ASTRAZENECA AB et al v. DR. REDDY'S LABORATORIES INC. et al

Filing 237

OPINION filed (11-6348). Signed by Judge Joel A. Pisano on 6/9/2014. (eaj)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

____________________________________
:
ASTRAZENECA AB, et al.
:
Plaintiffs,

Civil Action No. 11-2317 (JAP)
:

v.
:

Consolidated for discovery purposes
with: Civil Action Nos. 11-6348,
11-4275,13-0091

:
ANCHEN PHARMACEUTICALS INC.,
:
OPINION
Defendant.
:
____________________________________

PISANO, District Judge
In this Hatch-Waxman patent infringement action, Defendant Anchen Pharmaceuticals
Inc. (“Defendant”) moves under Federal Rule of Civil Procedure 12(b)(1) to dismiss the
complaint filed by plaintiffs AstraZeneca AB, AstraZeneca LP, KBI-E Inc., and Pozen Inc.
(collectively, “Plaintiffs”) for lack of subject matter jurisdiction. Specifically, Defendant
asserts that Plaintiffs’ claims have been rendered moot, and that the matter should be
dismissed without prejudice. The Court decides the matter without oral argument pursuant to
Federal Rule of Civil Procedure 78 and Local Civil Rule 78.1. For the reasons below,
Defendant’s motion is granted.
I. BACKGROUND
In September of 2011, Defendant provided notice to Plaintiffs that it had filed
Abbreviated New Drug Application (“ANDA”) No. 202767 with the United States Food and

Drug Administration (“FDA”) under 21 U.S.C. § 355(j) to obtain FDA approval to
commercially manufacture, use, import, offer for sale, and sell in the United States certain
dosages of naproxen and esomeprazole magnesium delayed release tablets, which are generic
versions of Plaintiffs’ drug product Vimovo. The Orange Book (the FDA’s manual of
Approved Drug Products with Therapeutic Equivalence Evaluations) lists seven patents as
covering Vimovo. In its ANDA filing, Anchen included certifications under 21 U.S.C. §
355(j)(2)(A)(vii)(IV) (i.e., “Paragraph IV” certifications) as to five of these patents: U.S.
Patent Nos. 5,900,424 (“the ’424 patent”); 6,369,085 (“the ’085 patent”); 6,926,907 (“the
’907 patent”); 7,411,070 (“the ’070 patent”); and 7,745,466 (“the ’466 patent”). Defendant
filed certifications under § 355(j)(2)(A)(vii)(III) (i.e., “Paragraph III certifications”) as to the
other two patents. On October 28, 2011, Plaintiff filed its complaint in this matter alleging
that by virtue of Defendant’s ANDA filing, Defendant had infringed the ‘085, ‘907, ‘070, and
‘466 patents.
Two years later, on October 4, 2013, Defendant submitted documentation to FDA
amending its Paragraph IV certifications for the ‘424, ‘085, ‘907, ‘070, and ‘466 patents. See
Declaration of Sean Kelly, Ex. 3. Consequently, Defendant has certified to FDA that it is no
longer seeking approval of its ANDA prior to the expiration dates of these patents.
Defendants notified Plaintiffs of their amendment, and provided copies of the amended
certification as well as a form stipulation of dismissal. Plaintiffs, however, refused to dismiss
their claims. This motion followed.

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II. ANALYSIS
A. Hatch-Waxman Framework
Under the Federal Food, Drug, and Cosmetic Act (“FDCA”), the FDA is authorized to
regulate the manufacture, distribution, and sale of drugs in the United States. In accordance
with the FDCA, pharmaceutical companies seeking to market new drugs (often referred to as
“pioneer” or “branded” drugs) must first obtain FDA approval by filing a new drug
application (“NDA”) containing extensive scientific data demonstrating the safety and
effectiveness of the drug. 21 U.S.C. §§ 355(a), (b). An NDA applicant must also submit
information on any patent that claims the drug, or a method of using the drug, and for which a
claim of patent infringement could reasonably be asserted against an unauthorized party. 21
U.S.C. §§ 355(b)(1), (c)(2). The FDA publishes this patent information in the “Approved
Drug Products with Therapeutic Equivalence Evaluations” list, commonly known as the
“Orange Book.” Id.; see also 21 C.F.R. § 314.53(e).
The approval of generic drugs is governed by the FDCA as modified by the Drug
Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”),
codified at 21 U.S.C. § 355 and 35 U.S.C. §§ 156, 271, and 282. These amendments were
designed to balance the interests of encouraging innovation in the development of new drugs
and accelerating the availability of lower-cost generic alternatives to branded drugs.
Under the Hatch-Waxman Act, a manufacturer submits an ANDA requesting approval
of a generic version of an approved drug product. 21 U.S.C. § 355(j). The ANDA must
include, among other things, data showing that the generic drug product is the bioequivalent
to the branded drug product. 21 U.S.C. § § 355(j)(2)(A)(iv); (j)(4)(F). With respect to
Orange Book listed patents for the branded drug, the Act requires each ANDA applicant to

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submit one of four certifications: (1) the Orange Book contains no patent information
relevant to their ANDA (“Paragraph I certification”), (2) the listed patents have expired
(“Paragraph II certification”), (3) the applicant will not enter the market until the listed patents
expire (“Paragraph III certification”), or (4) the applicant believes that the listed patents are
invalid or will not be infringed by the applicant's generic compositions (“Paragraph IV
certification”). 21 U.S.C. § 355(j)(2)(A)(vii)(I)-(IV). This certification is typically referred to
as a “Paragraph I,” “Paragraph II,” “Paragraph III,” or “Paragraph IV” certification.
An applicant wishing to challenge the validity of a patent or to claim that the patent
would not be infringed by the product covered by the ANDA submits a Paragraph IV
certification. An applicant files a Paragraph IV certification if the applicant believes “to the
best of his knowledge ... that such patent is invalid or will not be infringed by the
manufacture, use, or sale of the new drug for which the application is submitted[.]” 21 U.S.C.
§ 355(j)(2)(A)(vii)(IV). Under the Hatch-Waxman Act, a drug patent owner is permitted to
bring an action for infringement in response to the filing of a Paragraph IV certification. See
35 U.S.C.A. § 271(e)(2)(A). Specifically,
[i]t shall be an act of infringement to submit … an application under section
505(j) of the Federal Food, Drug, and Cosmetic Act … for a drug claimed in a
patent or the use of which is claimed in a patent … if the purpose of such
submission is to obtain approval under such Act to engage in the commercial
manufacture, use, or sale of a drug … claimed in a patent or the use of which is
claimed in a patent before the expiration of such patent.
35 U.S.C. § 271(e)(2). The Supreme Court has described § 271(e)(2) as creating “a highly
artificial act of infringement” that is triggered upon submission of an ANDA containing an
erroneous Paragraph IV certification. Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 678,
110 S. Ct. 2683, 110 L. Ed.2d 605 (1990).

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Although Defendant originally submitted its ANDA with Paragraph IV certifications
with respect to the above-mentioned five patents, Defendant has amended these certifications
to Paragraph III certifications. As such, Defendant has now certified to FDA that it will only
market its ANDA product after expiration of the ‘424, ‘085, ‘907, ‘070, ‘466 patents.
Defendant asserts, therefore, that no case or controversy exists between the parties and the
instant action should be dismissed without prejudice.
B. Legal Standard
Defendant brings its motion under Federal Rule of Civil Procedure 12(b)(1). Pursuant
to Rule 12(b)(1), a case may be dismissed for “lack of subject-matter jurisdiction.”
Challenges to jurisdiction under Rule 12(b)(1) may be either facial or factual. Petruska v.
Gannon Univ., 462 F.3d 294, 302 n. 3 (3d Cir.2006), cert. denied, 550 U.S. 903, 127 S.Ct.
2098, 167 L.Ed.2d 813 (2007). A facial attack challenges the sufficiency of the pleadings,
and the trial court “must consider the allegations of the complaint as true.” Id. However, in a
factual attack, plaintiff's allegations are afforded no presumption of truthfulness, id., and the
trial court may review evidence outside the pleadings. Gould Electronics Inc. v. United
States, 220 F.3d 169, 176 (3d Cir.2000). The plaintiff bears the burden of establishing that
jurisdiction exists. Petruska, 462 F.3d at 302 n. 3.
The jurisdiction of the federal courts is limited by Article III, § 2, of the Constitution
to “Cases” and “Controversies.” Article III restricts the authority of federal courts to
resolving “‘the legal rights of litigants in actual controversies.’” Valley Forge Christian
College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 471, 102
S.Ct. 752, 70 L.Ed.2d 700 (1982). Notably, the “case-or-controversy” requirement exists at
all stages of a case. “[A]an actual controversy must be extant at all stages of review, not

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merely at the time the complaint is filed.” Genesis Healthcare Corp. v. Symczyk, 133 S.Ct.
1523, 1528 (2013).
A case becomes moot if the “issues presented are no longer ‘live’ or the parties lack a
legally cognizable interest in the outcome.” Murphy v. Hunt, 455 U.S. 478, 481, 102 S. Ct.
1181, 71 L.Ed.2d 353 (1982); see also Lewis v. Continental Bank Corp., 494 U.S. 472, 47778, 110 S. Ct. 1249, 108 L.Ed.2d 400 (1990). Mootness occurs if (1) it can be said with
assurance that there is no reasonable expectation that the alleged violation will recur, and (2)
interim relief or events have completely and irrevocably eradicated the effects of the alleged
violation. County of Los Angeles v. Davis, 440 U.S. 625, 631, 99 S.Ct. 1379, 1383, 59
L.Ed.2d 642 (1979).
Defendant argues that as a result of the amendment of its Paragraph IV certifications
to Paragraph III certifications, any “live” issue that previously existed has been removed from
this case because is not seeking approval for its ANDA until after February 28, 2023, which is
the date on which the last of the five patents at issue expires. Plaintiffs respond first by
asserting that Defendant’s motion must be denied because Defendant is not permitted to
change its Paragraph IV certification to a Paragraph III certification. Plaintiffs point to 21
C.F.R. 314.94, which states in the relevant part:
A certification submitted under paragraphs (a)(12)(i) through (a)(12)(iii) of this
section may be amended at any time before the effective date of the approval
of the application. However, an applicant who has submitted a paragraph IV
patent certification may not change it to a paragraph III certification if a patent
infringement suit has been filed against another paragraph IV applicant unless
the agency has determined that no applicant is entitled to 180–day exclusivity
or the patent expires before the lawsuit is resolved or expires after the suit is
resolved but before the end of the 180–day exclusivity period.

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21 C.F.R. 314.94(a)(12)(viii). It appears that this regulation was originally put in place to
prevent another Paragraph IV ANDA applicant from circumventing a first applicant’s 180day exclusivity period by amending a Paragraph IV certification to a Paragraph III
certification after a patent was declared invalid. See 59 Fed. Reg. 50338 (Oct. 19, 1994)
(“[T]he protection offered by 180-day exclusivity should not be undermined by changes from
paragraph IV certification … [T]he agency has required that a patent remain on the list after
being declared invalid or unenforceable until the end of any applicable 180-day exclusivity
period… [W]here there is a patent that has been challenged by a paragraph IV applicant, a
subsequent applicant will not be able to file a certification that there is no relevant patent or
seek an immediately effective approval until either the patent or the 180-day exclusivity
period expires.”).
Defendant argues, however, that subsequent changes to 21 U.S.C. § 355 have rendered
this regulation “irrelevant.” Defendant notes that as a result of amendments in 2003 under the
Medicare Modernization Act, any first applicant’s 180-day exclusivity is automatically
forfeited upon expiration of all the Orange Book-listed patents. See 21 U.S.C.
§355(j)(5)(D)(i)(VI). As a result, a later applicant who has amended all their Paragraph IV
certifications to Paragraph III certifications can no longer enter the market prior to the end of
the first applicant’s 180 days of exclusivity, as that 180 days of exclusivity is forfeited at the
same time as the approval of the later applicant’s ANDA—i.e., the day the last Orange Book
patent expires. See 21 U.S.C. § 355(j)(5)(B)(ii) (“If the applicant made a [Paragraph III
certification], the approval may be made effective on the date certified under subclause (III).”)
Thus, in light of Defendant’s Paragraph III certifications, Defendant’s ANDA application
cannot be approved until any 180-day exclusivity periods have been forfeited.

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The Court finds Defendant’s argument persuasive. The applicability and purpose of
21 C.F.R. 314.94(a)(12)(viii) appears to have been negated by the changes to § 355. Indeed,
as Defendants point out, courts have recognized generic applicants’ amendments of Paragraph
IV certifications to Paragraph III certifications and allowed parties to stipulate to dismissal of
a case based on such amendment. See Pfizer, Inc. v. Anchen Pharm., Inc., Consolidated Civ.
Action No. 12-808, Docket Entry No. 32; Pfizer Inc. v. Apotex, Inc., Consolidated Civ. Action
No. 12-808, Docket Entry No. 132; Depomed, Inc. v. Impax Labs., Inc., Civ. Action No. 122154, Docket Entry No. 82. Plaintiffs, on the other hand, who bear the burden of establishing
jurisdiction here, have pointed to no evidence that FDA has applied 21 C.F.R.
314.94(a)(12)(viii) to an ANDA for a reference-listed drug, where the first-filer filed their
ANDA after the relevant 2003 Medicare Modernization Act provisions took effect. The
Court, therefore, rejects Plaintiffs’ argument that this regulation forecloses a finding of
mootness here.
The Court also rejects Plaintiffs’ argument that Defendant’s “voluntary cessation of
infringing activity” fails to render the matter moot “because [Defendant] is free to change its
certification back to Paragraph IV at any time.” Pl. Br. at 1. This is a Hatch-Waxman case,
based upon a statutory scheme pursuant to which the filing of a Paragraph IV certification
constitutes a “highly artificial” act of infringement. See Eli Lilly & Co., supra. As explained
by the Federal Circuit, the enactment of § 271(e)(2) provided a “new” and “specialized” cause
of action that enables court to “promptly resolve infringement and validity disputes before the
ANDA applicant had engaged in the traditional statutorily defined acts of infringement.”
AstraZeneca Pharmaceuticals LP v. Apotex Corp., 669 F.3d 1370, 1377 (Fed. Cir. 2012). As
such, the factual scenario in this case is far different than those cases relied upon by Plaintiffs

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in support of its argument, as those cases involve defendants that have engaged or may
engage in a repeated course of wrongful conduct, e.g., the discharge of mercury on multiple
occasions in excess of the limits in an environmental permit or a proposed hiring practice that
would be applied to multiple job applications. See Davis, 440 U.S. 625, supra; Friends of the
Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 120 S.Ct. 693
(2000). Here, Defendants have not engaged in any conduct other than the filing of a
Paragraph IV certification, which has now been effectively withdrawn. This single, “highly
artificial” act of alleged infringement hardly constitutes a “challenged practice” as found in
the cited cases. Friends of the Earth, Inc., 528 U.S. at 170.
Furthermore, under this Hatch-Waxman statutory scheme, the remedy for a prevailing
plaintiff is an injunction delaying approval of a defendant’s ANDA until expiration of all
listed Orange Book patents. Defendant’s amendment effectively gives Plaintiffs the relief that
would have been available to them were this case to proceed.
Plaintiff next argues that this Court retains jurisdiction because Plaintiffs have asserted
counterclaims for a declaratory judgment that the relevant patents are not infringed and are
invalid. However, as discussed above, as no case or controversy exists to support Plaintiff’s
infringement claims, it follows that no case or controversy exists to support reciprocal
declaratory judgment claims by Defendant.
Finally, Plaintiffs assert that Defendant’s motion should be denied because Plaintiffs’
request for attorney fees “is an independent basis for the Court’s jurisdiction.” Pl. Br. at 7.
However, whether the Court may hear any subsequent request for attorney fees under 35
U.S.C. § 285 has no bearing on the specific issue to be decided with respect to Defendant’s

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motion, i.e., whether the causes of action asserted in this action have been rendered moot. As
Plaintiffs’ themselves note, their request for attorney fees is not a cause of action in this case:
A request under Section 285 is not a separate cause of action. “[R]ather a party
pleading ‘exceptional case’ is simply noting its intention to move for
attorney fees, at the conclusion of the case, pursuant to 35 U.S.C. § 285.”
Nycomed U.S. Inc. v. Glenmark Generics Ltd., No. 8-cv-5023, 2010 WL
1257803 at *3 (E.D.N.Y. Mar. 26, 2010).
Pl. Br. at 9 (emphasis added). Although the merits of a Section 285 motion appear dubious
here, the fact that Plaintiffs have in their complaint “noted their intention” to seek such relief
does not preclude dismissal of this action as moot.
In sum, Defendant no longer seeks approval of its ANDA until after expiration of all
the applicable patents. As such, Defendant cannot sell a drug product under its ANDA that
would infringe Plaintiffs’ patents. Consequently, there is no longer a case or controversy
between the parties; the matter is moot. The Court lacks jurisdiction to continue this matter,
and, therefore, grants Defendant’s motion to dismiss.
III. CONCLUSION
For the reasons above, Defendant’s motion to dismiss this matter without prejudice is
granted. An appropriate Order accompanies this Opinion.

/s/ JOEL A. PISANO
United States District Judge
Dated: June 9, 2014

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