Astrazeneca Ab v. Impax Laboratories, Inc.

Decision Date25 May 2007
Docket NumberNo. M-21-81 (BSJ).,No. 01 CIV. 2998(BSJ).,No. MDL 1291.,No. 00 CIV. 7597(BSJ).,00 CIV. 7597(BSJ).,01 CIV. 2998(BSJ).,M-21-81 (BSJ).,MDL 1291.
Citation490 F.Supp.2d 368
PartiesASTRAZENECA AB, et al, Plaintiffs, v. IMPAX LABORATORIES, INC. Defendants. In re Omeprazole Patent Litigation.
CourtU.S. District Court — Southern District of New York

Errol B. Taylor, Fredrick M. Zullow, John M. Griem, Jr., Lawrence T. Kass, Milbank, Tweed, Hadley & McCloy LLP, New York, NY, for Plaintiffs.

Order

JONES, District Judge.

Presently before the Court is Impax Laboratories, Inc.'s Motion to Dismiss for Lack of Subject Matter Jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). For the reasons set forth below, Impax's motion is DENIED.

Background

This is a patent infringement action brought by Plaintiffs AstraZeneca AB, Aktiebolaget Hässle, KBI-E Inc., KBI Inc., Astra Pharmaceuticals, L.P., and AstraZeneca, LP (collectively "Plaintiffs," "AstraZeneca," or "Astra") against Impax Laboratories, Inc. ("Impax"), a manufacturer of generic pharmaceutical products in the United States. Astra alleges infringement of U.S. Patent Numbers 4,786,505 and 4,853,230 (the "'505 Patent" and the "'230 Patent," respectively), which cover the Prilosec® formulation.

A. Statutory Background

Resolution of this matter requires the Court to analyze three distinct statutory provisions; therefore, the Court will provide a brief overview of the relevant provisions. For a detailed explanation, see Mylan Labs., Inc. v. Thompson, 389 F.3d 1272 (D.C.Cir.2004); Barr Labs., Inc. v. Thompson, 238 F.Supp.2d 236 (D.D.C.2002).

1. The Hatch-Waxman Amendments

21 U.S.C. § 355(j), a provision of the 1984 Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act ("FDCA"), "creates an, approval shortcut for applicants seeking to market generic versions of approved drugs." Thompson, 389 F.3d at 1274-75. Section 355(j) permits a generic applicant to file an abbreviated new drug application ("ANDA") with the U.S. Food and Drug Administration ("FDA") certifying that the generic version is bioequivalent to an approved drug, and thus avoid having to conduct its own clinical trials. Id. at 1275. The ANDA must include "a certification, that for each of the patents applicable to the pioneer drug, the proposed generic drug would not infringe the patent because (I) the patent information has not been filed; (II) the patent has expired; (III) the patent will expire on a stated date; or (IV) the patent is invalid or will not be infringed by the manufacture, use or sale of the drug for which the abbreviated application applicant seeks approval." 21 U.S.C. § 355(j)(2)(A)(viii), cited in Mylan Labs., Inc. V. Leavitt, No. 07-579, 2007 WL 1241884, at *2 (D.D.C. Apr.30, 2007). These certifications are referred to as Paragraphs I, II, III, and IV, respectively.

35 U.S.C. § 271(e)(2), a patent statute, also enacted in the Hatch-Waxman Amendments, creates a cause of action for patent infringement based solely upon the filing of an ANDA containing a Paragraph IV certification. Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 676, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990). Section 271(e)(4) sets out the exclusive remedies available in a patent infringement action under § 271(e)(2):

For an act of infringement described in paragraph (2)

(A) the court shall order the effective date of any approval of the drug or veterinary biological product in the infringement to be a date which is not earlier than the date of expiration of the patent which has been infringed,

(B) injunctive relief may be granted against an infringer to prevent the commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of an approved drug or veterinary biological product, and

(C) damages or other monetary relief may be awarded against an infringer only if there has been commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of an approved drug or veterinary biological product.

35 U.S.C. § 271(e)(4).

2. The Period of Market Exclusivity

In 1997, in an effort to encourage the pediatric testing of drugs, Congress passed the Food and Drug Administration Modernization Act, Pub.L. No. 105-115, 111 Stat. 2296 (1997), which grants manufacturers of drugs that agree to conduct pediatric studies, six months of market exclusivity for their products. Ass'n of Am. Physicians & Surgeons, Inc. v. U.S.F.D.A., 226 F.Supp.2d 204, 206 (D.D.C.2002). 21 U.S.C. § 355a, the "pediatric exclusivity" provision, authorizes a patent holder to receive a six-month period of market exclusivity beyond the patent's expiration date, if the patent holder "has satisfactorily conducted pediatric testing of its drug upon the FDA's request." Thompson, 389 F.3d at 1275. This provision serves as an incentive for a drug patent holder to conduct expensive and difficult pediatric studies of a drug that the FDA believes may have a beneficial pediatric use. Thompson, 389 F.3d at 1276; cf. Ass'n of Am. Physicians & Surgeons, 225 F.Supp.2d at 206 (noting that "[b]ecause of the expense and difficulty in finding substantial pediatric populations to undergo tests, along with the ethical complications associated with testing new drugs on children, many drugs are tested for safety and effectiveness in adults only").

"If the FDA makes a request and the NDA holder satisfies that request's requirement, pediatric exclusivity provides for a six-month delay in the effective date of the pending ANDAs." Barr Labs., 238 F.Supp.2d at 241. The effect of the grant of pediatric exclusivity depends on the type of certification included in the ANDA. If the drug is the subject of a Paragraph II or Paragraph III certification, "the period during which an application may not be approved under .... [21 U.S.C. § 355(j)(5)(B)] shall be extended by a period of six months after the patent expires (including any patent extensions)." 21 U.S.C. § 355a(c)(2)(A). If the drug is the subject of a Paragraph IV certification "and in the patent infringement litigation resulting from the certification the court determines that the patent is valid and would be infringed, the period during which an application may not be approved under [21 U.S.C. § 355(j)(5)(B)] shall be extended by a period of six months after the date the patent expires (including any patent extensions)." 21 U.S.C. § 355a(c)(2)(B).

As an initial matter, the Court notes that AstraZeneca is entitled to a six-month period of pediatric exclusivity under 21 U.S.C. § 355a(c)(2)(B). This period of pediatric exclusivity is set to expire on October 20, 2007.

B. The Present Case

In April 2000, Impax sent Astra notice that it had submitted an abbreviated new drug application ("ANDA") to the FDA seeking approval to engage in the commercial manufacture, use, or sale of its 10-mg and 20-mg omeprazole products, called "Omeprazole Delayed Release Capsules 10 and 20 mg," as generic versions of Astra's Prilosec® product. As part of its ANDA, Impax included a Paragraph IV Certification, as described in 21 U.S.C. § 355(j)(2)(A)(vii)(IV), stating that the '505 and '230 patents "[are] invalid or will not be infringed by the manufacture, use, or sale of the new drug." (Second Am. Compl. Against Impax (hereinafter "Second Am. Compl.") ¶¶ 12, 24.)

On May 15, 2000, Plaintiffs filed their initial Complaint alleging that Impax committed an act of infringement under 35 U.S.C. § 271(e)(2) with respect to the '505 and '230 patents, by filing its ANDA seeking approval from the FDA to engage in the commercial manufacture, use, or sale of its 10- and 20-mg Omeprazole Delayed Release Capsules, prior to the expiration of the '505 and '230 patents. (Second Am. Compl. ¶¶ 11, 16, 28.) On January 8, 2002, Impax sent Astra notice that it had "submitted an amendment to ANDA 75-785, providing for the addition of a 40mg strength" Omeprazole Delayed Release Capsule. (Trial Ex. 1128.)

On November 8, 2002, Impax obtained final approval of its ANDAs and in September 2004, began to market and sell its generic products. (Impax's Mem. of Law in Supp. of its Mot. to Dismiss Under Rule 12(b)(1) for Lack of Subject Matter Jurisdiction (hereinafter "Def.'s Motion") at 2.) With leave of Court, Plaintiffs filed a Second Amended Complaint on March 1, 2005, adding allegations of direct, contributory, and inducing infringement under 35 U.S.C. § 271(a), (b), and (c), respectively, and a demand for damages. (Second Am. Compl. ¶¶ 19a-20, 31a-32.) On February 14, 2005, Impax filed its Answer and Counterclaims to Plaintiffs' Second Amended Complaint. Impax asserted counterclaims of invalidity and non-infringement, and demanded a jury trial on Plaintiffs' infringement claims and its counterclaims. (Impax Answer & Countercls. ¶ 235.) In order to include Impax in the consolidated Second Wave Bench Trial,1 Plaintiffs agreed to dismiss with prejudice their claims for damages under § 271(a)-(c). In January 2006, the Court severed and stayed Impax's antitrust counterclaims pending the resolution of the patent infringement action, and ordered Plaintiffs to submit a voluntary dismissal of the damages claims.2 (Order Denying Impax's Claim to Jury Trial, Jan. 13, 2006.)

The case was tried to the Court sitting without a jury for 42 trial days, starting April 3, 2006 and ending June 14, 2006. Post-trial findings of fact and conclusions of law were fully submitted on August 1, 2006. The '505 and '230 patents expired on April 20, 2007, while, a final decision was sub judice.

Discussion

On April 23, 2007, Impax filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). Impax asserts that upon the expiration of the '505 and '230 patents on April 20, 2007, the Court was divested of jurisdiction over Plaintiffs' claims for patent infringement under 35 U.S.C. § 271(a)-(c) and § 271(e)(2).

A. Legal Standard for Dismissal

A motion to dismiss for...

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