Case Briefing

A suit brought by the filer of an Abbreviated New Drug Application (ANDA) for declaratory judgment that it would not infringe a drug company's patent listed in the Orange Book was dismissed for lack of a case or controversy between the parties. Teva Pharmaceuticals USA Inc. v. Pfizer Inc., 2003 U.S. Dist. LEXIS 21940, (U.S. Dist. Ct., Dist. of Mass. 12/8/03).

Teva Pharmaceuticals, a manufacturer of generic pharmaceuticals, brought this declaratory judgment action against Pfizer seeking a determination that its generic version of sertraline hydrochloride would not infringe Pfizer's patented version of the drug, which is sold under the trade name Zoloft'. Teva had filed an ANDA with paragraph III and IV certifications in July 2002, but was not the first manufacturer to file a sertraline hydrochloride ANDA. In 1999, Zenith Goldline Pharmaceuticals Inc., now known as Ivax, filed the first sertraline hydrochloride ANDA.

Like Teva, Ivax filed a paragraph III certification disclaiming any intention of selling the drug prior to the expiration of a patent not in issue in this case, as well as a paragraph IV certification challenging the Pfizer patent that is the subject of this action. As the first ANDA filer, were Ivax to prevail in the patent action, it would have been entitled under ' 355(j)(5)(B)(iv) of the Hatch-Waxman Act to a 180-day market exclusivity period. That period would begin to run either on the date of the first commercial sale of the generic drug (which given the paragraph III certification, would be June 30, 2006) or on the date of a court decision invalidating the Pfizer patent. In response to Ivax's ANDA, Pfizer brought an infringement action against Ivax within the 45-day “stay-put” period mandated by ' 355(j)(5)(B)(iii). Pfizer and Ivax then settled the case, with Ivax taking the rights to the exclusivity period. According to Teva, the settlement gives Pfizer a vested interest in protecting Ivax's exclusivity rights. This is so, because unless an intervening court decision opens the market further, Zoloft will face only one generic drug competitor during the exclusivity period.

Pfizer took no action against Teva after it filed its ANDA, so on Jan. 24, 2003, Teva filed this complaint seeking a declaratory judgment of invalidity/non-infringement. Pfizer moved to dismiss the action, arguing that the court lacked subject matter jurisdiction because of the absence of any actual controversy between the parties.

The court here noted that under the Declaratory Judgment Act, 28 U.S.C. ' 2201(a) (1994), a district court has jurisdiction over a suit for declaratory judgment only when there is an actual controversy. According to the test set out in Amana Refrigeration Inc. v. Quadlux Inc., 172 F.3d 852, 855 (Fed. Cir. 1999), in order for an actual controversy to exist, there must be both “1) an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit, and 2) present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity.” In addition, even if there is an actual controversy, the district court is not required to exercise declaratory judgment jurisdiction, but has discretion to decline that jurisdiction. EMC Corp. v. Norand Corp., 89 F.3d 807, 810 (Fed. Cir. 1996). Hence, two questions were before the court: Had Teva satisfied the two prongs of the “actual controversy” test and, if so, should the court exercise jurisdiction?

The court here found that, clearly, Teva had satisfied the second prong of the test by filing the ANDA. As to the first prong, Teva argued that Pfizer's actions (or inactions) to date had created a reasonable apprehension of suit. Teva cited the following indices of aggression: 1) Pfizer had listed the patent in the Orange Book, thus declaring its intention to sue any potential infringer; 2) Pfizer had refused to grant Teva a covenant not to sue; 3) Pfizer had aggressively asserted its patent rights against alleged infringers of other of its patents; 4) Pfizer sued Ivax, the first generic manufacturer of sertraline hydrochloride; and 5) it would be in Pfizer's self-interest “to leave a cloud of litigation” hanging over Teva as a means of protecting Ivax's 180-day exclusivity period. These arguments, the court found, did not satisfy the first prong of the Amana test because a listing in the Orange Book does not allow a court to infer that the patent holder intends to sue all potential infringers; such an inference would eliminate the first prong of the Amana test. In addition, the court found that there is nothing in the Federal Food Drug and Cosmetic Act that requires a patent holder to respond in any way to a potential infringer's request for a covenant not to sue. Finally, even if Pfizer does have an interest in preserving Ivax's six-month monopoly, there is nothing wrong with its doing so, especially since the intent of the Hatch-Waxman Amendments is to encourage challenges to market-dominating pharmaceutical patents by so rewarding first filers.

'Publication' Not Available to the Public

Because the district court did not err in its rulings on claim construction, validity, infringement, and evidentiary matters, the Federal Circuit affirmed its finding that Astra's disputed patents relating to commercial drug Prilosec' were valid and infringed by Abbreviated New Drug Applicants Andrx Pharmaceuticals Inc., Genpharm Inc., Cheminor Drugs Ltd., Reddy-Cheminor Inc., and Schein Pharmaceutical Inc. In Re Omeprazole Patent Litigation Astra Aktiebolag v. Andrx Pharmaceuticals Inc., 2003 U.S. App. LEXIS 24899 (Fed. Cir. 12/11/03).

Among the numerous arguments on appeal was one that the patents were invalid for obviousness. The obviousness arguments relied in part on a brochure published by Shin-Etsu Chemical Company's (titled TC-5), and another publication. The district court found that these references were not available to the public and thus were not “printed publications” under 35 U.S.C. ' 102, despite Astra's statement, while prosecuting one of its patents before the European Patent Office, that TC-5 is a “general publication promoting the use of TC-5.” The Federal Circuit found this statement did not unambiguously convey that TC-5 was a “generally available” publication; the statement could also have referred to the nature of what TC-5 discloses, not the breadth of its availability or dissemination.

U.S. Attorney Files Drug Counterfeiting Complaint

In a criminal complaint filed December 5 in the U.S. District Court in Kansas City, MO, a Florida man was charged with selling counterfeit Lipitor', a prescription drug manufactured and distributed by Pfizer Ireland Pharmaceuticals and Pfizer Inc. The complaint alleges that Julio Cesar Cruz sold 203 bottles of Lipitor 10 mg tablets, with each bottle containing 5000 tablets, to G&K Pharma LLC, a Florida firm licensed to sell wholesale drugs in Missouri. Some of the tablets in each bottle tested by the Office of Criminal Investigations for the FDA, however, were counterfeit, ie, not manufactured or distributed by Pfizer. Further forensic analysis indicated that the bottles contained a mixture of counterfeit Lipitor and illegally diverted foreign-manufactured Lipitor. The complaint also alleges that Cruz manipulated and falsified the drugs' pedigree.

Request for Declaratory Judgment of Non-Infringement Denied

A suit brought by the filer of an Abbreviated New Drug Application (ANDA) for declaratory judgment that it would not infringe a drug company's patent listed in the Orange Book was dismissed for lack of a case or controversy between the parties. Teva Pharmaceuticals USA Inc. v. Pfizer Inc. , 2003 U.S. Dist. LEXIS 21940, (U.S. Dist. Ct., Dist. of Mass. 12/8/03).

Teva Pharmaceuticals, a manufacturer of generic pharmaceuticals, brought this declaratory judgment action against Pfizer seeking a determination that its generic version of sertraline hydrochloride would not infringe Pfizer's patented version of the drug, which is sold under the trade name Zoloft'. Teva had filed an ANDA with paragraph III and IV certifications in July 2002, but was not the first manufacturer to file a sertraline hydrochloride ANDA. In 1999, Zenith Goldline Pharmaceuticals Inc., now known as Ivax, filed the first sertraline hydrochloride ANDA.

Like Teva, Ivax filed a paragraph III certification disclaiming any intention of selling the drug prior to the expiration of a patent not in issue in this case, as well as a paragraph IV certification challenging the Pfizer patent that is the subject of this action. As the first ANDA filer, were Ivax to prevail in the patent action, it would have been entitled under ' 355(j)(5)(B)(iv) of the Hatch-Waxman Act to a 180-day market exclusivity period. That period would begin to run either on the date of the first commercial sale of the generic drug (which given the paragraph III certification, would be June 30, 2006) or on the date of a court decision invalidating the Pfizer patent. In response to Ivax's ANDA, Pfizer brought an infringement action against Ivax within the 45-day “stay-put” period mandated by ' 355(j)(5)(B)(iii). Pfizer and Ivax then settled the case, with Ivax taking the rights to the exclusivity period. According to Teva, the settlement gives Pfizer a vested interest in protecting Ivax's exclusivity rights. This is so, because unless an intervening court decision opens the market further, Zoloft will face only one generic drug competitor during the exclusivity period.

Pfizer took no action against Teva after it filed its ANDA, so on Jan. 24, 2003, Teva filed this complaint seeking a declaratory judgment of invalidity/non-infringement. Pfizer moved to dismiss the action, arguing that the court lacked subject matter jurisdiction because of the absence of any actual controversy between the parties.

The court here noted that under the Declaratory Judgment Act, 28 U.S.C. ' 2201(a) (1994), a district court has jurisdiction over a suit for declaratory judgment only when there is an actual controversy. According to the test set out in Amana Refrigeration Inc. v. Quadlux Inc. , 172 F.3d 852, 855 (Fed. Cir. 1999), in order for an actual controversy to exist, there must be both “1) an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit, and 2) present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity.” In addition, even if there is an actual controversy, the district court is not required to exercise declaratory judgment jurisdiction, but has discretion to decline that jurisdiction. EMC Corp. v. Norand Corp. , 89 F.3d 807, 810 (Fed. Cir. 1996). Hence, two questions were before the court: Had Teva satisfied the two prongs of the “actual controversy” test and, if so, should the court exercise jurisdiction?

The court here found that, clearly, Teva had satisfied the second prong of the test by filing the ANDA. As to the first prong, Teva argued that Pfizer's actions (or inactions) to date had created a reasonable apprehension of suit. Teva cited the following indices of aggression: 1) Pfizer had listed the patent in the Orange Book, thus declaring its intention to sue any potential infringer; 2) Pfizer had refused to grant Teva a covenant not to sue; 3) Pfizer had aggressively asserted its patent rights against alleged infringers of other of its patents; 4) Pfizer sued Ivax, the first generic manufacturer of sertraline hydrochloride; and 5) it would be in Pfizer's self-interest “to leave a cloud of litigation” hanging over Teva as a means of protecting Ivax's 180-day exclusivity period. These arguments, the court found, did not satisfy the first prong of the Amana test because a listing in the Orange Book does not allow a court to infer that the patent holder intends to sue all potential infringers; such an inference would eliminate the first prong of the Amana test. In addition, the court found that there is nothing in the Federal Food Drug and Cosmetic Act that requires a patent holder to respond in any way to a potential infringer's request for a covenant not to sue. Finally, even if Pfizer does have an interest in preserving Ivax's six-month monopoly, there is nothing wrong with its doing so, especially since the intent of the Hatch-Waxman Amendments is to encourage challenges to market-dominating pharmaceutical patents by so rewarding first filers.

'Publication' Not Available to the Public

Because the district court did not err in its rulings on claim construction, validity, infringement, and evidentiary matters, the Federal Circuit affirmed its finding that Astra's disputed patents relating to commercial drug Prilosec' were valid and infringed by Abbreviated New Drug Applicants Andrx Pharmaceuticals Inc., Genpharm Inc., Cheminor Drugs Ltd., Reddy-Cheminor Inc., and Schein Pharmaceutical Inc. In Re Omeprazole Patent Litigation Astra Aktiebolag v. Andrx Pharmaceuticals Inc., 2003 U.S. App. LEXIS 24899 (Fed. Cir. 12/11/03).

Among the numerous arguments on appeal was one that the patents were invalid for obviousness. The obviousness arguments relied in part on a brochure published by Shin-Etsu Chemical Company's (titled TC-5), and another publication. The district court found that these references were not available to the public and thus were not “printed publications” under 35 U.S.C. ' 102, despite Astra's statement, while prosecuting one of its patents before the European Patent Office, that TC-5 is a “general publication promoting the use of TC-5.” The Federal Circuit found this statement did not unambiguously convey that TC-5 was a “generally available” publication; the statement could also have referred to the nature of what TC-5 discloses, not the breadth of its availability or dissemination.