Teva Pharmaceuticals Usa, Inc. v. Pfizer Inc.

• Decision Date: 04 April 2005
• Docket Number: No. 04-1186.,04-1186.
• Parties: TEVA PHARMACEUTICALS USA, INC., Plaintiff-Appellant, v. PFIZER INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

405 F.3d 990

TEVA PHARMACEUTICALS USA, INC., Plaintiff-Appellant, v. PFIZER INC., Defendant-Appellee.

No. 04-1186.

United States Court of Appeals, Federal Circuit.

April 4, 2005.

Appealed from: United States District Court for the District of Massachusetts. Judge Richard G. Stearns.

On Petition for Panel Rehearing and Rehearing En Banc.

Henry C. Dinger, Goodwin Procter LLP, of Boston, Massachusetts, filed a combined petition for panel rehearing and rehearing en banc for plaintiff-appellant. Of counsel on the petition was Thomas J. Meloro, Jr., Kenyon & Kenyon, of New York, New York.

Dimitrios T. Drivas, White & Case LLP, of New York, New York, filed an opposition to the petition for defendant-appellee. With him on the opposition were Jeffrey J. Oelke and Adam Gahtan.

Brian T. Moriarty, filed an amicus curiae brief for the Generic Pharmaceutical Association.

William L. Mentlik, Lerner, David, Littenberg, Krumholz & Mentlik, LLP, of Westfield, New Jersey, filed an amicus curiae brief for IVAX Pharmaceuticals, Inc. With him on the brief was Roy H. Wepner.

Lawrence DeMille-Wagman, Attorney, Federal Trade Commission, of Washington, DC, filed an amicus curiae brief for the Federal Trade Commission. With him on the brief were John D. Graubert, Acting General Counsel; Susan A. Creighton, Director, Bureau of Competition; John F. Daly, Deputy General Counsel for Litigation; and Lore A. Unt, Counsel for Intellectual Property.

Theodore Case Whitehouse, Willkie Farr & Gallagher LLP, of Washington, DC, filed an amici curiae brief for United States Senators Edward M. Kennedy, John S. McCain, and Charles E. Schumer.

Before MICHEL, Chief Judge, NEWMAN, MAYER, LOURIE, CLEVENGER, RADER, SCHALL, BRYSON, GAJARSA, LINN, DYK, and PROST, Circuit Judges.

ORDER

A combined petition for panel rehearing and rehearing en banc was filed by the Appellant, and a response thereto was invited by the court and filed by the Appellee.¹ The petition for rehearing was referred first to the merits panel that heard the appeal. Thereafter, the petition for rehearing en banc, response, and the amici curiae briefs were referred to the circuit judges who are authorized to request a poll whether to rehear the appeal en banc. A poll was requested, taken, and failed.

Upon consideration thereof,

IT IS ORDERED THAT:

(1) The petition for panel rehearing is denied.

(2) The petition for rehearing en banc is denied.

(3) The mandate of the court will issue on April 11, 2005.

MAYER, GAJARSA, and DYK, Circuit Judges, would rehear the appeal en banc.

GAJARSA, Circuit Judge, with whom DYK, Circuit Judge, joins, dissents in a separate opinion.

DYK, Circuit Judge, with whom GAJARSA, Circuit Judge, joins, dissents in a separate opinion.

GAJARSA, Circuit Judge, with whom DYK, Circuit Judge, joins, dissenting from the order declining rehearing en banc.

The Court has denied the petition to review this case en banc. I must respectfully dissent from that denial. This is a critical issue under the Hatch-Waxman Act.¹ The failure of this court by en banc action to correct the Teva court's decision, 395 F.3d 1324 (Fed.Cir.2005), allows the statutory procedures to be manipulated by the patent holders to the clear and foreseeable detriment of the generic drug industry.

The Teva court's reasonable apprehension analysis is the wrong test for a concrete, actual, or imminent injury in fact when considering the problem of a generic with a second-filed ANDA certification.² Article III does not compel it, and the Supreme Court has rejected the doctrinal rigidity that Teva introduces. Our cases recognize reasonable apprehension, in the typical patent infringement case, as but a pragmatic attempt to give operational guidance against which patentees can structure their conduct, and control their litigation costs, in a fact-specific area of law. The ANDA facts correspond to the typical infringement case in name only, and it is this court's constitutional duty to look at those facts in their proper context. The Teva court's misguided Article III analysis further thwarts Congress's clear intent to foster, through the detailed provisions of Hatch-Waxman, greater competition in generic pharmaceuticals.

I.

The question is whether Teva has shown a justiciable case or controversy within Article III. Congress unambiguously swept aside any additional limitation on jurisdiction potentially introduced by the Declaratory Judgment Act, 28 U.S.C. § 2201.

[T]he courts of the United States shall, to the extent consistent with the Constitution, have subject matter jurisdiction in any action brought by such person under section 2201 of title 28 for a declaratory judgment that such patent is invalid or not infringed.

35 U.S.C.A. § 271(e)(5) (West Supp.2004), as added by Pub. L. 108-173, 117 Stat. 2457 (Dec. 8, 2003). The law is clear that this justiciability issue has three elements: (1) a concrete, actual or imminent injury in fact; (2) fairly traceable causation between the injury and defendant's conduct; and (3) redressability. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 103-04, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998); Valley Forge Christian Coll. v. Ams. United for Separation of Church and State, Inc., 454 U.S. 464, 472, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982). Only the concrete injury in fact is disputed.

The cases treat the controversy requirements of Article III and § 2201 together and their approach is instructive here. Jurisdiction under § 2201 can be no broader than jurisdiction under Article III, yet the cases show that § 2201 is very broad indeed. Article III is no narrower. See Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 240, 57 S.Ct. 461, 81 L.Ed. 617 (1937) (§ 2201 "has regard to the constitutional provision and is operative only in respect to controversies which are such in the constitutional sense[.]"). As the Supreme Court recognizes, the § 2201 controversy requirement is highly fact specific.

The difference between an abstract question and a "controversy" contemplated by the Declaratory Judgment Act is necessarily one of degree, and it would be difficult, if it would be possible, to fashion a precise test for determining in every case whether there is such a controversy. Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.

Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 85 L.Ed. 826 (1941). The Supreme Court,³ this court,⁴ and our sister circuits⁵ consistently apply this holding by looking to all the circumstances surrounding a controversy.

A.

The Teva majority opinion does not, and its reasons for failing to do so are not convincing. In far more difficult factual contexts the courts have nonetheless found "a concrete, actual or imminent injury in fact" satisfying Article III. In Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S. 59, 98 S.Ct. 2620, 57 L.Ed.2d 595 (1978), for example, the appellees challenged the constitutionality of the Price-Anderson Act. By that Act, Congress limited the aggregate tort liability of nuclear power plant operators for a single nuclear "incident." The appellant was a utility that was constructing nuclear power plants. The appellees, including persons "who live within close proximity of the planned facilities," challenged the statute under the Fifth Amendment. Id. at 67, 98 S.Ct. 2620 (emphasis added). Their theory was that "in the event of a nuclear accident their property would be `taken' without any assurance of just compensation." Id. at 69, 98 S.Ct. 2620 (emphasis added). The court concluded that this theory stated a justiciable Article III controversy. See id. at 81, 98 S.Ct. 2620 ("[A]ppellees will sustain immediate injury from the operation of the disputed power plants.").

The breadth of Article III standing in environmental cases sharply contrasts with the Teva court's narrow construction in this ANDA context. The Supreme Court has held that a concrete injury in fact, for Article III, is shown where a non-profit's members allege that a polluter's discharges, "and the affiant members' reasonable concerns about the effects of those discharges, directly affected those affiants' recreational, aesthetic, and economic interests." Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 183-84, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (emphasis added). The Court expressly ruled that conditional statements — that members would use a river for recreation if Laidlaw stopped discharging pollutants into it — sufficed to show concrete injury in fact under Article III. Id. at 184, 120 S.Ct. 693. Teva's injury in this case, by comparison, is far more immediate.

The facts showing Teva's "concrete, actual or imminent injury" are far easier to identify. Ivax filed the first ANDA on the active ingredient for Zoloft; Teva filed a subsequent or second ANDA. Teva certified that its proposed formulation would not infringe Pfizer's U.S. Patent No. 5,248,699, or that the patent was invalid. Pfizer had 45 days to sue Teva for this patent infringement, 35 U.S.C. § 271(e)(2)(A), and did not. Although Pfizer had sued Ivax, they settled out of court. Pfizer granted Ivax a royalty bearing license for the '699 patent, preserved Ivax's 180 day statutory exclusivity, and designed a comfortable duopoly set to begin on June 30, 2006 and potentially last 180 days past the '699 patent expiration in 2010. The FDA therefore could not approve Teva's generic drug until 180 days after Ivax's exclusivity expired — when either the '699 patent expired or was invalidated — and without FDA approval Teva could not market its product.

By settling with Ivax, Pfizer leveraged the Hatch-Waxman exclusivity to insulate the '699 patent from any validity challenge....