Orange Book Blog

Teva Pharms. USA v. Eisai et al., No. 2009-1593 (Fed. Cir. 2010)

In a 3-0 decision last week, the Federal Circuit held that Teva has standing to challenge four of Eisai’s Orange Book-listed patents on Aricept (donepezil)–notwithstanding that Eisai statutorily disclaimed two of the patents and granted Teva covenants not to sue on the others.  The Federal Circuit essentially decided that the facts of this case were more like those in Caraco v. Forest, where the court determined there was declaratory judgment jurisdiction for a subsequent Paragraph IV filer, than those in Janssen v. Apotex, where the court determined there was not.

All of these cases involve at least two Orange Book-listed patents, an earlier-expiring patent (“EEP”) and a later-expiring patent (“LEP”), and a first Paragraph IV (“P.IV”) filer who has earned 180-day exclusivity by virtue of not being sued on the LEP.  A subsequent P.IV filer then comes along and, seeking to trigger the first filer’s exclusivity, files a declaratory judgment claim that the LEP is invalid or not infringed.  The patent owner grants the subsequent filer a covenant not to sue on the LEP and moves to dismiss the DJ claim (arguing, “we granted a covenant not to sue, so there’s no threat of a lawsuit, and therefore no case or controversy”).

In Caraco, the first filer, Ivax, filed P.IV certifications on the EEP and LEP.  The patent owner, Forest Labs, sued Ivax on the EEP but not the LEP.  The Federal Circuit found the EEP valid and infringed by Ivax.  Thus, Ivax couldn’t lauch (and its 180-day exclusivity couldn’t start) until the EEP expired.  The subsequent filer, Caraco, filed P.IV certifications on both the EEP and LEP and, like the first filer, was sued on the EEP but not on the LEP.  Thus, in order to trigger Ivax’s 180-day exclusivity, Caraco filed a DJ action on the LEP and sought a declaration of noninfringement.

Finding that Caraco had standing to pursue its DJ action on the LEP, the Federal Circuit stated, “Caraco alleges that it has been restrained from the free exploitation of non-infringing goods.  This is exactly the type of injury-in-fact that is sufficient to establish Article III standing under our caselaw.”  More specifically, according to the court, “the injury upon which Caraco’s suit is premised is the delay in triggering Ivax’s exclusivity period between now and when the [EEP] expires in 2012, not any delay in triggering Ivax’s exclusivity period after the [EEP] expires.”  To cure the injury, it wasn’t enough that Caraco could obtain a judgment that the EEP was invalid; in order to trigger Ivax’s exclusivity and market its noninfringing goods, Caraco also needed to obtain a judgment of invalidity or noninfringement on the LEP.  Moreover, the court found that Caraco’s injury was “fairly traceable” to Forest because if Forest hadn’t listed the LEP in the Orange Book, Caraco would not have been blocked from the market.

In Janssen, the first filer, Teva, filed a Paragraph III (P.III) certification on the EEP and a P.IV on the LEP (actually two LEPs, but the number doesn’t matter).  The patent owner, Janssen, declined to sue Teva.  Due to Teva’s P.III certification, Teva couldn’t launch (and its 180-day exclusivity couldn’t start) until the EEP expired.  The subsequent filer, Apotex, filed P.IV certifications on both the EEP and LEP but, like the subsequent filer in Caraco, was sued only on the EEP.  Thus, in order to trigger Teva’s 180-day exclusivity, Apotex filed a DJ action on the LEP.  But while its DJ claim was pending, Apotex stipulated to the validity of the EEP.  This fact–the only essential difference between Janssen and Caraco–turned out to be dispositive.

Finding that Apotex lacked standing to pursue its DJ action on the LEP, the Federal Circuit stated, “The key difference between Caraco and this case is that the harm that gave rise to the jurisdiction over the declaratory judgment claim in Caraco ceased to exist once Apotex stipulated to the validity, infringement, and enforceability of the [EEP].  Therefore, unlike Caraco, Apotex cannot claim that at the time of the district court’s dismissal it was being excluded from selling a noninfringing product by an invalid patent–it stipulated to the validity of the [EEP].”  In other words, any delay in triggering the first filer’s exclusivity before expiration of the EEP was self-inflicted (due to Apotex’s stipulation), and not “fairly traceable” to the patent owner.

Which brings us to last week’s case.  In Teva v. Eisai, the first filer, Ranbaxy, filed a P.III certification on the EEP and a P.IV on the LEP (actually four LEPs; again, the number doesn’t matter).  Janssen declined to sue Ranbaxy.  Due to its P.III certification, Ranbaxy couldn’t launch until the EEP expired.  The subsequent filer, Teva in this case, filed P.IV certifications on both the EEP and LEP but, like the subsequent filers in Caraco and Janssen, was sued only on the EEP.  Thus, like the subsequent filers in the two prior cases, Teva filed a DJ action on the LEP in order to trigger the first filer’s 180-day exclusivity.  The wrinkle in this case is that Eisai obtained a preliminary injunction on the EEP against Teva.  Eisai argued that the preliminary injunction was like Apotex’s stipulation in the Janssen case.  The district court agreed and dismissed Teva’s DJ action.  But the Federal Circuit reversed.

Finding that Teva had standing to pursue its DJ action on the LEP, the Federal Circuit stated:

Eisai is correct that Teva [has] been subject to a preliminary injunction arising out of the separate [EEP] patent litigation. . . .  As the name itself admits, however, that injunction was “preliminary.”  Indeed, the underlying litigation was still ongoing; there had been no final determination as to the validity, infringement, or enforceability of the ‘841 patent.  Thus, unlike the generic drug company in Janssen which stipulated to the validity, enforceability and infringement of an Orange Book patent, there was no equivalent final judgment regarding the [EEP].  Indeed, Teva would not necessarily remain subject to an injunction, depending on the outcome of the [EEP] patent infringement litigation.

In other words, since the injunction on the EEP was only preliminary, it was not like Apotex’s stipulation, and there was still a risk that the subsequent filer’s drug product, which allegedly did not infringe the LEP, was being blocked from the market by an invalid EEP.

There’s only one problem with this reasoning: the parties had stipulated in July that the preliminary injunction would remain in effect until the EEP expires on November 25, 2010.  The court addressed this fact in a footnote: “This stipulation does not change our analysis in this case for two reasons.  First, it does not affect jurisdiction at the outset of this appeal.  Second, given that the stipulation is only relevant, if at all, until the expiration of the [EEP] patent on November 25, after that date the DJ patents would bar Teva from obtaining FDA approval earlier and marketing” its generic drug product.

As to the court’s first reason, however, the court has confirmed–including as recently as the Janssen case–that jurisdiction over a declaratory judgment action must be present “at all stages of review.”  And as to the court’s second reason, any delay in marketing after expiration of the EEP is a different injury than the one upon which the Caraco decision was based (delay before expiration of the EEP).

In fact, indefinite delay is an injury that the Federal Circuit previously found to be insufficient to give rise to declaratory judgment jurisdiction.  In the Janssen case, Apotex argued that “absent a declaratory judgment action, its approval of its noninfringing generic risperidone product will be indefinitely delayed until Teva’s 180-day exclusivity period is triggered.”  In response, the Janssen court explained:

In Caraco, this court considered the same harm that Apotex alleges and concluded that it was insufficient to create a justiciable Article III case or controversy.  See Caraco (noting possible delay of the first Paragraph IV ANDA filer launching after the expiration of a patent is too speculative to create a justiciable Article III case or controversy).  Our decision in Caraco is supported by Supreme Court precedent which has emphasized that the dispute must be “definite and concrete” and be “real and substantial” in order to give rise to justiciable Article III case or controversy.  Therefore, we hold that a possible delay in the future of a first Paragraph IV ANDA filer in launching its generic product does not give rise to declaratory judgment jurisdiction.

Thus, the Federal Circuit’s stated rationale for finding declaratory judgment jurisdiction in Teva v. Eisai is inconsistent with its holdings in Caraco and Janssen.  There may be some other, unstated, way of reconciling the outcomes.  But if the court is changing course–and holding that indefinite delay after expiration of an EEP is a legally cognizable injury–it would be a significant expansion of declaratory judgment jurisdiction.