Allergan, Inc. v. Actavis, Inc.

• Decision Date: 23 December 2014
• Docket Number: CASE NO. 2:14-CV-188,CASE NO. 2:14-CV-638
• Parties: ALLERGAN, INC., Plaintiff, v. ACTAVIS, INC. et al. Defendants
• Court: U.S. District Court — Eastern District of Texas

ALLERGAN, INC., Plaintiff, v. ACTAVIS, INC. et al. Defendants

CASE NO. 2:14-CV-638

CASE NO. 2:14-CV-188

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

December 23, 2014

LEAD CASE

MEMBER CASE

MEMORANDUM OPINION AND ORDER

Before the Court are Defendants' (Actavis PLC, Actavis, Inc., Watson Laboratories, Inc. and Actavis Pharma, Inc., collectively, "Defendants") Motions to Dismiss for Lack of Personal Jurisdiction (-188 Case, Dkt. No. 24; -638 Case, Dkt. No. 35) and Plaintiff Allergan, Inc.'s Motions for Summary Judgment on Count I and Motions to Dismiss Count II (-188 Case, Dkt. No. 35; -638 Case Dkt. No. 14). Having considered the parties' briefing and the entire record, the Court finds as follows:

• Defendants' motions to dismiss for lack of personal jurisdiction should be, and hereby are DENIED;

• Allergan's motions for summary judgment with respect to its declaratory judgment claims should be, and hereby are GRANTED-IN-PART; and

• Allergan's motions to dismiss its patent infringement claims should be, and hereby are GRANTED.¹

I. BACKGROUND AND SUMMARY OF THE COURT'S OPINION

A. Statutory Framework

This case involves the Defendants' efforts to obtain FDA approval for, and then bring to market, a generic version of Plaintiff Allergan, Inc.'s FDA approved and patented drug, RESTASIS. To accomplish their goal, Defendants must comply with the statutes and regulations governing the approval of generic drugs, including the Food, Drug and Cosmetic Act ("FDCA"), codified at 21 U.S.C. §§ 301 et seq., and specifically the Hatch Waxman amendments to the FDCA, codified at 21 U.S.C. § 355 and 35 U.S.C. § 271(e). The purpose of the Hatch Waxman framework is "to balance two conflicting policy objectives: to induce name brand pharmaceutical firms to make the investments necessary to research and develop new drug products, while simultaneously enabling competitors to bring cheaper, generic copies of those drugs to market." Mylan Pharms., Inc. v. Thompson, 268 F.3d 1323, 1326 (Fed. Cir. 2001) (citing Abbott Labs. v. Young, 920 F.2d 984, 991 (D.C. Cir. 1990) (Edwards, J., dissenting on other grounds)).

1. The ANDA process and "safe harbor."

Under the Hatch Waxman framework, "a pharmaceutical manufacturer seeking approval to market a generic version of a previously approved drug may submit an abbreviated new drug application ('ANDA') to the FDA." Id., at 1325-26 (citing 21 U.S.C. § 355(j) (1994)). An ANDA provides the generic manufacturer with an expedited approval process and dramatically reduces the cost of bringing the generic drug to market, as compared to the approval process required for new "brand-name" drugs. Id. Moreover, the Hatch-Waxman "safe harbor" provisions shield the generic manufacturer from liability for patent infringement that might otherwise attach to the development of the generic drug. See 35 U.S.C. § 271(e)(1).

The expedited approval process and "safe harbor" from patent infringement are valuable assets to a generic manufacturer. To balance these advantages, generic manufacturers must strictly comply with the statutory and regulatory provisions governing the timing and content of disclosures made to the FDA during the ANDA process. See, e.g., 21 U.S.C. § 355(j)(2)(A)(iv) (concerning the bioequivalence of the proposed generic drug).

2. Infringement under 35 U.S.C. § 271(e)(2) and paragraph IV notice.

Once an ANDA has been submitted to the FDA, the name brand manufacturer/patentee may bring an action for infringement under 35 U.S.C. § 217(e)(2), which provides in pertinent part:

It shall be an act of infringement to submit--

(A) an application under section 505(j) of the Federal Food, Drug, and Cosmetic Act [21 USCS § 355(j)] or described in section 505(b)(2) of such Act [21 USCS § 355(b)(2)] for a drug claimed in a patent or the use of which is claimed in a patent.

This provision creates a "highly artificial act of infringement," allowing the patentee to assert its rights before the generic manufacturer has actually entered the market by making, using or selling the patented product. Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 678 (1990).

Further, the Hatch Waxman framework requires the applicant to:

(1) give notice to the name brand manufacturer that it has filed an ANDA targeting the name brand drug;

(2) certify whether its proposed generic drug will infringe any of the patents listed in connection with the name brand drug in the Orange Book; and

(3) state in detail the basis for any belief that the relevant patents are invalid, unenforceable, or not infringed by the proposed generic drug.

21 U.S.C. § 355(j)(2)(B)(i); 21 C.F.R. § 314.95(c)(6). An ANDA applicant has four such certification options: it may certify (I) that the required patent information has not been filed, (II) that the patent has expired, (III) that the patent will expire on a particular date, or (IV) that the patent is invalid, unenforceable or will not be infringed by the drug for which the applicant seeks approval. See 21 U.S.C. § 355(j)(2)(A)(vii)(I)-(IV). The fourth option, aptly named a "paragraph IV" notice, is at issue in this case.

Such notice triggers a forty-five (45) day count down, during which the patentee may sue the generic manufacturer for infringement. 21 U.S.C. § 355(j)(5)(B)(iii). "If the patentee files suit within that period, the FDA may not approve the ANDA until the expiration of the patent, judicial resolution of the infringement suit, a judicial determination that the patent is invalid or unenforceable, or thirty months from the patentee' s receipt of notice, whichever is earliest." Mylan Pharms., 268 F.3d at 1327 (citing 21 U.S.C. § 355(j)(5)(B)). This automatic stay of the ANDA process balances the competing interests of the generic applicant and the patentee, and "enable[s] a court to promptly resolve any dispute concerning infringement and validity." Glaxo Inc. v. Novopharm Ltd., 110 F.3d 1562, 1569 (Fed. Cir. 1997).

B. Procedural History, Pre-Suit

Allergan manufactures and distributes RESTASIS, an ophthalmic product for the treatment of dry eye. It has done so since the FDA approved Allergan's New Drug Application in December of 2002.

On November 14, 2011 Defendants submitted ANDA No. 203463 to the FDA in order to obtain approval for a generic form of RESTASIS. See Dkt No. 14-1.² The FDA responded to Defendants' ANDA on August 30, 2013, stating that "We [the FDA] are refusing to receive thisANDA under 21 CFR 314.101(d)(3) . . . " Id. at 2-3 (listing the defects in Defendant's ANDA and potential remedial measures Defendants might take). The FDA further clarified that, "[i]f [Defendants] choose to respond to this letter to correct the deficiencies, the response will be considered a new original ANDA." Id. at 3 (emphasis in original). Defendants replied in a letter dated October 18, 2013, and submitted various revised or supplemental information to the FDA. See Dkt. No. 14-2. Based on the record before the Court, it does not appear that the FDA has responded to Defendants' October 2013 correspondence.

On January 14, 2014, U.S. Patent No. 8,629,111 issued, listing Allergan as the assignee (-188 Case, Dkt. No. 1-2). On the same day, Defendants sent Allergan a letter asserting (among other things) that that the FDA had "received" Defendants' ANDA and that such ANDA contains a paragraph IV notice for the '111 Patent:

Pursuant to 21 U.S.C. § 3550)(2)(B)(iv)(I) and 21 C.F.R. § 314.95(c)(1), we advise you that FDA has received an Abbreviated New Drug Application ("ANDA") from Watson for Cyc1osporine Ophthalmic Emulsion, 0.05%. The ANDA contains the required bioequivalence data and/or bioequivalence waiver. The ANDA was submitted under 21 U.S.C. § 3550) and contains a paragraph IV certification requesting approval to engage in the commercial manufacture, use or sale of cyc1osporine ophthalmic emulsion, 0.05%, prior to the expiration of the '111 patent.

See -188 Case, Dkt. No. 1-3 at 2 (emphasis added). In response, Allergan contacted the FDA in order to determine the status of Defendants' ANDA. Dkt. No. 1-6. Allergan also asked that Defendants withdraw their purported paragraph IV notice. Dkt. No. 1-5.

C. Procedural History before this Court

Allergan filed suit in this Court on March 6, 2014, seeking a declaratory judgment that Defendants' ANDA application cannot trigger infringement under 35 U.S.C. § 271(e)(2), or alternatively, seeking to recover for infringement of the '111 Patent. See -188 Case, Dkt. No. 1at 16, 17. In lieu of answering Allergan's complaint, Defendants' filed a motion to dismiss for lack of personal jurisdiction (-188 Case, Dkt. No. 24). Allergan opposed the motion to dismiss, see Dkt. No. 40, filed a motion for summary judgment on its claim for declaratory relief, and simultaneously moved to dismiss its patent infringement claims for lack of subject matter jurisdiction. See -188 Case, Dkt. No. 35.

In the interim, the U.S. Patent and Trademark Office issued four additional patents relating to RESTASIS. See Dkt. No. 1-2 (U.S. Patent. No. 8,633,162); Dkt. No. 1-3 (U.S. Patent No. 8,642,556); Dkt. No. 1-4 (U.S. Patent. No. 8,648,048); and Dkt. No. 1-5 (U.S. Patent No. 8,685,930). Such patents were listed in the Orange Book as covering RESTASIS, and Defendants sent Allergan a second letter, purporting to constitute a paragraph IV notice regarding the same:

Pursuant to 21 U.S.C. § 355G)(2)(B)(iv)(I) and 21 C.F.R. § 314.95(c)(1), we advise you that FDA has received an Abbreviated New Drug Application ("ANDA") from Watson for Cyclosporine Ophthalmic Emulsion, 0.05%. The ANDA contains the required bioequivalence data and/or bioequivalence waiver. The ANDA was submitted under 21 U.S.C. § 355G) and contains a paragraph IV certification requesting approval to engage in the commercial manufacture, use or sale of cyclosporine ophthalmic emulsion, 0.05%, prior to the expiration of the '162, '556, '048, and '930 patents.

Dkt. No. 1-6 (emphasis added).

Accordingly, and after...