Apotex, Inc. v. Daiichi Sankyo, Inc.

Decision Date31 March 2015
Docket Number2014–1291.,Nos. 2014–1282,s. 2014–1282
Citation781 F.3d 1356,114 U.S.P.Q.2d 1269
PartiesAPOTEX, INC., Plaintiff–Appellant v. DAIICHI SANKYO, INC., Daiichi Sankyo Co., Ltd., Defendants–Appellees v. Mylan Pharmaceuticals Inc., Movant–Cross–Appellant.
CourtU.S. Court of Appeals — Federal Circuit

Steven Eric Feldman, Husch Blackwell LLP, Chicago, IL, argued for plaintiff-appellant. Also represented by Sherry Lee Rollo, James Patrick White, Daniel Ronald Cherry.

Dominick A. Conde, Fitzpatrick, Cella, Harper & Scinto, New York, N.Y., argued for defendants-appellees. Also represented by Charles Austin Ginnings, Nina Shreve.

Michael Shumsky, Kirkland & Ellis LLP, Washington, DC, argued for movant-cross-appellant. Also represented by John Kevin Crisham, Stephen S. Schwartz.

Before TARANTO, MAYER, and CLEVENGER, Circuit Judges.


TARANTO, Circuit Judge.

Apotex, Inc. brought this action against Daiichi Sankyo Co., Ltd. and Daiichi Sankyo, Inc. (collectively, Daiichi) to obtain a declaratory judgment that Apotex will not infringe a patent owned but disclaimed by Daiichi if Apotex manufactures or sells a generic drug bioequivalent to Daiichi's Benicar®. Apotex cannot infringe the patent, because Daiichi has disclaimed it, but Apotex nevertheless claims a concrete interest in obtaining a judgment of non-infringement for its generic drug because such a judgment would enable Apotex to receive marketing approval from the United States Food and Drug Administration and to enter the market sooner than otherwise. The district court dismissed Apotex's complaint for lack of a case or controversy. We reverse. Under the statute that governs marketing approval of generics, Apotex has a concrete, potentially high-value stake in obtaining the judgment it seeks; and Daiichi has a concrete, potentially high-value stake in denying Apotex that judgment and thereby delaying Apotex's market entry—as does Mylan Pharmaceuticals, Inc., the first applicant for approval of a generic version of Benicar®. We also reverse the district court's denial of Mylan's motion to intervene in this action.


Under the authority of the FDA's approval of its New Drug Application (NDA), 21 U.S.C. § 355(a), (c), Daiichi markets Benicar ® for treating hypertension. In seeking FDA approval for Benicar ®, Daiichi listed two patents in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations publication, or “Orange Book.” See 21 U.S.C. § 355(b)(1) (requiring listing of patents that “could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug”); 21 C.F.R. §§ 314.3, 314.53. The first, U.S. Patent No. 5,616,599, covers the active ingredient of the drug, olmesartan medoxomil. It expires on April 25, 2016, but because Daiichi provided the FDA certain data concerning the drug's effects on children, the FDA must wait six months longer—i.e., until October 25, 2016—before approving a generic version of the drug. See 21 U.S.C. § 355a(b)(1)(B)(i). Daiichi's second listed patent, U.S. Patent No. 6,878,703, covers methods of treatment. It expires on November 19, 2021.

At least two generic manufacturers have sought approval from the FDA to market generic olmesartan medoxomil products. All parties agree that Mylan (actually Matrix Laboratories, which is now Mylan) was the first to seek approval: it filed an Abbreviated New Drug Application (ANDA) with the FDA, under 21 U.S.C. § 355(j), in April 2006. In that application, Mylan certified under paragraph IV of § 355(j)(2)(A)(vii) that both the '599 and ' 703 patents were invalid or would not be infringed by Mylan's proposed drug.

In early July 2006, after receiving notice of Mylan's paragraph IV certification, Daiichi disclaimed all claims of the '703 patent. See 35 U.S.C. § 253. The record does not tell us why. We have no information about whether, for example, Daiichi recognized the invalidity of the patent or, even, that it never should have been listed under § 355(b)(1)'s “could reasonably be asserted” standard.

Having disclaimed the '703 patent, Daiichi sued Mylan for infringing the '599 patent, invoking the declaration of 35 U.S.C. § 271(e)(2)(A) that the submission of a paragraph IV certification constitutes an act of infringement. Only validity was disputed in the case, and after a full trial, the district court upheld the validity of the '599 patent and entered judgment of infringement against Mylan. Daiichi Sankyo Co. v. Mylan Pharm. Inc., 670 F.Supp.2d 359, 387 (D.N.J.2009). We affirmed. Daiichi Sankyo Co. v. Matrix Labs., Ltd., 619 F.3d 1346 (Fed.Cir.2010). With the '703 patent disclaimed and the '599 patent upheld, Mylan's earliest date of market entry—the earliest effective date of any FDA approval for Mylan—is October 25, 2016, six months after the expiration date of the '599 patent.

In June 2012, four years before that date and roughly two years after the '599 litigation was over, Apotex filed its own ANDA for generic olmesartan medoxomil. Apotex included two different certifications under 21 U.S.C. § 355(j)(2)(A)(vii). One was a paragraph III certification accepting, rather than disputing, the result of the 20062010 litigation. That certification states that the '599 patent is valid and that Apotex's product would infringe, thereby barring an effective date of FDA approval any earlier than October 25, 2016. See § 355(j)(5)(B)(ii). Apotex's other certification was a paragraph IV certification stating that Apotex's product would not infringe the '703 patent.

As is undisputed here, non-infringement of the '703 patent follows as a matter of law from the fact that Daiichi has formally disclaimed it. See Altoona Publix Theatres, Inc. v. American Tri–Ergon Corp., 294 U.S. 477, 492, 55 S.Ct. 455, 79 L.Ed. 1005 (1935) ; Guinn v. Kopf, 96 F.3d 1419, 1422 (Fed.Cir.1996). Indeed, in its July 2006 letter asking the FDA to remove the ' 703 patent from the Orange Book, Daiichi stated: “The effect of the disclaimer is that the 6,878,703 patent no longer exists.” J.A. 99. And in July 2012, it wrote to Apotex stating that, because of its disclaimer of the ' 703 patent, it “cannot ... sue any entity ... for infringement of that patent.” J.A. 104.

Daiichi did not sue Apotex for infringing the '703 patent, and the FDA has not removed the '703 patent from the Orange Book, despite Daiichi's 2006 request. See Teva Pharm. USA, Inc. v. Sebelius, 595 F.3d 1303, 1317–18 (D.C.Cir.2010) (patent owner's unilateral request to remove patent from Orange Book is not a sufficient basis for FDA to do so). But Apotex sued Daiichi in the United States District Court for the Northern District of Illinois under 21 U.S.C. § 355(j)(5)(C)(i) and 35 U.S.C. § 271(e)(5), seeking a declaratory judgment that its product would not infringe the disclaimed '703 patent. Mylan moved to intervene, and both it and Daiichi moved to dismiss Apotex's complaint. Given the non-infringement consequence of the Daiichi disclaimer, the dispute in the district court was not over the merits of infringement. Rather, the dispute was over whether, precisely because non-infringement is indisputable, the district court must deny the requested declaratory judgment for lack of a case or controversy.

Apotex asserted that it has a concrete stake in securing the requested declaratory judgment because, under the governing statutory provisions, the requested judgment would allow it to enter the market earlier than it could without the judgment. Two statutory provisions are key. First: Under § 355(j)(5)(B)(iv), because Mylan was the first to file an ANDA for generic olmesartan medoxomil and has maintained a paragraph IV certification regarding the '703 patent, Mylan is presumptively entitled to a period of 180 days of exclusivity—starting whenever, after October 25, 2016, it enters the market—before facing competition from another seller of generic olmesartan medoxomil. That exclusivity period would end no earlier than April 23, 2017. Second: Under § 355(j)(5)(D), the exclusivity period may be forfeited in certain specified circumstances. According to Apotex, a court judgment of non-infringement would cause Mylan to forfeit the exclusivity period if Mylan has not marketed its drug 75 days after appeal rights are exhausted (certiorari aside) and Apotex has obtained tentative approval for its generic product from the FDA. § 355(j)(5)(D)(i)(I)(bb)(AA). If that is correct, and the judgment comes soon enough, Apotex could enter the market substantially before April 23, 2017 (even longer before a later end of Mylan's exclusivity period if Mylan delays entry past October 25, 2016); such entry would likely transfer sales from Daiichi and Mylan to Apotex and, because of the greater competition, reduce the price Daiichi and Mylan would charge.

Daiichi and Mylan did not dispute that an earlier-than-otherwise Apotex entry into the market would likely have the identified effects, to Apotex's benefit and Daiichi's and Mylan's detriment. But Daiichi argued that no controversy exists because it could not now assert the disclaimed '703 patent against Apotex. Mylan added arguments based on the fact that Apotex lacked (and lacks) a “tentative approval” from the FDA for its ANDA.1 Specifically, Mylan argued that redress of Apotex's delayed-market-entry injury is unduly speculative before tentative approval is in hand. Mylan also made an argument based on the fact that tentative approval is a necessary statutory condition for the forfeiture of Mylan's presumptive exclusivity period based on the declaratory judgment requested here. § 355(j)(5)(D). It argued that the forfeiture provision should be read to mean that, for a declaratory judgment brought by a second ANDA filer to cause forfeiture, the second ANDA filer must have had tentative FDA approval when it brought the declaratory-judgment action. Under that interpretation, Mylan contended, the present action cannot provide Apotex forfeiture relief—even if Apotex could file an identical...

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