Case Briefing

Court Finds 'Case or Controversy' Despite Patent Holder's Inaction

The U.S. District Court for the Northern District of Illinois, Eastern Division, denied defendant's motion to dismiss this suit as plaintiff ANDA applicant established a reasonable apprehension that it would be sued for patent infringement. Teva Pharamaceuticals USA Inc. v. Abbott Laboratories, No. 03 C 5455, 2004 U.S. Dist. LEXIS 274 (1/9/04).

Plaintiff Teva filed this action seeking a declaratory judgment that three patents held by defendant, Abbott Laboratories, were invalid and would not be infringed if Teva commercially marketed a generic version of Abbott's antibiotic BIAXIN. Abbott moved for dismissal, citing lack of subject matter jurisdiction and claiming that no justiciable case or controversy existed at the time Teva filed its suit. Teva countered that it reasonably apprehended a patent infringement suit by Abbott based on three factors: 1) Abbott commenced proceedings in Canada under the Patented Medicines (Notice of Compliance) Regulations against Novopharm, a Teva affiliate, in connection with Novopharm's attempt to obtain approval to market generic versions of BIAXIN in Canada; 2) Abbott refused to covenant that it would not enforce its patent rights against Teva; and, 3) Abbott has a history of patent enforcement against Teva concerning Teva's efforts to market generic versions of Abbott's brand name drugs. Abbott denied that these factors gave Teva any reasonable apprehension of a patent infringement suit.

The court was persuaded that, when considered together, the Canadian proceedings and Abbott's history of patent enforcement against Teva rose to a level sufficient to indicate an intent on the part of Abbott to enforce its patent against Teva. Thus, Teva's apprehension of an infringement suit by Abbott if Teva attempted to market a generic version of BIAXIN was reasonable and Abbott's motion to dismiss must therefore be denied.

Bayer AG Wins Case in Europe

The European Court of Justice ruled January 6 that Bayer AG was not guilty of violating EU trade rules by colluding with southern European wholesalers in seeking to prevent parallel imports of its heart drug, Adalat, to other European countries. “Parallel import” is the term used to describe the purchase of drugs in countries where prices are low because they are government regulated, then reselling them in countries with higher prices. Agreeing with the 2000 decision of the Court of First Instance, the high court held that the European Commission erred when it fined Bayer 3 million euros in 1996 for restricting the supply of Adalat to France and Spain in order to stop the drug from being resold in Britain.

The complaint lodged against Bayer was based on an allegation that there had been an agreement between it and the French and Spanish suppliers. As no such agreement could be proven, the courts were compelled to side with Bayer. The European Court of Justice, however, left open the possibility that if a complaint were framed another way — ie, not requiring a showing that there had been an agreement between the drug manufacturer and any other party — the outcome might be different in similar cases.

In a follow-up move, the European Commission issued a document in mid-January reiterating its position that parallel import of drugs is a lawful form of trade in the European Union. The European Commission is reportedly reviewing other supply quota systems instituted by drug companies in order to see if they meet EU anti-trust regulations.

Antitrust Claims Were Compulsory Counterclaims to Patent Action

The U.S. District Court for the District of Massachusetts dismissed plaintiff drug manufacturer's federal and state antitrust claims against rival pharmaceutical companies as they were compulsory counterclaims that should have been raised in the underlying patent infringement action. Eon Laboratories Inc. v. Smithkline Beecham Corp., Civ. Act. No. 03-10506-WGY, 2003 U.S. Dist. LEXIS 23534 (12/23/03).

This was a consolidated action against SmithKline Beecham Corp., Beecham Group PLC, and GlaxoSmithKline PLC (collectively “SmithKline”) for violations of the antitrust laws related to its patent for the chemical compound nabumetone, which it sells commercially as “Relafen.” After successfully defending against SmithKline's action to enforce its patent, Eon, a manufacturer of generic nabumetone, initiated suit against SmithKline, asserting violations of federal and state antitrust laws, violation of the Massachusetts Consumer Protection Act, tortious interference with contractual and business relationships and malicious prosecution. Essentially, Eon asserted that but for SmithKline's wrongful filing of patent lawsuits, it could have entered the market for generic nabumetone as early as June, 1999, 6 months after Teva, the first generic applicant, received tentative approval from the FDA. Because of the pending litigation, however, Teva and Eon could not begin marketing their generic products until after the stay period terminated and SmithKline's patent was invalidated.

SmithKline here moved to dismiss Eon's claims as barred by the doctrine governing compulsory counterclaims. The court found that all but the malicious prosecution cause of action were compulsory counterclaims under Federal Rule of Civil Procedure 13(a) as: 1) the issues of fact and law raised by the claims and counterclaims were largely the same, 2) res judicata would bar a subsequent suit on defendant's claims absent the compulsory counterclaim, 3) substantially the same evidence supports or refutes plaintiffs claims as well as defendant's counterclaims, and 4) there is a logical relation between the claims and counterclaims. Although Eon had not yet received approval of its ANDA when SmithKline brought suit, it could have brought its antitrust claims at that time by asserting that approval was probable, the court found. Therefore, it antitrust and related claims were barred as compulsory counterclaims under Rule 13(a).

Court Finds 'Case or Controversy' Despite Patent Holder's Inaction

The U.S. District Court for the Northern District of Illinois, Eastern Division, denied defendant's motion to dismiss this suit as plaintiff ANDA applicant established a reasonable apprehension that it would be sued for patent infringement. Teva Pharamaceuticals USA Inc. v. Abbott Laboratories, No. 03 C 5455, 2004 U.S. Dist. LEXIS 274 (1/9/04).

Plaintiff Teva filed this action seeking a declaratory judgment that three patents held by defendant, Abbott Laboratories, were invalid and would not be infringed if Teva commercially marketed a generic version of Abbott's antibiotic BIAXIN. Abbott moved for dismissal, citing lack of subject matter jurisdiction and claiming that no justiciable case or controversy existed at the time Teva filed its suit. Teva countered that it reasonably apprehended a patent infringement suit by Abbott based on three factors: 1) Abbott commenced proceedings in Canada under the Patented Medicines (Notice of Compliance) Regulations against Novopharm, a Teva affiliate, in connection with Novopharm's attempt to obtain approval to market generic versions of BIAXIN in Canada; 2) Abbott refused to covenant that it would not enforce its patent rights against Teva; and, 3) Abbott has a history of patent enforcement against Teva concerning Teva's efforts to market generic versions of Abbott's brand name drugs. Abbott denied that these factors gave Teva any reasonable apprehension of a patent infringement suit.

The court was persuaded that, when considered together, the Canadian proceedings and Abbott's history of patent enforcement against Teva rose to a level sufficient to indicate an intent on the part of Abbott to enforce its patent against Teva. Thus, Teva's apprehension of an infringement suit by Abbott if Teva attempted to market a generic version of BIAXIN was reasonable and Abbott's motion to dismiss must therefore be denied.

Bayer AG Wins Case in Europe

The European Court of Justice ruled January 6 that Bayer AG was not guilty of violating EU trade rules by colluding with southern European wholesalers in seeking to prevent parallel imports of its heart drug, Adalat, to other European countries. “Parallel import” is the term used to describe the purchase of drugs in countries where prices are low because they are government regulated, then reselling them in countries with higher prices. Agreeing with the 2000 decision of the Court of First Instance, the high court held that the European Commission erred when it fined Bayer 3 million euros in 1996 for restricting the supply of Adalat to France and Spain in order to stop the drug from being resold in Britain.

The complaint lodged against Bayer was based on an allegation that there had been an agreement between it and the French and Spanish suppliers. As no such agreement could be proven, the courts were compelled to side with Bayer. The European Court of Justice, however, left open the possibility that if a complaint were framed another way — ie, not requiring a showing that there had been an agreement between the drug manufacturer and any other party — the outcome might be different in similar cases.

In a follow-up move, the European Commission issued a document in mid-January reiterating its position that parallel import of drugs is a lawful form of trade in the European Union. The European Commission is reportedly reviewing other supply quota systems instituted by drug companies in order to see if they meet EU anti-trust regulations.

Antitrust Claims Were Compulsory Counterclaims to Patent Action

The U.S. District Court for the District of Massachusetts dismissed plaintiff drug manufacturer's federal and state antitrust claims against rival pharmaceutical companies as they were compulsory counterclaims that should have been raised in the underlying patent infringement action. Eon Laboratories Inc. v. Smithkline Beecham Corp., Civ. Act. No. 03-10506-WGY, 2003 U.S. Dist. LEXIS 23534 (12/23/03).

This was a consolidated action against SmithKline Beecham Corp., Beecham Group PLC, and GlaxoSmithKline PLC (collectively “SmithKline”) for violations of the antitrust laws related to its patent for the chemical compound nabumetone, which it sells commercially as “Relafen.” After successfully defending against SmithKline's action to enforce its patent, Eon, a manufacturer of generic nabumetone, initiated suit against SmithKline, asserting violations of federal and state antitrust laws, violation of the Massachusetts Consumer Protection Act, tortious interference with contractual and business relationships and malicious prosecution. Essentially, Eon asserted that but for SmithKline's wrongful filing of patent lawsuits, it could have entered the market for generic nabumetone as early as June, 1999, 6 months after Teva, the first generic applicant, received tentative approval from the FDA. Because of the pending litigation, however, Teva and Eon could not begin marketing their generic products until after the stay period terminated and SmithKline's patent was invalidated.

SmithKline here moved to dismiss Eon's claims as barred by the doctrine governing compulsory counterclaims. The court found that all but the malicious prosecution cause of action were compulsory counterclaims under Federal Rule of Civil Procedure 13(a) as: 1) the issues of fact and law raised by the claims and counterclaims were largely the same, 2) res judicata would bar a subsequent suit on defendant's claims absent the compulsory counterclaim, 3) substantially the same evidence supports or refutes plaintiffs claims as well as defendant's counterclaims, and 4) there is a logical relation between the claims and counterclaims. Although Eon had not yet received approval of its ANDA when SmithKline brought suit, it could have brought its antitrust claims at that time by asserting that approval was probable, the court found. Therefore, it antitrust and related claims were barred as compulsory counterclaims under Rule 13(a).