PURDUE PHARMACEUTICAL PRODUCTS L.P. et al v. ACTAVIS ELIZABETH LLC
Filing
152
OPINION fld. Signed by Judge Jose L. Linares on 4/9/14. (sr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
PURDUE PHARMACEUTICAL
PRODUCTS, L.P., et al.
Plaintiffs,
v.
Civil Action No. 12-5311 (JLL)
[Consolidated with Civil Action No. 13-5003)
ACTAVIS ELIZABETH, LLC, et al.
Defendants
OPINION
PURDUE PHARMACEUTICAL
PRODUCTS, L.P., et al.
Plaintiff,
V.
TWI PHARMACEUTICALS, INC.
Defendants.
LINARES, District Judge.
This patent infringement action stems from various generic drug manuf
acturers’ attempts
to obtain Food and Drug Administration (“FDA”) approval to market
a generic version of
Plaintiffs/Counterclaim Defendants Purdue Pharmaceutical Products,
L.P. (“Purdue
Pharmaceutical”), Purdue Pharma, L.P. (“Purdue Pharma”), and Transc
ept Pharmaceuticals, Inc.
(“Transcept”) (collectively “Plaintiffs”)’s Intermezzo®, a drug used
to treat middle-of-the-night
insomnia.
1
Plaintiffs have moved to dismiss Defendant/Counterclaim Plaintiff TWI Pharmaceutic
als,
Inc. (“TWi”)’s counterclaims seeking declaratory judgment of non-infringement of
two patents
covering Intermezzo® pursuant to Federal Rule of Civil Procedure 12(b)(1). TWi
has opposed
Plaintiffs’ motion, and has cross-moved for judgment on the pleadings pursuant
to Federal Rule
of Civil Procedure 12(c). The Court has considered the submissions made in suppor
t of, and in
opposition to Plaintiffs and TWi’s respective motions, and decides this matter withou
1
t oral
argument pursuant to Federal Rule of Civil Procedure 78. For the reasons set forth
below, both
Plaintiffs’ motion and TWi’s cross-motion are denied.
I.
BACKGROUND
A.
Statutory Framework
In enacting the Drug Price Competition and Patent Restoration Act of 1984, Pub.
L. No.
98-417,98 Stat. 1585 (the “Hatch-Waxman Act”), “Congress struck a balance
between two
competing policy interests: (1) inducing pioneering research and development
of new drugs and
(2) enabling competitors to bring low-cost, generic copies of those drugs to market
.” Andrx
Pharms., Inc. v. Biovail Corp., 276 F.3d 1368, 1371 (Fed. Cir. 2002). “Unde
r the Hatch
Waxman framework, a brand-name company seeking FDA approval of a new
drug must file a
new drug application (“NDA”) with the.
.
.
[FDA].” Dey Pharma, LP v. Sunovision Pharms.,
Inc., 677 F.3d 1158, 1159 (Fed. Cir. 2012). The NDA must include “inform
ation regarding the
new drug’s safety and efficacy obtained from clinical trials.” Janssen Pharm
aceutica, N. V. v.
Apotex, Inc., 540 F.3d 1353, 1355 (Fed. Cir. 2008). The NDA must also include
“information
The Court has considered all of the parties’ submissions in spite of the fact
that Plaintiff’s brief in opposition to
TWi’s cross-motion (Docket Entry No. 139) and TWi’s reply brief in support
of its cross-motion (Docket Entry No.
140) are not in compliance either Magistrate Judge Joseph A. Dickson’s scheduling
order entered on March 6, 2014
or with the Local Civil Rule 7.1(h). All counsel are reminded that it is critical
that they strictly comply with this
Court’s orders and with the Local Civil and Patent Rules.
2
about patents ‘with respect to which a claim of patent-infringement could reasonably be
asserted.” Dey, 677 F.3d at 1159 (quoting 21 U.S.C.
§ 355(b)(l)). The FDA publishes the
patent information in the Approved Drug Products with Therapeutic Equivalence Evaluations,
a
publication that is also known as the “Orange Book.” 21 U.S.C.
§ 355(b)(1); see also Andrx, 276
F.3d at 1371. Once the FDA approves a new drug, that drug becomes known as a “listed drug.”
21 U.S.C.
§ 355(j)(2)(A)(i).
“To encourage the development of generic versions of listed drugs, the [Hatch-Waxman]
Act created an expedited approval process known as an Abbreviated New Drug Application
(ANDA).” Janssen, 540 F.3d at 1355-56 (citing 21 U.S.C.
§
355(j)). Filing an ANDA obviates
the need for generic drug companies to conduct clinical trials to prove the safety and efficacy
of
generic versions of listed drugs; under the Hatch-Waxman Act, generic drug companies may
rely
on the research of the NDA filer so long as they demonstrate in the ANDA that its generic
product is bioequivalent to the NDA drug. See 21 U.S.C.
§ 355(j)(2)(A), (j)(8)(B). “The ANDA
applicant must also include a certification to each patent listed in the Orange Book coverin
g the
listed drug that either (1) no patent information has been filed with the FDA; (II) the patent
has
expired; (III) the patent will expire on a particular date and approval of the ANDA should
be
deferred until expiration; or (IV) in the opinion of the ANDA applicant, the patent is invalid
or
will not be infringed by the manufacture, use, or sale of the generic drug.” Jansse
n, 540 F.3d at
1356 (citing 21 U.S.C.
§ 355(j)(2)(A)(vii)).
The time within which the FDA will act on a generic drug company’s request for
approval depends on the type of certification included in the ANDA. “If [as in this
casej an
ANDA contains only paragraph IV certifications, the ANDA may be approved unless
the NDA
filer sues the ANDA filer for patent infringement within 45 days” of receiving notice
of the
3
ANDA filing. Dey, 677 F.3d at 1159 (citing 21 U.S.C.
2
§ 355(j)(5)(B)(iii)). The first drug
company that files an ANDA containing a paragraph IV certification is entitled to a 180-da
y
period of generic marketing exclusivity before the FDA may approve any later paragr
aph IV
ANDA based on the same NDA. See 21 U.S.C.
§ 355(j)(5)(B)(iv)).
Before Congress amended the Hatch-Waxman Act in 2003, the first ANDA filer’s 180day exclusivity period was triggered by either its “first commercial marketing of the [gener
ic)
drug,” or a judicial decision “holding the patent which is the subject of the certification to be
invalid or not infringed.” 21 U.S.C.
§ 355(j)(5)(B)(iv) (2000). In 2003, however, Congress
enacted the Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(“MMA”), Pub. L. No. 108-173,
§ 1102, 117 Stat. 2066, 2457-60, which amended the Hatch
Waxman Act’s provisions governing a first ANDA filer’s exclusivity period. Under the
MMA,
only the first ANDA filer’s commercial marketing may trigger the 180-day exclusivity
period.
See 21 U.S.C.
§
355(j)(5)(B)(iv). But the first ANDA-filer’s 180-day exclusivity period can be
forfeited under certain circumstances. For instance, if a later ANDA-filer obtains a final
judgment that each of the listed drug’s Orange Book patents are invalid or not infring
ed, the first
ANDA filer must market its product within 75 days of the later ANDA filer’s judgm
ent, or
forfeit its period of exclusivity. See 21 U.S.C.
B.
§ 355(j)(5)(D)(i)(I).
Factual Background
3
Purdue Pharmaceutical is the current holder of NDA No. 022328, for sublingual
tablets
containing 1.75 mg and 3.5 mg of zolpidem tartrate, which the FDA approved on Novem
ber 23,
2011 to treat middle-of-the-night insomnia.
2
(Purdue’s Compl. against TWi (hereinafter,
Under the Hatch-Waxman Act, the filing of an ANDA is an act of infringement
. See 35 U.S.C.
§ 271(e)(2).
The Court sets forth only those facts which are specifically relevant to deciding the
pending motions.
4
“Compi.”) at ¶ 16.) Purdue Pharma markets the approved drug under the tradename Intennezzo®
.
(Id.)
There are four patents covering Intermezzo® which are listed in the Orange Book: (1) U.s.
Patent No. 7,658,945 (the “945 Patent”) entitled “Compositions for delivering hypnotic agents
across the oral mucosa and methods of use thereof; (2) U.S. Patent No. 7,682,628 (the “628
Patent”) entitled “Compositions for delivering hypnotic agents across the oral mucosa and metho
ds
of use thereof (3) U.S. Patent No. 8,242,131 (the “131 Patent”) entitled “Methods of Treatin
g
Middle-of-the-Night Insomnia; and (4) U.S. Patent No. 8,252,809 (the “809 Patent”) entitle
d
“Compositions for Treating Insomnia.” (TWi’ s Counterclaim (“Counterclaim”) at
¶J 1, 8-13.)
Transcept owns these four patents. (Counterclaim at ¶ 13.) Purdue Pharmaceuticals and Purdue
Pharma are the exclusive licensees for these patents. (See Compl. at 18.)
¶
On or before July 8, 2013, TWi submitted an ANDA with paragraph IV certifications to
the FDA for 1.75 mg and 3.5 mg zolpidem tartrate sublingual tablets, purportedly bioequivalent
to
Intermezzo®. (Compi. at ¶ 19.) By the time TWi submitted this ANDA to the FDA, at least
four
other generic drug companies had already submitted ANDAs seeking FDA approval
to market
generic versions of Intermezzo®. (See, e.g., Plaintiffs’ Consolidated Complaint asserti
ng patent
infringement claims against various defendants, Civil Action No. 12-5311, Docket Entry
No. 36.)
On August 20, 2013, Plaintiffs filed a two-count complaint seeking a declaratory judgm
ent
that TWi has: (1) infringed the ‘131 Patent, and (2) infringed the ‘809 Patent. (Civil
Action No.
13-5003, Docket Entry No. 1.) Notably, Plaintiffs did not assert any claims involv
ing the ‘945 or
‘628 patents against TWi. On October 17, 2013, TWi filed a Counterclaim seekin
g declaratory
judgment that all four patents listed in the Orange Book listing for Intermezzo® are
not infringed.
(See Counterclaim at ¶J 19-36.)
5
On January 24, 2014, Plaintiffs tendered a covenant “not to sue TWi under any patent claim
of’ either the ‘945 or the ‘628 patents in connection with TWi’s ANDA seeking approval to
manufacture, use and sell a generic version of Intermezzo®. (See Civil Action No. 12-5311,
Docket Entry No. 1 17-1.) Plaintiffs’ covenant does not contain any language suggesting either
that the ‘945 and ‘628 patents are invalid, or that TWi has not infringed these patents. In fact, the
covenant specifically states that it “does not.
.
.
constitute an admission by any Plaintiff as to the
scope or interpretation of, the infringement of, the validity of, or the enforceability of,
patent
(including but not limited to [the ‘945 and ‘628 patents]).” (Id.) (emphasis added).
II.
LEGAL STANDARD
A.
Motion to Dismiss for Lack of Subject Matter Jurisdiction
It has long been a well settled “fundamental precept that federal courts are courts of
limited jurisdiction,’ empowered to act only within the bounds of Article III of the United
States
Constitution.” Highway Equip. Co. v. FECO, Ltd., 469 F.3d 1027, 1032 (Fed. Cir. 2006) (quotin
g
Owen Equip. & Erection C’o. v. Kroger, 437 U.S. 365, 374 (1978)). Under Article III of the
United
States Constitution, federal courts may adjudicate only cases or controversies. U.S. Const.
Art. III.
The Declaratory Judgment Act provides that, “[i]n 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,
or not further relief is or could be sought.” 28 U.S.C.
whether
§ 2201(a). As the Federal Circuit has
recognized, “the Declaratory Judgment Act does not provide an independent basis
of subject
matter jurisdiction.” Matthews Int’l Corp.
V.
Biosafe Eng ‘g, LLC, 695 F.3d 1322, 1327-28 (Fed.
Cir. 2012). Rather, “[i]ts remedy may lie only if the court has jurisdiction from some
other source
.”
Cat Tech, LLC v. TubeMaster, Inc., 528 F.3d 871, 879 (Fed. Cir. 2008).
“The party seeking to
6
establish declaratory jurisdiction bears the burden of demonstrating that an Article III case or
controversy exists at the time the claim for declaratory relief is filed.” Matthews, 695 F.3d at 1328.
“In the Hatch-Waxman context, Congress extended declaratory judgment jurisdiction to
ANDA paragraph IV disputes, 21 U.S.C.
§ 355(j)(5)(C), and has directed federal courts to exercise
jurisdiction over these disputes ‘to the extent consistent with the constitution,’ 35 U.S.C.
271(e)(5).”
Dey, 677 F.3d at 1162.
§
Federal courts are empowered to exercise declaratory
judgment jurisdiction when “the facts alleged, under all the circumstances, show that there
is a
substantial controversy, between parties having adverse legal interests, of sufficient immed
iacy
and reality to warrant the issuance of a declaratory judgment.” Id. (quoting Medlmmune, Inc.
v.
Genentech, Inc., 549 U.S. 118, 127 (2007)). In other words, a declaratory judgment action
is
“justiciable under Article III only where (1) the plaintiff has standing, (2) the issues presen
ted are
ripe for judicial review, and (3) the case is not rendered moot at any stage of the litigati
on.” Caraco
Pharm. Labs., Ltd. v. Forest Labs., Ltd., 527 F.3d 1278, 1291 (Fed. Cir. 2008) (intern
al citations
omitted).
B.
Motion for Judgment on the Pleadings
Federal Rule of Civil Procedure 12(c) provides that “[a]fter the pleadings are closed
—but
early enough not to delay trial—a party may move for judgment on the pleadings.”
Under Rule
12(c), a court must view the facts in the pleadings and any inferences drawn therefr
om in the light
most favorable to the nonmoving party. Sikirica v. Nationwide Ins. C’o., 416 F.3d
214, 220 (3d
Cir. 2005).
“Judgment will not be granted unless the movant clearly establishes there are
no
material issues of fact, and he is entitled to judgment as a matter of law.” Id.
III.
DISCUSSION
A. Plaintiffs’ Motion to Dismiss
7
Plaintiffs have moved to dismiss TWi’ s counterclaims relating to the two patents for which
they have given a covenant not to sue (i.e., the ‘945 and ‘628 patents). In support of their motion
to dismiss, Plaintiffs make three arguments: (1) “[n]o Article III case or controversy exists” over
the counterclaims relating to the ‘945 or ‘628 patents because the “covenant not to sue render
ed
moot any such controversy,” (P1. Br. at 4); (2) “[n]o Article III case or controversy exists under
the Hatch-Waxman Act because the Court cannot redress TWi’s alleged injury,” (P1. Br. at 4); and
(3) “[n]o Article III case or controversy exists because the dispute is not ripe in light of TWi’s
inability to obtain tentative approval [from the FDA],” (P1. Br. at 4-7). For the reasons that follow
,
Plaintiffs’ arguments do not persuade the Court that it would be appropriate to dismis TWi’s
s
counterclaims relating to the ‘945 and ‘628 patents.
1. Plaintiffs’ Covenant not to Sue does not Render Moot TWi’s Counterclaims relating to
the ‘945 Patent and the ‘628 Patent
‘The mootness doctrine requires that the requisite personal stake that is required for a
party to have standing at the outset of an action must continue to exist throughout all stages
of the
action.” Caraco, 527 F,3d at 1296. “[A] case is moot when the issues presented are
no longer
‘live’ or the parties lack a legally cognizable interest in the outcome” Powell v. McCor
mack, 395
U.S. 486, 496 (1969). In declaratory judgment actions, “the question in each case is whethe
r the
facts alleged, under all the circumstances, show that there is a substantial controversy,
between the
parties having adverse legal interests, of sufficient immediacy and reality to warran
t the issuance
of declaratory judgment.” Medlmmune, 549 U.S. at 771.
Plaintiffs maintain that because their “covenant eliminated all risk that TWi would
face
infringement liability for its ANDA product under the ‘945 and ‘628 patents
,” there is no
justiciable case or controversy for this Court to resolve. (P1. Br. at 4.) Plainti
ffs’ argument is
premised on the assumption that without the actual threat of an infringement lawsui
t concerning
8
the ‘945 and ‘628 patents, TWi has no cognizable legal interest in seeking judicial review
of
whether it has infringed these patents. But this argument fails to account for the reality that as
a
later ANDA filer, the FDA cannot approve TWi’s ANDA to market a generic version
of
Intermezzo® until the first filer’s 180-day exclusivity period is either forfeited or runs out. And
one of the ways that TWi may trigger the first ANDA filer’s exclusivity period so as to precipi
tate
its own entry into market is by obtaining a final favorable judgment on all Orange Book listed
patents for Intermezzo®, including the ‘945 and ‘628 patents. See 21 U.S.C.
§ 355(j)(5)(D)(i)(I).
There 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. Dey, for example, involved a second ANDA filer’s declaratory judgment action
against a patent holder designed to trigger the first ANDA filer’s exclusivity period. 677 F.3d
at
1161. The patent holder had sued the second ANDA filer for infringement of two out
of three
patents listed in the Orange Book for the drug at issue. Id. The second ANDA filer then brough
t
a declaratory judgment action seeking a declaration that the third patent was either invalid
or not
infringed. Id. In response, the patent holder provided a covenant not to sue on the third
patent,
and filed a motion to dismiss the second ANDA filer’s declaratory judgment claim
for lack of
subject matter jurisdiction. Id.
The Federal Circuit affirmed the district court’s denial of the patent holder’s motion
to
dismiss, rejecting the notion that the covenant not to sue mooted the second
ANDA filer’s
declaratory judgment action. Id. at 1164. The Federal Circuit also held that the
second ANDA
filer’s claim was justiciable because a favorable judgment on this claim would
“eliminate the
potential to exclude [the second ANDA filer] from the market,” as such a judgm
ent could serve to
trigger the first ANDA filer’s exclusivity period so long as the later ANDA
filer also obtained a
9
favorable judgment on the other two patents at issue in the action brought by the patent holder
.
See id. at 1164 (emphasis added). Specifically, the court held that “eliminating one barrier
[to
market entry] is sufficient for declaratory jurisdiction, so long as litigation is also pendin
g that
could eliminate the other barriers.” Id.
4
Similarly, in Caraco the Federal Circuit rejected the argument that declaratory judgm
ent
actions concerning patents over which the patent holder has granted a covenant
not to sue
categorically are non-justiciable. Caraco involved an NDA filer which sued a second
ANDA filer
for infringement of one of two patents listed in the Orange Book for the drug at issue.
527 F.3d at
1288. The second ANDA filer then brought a declaratory judgment action over the patent
on
which the NDA filer decided not to sue. Id. In response, the NDA filer gave the second ANDA
filer a covenant not to sue covering the patent that was the subject of the second ANDA
filer’s
declaratory judgment action. Id. at 1289. The Federal Circuit held that the second ANDA
filer’s
action was justiciable in spite of the covenant not to sue because the NDA filer’s failure
to seek
judicial resolution of one of the Orange Book patents could “potentially exclude non-in
fringing
generic drugs from the market” by foreclosing the second ANDA filer’s ability to
trigger the first
ANDA filer’s exclusivity period. See id. at 1292. The court also held that the second
ANDA
filer’s declaratoryjudgment action was not mooted by the NDA filer’s covenant not
to sue because
resolution of “the dispute as to infringement or invalidity of the relevant Orange
-Book-listed
patents” could potentially trigger the first ANDA filer’s exclusivity period, and
said dispute thus
constituted
“
a substantial controversy, between parties having adverse legal interests, of suffici
ent
immediacy and reality to warrant the issuance of declaratory judgment.”
See id. (quoting
Medlmmune, 549 U.S. at 127).
In Dey, there was litigation pending that “could eliminate the other barriers,”
as all
Orange Book were the subject of litigation. See generally 677 F.3d 1158.
10
three patents listed in the
Indeed, 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 infring
ed. Like
the later ANDA filers’ claims in Dey and Caraco, TWi’s counterclaims could potentially
trigger
the first ANDA filer’s 180-day exclusivity period. This would have the effect of expedi
ting TWi’s
ability to market its generic version of Intermezzo®. Accordingly, this Court holds
that TWi’s
counterclaims present a substantial controversy appropriate for judicial review.
2. TWi’s Injury is Sufficiently Redressable
TWi must establish that it has standing to pursue its counterclaims concerning the
‘945 and
‘628 patents for these counterclaims to be justiciable. The “irreducible constitutiona
l minimum of
standing contains three requirements:” (1) a concrete injury that is (2) “fairly traceab
le” to the
complained of conduct which is (3) likely to be redressed should the court grant
the requested
relief. Steel Co. v. Citizensfor a Better Env ‘t, 523 U.S. 83, 102-03 (1998). Accord
ing to Plaintiffs,
TWi fails to satisfy the third of the standing requirements. Specifically, Plainti
ffs argue 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 TWi
as
has not received
tentative approval from the FDA to market its generic product. (See P1. Br. at
4-5; P1. Reply Br. at
2-3.)
In relevant part, the Hatch-Waxman Act provides that a first ANDA filer will
forfeit its
180-day exclusivity period if it fails to market its generic within 75 days
from which “any other
applicant (which other applicant has received tentative approval)” obtains
a “final judgment
.
that each of the patents with respect to which the first [ANDA] applicant
submitted and lawfully
11
maintained a certification qualifying the first applicant for the 180-day exclusivity period
invalid or not infringed.” 21 U.S.C.
.
.
.
is
§ 355(j)(5)(D)(i)(I)(AA)-(BB). Plaintiffs maintain that
because “an applicant in TWi’s position cannot trigger the first applicant’s exclus
ivity period
through a declaratory judgment action unless it has first received tentative approv
al,” this Court
cannot redress TWi’s purported injury. (P1. Reply Br. at 2.) The Court is not persua
ded.
Although TWi requires tentative approval from the FDA before it can trigger the
first
ANDA filer’s 180-day exclusivity period, the statute does not explicitly require
TWi to obtain
tentative approval before seeking declaratory judgment of non-infringement with
respect to y of
the Orange Book patents for Intermezzo®. 21 U.S.C.
§ 355j)(5)(D)(i)(I). More importantly, to
require TWi to obtain tentative approval as a condition precedent to asserting jurisdiction
over its
counterclaims would undermine the Hatch-Waxman Act’s policy of encouraging
“early resolution
of patent disputes.” See Caraco, 527 F.3d at 1285. Although the Caraco court
interpreted a
version of the Hatch-Waxman Act that predates the MMA amendments, its observ
ations regarding
the general policy underlying the Hatch-Waxman Act are squarely applicable
to this case. See,
e.g., Seattle Children’s Hospital v. Akorn, Inc., No. 10-5118, 2011 U.S. Dist. LEXIS
145998, at
*21 (N.D, Iii. Dec. 20, 2011) (observing that “Caraco specifi
cally addressed the concept that a
generic applicant be permitted to seek prompt resolution of.
amended versions of the [Hatch-Waxman] Act.”).
.
.
patent issues under the original and
The Caraco court noted that “Congress
explained the need for broad federal jurisdiction over [civil actions to obtain
patent certainty] as
follows:
[W]hen generic applicants are blocked by a first generic applicant’s 180day exclusivity, the brand drug company could choose not to sue those other
generic applicants so as to delay a final court decision that could trigger the
‘failure to market’ provision and force the first generic to market.
12
In.
these
circumstances, generic applicants must be able to seek a
resolution of disputes involving all patents listed in the Orange Book with
respect to the drug immediately upon the expiration of the 45-day period.
We believe there can be a case or controversy sufficient for courts to hear
these cases merely because the patents at issue have been listed in the FDA
Orange Book, and because the statutory scheme of the Hatch-Waxman Act
relies on early resolution of patent disputes. The declaratory judgment
provisions of this bill are intended to encourage such early resolution of
patent disputes.
.
.
.
.
.
Caraco, 527 F.3d at 1285 (quoting 149 Cong. Rec. S15885 (Nov. 25, 2003)).
Congress’s intent in encouraging early resolution of a later ANDA filer’s declara
tory
judgment claims is also reflected in a letter from the Federal Trade Commission
that, in relevant
part, reads:
Without the right to seek declaratory judgment, a subsequent generic
applicant that develops a clearly non-infringing product cannot trigger the
first generic applicant’s exclusivity because the subsequent generic
applicant will not be sued for patent infringement by the brand-name
company. If the brand-name company and the first generic applicant agree
that the generic will not begin commercial marketing, then the 180-day
exclusivity becomes an absolute bar to any general entrant. Moreover,
speedier resolution of patent infringement suits will redound to the benefit
of consumers by resolving any possible uncertainty that prevents a generic
applicant from marketing its products. It also will allow for the
simultaneous running of the periods for FDA approval and for the
resolutions olpatent infringement issues.
149 Cong. Rec. S15886.
Indeed, at least one other district court has rejected the argument that a later
ANDA filer
must obtain tentative approval from the FDA before declaratory judgment
claims regarding patents
over which the patent holder has granted a covenant not to sue are justicia
ble. See A/corn, Inc.,
2011 U.S. Dist. LEXIS 145998, at *25. Tn A/corn, an NDA filer moved
to dismiss its infringement
action against a later ANDA filer for lack of subject matter jurisdi
ction. Id. at *8. Specifically,
the NDA filer argued that because it gave the later ANDA filer a covena
nt not to sue with respect
to the patent at issue, its claim was no longer justiciable. Id. at *8. In respon
se, the later ANDA
13
filer maintained that without a final judgment of non-infringement in its favor, it would not be able
“to bring about the exhaustion or forfeiture” of the first ANDA filer’s 180-day exclusivity period.
Id. at *13.
Among other things, the NDA filer in Akorn argued that any injury arising from the later
ANDA filer’s inability to trigger the first ANDA filer’s exclusivity period could not be redressed
by a favorable judgment because the later ANDA filer had “yet to receive ‘tentative approval’ of
its ANDA and there [was] no telling if or when the FDA may approve [the later ANDA filer’s]
ANDA.” Id. at *25. Judge Robert M. Dow, of the Northern District of Illinois, rejecte this
d
argument on the basis that the “2003 amendments [to 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.” Id. Judge Dow reasoned that if the NDA filer
had not sued within 45 days of receiving notice of the ANDA filing, the later ANDA filer could
have filed a declaratory judgment action against the NDA filer even if it “had not received tentative
approval for its ANDA.
21 U.S.C.
.
.
and even if [the NDA filer] had not threatened suit.” Id. at *27 (citing
§ 355(j)(5)(C)(i)(ll) and 35 U.S.C. § 271(e)(5)). Accordingly, Judge Dow held that
“[n]otwithstanding [the NDA filer’s] unilateral covenant not to sue, the case or contro
versy
between the parties
Orange Book.
.
.
.
.
.
endures because of the continued listing of [the patent at issue] in the
which bears on [the later ANDA filer’s] efforts to obtain FDA approval to market
a generic version of [its drug].” Id. at *28.
As far as this Court is aware, the Federal Circuit has not specifically addressed whethe
ra
later ANDA filer must have tentative approval prior to bringing a declaratory judgm
ent claim
concerning patents over which an NDA filer or patent holder has granted a covenant
not to sue.
The Court is, nevertheless, mindful that in Caraco the Federal Circuit held that
“even after a
14
covenant not to sue has been granted, the dispute as to infringement or invalidity
of the relevant
Orange-Book-listed patents” is justiciable when a judgment in favor of a later
ANDA filer may
trigger the first ANDA filer’s 180-day exclusivity period. A faithful application
of this principle,
and of Judge Dow’s persuasive reasoning in Akorn, compels this Court to hold
that TWi has
standing to pursue its counterclaims, particularly in light of the Hatch-Waxm
an Act’s policy
favoring early resolution of patent disputes.
3. TWi s Counterclaims are Ripe for Judicial Review
‘
“Whether an action is ‘ripe’ requires an evaluation of ‘both the fitness of the issues
for
judicial decision and the hardship to the parties of withholding court consideration
.” Caraco, 527
F.3d at 1294-95. “[A]n action is fit for judicial review where further factual develo
pment would
not ‘significantly advance [a court’s] ability to deal with the legal issues presen
ted.” Id. (quoting
Nat ‘1 Park Hospitality Ass ‘ii v. Dep ‘t ofInterior, 538 U.S. 803. 812 (2003)
). “[Wjithholding court
consideration of an action causes hardship to the plaintiff where the complained-o
f conduct has an
‘immediate and substantial impact’ on the plaintiff.” Id. (quoting Gardner v.
Toilet Goods Ass ‘n,
387 U.S. 167, 171 (1967)).
Here, TWi ‘s counterclaims satisfy the ripeness requirements.
Because TWi “has a
complete generic drug product that has been submitted to the FDA for approv
al,” additional factual
development would not help this Court determine whether TWi’s generic
drug “infringes the
claims of’ Plaintiffs’ ‘945 and ‘628 patents. See Caraco, 527 F.3d at 1295
(holding that later
ANDA filer’s claims satisfied the fitness prong of the ripeness test becaus
e the later ANDA filer’s
“generic drug product.
.
.
[had] been submitted to the FDA for approval, and no additional facts
[were] required to determine whether this drug infringe[d] the claims of’
the NDA filer’s patent).
Moreover, as discussed above, delaying judicial consideration of TWi’s
counterclaim
s could result
15
in depriving TWi of the ability to trigger the first ANDA filer’s 180-day exclus
ivity period, thus
causing TWi to lose profits during the period of time it is excluded from the market
. See 21 U.S.C.
§ 355(j)(5)(D). Under such circumstances, delay in resolving TWi’s counterclaims will have an
immediate and substantial impact on TWi. See Caraco, 527 F.3d at 1295 (noting
that if the later
ANDA filer’s drug does not infringe on the NDA filer’s patent, delay in judicia
l resolut
ion of later
ANDA filer’s declaratory judgment action “creates a potential for lost profits
” which amounts to
“immediate and substantial impact”). Accordingly, this Court holds that TWi’s
counterclaims are
ripe for judicial review.
In light of the Court’s conclusion that TWi’s counterclaims: (1) are not moot, (2)
seek relief
that will sufficiently redress an injury so as to confer standing, and (3) are ripe
for judicial review,
Plaintiffs’ motion to dismiss TWi’s counterclaims is denied.
5
B. TWi’s Motion for Judgment on the Pleadings
TWi moves for judgment on the pleadings as to its counterclaims on the ‘628
and ‘945
patents on the grounds that “there are no disputed facts” and “there is nothin
g to resolve.” (See
Def Oppn. Br. at 6.) Tn their brief in opposition to TWi’s cross-motion,
Plaintiffs request leave to
amend their answer to TWi’s counterclaims should this Court hold that
TWi’s counterclaims are
justiciable. (See P1. Oppn. Br. at 4-5.)
Under Federal Rule of Civil Procedure 1 5(a)(2), courts “should freely give
leave [to amend
pleadings] when justice so requires.” “This approach ensures that
a particular claim will be
In the alternative, Plaintiffs argue that this Court should exercise its discret
ion to decline jurisdiction under the
Declaratory Judgment Act. (P1. Br. at 7.) It is well settled that “even
if a case or controversy exists, the trial court
has significant discretion in determining whether or not to exercise
declaratory judgment jurisdiction.” Matthews,
695 F.3d at 1328 n.3. “The use of discretion is not plenary, howev for
er,
there must be well-founded reasons for
declining to entertain a declaratory judgment action.” Elecs for Imagin
g, Inc. v. Coyle, 394 F.3d 1341, 1345 (Fed.
Cir. 2005) (citations and internal quotation marks omitted). As discuss
ed above, declining jurisdiction over TWi’s
counterclaims would undermine the Hatch-Waxman Act’s policy of
early resolution of patent disputes. Thus, the
Court will not exercise its discretion to decline jurisdiction over TWi’s
counterclaims concerning the ‘945 and ‘628
patents.
16
decided on the merits rather than on technicalities.” Dole v. Arco Chemical Co., 921 F.2d 484,
487 (3d Cir. 1990). “Nonetheless, leave to amend may be denied if the court finds that there has
been undue delay that would prejudice the nonmoving party, that the moving party has acted in
bad faith, or that the amendment would be futile.” Kemin Foods, L. C. v. Pigmentos Vegetales Del
Centro S.A. Dc. C. V., 464 F.3d 1339, 1353 (Fed. Cir. 2006). Whether to grant any party leave
to
amend is a decision left to the “sound discretion of the District Court.” E.g., Winer Family
Trust
v. Queen, 503 F.3d 319, 331 (3d Cir. 2007).
Here, there is nothing to suggest that Plaintiffs have caused undue delay in seeking leave
to amend their answer, or that TWi would be unduly prejudiced by granting Plaintiff’s such
leave.
Accordingly, the Court will exercise its discretion to allow Plaintiffs to amend their answer
to
TWi’s counterclaims. As the Court will allow Plaintiffs to amend their answer, it will
deny TWi’s
cross-motion for judgment on the pleadings as moot. TWi may renew its motion for judgm
ent on
the pleadings after Plaintiffs file their amended answer should it believe that it is
entitled to such
relief.
IV.
CONCLUSION
For the foregoing reasons, Plaintiffs’ motion to dismiss TWi’s counterclaims on the
‘945
and ‘628 patents is denied, as is TWi’s cross-motion for judgment on the pleadings.
TWi may file
an amended answer to TWi’s counterclaims within fourteen days from the date
of entry of the
Order accompanying this Opinion. Additionally, to the extent they have not
already done so,
Plaintiffs and TWi must abide by Magistrate Judge Joseph A. Dickson’s Order
of March 6, 2014
requiring them to “confer and identify any disputed claim terms not already
briefed.
.
.
requiring
supplemental briefing by Plaintiffs and TWi in advance of the Markman hearing
scheduled.. for
.
17
May 8, 2014.” (See Am. Scheduling Order of Mar. 6, 2014 at 2, Docket Entry No. 132.)6
Under
¶
no circumstances will this Court grant any requests to adjourn the Markman hearing schedu
led for
May 8, 2014.
An appropriate Order follows.
Dated:
of April, 2014.
JO
L. LINARES
U. DISTRICT JUDGE
.
6
The Court is mindful that TWi has requested that Plaintiffs provide a list of dispute
d claim tenns with respect to
the ‘628 and ‘945 patents. The Court fails to see how the scheduling order
that Judge Dickson entered on March 6,
2014 does not address this request. For the avoidance of confusion. Plainti
ff and TWi shall serve on each other a
complete list of claim terms which each party contends this Court must constru
e in advance of the Markman hearing
scheduled on May 8, 2014, and strictly comply with all deadlines set forth
in Judge Dickson’s March 6, 2014 Order.
18
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