First published in Westlaw Journal Intellectual Property

The Hatch-Waxman Amendments changed the federal Food, Drug and Cosmetic Act to provide, among other things, a mechanism for litigating certain infringement issues before approval of any proposed generic drug product.1

When the U.S. Food and Drug Administration approves a "brand" pharmaceutical company's new drug application, or NDA, the brand company must identify patents that cover its new drug product and submit the patents for listing in the FDA's "Drug Products with Therapeutic Equivalence Evaluations," commonly known as the Orange Book. This sets the stage for generic challenges to the patents in subsequent litigation.

A generic drug manufacturer seeking to copy the brand drug must consult the Orange Book and submit with its amended new drug application one of four certifications for any patent listed in the Orange Book for the brand drug. If the generics manufacturer submits a "paragraph IV" certification that, in its judgment the patent is "invalid or will not be infringed by the manufacture, use, or sale of the drug for which the [ANDA] is submitted," the Hatch-Waxman Amendments provide that the brand company may initiate patent infringement litigation against the generics maker based on the latter's ANDA submission.2

In particular, the generics company making the paragraph IV certification must notify the patentee of this certification, and the patentee, typically the brand company, then has 45 days to sue the generics manufacturer for infringement under 35 U.S.C. § 271(e)(2).3

The mere filing of an ANDA with a paragraph IV certification provides a "jurisdictional hook" in that Section 271(e)(2) establishes jurisdiction for an action of infringement against an ANDA applicant who has yet to engage in the traditional statutorily defined acts of infringement: the making, using, selling or importing into the United States of the patented product. Among the additional benefits of the statutory hook is the FDA's automatic 30-month suspension of its approval of the generic drug pending judicial determination of the brand's complaint.

Notably, those benefits also extend to any newly listed patent issued to the brand after NDA approval if the patent is timely listed within 30 days of issuance and the generic has not yet received final approval from the FDA. If the new patent is timely listed, an ANDA applicant must amend its application to include a certification against the newly issued patent and notify the patentee of this amendment, giving the patentee the opportunity to amend its complaint to assert the newly issued patent. If the new patent is not timely listed, the ANDA applicant need not submit an amended patent certification.4

So a question arises: Can a patentee that has not timely listed its patent in the Orange Book enforce its patent rights against an ANDA applicant? Absent the jurisdictional hook provided by a paragraph IV certification directed to the late-listed patent, can the patentee bring an action for patent infringement against the ANDA applicant under Section 271(e)? Or must it wait until the ANDA applicant launches its generic product, thus conclusively establishing jurisdiction under the other subsections of 35 U.S.C. § 271, such as Section 271(a)?

Taking it a step further, can the patentee assert any patents against a generic applicant where the generic applicant has not made a paragraph certification against the asserted patents? This article addresses these questions through the analysis of decisions of the district courts and the U.S. Court of Appeals for the Federal Circuit.

Jurisdictional Trigger

In Cephalon Inc. v. Sandoz Inc. the U.S. District Court for the District of Delaware ruled on whether it had jurisdiction to consider infringement issues regarding two late-listed patents that the patentee sought to assert in ongoing ANDA litigation concerning two other, timely listed patents that were the subject of paragraph IV certifications.5

In January 2010, Sandoz notified Cephalon that it had filed an ANDA seeking approval of a generic version of Cephalon's Fentora-brand fentanyl citrate buccal tablets. In its notice letter, Sandoz told Cephalon that it had made paragraph IV certifications against U.S. Patent Nos. 6,200,604 and 6,974,590. Cephalon filed suit under Section 271(e)(2) on Feb. 16, 2010, alleging that Sandoz infringed the claims of the named patents.

Nearly one year later, on Jan. 4, 2011, U.S. Patent Nos. 7,862,832 and 7,862,833 were issued. But Cephalon did not submit the '832 and '833 patents for listing in the Orange Book until 81 days after issuance.

Because Cephalon had missed the statutory 30-day deadline, Sandoz did not make any certifications, including paragraph IV certifications, about the late-listed patents, nor was it required to do so. Nonetheless, Cephalon filed a complaint against Sandoz alleging infringement of the '832 and '833 patents under Section 271(e)(2) and seeking relief under the Declaratory Judgment Act.

Sandoz moved to dismiss Cephalon's complaint for lack of subject matter jurisdiction and failure to state a claim. Relying on an unpublished decision by the U.S. District Court for the District of New Jersey, Eisai Co. v. Mutual Pharmaceutical Co., Sandoz argued that where there is no paragraph IV certification, there is no jurisdiction.6

The Cephalon court disagreed with Sandoz's "sweeping conclusion that the absence of a paragraph IV certification limits, as a matter of law, the court's subject matter jurisdiction under both 35 U.S.C. § 271(e)(2) and . . . [the Declaratory Judgment Act]." Downplaying the importance of the paragraph IV certification in Hatch-Waxman ANDA litigation, the court characterized its "sole purpose . . . [as] provid[ing] notice of what patents may be implicated by the ANDA, in order to trigger suit."

The court said concerns about the lack of notice via an amended paragraph IV did not preclude jurisdiction, especially since "the certification provisions exist for the benefit of the patentee" and Sandoz was clearly on notice of the newly issued patents.

Denying Sandoz's motion, the court found that it had subject matter jurisdiction to decide Cephalon's new infringement claims under Section 271(e)(2) despite Cephalon's 81-day delay in listing the newly asserted patents in the Orange Book, saying that "the jurisdictional trigger was properly pulled by the filing of an ANDA and the initial paragraph IV certification." The court further held that jurisdiction was satisfied under 28 U.S.C. § 2201, which governs declaratory judgment actions.

Did Cephalon Contradict Precedent?

The Cephalon court's opinion may arguably run afoul of earlier Supreme Court and Federal Circuit precedent that some believe indicate a paragraph IV certification is required to invoke jurisdiction for infringement claims under Section 271(e)(2).

The U.S. Supreme Court in Eli Lilly & Co. v. Medtronic Inc. stated, "That is what is achieved by Section 271(e)(2)—the creation of a highly artificial act of infringement that consists of submitting an ANDA or a paper NDA containing the fourth type of certification that is in error as to whether commercial manufacture, use, or sale of the new drug (none of which, of course, has actually occurred) violates the relevant patent."7

Perhaps following the guidance of this language, a subsequent line of Federal Circuit decisions also discussed the role paragraph IV certification plays in Hatch-Waxman ANDA litigation. In Bristol-Myers Squibb Co. v. Royce Laboratories, the Federal Circuit said "[i]nclusion of a paragraph IV certification in an ANDA . . . is deemed an act of infringement."8

Similarly, in Allergan Inc. v. Alcon Laboratories, the Federal Circuit said that "[a]s suggested by the certification process, a generic drug manufacturer may file an ANDA before a patent expires and, in so doing, allege non-infringement and invalidity of the patent. The Hatch-Waxman Act provides that, in that situation, the filing of the ANDA is an act of infringement."9

Should the Precedent be Interpreted So Narrowly?

While some might argue that Supreme Court and Federal Circuit precedent support the notion that subject matter jurisdiction for infringement claims under Section 271(e)(2) is established only where there are paragraph IV certifications, certain courts have interpreted the statute differently, seeming to follow a line of reasoning similar to that the Cephalon court expressed where "'the inquiry truly begins because the ANDA filer seeks approval to market a patented drug prior to the expiration of the relevant patent.'"10

The court in Teva Pharmaceuticals USA v. Abbott Laboratories interpreted the language of Eli Lilly somewhat differently, finding jurisdiction in the absence of a paragraph IV certification.11

The court described Eli Lilly's language as "a persuasive explanation of why Congress passed Section 271(e)(2), but it does not follow that Congress therefore intended to limit the artificial act of infringement created by Section 271(e)(2) to ANDAs containing paragraph IV certifications."12

The court explained: "The language of Section 271(e)(2)(A) does not require that the ANDA contain a certification to constitute an act of infringement. It only requires that the application be filed under Section 355(j)."

Similarly, in Bayer Healthcare v. Norbrook Laboratories, the court stated: "Whether an [ANDA] submission contains a paragraph IV certification or any certification is not critical under Section 271(e) (2)(A), as long as 'the purpose of such submission is to obtain approval . . . to engage in the commercial manufacture, use, or sale of a drug or veterinary biological product claimed in a patent or the use of which is claimed in a patent.'"13

Is the Dispute Over?

The Federal Circuit may have laid this issue to rest recently in AstraZeneca Pharmaceuticals v. Apotex Corp.14

The Federal Circuit upheld jurisdiction even though the defendants' ANDAs did not contain paragraph IV certifications against AstraZeneca's timely Orange Book-listed method-of-use patents. The ANDAs contained only a "carve out" statement under 21 U.S.C. § 355(j)(2)(A)(viii), stating the generics manufacturers were seeking to market a drug under a non-patented method of use.

To that end, the two patents-in-suit claimed methods of using AstraZeneca's cholesterol lowering drug rosuvastatin calcium, under the brand name Crestor, to treat heterozygous familial hypercholesterolemia and to lower the cardiovascular disease risk for individuals with elevated circulating C-reactive protein.

The generics companies, however, affirmatively carved out these patented methods, and sought instead to market the drug for the non-patented treatment of patients with homozygous familial hypercholesterolemia or hypertriglyceridemia.

Thus, the generics companies' ANDAs did not contain paragraph IV certifications to the Orange Book-listed method-of-use patents.

During pending litigation concerning infringement of AstraZeneca's compound patent, AstraZeneca filed a complaint alleging infringement that the ANDA filings for rosuvastatin calcium would trigger infringement of the method-of-use patents under Section 271(e)(2).

The District Court dismissed AstraZeneca's infringement claims for lack of subject matter jurisdiction. On appeal, however, the Federal Circuit rejected the lower court's finding of no subject matter jurisdiction, clarifying that the district courts have original jurisdiction over any civil action arising under any act of Congress relating to patents under 28 U.S.C. § 1338(a).

The court said Congress established a "specialized new cause of action for patent infringement" when it enacted Section 271(e)(2) and that "[w]hen patentees pursue this route, their claims necessarily arise under an Act of Congress relating to patents."15 Accordingly, "the requirements for jurisdiction in the district courts are met once a patent owner alleges that another's filing of an ANDA infringes its patent under Section 271(e)(2), and this threshold jurisdictional determination does not depend on the ultimate merits of the claims."

Following in the footsteps of AstraZeneca, the District Court in Research Foundation of State University of New York v. Mylan Pharmaceuticals encountered a slightly different scenario.16

The court addressed the question of whether a generic drug manufacturer can be held liable under Section 271(e)(2) for a patent issued and listed after the ANDA has already been approved but before the ANDA product had launched. Liability under Section 271(e)(2), if found, would effectuate the FDA's immediate withdrawal of its approval of the ANDA product.

In Mylan the FDA approved Mylan's ANDA for a generic version of Oracea on July 1, 2010. Five days later, the U.S. Patent and Trademark Office issued a new patent covering Galderma's branded Oracea product, called the Chang patent. Mylan did not amend its ANDA to add a certification regarding the Chang patent, but instead brought a declaratory judgment action seeking a declaration of non-infringement and invalidity of the Chang patent in October 2010.

The court held the Chang patent valid and infringed by Mylan, but considered additional briefing and oral argument before deciding on the proper remedy.

In its briefing, Galderma argued that it was entitled under Section 271(e)(2) to a change in the effective date of Mylan's ANDA, which would effectively withdraw FDA approval of Mylan's ANDA.17 Mylan, however, argued, in part, that Section 271(e)(2) did not apply because a paragraph IV certification "is a necessary predicate to a claim under Section 271(e)."18

Ultimately, the Mylan court held that a paragraph IV certification was not required for subject matter jurisdiction over a patentee's Section 271(e)(2) claims where the patent issued after ANDA approval but before the generic manufacturer's launch.19

Last year, in Merck Sharp & Dohme Corp. v. Sandoz, Inc., a district court dealt with yet another scenario.20 The case involved two patents that were listed in the Orange Book for one brand dosage strength, the 115 milligram dose, but only one of those patents was listed for the second dosage strength, the 150 mg dose.

Merck realized this mistake, but only after Sandoz had filed its ANDA application to the 150 mg dose, certifying under paragraph IV to the single listed patent. Merck, nevertheless, asserted both patents under 35 U.S.C. § 271(a) even though Sandoz's ANDA contained only the single paragraph IV certification to the single listed patent for the 150 mg dose.

Sandoz filed a motion to dismiss the claims asserting the non-listed patent for lack of subject matter jurisdiction. In its motion, Sandoz repeated the same argument it had unsuccessfully advanced in Cephalon regarding the necessity of a paragraph IV certification, while once again relying on Eisai as well as another unpublished opinion from the same court, Novo Nordisk Inc. v. Mylan Pharmaceuticals.21

The District Court in Merck, however, did not accept the reasoning of the cases cited by Sandoz, and instead relied on the recent Federal Circuit holding in AstraZeneca, where the court found a paragraph IV certification unnecessary for establishing jurisdiction. Indeed, in denying Sandoz's motion, the District Court said, "Nothing in the plain language . . . [of the statute] suggests that infringement actions against ANDA filers must be based only on Orange Book listed patents."

Based on this line of cases, it appears that the patentee is not confined to asserting Orange Book-listed patents. Rather, subject matter jurisdiction appears to exist even if the asserted patent is late-listed, not listed at all or directed to arguably different subject matter. Thus, generics companies may consider conducting due diligence investigations of entire patent portfolios, rather than just the Orange Book-listed patents. In any event, this line of cases opens up additional avenues for infringement challenges that generics manufacturers may want to consider before filing an ANDA.