inc., Judge Robinson dealt with a situation where the 14 patentee failed to timely list in the Orange Book two patents that issued after the generic 15 manufacturer filed its ANDA. Civ. No. 11-821-SLR, 2012 WL 682045, at *1-2 (D. Del. Mar. 1, 16 2012) (Robinson, J.). The generic manufacturer moved to dismiss the infringement claims for 17 those two patents, but the patentee argued that declaratory judgment jurisdiction existed 18 “regardless of whether § 271(e)(2) is applicable to the facts of record.” Id. at *2. The court agreed 19 with the patentee, finding that the generic manufacturer had notice of the two new patents and had 20 engaged in activities sufficient to create a controversy, concluding: “I do not understand the 21 administrative paradigm of the Hatch-Waxman Act to preclude a patent holder from establishing 22 jurisdiction under 28 U.S.C. § 2201(a).” Id. at *5. Thus, Judge Robinson decided that a 23 § 271(e)(2) claim does not prevent a duplicative declaratory judgment infringement claim. See 24 also Bayer Healthcare, LLC v. Norbrook Labs., Ltd., No. 08-C-0953, 2009 WL 6337911, at *13-14 25 (E.D. Wis. Sept. 24, 2009) (finding Article III controversy in connection with an Abbreviated New 26 Animal Drug Application because “FDA may approve the ANADA in the immediate future”). 27 28 Other courts, however, have declined jurisdiction over similar claims. In another District of Delaware case, then-Magistrate Judge Stark addressed facts nearly identical to those presented 11 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS here. In re Rosuvastatin Calcium Patent Litig., MDL 08-1949, 2008 WL 5046424 (D. Del. Nov. 2 24, 2008) (Stark, M.J.), adopted by 2009 WL 87409 (D. Del. Jan. 12, 2009). There, the patentee 3 filed both “a standard ANDA patent infringement action pursuant to § 271(e)” and “a non-ANDA 4 patent infringement declaratory judgment action pursuant to § 271(a)” for an Orange Book-listed 5 patent. Id. at *4, 12. Judge Stark acknowledged that there was “no case expressly considering 6 whether both types of actions may be maintained simultaneously,” id. at *13, but granted 7 defendants’ motion to dismiss the declaratory judgment count, citing multiple reasons. First, 8 “[n]othing in the Hatch-Waxman Act appears to contemplate that a patentee, at the same time it 9 pursues the § 271(e) action created for it by the Act, would also pursue an ordinary § 271(a) patent 10 United States District Court For the Northern District of California 1 infringement action on the same patent and based on all the same facts.” Id. Second, there was no 11 immediate controversy because of the pending 30-month stay and the remaining time to trial. Id. 12 Third, a § 271(a) action would be “inconsistent with Congressional intent” because “Congress 13 evidently believed that a patentee in AstraZeneca’s position did not have a cause of action under 14 § 271(a).” Id. at *13. Fourth, the patentee’s two counts were duplicative because they would 15 provide identical relief. Id. Other district courts have reached similar conclusions about lack of 16 declaratory judgment jurisdiction over claims based only on filing of an ANDA. See Abbott Labs. 17 v. Zenith Labs., Inc., 934 F. Supp. 925, 938 (N.D. Ill. 1995) (finding no controversy under pre- 18 MedImmune standards due to uncertainty of FDA approval of generic); Eisai Co. v. Mut. Pharm. 19 Co., No. 06-3613, 2007 U.S. Dist. LEXIS 93585, at *62 (D.N.J. Dec. 20, 2007) (dismissing 20 declaratory judgment claims because “[a]t least until the ANDA is approved, however, the 21 controversy is not sufficiently immediate”). 22 Moreover, Judge Spero has already addressed this issue in connection with Takeda’s 23 asserted patents—a ruling that the parties omitted from their briefs. In the first wave of cases in 24 this district between Takeda and other generic manufacturers, the parties presented this issue in 25 post-trial briefing. See Takeda Pharm. Co. v. Handa Pharms., LLC, No. 11-CV-01609-JCS, 2013 26 U.S. Dist. LEXIS 187604, at *198-205 (N.D. Cal. Oct. 17, 2013). Takeda asserted a declaratory 27 judgment claim against defendant TWi for infringement of U.S. Patent No. 7,737,282 (the “’282 28 Patent”), which was not listed in the Orange Book, and TWi contested jurisdiction over this claim. 12 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 See id. at *143, 203. Judge Spero discussed some of the case law above, observing that this 2 question “is the subject of considerable disagreement among the lower courts and has not been 3 addressed in any precedential opinion by the Federal Circuit.” Id. at *200. Noting “the scant 4 record in this case as to the immediacy of the controversy,” Judge Spero declined jurisdiction as a 5 matter of discretion because Takeda’s declaratory judgment infringement claims were wholly 6 duplicative of its § 271(e)(2) infringement claims. Id. at *204-05. 4 Thus, a number of courts have 7 reached different conclusions about jurisdiction over declaratory judgment claims in similar 8 circumstances. 9 In addition to the foregoing case law, the parties also dispute whether the safe harbor United States District Court For the Northern District of California 10 provisions of § 271(e)(1) preclude jurisdiction over Count II. Mylan insists that Takeda cannot 11 establish an actual controversy based on Mylan’s activities for preparing its ANDA, see Mot. at 8, 12 while Takeda contends otherwise, see Opp’n at 14. Again, the case law contains conflicting 13 statements about whether a patentee can cite safe harbor activities as the basis for declaratory 14 judgment jurisdiction over claims regarding anticipated infringement. The Eisai court concluded 15 that “[a]ctivities protected by the safe harbor provision cannot serve as the basis for a declaratory 16 judgment of actual future infringement.” Eisai, 2007 WL 4556958, at *17. In an earlier 17 nonprecedential case, the Federal Circuit reached a similar conclusion, finding that activities under 18 § 271(e)(1) cannot support declaratory judgment claims, reasoning: “To permit Ventritex to be 19 protected from direct suit for infringement and yet allow the same activities to be subject to suit in 20 a declaratory judgment action would be nonsensical.” Intermedics, Inc. v. Ventritex Co., No. 92- 21 1076, 1993 WL 87405, at *4 (Fed. Cir. Feb. 22, 1993). However, more recently, the Federal 22 Circuit suggested a different conclusion: “the protected status of Novopharm’s activities leading to 23 its submissions to the FDA does not by itself prevent the district court from considering Glaxo’s 24 request for declaratory relief because such relief is directed to the time after the ANDA is 25 approved, when § 271(e)(1) no longer provides a shelter against infringement liability.” Glaxo, 26 Inc. v. Novopharm, Ltd., 110 F.3d 1562, 1571 (Fed. Cir. 1997). Notably, Glaxo dealt with a 27 4 28 The first-wave cases are currently on appeal to the Federal Circuit. However, at the hearing in this case, Takeda indicated that it does not plan to appeal Judge Spero’s decision to decline declaratory judgment jurisdiction over the ’282 Patent as to TWi. 13 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 “method of making” patent that the patentee could not assert under § 271(e)(2), such that 2 jurisdiction “was necessarily based upon the Declaratory Judgment Act.” Id. at 1570. 3 As Judge Spero noted, this issue “implicates important and unresolved questions as to the 4 interaction between the Declaratory Judgment Act and the Hatch-Waxman Act.” Takeda, 2013 5 U.S. Dist. LEXIS 187604, at *204. In light of the unsettled precedent above and Judge Spero’s 6 prior resolution of the same question, this Court does not decide whether an immediate and real 7 controversy exists. Rather, assuming an immediate and real controversy, the Court declines 8 jurisdiction for the reasons below. 9 B. Discretion United States District Court For the Northern District of California 10 Even if Takeda has alleged facts sufficient to establish a justiciable controversy, this Court 11 may decline declaratory judgment jurisdiction as a matter of discretion. See Micron Tech., Inc. v. 12 Mosaid Techs., Inc., 518 F.3d 897, 902 (Fed. Cir. 2008) (citing Wilton, 515 U.S. at 289). A district 13 court, when deciding whether to exercise its discretion, should determine whether hearing the case 14 would “serve the objectives for which the Declaratory Judgment Act was created.” Id. (citation 15 omitted). “The reason for giving this discretion to the district court is to enable the court to make a 16 reasoned judgment whether the investment of judicial time and resources in a declaratory action 17 will prove worthwhile in resolving a justiciable dispute.” Minn. Mining & Mfg. Co. v. Norton Co., 18 929 F.2d 670, 672 (Fed. Cir. 1991). “Situations justifying exercise of the court’s discretion to issue 19 a declaratory judgment include ‘(1) when the judgment will serve a useful purpose in clarifying 20 and settling the legal relations in issue, and (2) when it will terminate and afford relief from the 21 uncertainty, insecurity, and controversy giving rise to the proceeding.’” Id. at 672-73 (quoting E. 22 Borchard, Declaratory Judgments, 299 (2d ed. 1941)). 23 Here, the Court finds that exercising jurisdiction over Count II serves no useful purpose and 24 will not resolve any issues that adjudication of Count I will not also resolve. First, permitting 25 Takeda to proceed on Count II appears unnecessary in light of (if not contrary to) the Hatch- 26 Waxman Act. Congress enacted § 271(e)(2) to permit resolution of infringement disputes 27 stemming from the ANDA process. As the Supreme Court explained, “an act of infringement had 28 to be created for these ANDA . . . proceedings. That is what is achieved by § 271(e)(2)—the 14 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 creation of a highly artificial act of infringement that consists of submitting an ANDA . . . 2 containing the fourth type of certification that is in error as to whether commercial manufacture, 3 use, or sale of the new drug (none of which, of course, has actually occurred) violates the relevant 4 patent.” Eli Lilly, 496 U.S. at 678. This suggests that an infringement suit under the Declaratory 5 Judgment Act was not otherwise available to branded manufacturers or—at minimum—is now 6 unnecessary in light of § 271(e)(2). Judge Stark observed in Rosuvastatin that “to permit the 7 § 271(a) action to proceed seems to me to be inconsistent with Congressional intent. Congress 8 evidently believed that a patentee in AstraZeneca’s position did not have a cause of action under 9 § 271(a)—indeed, the lack of such an action was a motivating factor in creating the § 271(e)(2) United States District Court For the Northern District of California 10 action.” 2008 WL 5046424, at *13. Furthermore, § 271(e)(2) permits Takeda to pursue theories of 11 indirect infringement. See Allergan, Inc. v. Alcon Labs., Inc., 324 F.3d 1322, 1331 (Fed. Cir. 2003) 12 (“[S]ection 271(e)(2) may support an action for induced infringement.”). 13 Second, Count II will not “serve a useful purpose” or “terminate and afford relief from the 14 uncertainty, insecurity, and controversy” here because it is duplicative of Count I. Section 15 271(e)(4) provides relief for infringement under § 271(e)(2) and permits Takeda to obtain an order 16 delaying the effective date of the FDA’s approval of Mylan’s ANDA until after expiration of the 17 ’064 Patent, along with any appropriate injunctive or monetary relief. See Eli Lilly, 496 U.S. at 18 678 (“Quite obviously, the purpose of (e)(2) and (e)(4) is to enable the judicial adjudication upon 19 which the ANDA and paper NDA schemes depend.”). At the hearing, Takeda stated that Count II 20 offers “extra protection” by providing damages for any actual infringement by Mylan after the 21 FDA approves the ANDA and before final resolution of this litigation. However, § 271(e)(4)(C) 22 states that in connection with a § 271(e)(2) claim, a court may award “damages or other monetary 23 relief . . . if there has been commercial manufacture, use, offer to sell, or sale within the United 24 States . . . of an approved drug . . . .” The parties have not otherwise explained how Counts I and II 25 differ in any material respect for purposes of this litigation, as both involve resolution of whether 26 Mylan’s anticipated generic product will infringe the ’064 Patent upon FDA approval. See Glaxo, 27 110 F.3d at 1568 (infringement under § 271(e)(2) “focuse[s] on what is likely to be sold following 28 FDA approval”). In declining jurisdiction over a similar claim, Judge Spero found that “resolution 15 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 of Takeda’s infringement claim under § 271(a) and the Declaratory Judgment Act will not ‘serve a 2 useful purpose in clarifying and settling the legal relations in issue’ because the Court has already 3 found that it has jurisdiction over Takeda’s infringement claims under the Hatch-Waxman Act.” 4 Takeda, 2013 U.S. Dist. LEXIS 187604, at *204-05. Other district courts have also noted the 5 redundancy of such claims. See Rosuvastatin, 2008 WL 5046424, at *13 (“There is no relief 6 Plaintiffs could be awarded by prevailing on Count II that they would not also be able to obtain if 7 they prevail on Count I.”); Watson, 629 F. Supp. 2d at 351 n.19 (noting “it is not entirely clear to 8 the court why these counts have been included”). Indeed, at the hearing, Takeda stated that it is not 9 appealing Judge Spero’s jurisdictional ruling for the ’282 Patent because Takeda can obtain all United States District Court For the Northern District of California 10 necessary relief in that case from its § 271(e)(2) claim. 11 As noted above, Takeda indicated that it may need to pursue Count II if the Federal Circuit 12 decides that § 271(e)(2) claims do not apply to patents not listed in the Orange Book, including the 13 ’064 Patent. However, Takeda admitted that it could re-file Count II at a later time if necessary. 14 Thus, there is no apparent practical reason for Takeda to maintain Count II at this time. 15 For these reasons, the Court concludes that investment of judicial time and resources to 16 resolve Count II of Takeda’s complaint is unwarranted. Accordingly, Count II is DISMISSED 17 WITHOUT PREJUDICE. 18 The analysis above also applies to the declaratory judgment counts that Takeda has pleaded 19 against Mylan for the seven additional asserted patents in the two other consolidated cases. See 20 Case No. 13-CV-04001-LHK, Compl. ¶¶ 47-53 (Count III); Case No. 13-CV-04002-LHK, Compl. 21 ¶¶ 60-66 (Count VI). 5 At hearing, the Court gave the parties an opportunity to explain why those 22 counts differ from Count II in this case, for purposes of declaratory judgment jurisdiction. The 23 parties did not identify any reason why those counts should not also be dismissed, should the Court 24 dismiss Count II for the ’064 Patent. Accordingly, it is further ordered that Takeda’s Count III in 25 Case No. 13-CV-04001-LHK and Count VI in Case No. 13-CV-04002-LHK are DISMISSED 26 WITHOUT PREJUDICE. See Rosuvastatin, 2008 WL 5046424, at *13 n.14 (dismissing additional 27 28 5 Mylan filed counterclaims for judgments of invalidity and noninfringement of U.S. Patent No. 8,105,626. 16 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS 1 declaratory judgment claims under similar circumstances). 2 Finally, Mylan requests in the alternative that the Court terminate the 30-month stay of 3 FDA approval. Mylan’s theory is that the stay prevents an actual controversy, so declaratory 4 judgment jurisdiction cannot exist “unless Takeda wishes to waive the automatic stay.” Mot. at 2. 5 Because the Court grants Mylan’s partial motion to dismiss Count II, Mylan’s alternative request to 6 terminate the stay is DENIED as moot. 7 IV. 8 9 CONCLUSION For the foregoing reasons, the Court declines to exercise declaratory judgment jurisdiction over Count II. Mylan’s partial motion to dismiss is GRANTED, and Count II of Takeda’s United States District Court For the Northern District of California 10 complaint is DISMISSED WITHOUT PREJUDICE. Count III in Case No. 13-CV-04001-LHK 11 and Count VI in Case No. 13-CV-04002-LHK are also DISMISSED WITHOUT PREJUDICE. 12 IT IS SO ORDERED. 13 Dated: August 1, 2014 _________________________________ LUCY H. KOH United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 Case Nos.: 14-CV-00314-LHK; 13-CV-04001-LHK; 13-CV-04002-LHK ORDER GRANTING PARTIAL MOTION TO DISMISS

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