Takeda Pharm. Co. v. Mylan Inc.

• Decision Date: 01 August 2014
• Docket Number: Case No.: 14–CV–00314–LHK,Consolidated and Related Cases: 13–CV–04001–LHK, 13–CV–04002–LHK
• Citation: 62 F.Supp.3d 1115
• Court: U.S. District Court — Northern District of California
• Parties: Takeda Pharmaceutical Co., Ltd., Takeda Pharmaceuticals U.S.A., Inc., and Takeda Pharmaceuticals America, Inc., Plaintiff, v. Mylan Inc. and Mylan Pharmaceuticals Inc., Defendants.

62 F.Supp.3d 1115

Takeda Pharmaceutical Co., Ltd., Takeda Pharmaceuticals U.S.A., Inc., and Takeda Pharmaceuticals America, Inc., Plaintiff

v.Mylan Inc. and Mylan Pharmaceuticals Inc., Defendants.

Case No.: 14–CV–00314–LHK

Consolidated and Related Cases: 13–CV–04001–LHK, 13–CV–04002–LHK

United States District Court, N.D. California, San Jose Division.

Signed August 01, 2014

Heather E. Takahashi, Jeffrey I. Weinberger, Ted G. Dane, Esq., Munger, Tolles and Olson LLP, Los Angeles, CA, Eric Kelvin Chiu, Tina Wang Arroyo, Munger, Tolles & Olson LLP, San Francisco, CA, for Plaintiff.

Ryan W. Koppelman, Alston & Bird LLP, East Palo Alto, CA, for Defendants.

ORDER GRANTING PARTIAL MOTION TO DISMISS

LUCY H. KOH, United States District Judge

Plaintiffs Takeda Pharmaceutical Co. Ltd., Takeda Pharmaceuticals U.S.A., Inc., and Takeda Pharmaceuticals America, Inc. (collectively, “Takeda”) filed this patent infringement action against Defendants Mylan Pharmaceuticals Inc. and Mylan Inc. (collectively, “Mylan”). See Compl. (ECF No. 1). Takeda's claims relate to Mylan Pharmaceuticals Inc.'s filing of an Abbreviated New Drug Application (“ANDA”) for a generic form of Takeda's branded drug Dexilant®>, for treatment of gastroesophageal reflux disease

. In its Complaint, Takeda pleaded two Counts. Count I is a claim for infringement under the Hatch–Waxman Act pursuant to 35 U.S.C. § 271(e)(2). Id. ¶¶ 29–31. Count II seeks a declaratory judgment of infringement under 28 U.S.C. § 2201, “[p]ursuant to 35 U.S.C. § 271(a), (b), or (c).” Id. ¶¶ 32–38.

Mylan moves to dismiss Count II under Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction or, alternatively, for an order terminating the automatic stay of the Food and Drug Administration's (“FDA”) approval of Mylan's ANDA. See ECF No. 13 (“Mot.”) at 1. Mylan argues that the Court lacks jurisdiction over Count II under the Declaratory Judgment Act because there is no controversy of “sufficient immediacy and reality.” Id. at 6–10. Additionally, Mylan argues that the Court should not exercise its discretion to hear Count II because it would undermine congressional intent in enacting the Hatch–Waxman Act. Id. at 10–12.

On April 14, 2014, Takeda opposed Mylan's Motion to Dismiss. ECF No. 19–3 (“Opp'n”). On April 24, 2014, Mylan replied. ECF No. 26–4 (“Reply”). The Court held a hearing on July 31, 2014. Having considered the parties' submissions and the relevant law, the Court GRANTS Mylan's motion to dismiss Count II. Consequently, Mylan's alternative request for an order terminating the automatic 30–month stay of the FDA's approval of ANDA No. 205–205 is DENIED as moot.

I. BACKGROUND

A. The Hatch–Waxman Act

The Hatch–Waxman Act's framework for generic drugs and resolution of related patent infringement disputes has been explained repeatedly in detail. See generally Caraco Pharm. Labs., Ltd. v. Forest Labs., Ltd., 527 F.3d 1278, 1282–86 (Fed.Cir.2008) (explaining ANDA procedures and patent infringement claims under the Hatch–Waxman Act). The Court notes only relevant parts of this legal background for purposes of this motion.

The Food, Drug, and Cosmetic Act (“FDCA”) requires a drug manufacturer to submit a New Drug Application (“NDA”) to the FDA for approval. 21 U.S.C. § 355(a). In addition to extensive testing and safety information concerning the drug, the manufacturer must also submit the patent number and expiration date of any patent that claims the drug or a method of using the drug with respect to which a claim of patent infringement could reasonably be asserted. Id. § 355(b)(1). Once the NDA is approved, the FDA lists this patent information with the approved drug in its Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the “Orange Book.” See id. §§ 355(b)(1), 355(j)(7)(A)(i)-(iii). The Orange Book must list “each drug which has been approved for safety and effectiveness” through an NDA. Id. § 355(j)(7)(A)(i)(I). If a patent claiming the drug or method of using the drug issues after the NDA is approved, the NDA holder must submit the patent information to the FDA within 30 days of issuance for publication in the Orange Book. Id. § 355(c)(2).

The Hatch–Waxman Act amended the FDCA to provide for the ANDA process, which allows drug manufacturers to obtain FDA approval for generic versions of previously approved drugs without repeating the extensive testing required for an NDA. See id. § 355(j). When submitting an ANDA to the FDA, the generic manufacturer must make one of four certifications for each patent listed in the Orange Book for the reference-listed drug: (1) that no patent information has been filed, (2) that the patent has expired, (3) that the patent will expire on a specific date, or (4) that the patent “is invalid or will not be infringed by the manufacture, use, or sale of the drug for which the application is submitted” (a “Paragraph IV” certification). Id. § 355(j)(2)(A)(vii). If a generic manufacturer makes a Paragraph IV certification in its ANDA, the Hatch–Waxman Act requires that the applicant give notice to the patent owner, setting forth the factual and legal basis for the applicant's opinion that the patent is invalid or will not be infringed by the applicant's proposed generic drug. Id. § 355(j)(2)(B). If the ANDA contains a Paragraph IV certification, the patent owner may sue the generic applicant for infringement under 35 U.S.C. § 271(e)(2) within 45 days after receiving notice, which triggers a 30–month stay of FDA approval of the ANDA. Id. § 355(j)(5)(B)(iii).¹

35 U.S.C. § 271(e) defines infringement under the Hatch–Waxman Act with regard to a generic manufacturer's use of a patent for purposes of developing an ANDA and seeking FDA approval. A generic drug manufacturer enjoys a “safe harbor” from infringement suits for use of the patent during development and submission of an ANDA: “It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention ... solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.” § 271(e)(1). In other words, § 271(e)(1) “allows competitors, prior to the expiration of a patent, to engage in otherwise infringing activities necessary to obtain regulatory approval.” Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 671, 110 S.Ct. 2683, 110 L.Ed.2d 605 (1990).

Once an ANDA is filed, however, § 271(e)(2) makes such a filing an act of infringement “if the purpose of such submission is to obtain approval under such Act to engage in the commercial manufacture, use, or sale of a drug ... claimed in a patent or the use of which is claimed in a patent before the expiration of such patent.” Thus, § 271(e)(2) makes the “paper act” of filing an ANDA an act of infringement. This provision, according to the Supreme Court, created “a new (and somewhat artificial) act of infringement for a very limited and technical purpose that relates only to certain drug applications.” Eli Lilly, 496 U.S. at 676, 110 S.Ct. 2683 ; see also Glaxo Grp. Ltd. v. Apotex, Inc., 376 F.3d 1339, 1351 (Fed.Cir.2004) (“35 U.S.C. § 271(e)(2) is designed to create an artificial act of infringement for purposes of establishing jurisdiction in the federal courts.”). Because § 271(e)(1) exempts generic manufacturers from an infringement suit during ANDA development, § 271(e)(2) “permit[s] patent holders to bring suit against generic companies despite the fact that the generic companies have not yet infringed the patents at issue.” Apotex, 376 F.3d at 1351 ; see also Bristol – Myers Squibb Co. v. Royce Labs., Inc., 69 F.3d 1130, 1135 (Fed.Cir.1995) (stating that § 271(e)(2) “makes it possible for a patent owner to have the court determine whether, if a particular drug were put on the market, it would infringe the relevant patent”).

The Federal Circuit has held that § 271(e)(2) “is not a jurisdictional statute in the strict sense of the word” because in a suit under § 271(e)(2), district courts have subject matter jurisdiction pursuant to 28 U.S.C. § 1338(a), which provides for original jurisdiction in the district courts for any civil action “arising under any Act of Congress relating to patents.” Allergan, Inc. v. Alcon Labs., Inc., 324 F.3d 1322, 1330 (Fed.Cir.2003) (quoting 28 U.S.C. § 1338(a) ). However, § 271(e)(2) “makes it possible for the district court to exercise its section 1338(a) jurisdiction in the situation in which an ANDA has been filed.” Id. at 1330. Thus, the Federal Circuit has deemed § 271(e)(2) to be “primarily a jurisdictional-conferring statute that establishes a case or controversy in a declaratory judgment action.” Apotex, 376 F.3d at 1351.

B. Procedural Background

Takeda asserts U.S. Patent No. 7,339,064 (the “'064 Patent”), which issued on March 4, 2008 and will expire on July 15, 2020. See Compl. ¶¶ 17, 18. The '064 Patent is entitled “Benzimidazole Compound Crystal” and claims crystalline forms of benzimidazole derivatives in a pharmaceutical composition for treating or preventing digestive ulcers. '064 Patent col. 1 ll.38–59. Takeda asserts that the '064 Patent claims “hydrate and sesquihydrate crystal forms of dexlansoprazole

,” which is the active ingredient in Dexilant®. Opp'n at 3–4. The '064 Patent is not currently listed in the Orange Book for Dexilant®>. Takeda explains that it has not submitted the required data to the FDA showing that the crystal forms claimed in the '064 Patent are bioequivalent to the crystal form in Dexilant®. See

id. at 4.

Mylan Pharmaceuticals Inc. submitted ANDA No. 205–205 to the FDA, seeking approval to market a generic version of Dexilant® in 30 mg and 60 mg dosage forms prior to expiration of the '064 Patent. See Compl. ¶ 21. In July 2013, Takeda received notice letters from Mylan with a Paragraph IV Certification that certain Takeda Orange Book patents are invalid,...