SUBMISSION OF AN ANDA OR 505(B)(2) APPLICATION AS AN ACT OF PATENT INFRINGEMENT

To balance the safe harbor rights of generic applicants to develop information for ANDA or 505(b)(2) filings, Hatch–Waxman provided that the submission of an ANDA or 505(b)(2) application may be treated as (what the Supreme Court has characterized as) an “artificial act of infringement” for a drug claimed in a patent or the use of which is claimed in a patent (144). Thus, the patent statute was amended to specify that “[i]t shall be an act of infringement to submit. . . [an ANDA or 505(b)(2) application] . . . if the purpose of such submission is to

obtain [FDA] approval. . . to engage in the commercial manufacture, use, or sale of a drug. . . claimed in a patent before the expiration of such patent” (145). The question of whether a Paragraph IV certification must be included in the ANDA or 505(b)(2) application to establish the statutory tort has been at issue in several cases (146).

In two separate cases (Teva v. Abbott and Glaxo v. Apotex), a Northern District of Illinois court held that the submission of an ANDA without a Paragraph IV certifica-tion was sufficient to be considered an artificial act of infringement and to establish subject matter jurisdiction (147). In so holding, the court relied on the language of

§271(e)(2), which mentions neither patent certifications nor any other limitation on the type of ANDA that would suffice to establish infringement. Both of these cases involved antibiotics approved by FDA before November 21, 1997, which are exempt from Orange Book listing requirements (148).

However, in the recent Eisai litigation, a different district court, citing a num-ber of prior interpretations of the statute by the Supreme Court and the Federal Circuit (149), read§271(e)(2) to require that an ANDA or 505(b)(2) application must contain a Paragraph IV certification to constitute an act of infringement (150). Based on that interpretation, the Eisai court dismissed Eisai’s infringement suit since the allegedly infringed patent “was not listed in the Orange Book for the drug at issue [when the ANDA was filed] and the ANDA contained no Paragraph IV certification against the patent” (151).

Hatch–Waxman provides that a patent owner has 45 days after receiving notice of a Paragraph IV Certification to sue the ANDA [or 505(b)(2)] applicant for infringement (152). The applicant is required to notify FDA “immediately” upon the filing of suit within the 45-day period (153). If the patentee does not file an infringe-ment action within the 45-day period, FDA may immediately approve the ANDA or 505(b)(2) application. If, on the other hand, the patent owner initiates suit, FDA can-not approve the application until the expiration of the 30-month stay for resolution of the litigation, as more fully set forth later (12).

Accordingly, upon receipt of notice of Paragraph IV Certifications, brand-name pharmaceutical companies frequently sue ANDA and 505(b)(2) applicants during the 45-day notice period, which forestalls generic competition in the mar-ketplace for the 30-month period(s) sanctioned by Hatch–Waxman (154).

Scope and Jurisdiction of Infringement Actions Commenced Under 35 USC§271(e)(2)

The artificial act of infringement under 35 USC§271(e)(2) is limited to indications for which approval is sought. It is not an act of infringement under§271(e)(2) to submit an ANDA to market a listed drug for a different indication than an unapproved indication covered by a listed use patent (155).

NDA holders are authorized to list patents in the Orange Book which they believe “could reasonably be asserted. . . [against an unlicensed party] engaged in the manufacture, use or sale of the drug” (156). In the past, ANDA or 505(b)(2) applicants could not seek patent delisting in infringement suits based on Orange Book–listed patents (157). A number of antitrust suits were commenced; however, they were predicated on the mala fides of Orange Book listings (158). Moreover, as indicated in Section “Challenges to Listing” earlier, an ANDA or 505(b)(2) filer sued

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on the basis of a Paragraph IV Certification may counterclaim for an order requiring the NDA holder to correct or delete the listing (50).

With respect to personal jurisdiction, it has been held that U.S. subsidiaries of foreign generic manufacturers actively involved in ANDA filings are subject to jurisdiction under§271(e)(2) (159). On the other hand, actions under that provision for infringement by third-party manufacturers that supply the active ingredients of generic drugs in issue in ANDAs have been dismissed (160).

Right of ANDA or 505(b)(2) Applicants to Seek Declaratory Judgments Hatch–Waxman precludes an ANDA or 505(b)(2) applicant from initiating a declaratory judgment action for noninfringement or invalidity of a listed patent within the 45-day period after receipt of its notice of the factual and legal basis for its Paragraph IV Certification (161). This provision facilitates initial commencement of a patent infringement suit and the consequent 30-month stay in accordance with the statutory scheme.

On the other hand, it has been held that an ANDA or 505(b)(2) applicant may seek a declaratory judgment during the 45-day period on other grounds, or file a counterclaim in the infringement suit for a declaratory judgment that it is not infringing other, unlisted patents (162). In either instance, it need only be shown that there is an actual controversy between the parties.

The 2003 statutory changes further sanctioned the commencement of an action for declaratory judgment of noninfringement of a patent for which a Paragraph IV Certification has been made, provided that:

a) the NDA holder or patent owner did not file an infringement suit within 45 days after receiving notice of such certification; (163) and

b) in any case in which the notice from the ANDA or 505(b)(2) applicant asserts non-infringement, and the notice is accompanied by a document offering con-fidential access to the ANDA or 505(b)(2) application for the sole purpose of determining whether an infringement action should be brought (164). The doc-ument offering confidential access must contain such restrictions as to persons entitled to access, and the use and disposition of any information accessed as would apply had a protective order been entered to protect trade secrets and confidential business information. A request for access under an offer of confi-dential access is considered an acceptance of the terms and restrictions in the offer and creates an enforceable contract.

Any ANDA or 505(b)(2) application to which confidential access is provided may be redacted by the applicant to remove information not relevant to any issue of patent infringement.

Any action for declaratory judgment brought subject to the foregoing pro-visions must meet the case or controversy requirements of 28 USC §2201 (165), and can only be commenced in the judicial district in which the defendant has its principal place of business or a regular and established place of business (166).

The Congressional intent was to make a claim for declaratory judgment of noninfringement subject to the constitutional requirement for determining whether

a “case or controversy” is presented sufficient to support jurisdiction. That test has been furthered by the Federal Circuit decision in Teva v. Novartis (167), apply-ing the recent landmark Supreme Court decision in MedImmune v. Genentech (168).

In Teva, the court reversed the dismissal of a declaratory judgment action commenced by Teva, which had filed an ANDA certifying noninfringement of five Orange Book–listed Novartis patents and been sued for infringement of only one of those patents. Teva sought a declaratory judgment of noninfringement for the remaining four patents to establish “patent certainty.” The Federal Circuit, relying on MedImmune, pointed out that:

In MedImmune, the Supreme Court in a detailed footnote stated that our two-prong “reasonable apprehension of suit” test “conflicts” and would “contra-dict” several cases in which the Supreme Court found that a declaratory judg-ment plaintiff had a justiciable controversy. 127 S. Ct. at 774 n.11. In MedIm-mune, the Court disagreed with our “reasonable apprehension of imminent suit” test and re-affirmed that the “actual controversy” requirement in the Declaratory Judgment Act is the same as the “Cases” and “Controversies”

requirement in Article III. Id. at 771. The Court further re-affirmed that an

“actual controversy” requires only that a dispute be “‘definite and concrete, touching the legal relations of parties having adverse legal interests’; and that it be ‘real and substantial’ and ‘admi[t] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical set of facts.’“ (169)

Based thereon, the court reasoned that:

Allowing Teva’s declaratory judgment action is consistent with the “contro-versy” requirement in Article III and the Declaratory Judgment Act because the suit will achieve a final determination that resolves the entire dispute between Teva and Novartis. Teva has experienced real and actual injury. Con-sequently, Teva’s injuries are traceable to Novartis’ conduct and those injuries can be redressed by a favorable judicial decision. Therefore, Teva has estab-lished standing and an actual controversy sufficient to confer jurisdiction under the Declaratory judgment Act. (170)

The Teva court concluded:

[A] declaratory judgment plaintiff is only required to satisfy Article III, which includes standing and ripeness, by showing under “all the circumstances” an actual or imminent injury caused by the defendant that can be redressed by judicial relief and that is of “sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” (171)

Accordingly, under the Teva case an ANDA filer may seek a declaratory judg-ment as to noninfringejudg-ment of an Orange Book–listed patent which has not been asserted against it so long as it can establish a real and immediate dispute between it and the NDA holder/patent owner affecting its legal rights.

In Pfizer v. Ranbaxy, a district court granted, based on a covenant not to sue, a motion to dismiss a declaratory judgment action by the ANDA-filer Ran-baxy (172). The court found no valid patent to enforce due to the pending reissue patent (173). The court had no jurisdiction Hatch–Waxman because “(1) Pfizer can-not enforce a pending reissue application against Ranbaxy; (2) any reissued patent has not been listed in the FDA Orange Book and cannot be until it has issued, 21

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USC§355(c)(2); and (3) Ranbaxy has not had to certify against a reissued patent”

(174).

More recently, the Federal Circuit found a “substantial controversy” justifying declaratory judgment jurisdiction for an ANDA filer even where the NDA holder had granted the generic company a covenant not to sue on an Orange Book–listed patent (175). The Caraco case is instructive as to the complexity which may occur in Hatch–Waxman litigations. In Caraco, the first ANDA filer, Ivax, had been held to infringe one of Forest’s two Orange Book–listed patents (the ‘712 patent). For-est did not sue Ivax for infringement of the other listed patent (the ‘941 patent), and Ivax had not sought declaratory relief as to noninfringement or invalidity of that patent (176). The court held that since Ivax could not trigger its 180-day exclu-sivity period before the expiration of both the ‘712 and ‘941 patents, subsequent Paragraph IV filers (including Caraco) could not trigger the exclusivity period (and thus expedite their own market entry) until both patents were held not infringed or invalid (177). Accordingly, notwithstanding Forest’s covenant not to sue Caraco on the ‘941 patent, since Caraco’s market entry was dependent on the conclusion of Ivax’s exclusivity period, the court, citing MedImmune, held Caraco and Forest had a substantial legal controversy “of sufficient immediacy and reality to warrant the issuance of a declaratory judgment” (178).

Right of Patent Owners to Seek Declaratory Judgments

The courts have recognized that the MedImmune decision also affects the scope of a patent owner’s right to seek declaratory relief in the face of imminent infringement, but have yet to define the “outer boundaries” of such jurisdiction (179). In activ-ities outside the Hatch–Waxman sphere, the Federal Circuit has held that “where a patentee asserts rights under a patent based on certain identified ongoing or planned activity of another party, and where that party contends that it has the right to engage in the accused activity without license, an Article III case or controversy will arise” (180).

Where the safe harbor exemption under §271(e)(1) is in issue, however, the patent owners’ rights are more limited. Thus, in Eisai the district court dismissed the patentees’ declaratory judgment claim (181), holding that “activities protected by the safe harbor provision cannot serve as the basis for a declaratory judgment of actual future infringement” (182). The court dismissed the claim notwithstand-ing the ANDA applicant’s assertion that it might launch the generic product at risk upon FDA approval and stipulation that it would provide Eisai with 45-day notice before commencing marketing (183). The court concluded that the “parties’

stipulation allows sufficient time to resolve certain issues by way of an infringe-ment action and a potential motion for preliminary relief, if Eisai so chooses” (184).

How the court would have ruled in the absence of the stipulation is subject to conjecture.

DELAYS IN THE APPROVAL OF ANDAS AND 505(B)(2) APPLICATIONS