ABRAXIS BIOSci. INC. v. NAVINTA LLC.

• Decision Date: 09 November 2010
• Docket Number: No. 2009-1539.,2009-1539.
• Citation: 625 F.3d 1359
• Parties: ABRAXIS BIOSCIENCE, INC., Plaintiff-Appellee, v. NAVINTA LLC, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

625 F.3d 1359

ABRAXIS BIOSCIENCE, INC., Plaintiff-Appellee,

v.NAVINTA LLC, Defendant-Appellant.

No. 2009-1539.

United States Court of Appeals,Federal Circuit.

Nov. 9, 2010.

Richard De Bodo, Hogan & Hartson, LLP, of Los Angeles, CA, argued for plaintiff-appellee. With him on the brief were Amy M. Gallegos; and Siegmund Y. Gutman, of Washington, DC.

Meredith Martin Addy, Brinks Hofer Gison & Lione, of Chicago, IL, argued for defendant-appellant. With her on the brief were Mark H. Remus, Laura A. Lydigsen, and Luke A. Parsons.

Before NEWMAN, GAJARSA, and LINN, Circuit Judges.

Opinion for the court filed by Circuit Judge GAJARSA. Dissenting opinion filed by Circuit Judge NEWMAN.

GAJARSA, Circuit Judge.

Appellant Navinta LLC appeals from a final judgment of the United States District Court for the District of New Jersey finding, inter alia, that Navinta's Abbreviated New Drug Application (“ANDA”) product would directly infringe claims 1-3 of U.S. Patent No. 4,870,086 (the “'086 patent”) and contribute to and induce infringement of claim 6 of the '086 patent. In addition, the district court found that Navinta's ANDA product would contribute to and induce infringement of claims 1 and 9 of U.S. Patent No. 5,670,524 (the “'524 patent”) and claim 1 of U.S. Patent No. 5,834,489 (the “'489 patent”), both disclosing methods of using low concentrations of ropivacaine hydrochloride to treat pain. See Abraxis Bioscience, Inc. v. Navinta, LLC, 640 F.Supp.2d 553, 569-92 (D.N.J.2009). Because the district court erred in failing to dismiss Abraxis Bioscience, Inc.'s (“Abraxis's”) action for lack of standing, we vacate the judgment below.

Background

Abraxis markets the drug Naropin® as a local or regional anesthetic indicated for use in surgery and for acute pain management, such as pain management during labor and delivery. Abraxis sells Naropin® in four concentrations: 1.0%, 0.75%, 0.5%, and 0.2%. The 0.2% concentration is the only FDA-approved strength for use in labor and delivery. The '086 patent discloses the sole active ingredient in Abraxis's Naropin® drug product, ropivacaine hydrochloride monohydrate (“ropivacaine”). ¹ The ' 489 patent claims the use of ropivacaine for treating pain at concentrations less than 0.5% administered epidurally. The ' 524 patent discloses the use of ropivacaine for treating pain at concentrations less than 0.25%. Asserted claim 9 of the ' 524 patent is a composition claim that covers “a pharmaceutical salt of ropivacaine at a concentration [...] lower than 0.25% by weight.”

The sole inventor of the '086 patent, Rune Sandberg, assigned his rights in the '086 patent to Astra Lakemedel Aktieboag (“Astra L”) on October 16, 1986. Arne Torsten Eek, as sole inventor, assigned his rights in the '524 and '489 patents to AB Astra on June 19, 1994. As a result of a merger between AB Astra and AstraZeneca AB (“AZAB”), AB Astra assigned the '524 and '489 patents to AZAB.

On April 26, 2006, Abraxis entered into an Asset Purchase Agreement (“APA”) with AstraZeneca (“AZ-UK”). The APA provides that AZ-UK “shall or shall cause one or more of its Affiliates to, Transfer to the Purchaser, and the Purchaser shall purchase and accept from the Seller or its Affiliates, as applicable, all of the right, title and interests of the Seller and its Affiliates in” the asserted patents. Following the execution of the APA, AZ-UK and Abraxis executed a written Intellectual Property Assignment Agreement (“IP Assignment Agreement”) on June 28, 2006 purportedly assigning the asserted patents to Abraxis. The “Further Assurances” provision of the IP Assignment Agreement states, in pertinent part, that “Seller will ... execute ... any and all further ... assignments ... as necessary to ... vest in Buyer any of the Transferred Intellectual Property.” There was a break in the chain of title, however, because the asserted patents were still owned by Astra L and AZ-AB, neither of which had assigned the rights in the asserted patents to AZ-UK. See Abraxis BioScience, Inc. v. Navinta LLC, No. 07-1251, 2009 WL 904043, at *2 (D.N.J. Mar. 30, 2009) (order denying motion to dismiss for lack of subject matter jurisdiction).

On November 13, 2006, Navinta filed an ANDA for a generic version of Naropin®. Along with the ANDA, Navinta filed a patent certification pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(IV) (“Paragraph IV Certification”), which alleged that none of the claims of the '086 patent would be infringed by the manufacture, use, or sale of Navinta's generic ropivacaine hydrochloride product. At the time of the Paragraph IV Certification, the only patent listed by Astra in the Food and Drug Administration's (“FDA's”) Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”) for Naropin® was the '086 composition patent. Although the '524 and '489 patents issued ten years earlier, on September 23, 1997, and November 10, 1998, respectively, Astra elected not to list those patents in the Orange Book.

On March 15, 2007, Abraxis filed an action against Navinta under the Hatch-Waxman Act, triggering the thirty-month statutory stay on approval of Navinta's ANDA. See Drug Price Competition and Patent Term Restoration Act of 1984, Pub.L. No. 98-417, 98 Stat. 1585 (1984) (codified at 21 U.S.C. §§ 355, 360cc; 35 U.S.C. §§ 156, 271). The complaint alleged that Navinta's ANDA with its Paragraph IV Certification artificially infringes the listed ' 086 patent under 35 U.S.C. § 271(e)(2). See Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 678, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990) ( Section 271(e)(2) creates “a highly artificial act of infringement that consists of submitting an ANDA ... containing a [Paragraph IV Certification] that is in error as to whether commercial, manufacture, use, or sale of the new drug (none of which, of course, has actually occurred) violates the relevant patent.”); Glaxo Group Ltd. v. Apotex, Inc., 376 F.3d 1339, 1351 (Fed.Cir.2004) (“[Section] 271(e)(2) is designed to create an artificial act of infringement for purposes of establishing jurisdiction in the federal courts....”). Also, to avoid the listing requirements under § 271(e)(2) with regards to the '524 and '489 method patents, the complaint erroneously alleged indirect infringement of the method patents under 35 U.S.C. § 271(b)-(c). Abraxis could not make any such allegation, however, because Navinta has never sold or offered to sell ropivacaine hydrochloride products and an act of actual commercial infringement is required for induced or contributory infringement. See 35 U.S.C. § 271(b)-(c).

On the same day this action was filed, Astra L and AZ-AB each executed nearly identical assignments of their respective patents to AZ-UK. The assignments reference the April 26, 2006 APA and provide that the assignments were executed to allow AZ-UK to “further convey” the patents to Abraxis. On November 12, 2007, almost eight months after filing suit, AZ-UK, in a separate document entitled “Intellectual Property Assignment Agreement,” “confirm[ed] the sale, assignment, conveyance and transfer to Abraxis, for Abraxis' sole and exclusive use and enjoyment, of all of AstraZeneca UK's right, title, and interest, in and to” the asserted patents. The agreement further stated that AZ-UK and Abraxis “consider and have considered Abraxis by way of assignment and pursuant to the [APA], to own all rights, title, and interest” to the asserted patents, including the right to sue for patent infringement no later than June 28, 2006.

Awaiting the expiration of the '086 patent on the composition, Navinta submitted a “Section viii Statement” along with a proposed labeling amendment seeking a use for its generic ropivacaine hydrochloride product not covered by the '524 and '489 method patents. As a general rule, the label associated with the generic version of a drug must be exactly the same as the label of the branded drug approved in the original New Drug Application (“NDA”). 21 U.S.C. § 355(j)(2)(A)(v), (j)(4)(G); 21 C.F.R. § 314.94(a)(8)(iv). One exception to the rule under the Hatch-Waxman Act is if a generic manufacturer makes a “Section viii Statement,” 21 U.S.C. § 355(j)(2)(A)(viii), seeking FDA approval for a use not covered by a method patent listed in the Orange Book, along with a proposed label that “carves out” the patented method. Navinta submitted the Section viii Statement to avoid Abraxis's infringement contentions regarding the unlisted method patents. Specifically, Navinta's labeling amendment sought to delete the indication for acute pain management and maintained only the indication for surgical anesthesia with a recommended concentration of greater than 0.5%. It is uncontested that the use of ropivacaine for surgical anesthesia at concentrations of at least 0.5% does not infringe the '524 and '489 patents because the claims of those patents are limited to methods of treating pain and also require concentrations less than 0.25% and 0.5%, respectively.

Initially, the FDA rejected Navinta's labeling amendment because the '524 and '489 patents were not listed in the Orange Book at the time the complaint was filed, and thus, there was no basis for the Navinta package insert to depart from the approved NDA package insert for Naropin®. Then, in late 2007, Abraxis finally listed the '524 and '489 patents in the Orange Book. In response, Navinta resubmitted its Section viii Statement and the FDA allowed the labeling amendment after Navinta made significant changes to its package insert to “carve out” all statements that might reasonably relate to the uses claimed in the '524 and '489 patents.

Subsequently, Navinta filed a motion to dismiss the infringement counts with respect to the '524 and '489 patents for lack of subject matter jurisdiction because the counts alleged speculative future infringement of the unlisted method patents under § 271(b)-(c). In response, Abraxis moved to amend the complaint to add a claim of...