Janssen Pharmaceutica, N.V. v. Apotex, Inc.

• Decision Date: 04 September 2008
• Docket Number: No. 2008-1062.,2008-1062.
• Citation: 540 F.3d 1353
• Parties: JANSSEN PHARMACEUTICA, N.V. and Janssen, L.P., Plaintiffs-Appellees, v. APOTEX, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

540 F.3d 1353

JANSSEN PHARMACEUTICA, N.V. and Janssen, L.P., Plaintiffs-Appellees, v. APOTEX, INC., Defendant-Appellant.

No. 2008-1062.

United States Court of Appeals, Federal Circuit.

September 4, 2008.

Scott B. Howard, Patterson Belknap Webb & Tyler LLP, of New York, NY, argued for plaintiffs-appellees. With him on the brief were Gregory L. Diskant and Irena Royzman.

Amy D. Brody, Rakoczy Molino Mazzochi Siwik LLP, of Chicago, IL, argued for defendant-appellant. With her on the brief were William A. Rakoczy, Christine J. Siwik, and Robert M. Teigen. Of counsel on the brief was Shashank Upadhye, Apotex, Inc., of Weston, Ontario, Canada.

Before MICHEL, Chief Judge, RADER and MOORE, Circuit Judges.

MOORE, Circuit Judge.

Defendant-Appellant Apotex, Inc. (Apotex) appeals the order of the United States District Court for the District of New Jersey dismissing its declaratory judgment action for noninfringement against Plaintiffs-Appellees Janssen Pharmaceutica, N.V. and Janssen, L.P. (collectively Janssen). We affirm.

BACKGROUND

I.

This case arises under the Hatch-Waxman Act (Act),¹ which governs the Food and Drug Administration's (FDA) approval of new and generic drugs. The goal of the Act is to better balance two competing interests in the pharmaceutical industry: "(1) inducing pioneering research and development of new drugs and (2) enabling competitors to bring low-cost, generic copies of those drugs to market." Andrx Pharms., Inc. v. Biovail Corp., 276 F.3d 1368, 1371 (Fed.Cir.2002).

Under the Act, a pioneering or brand name drug company seeking to manufacture a new drug must prepare, file, and have approved a new drug application (NDA) with the FDA. 21 U.S.C. § 355(a), (b). As part of its NDA, the applicant must submit information regarding the new drug's safety and efficacy obtained from clinical trials. 21 U.S.C. § 355(b)(1). The applicant must also identify all 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 U.S.C. § 355(b)(1), (c)(2). The FDA publishes a list of those patents in the "Orange Book." Drugs approved by the FDA are known as "listed drugs." 21 U.S.C. § 355(j)(2)(A)(i).

To encourage the development of generic versions of listed drugs, the Act created an expedited approval process known as an Abbreviated New Drug Application (ANDA). 21 U.S.C. § 355(j). Generic drug companies are not required to conduct their own independent clinical trials to prove safety and efficacy, but can instead rely on the research of the pioneer pharmaceutical companies. 21 U.S.C. § 355(j)(2)(A)(iv), (j)(8)(B). However, in order to rely on the research of the pioneer pharmaceutical companies, an ANDA applicant is required to show bioequivalence of its generic drug to the NDA drug. 21 U.S.C. § 355(j)(2)(A)(iv), (j)(8)(B). The ANDA applicant must also include a certification to each patent listed in the Orange Book covering the listed drug that either (I) no patent information has been filed with the FDA; (II) the patent has expired; (III) the patent will expire on a particular date and approval of the ANDA should be deferred until expiration; or (IV) in the opinion of the ANDA applicant, the patent is invalid or will not be infringed by the manufacture, use, or sale of the generic drug. 21 U.S.C. § 355(j)(2)(A)(vii). These options are respectively referred to as Paragraph I, II, III, and IV Certifications. The timing of ANDA approval is tied to the type of certification contained in the ANDA. For Paragraph IV ANDAs, the timing of approval depends upon two events: (1) whether the pioneer drug company brings an infringement action within 45 days of learning of the Paragraph IV ANDA filing, and (2) whether the company seeking approval was the first one to file an ANDA containing a Paragraph IV Certification to a listed patent (hereinafter first Paragraph IV ANDA filer).

In order to bring about early resolution of patent disputes between generics and pioneering drug companies, the Act provides that the filing of a Paragraph IV Certification is an act of patent infringement. 35 U.S.C. § 271(e)(2)(A); Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 678, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990). The ANDA filer must provide notice to the patentee and NDA holder of the factual and legal bases for the Paragraph IV Certification. 21 U.S.C. § 355(j)(2)(B). Upon such notice, the patentee and NDA holder have the option of suing on all, some, or none of the patents included in the Paragraph IV Certification. If the patentee or NDA holder does not bring suit within 45 days of receiving notice, the FDA may issue final approval of the ANDA once its approval requirements have been satisfied. 21 U.S.C. § 355(j)(5)(B)(iii). If, however, the brand name company brings suit within 45 days, the FDA may not approve the ANDA for 30 months. 21 U.S.C. § 355(j)(5)(B)(iii). The FDA may approve the ANDA after that period, or earlier if a court has decided the patent(s)-in-suit are invalid or not infringed. 21 U.S.C. § 355(j)(5)(B)(iii).

As an incentive for generic pharmaceutical companies to challenge suspect Orange Book listed patents, the Hatch-Waxman Act grants the first company to submit a Paragraph IV ANDA a 180-day period of generic marketing exclusivity during which time FDA will not approve a later-filed Paragraph IV ANDA based on the same NDA (hereinafter subsequent Paragraph IV ANDA). 21 U.S.C. § 355(j)(5)(B)(iv); see Minn. Mining & Mfg. Co. v. Barr Labs., Inc., 289 F.3d 775, 778 (Fed.Cir. 2002). Significantly, the first Paragraph IV ANDA filer is entitled to the 180-day exclusivity period regardless of whether it establishes that the Orange Book patents are invalid or not infringed by the drug described in its ANDA. All that is required for the first Paragraph IV ANDA filer to receive the 180-day exclusivity period is that it submits a substantially complete ANDA that contains a Paragraph IV Certification. 21 U.S.C. § 355(j)(5)(B)(iv)(II)(bb).

The start of the 180-day exclusivity period is triggered by the earlier of two events: (1) the first Paragraph IV ANDA filer's commercial marketing of a drug product; or (2) a court decision of noninfringement or invalidity.² 21 U.S.C. § 355(j)(5)(B)(iv) (2000). Only the first Paragraph IV ANDA filer can trigger its 180-day exclusivity period via the commercial-marketing trigger. 21 U.S.C. § 355(j)(5)(B)(iv)(I) (2000). However, the subsequent Paragraph IV ANDA filers can trigger the first Paragraph IV ANDA filer's 180-day exclusivity period via a successful court judgment. Minn. Mining, 289 F.3d at 780.

On December 8, 2003, the Hatch-Waxman Act was amended by Title XI of the Medicare Prescription Drug, Improvement and Modernization Act of 2003(MMA), Pub.L. No. 108-173, § 1102(a), 117 Stat. 2066, 2457-60. Prior to the MMA, NDA holders employed several methods of delaying the early resolution of patent disputes. See Teva Pharms. USA, Inc. v. Novartis Pharms. Corp., 482 F.3d 1330, 1342 & n. 7 (Fed.Cir.2007). The MMA ameliorates these situations by authorizing a "a civil action" under 28 U.S.C. § 2201 "for a declaratory judgment that the [listed] patent is invalid or will not be infringed by the drug for which the applicant seeks approval ..." 21 U.S.C. § 355(j)(5)(C)(i)(II). Specifically, the MMA allows a Paragraph IV ANDA filer a right to bring a declaratory judgment action for noninfringement or invalidity of the relevant listed patents against the patentee and NDA holder, if the patentee has not brought an infringement action within the 45-day notice period. 21 U.S.C. § 355(j)(5)(C). Congress extended federal court jurisdiction over these declaratory judgment actions "to the extent consistent with the Constitution." 35 U.S.C. § 271(e)(5). Therefore, federal courts have jurisdiction over these declaratory judgment actions to the extent that they present an Article III case or controversy. Caraco Pharm. Labs. v. Forest Labs., 527 F.3d 1278, 1285 (Fed.Cir.2008) (citation omitted).

II.

Janssen holds an approved NDA for its drug Risperdal® Oral Solution. The Orange Book originally listed U.S. Patent Nos. 4,804,663 (`663 patent), 5,453,425 (`425 patent) and 5,616,587 (`587 patent) in connection with this NDA. The '663 patent covers the compound risperidone, which is the active compound in the drug Risperdal® Oral Solution. The '425 and '587 patents cover specific aqueous solutions of risperidone and methods for preparing these solutions. The '663 patent expired on December 29, 2007. However, the FDA granted Janssen an additional six months of pediatric exclusivity pursuant to 21 U.S.C. § 355a, making June 29, 2008 the effective expiration date of the '663 patent.³ The '425 and '587 patents expire in 2014.

The '663 patent has been the subject of prior litigation. Following a bench trial, it was found to be infringed, valid, and enforceable. On May 11, 2007, this court affirmed the judgment of the district court. Janssen Pharmaceutica, N.V. v. Mylan Pharm., Inc., 456 F.Supp.2d 644, 671 (D.N.J.2006), aff'd, 223 Fed.Appx. 999 (Fed.Cir.2007). While Apotex was not a party to that trial, Apotex stipulated to infringement, validity, and enforceability of the '663 patent based on the Federal Circuit opinion. Therefore, this stipulation took effect on May 11, 2007.

Prior to September 2002, Teva Pharmaceuticals USA, Inc. (Teva) filed an ANDA to make a generic version of risperidone oral solution. In filing its ANDA, Teva respected the validity of the '663 patent by filing a Paragraph III Certification on that patent. Teva was the first ANDA applicant to file a Paragraph IV Certification on the '425 and '587 patents. As such, Teva is entitled to 180 days of generic market exclusivity, during which the FDA will not approve a later-filed Paragraph IV ANDA based on the same NDA. Teva's 180-day exclusivity period will begin either the day it begins marketing its drug, or on the date a court determines that the...