Metrics, Inc. v. Senju Pharmaceutical Co., Ltd.

Addressing threshold jurisdictional issues of a petition for inter partes review (IPR), the U.S. Patent and Trademark Office’s (USPTO) Patent Trial and Appeal Board (PTAB or Board) determined that a d/b/a name does not create a legal entity “separate from the underlying corporate entity” that should have been named as a real party in interest and that a Paragraph IV certification in an Abbreviated New Drug Application (ANDA) with the U.S. Food and Drug Administration (FDA) did not trigger a time bar to the IPR petition because the certification was not a functional equivalent to a declaratory judgment action.  Metrics, Inc. v. Senju Pharmaceutical Co., Ltd., Case No. IPR2014-01041 (PTAB, Feb. 19, 2015) (Obermann, APJ.).

The patent owner argued that the IPR petition should be vacated because it did not identify Coastal Pharmaceuticals, Inc. (Coastal), the entity that filed the ANDA certification.  This argument contradicted the patent owner’s prior concession in a related litigation that the petitioner and Coastal were “one and the same.”  The PTAB considered this and other evidence showing that Coastal was an assumed name or d/b/a name of petitioner, but otherwise the same party.  The PTAB found that Coastal was “not a separate juridical entity, or therefore, a separate real party-in-interest in this proceeding.”  Further, the PTAB stated that any collateral estoppel effect of the PTAB’s final written decision “will bind petitioner, whether operating [as Metrics or] . . . under its business name, Coastal.”

The patent owner also argued that the petitioner’s IPR was an improper attempt to circumvent the Hatch-Waxman Act, given that Coastal is the second filer of an ANDA.  In its ANDA certification, Coastal stated that its eye drops did not infringe the patent owner’s patent-in-suit.  The patent owner urged the PTAB to consider the certification in Coastal’s ANDA filing as being tantamount to a declaratory judgment action.

Under Hatch-Waxman, a first ANDA filer cannot pursue a declaratory judgment action in district court until after a patentee is given the opportunity to sue the first ANDA filer in district court.  When the patentee sues the first ANDA filer, the FDA creates a 30-month stay of FDA approval of any generic versions of the patentee’s product so that the district court may adjudicate the dispute.  This 30-month stay can terminate early if a district court invalidates the patentee’s patent.  If successful in invalidating the patent, the first ANDA filer is given a 180-day exclusivity period of over subsequent ANDA filers, like Coastal.  Here, the patent owner argued that, if permitted, the petitioner’s IPR creates conflict among the first ANDA filer, the district court, the PTAB and the FDA.  To resolve this conflict, the patent owner argued that the certification is tantamount to a declaratory judgment action, which would trigger the one-year time bar for filing an IPR.  In contrast, the petitioner argued that the certification is considered an act of infringement, based on which the patentee can file suit, not the ANDA filer.

On this point, the PTAB determined that even though Coastal’s certification “may represent an out-of-court challenge to patent validity . . . it does not constitute ‘a civil action challenging the validity of’ any patent claim.”  Therefore, the Board concluded that the IPR petition was not time barred based on Coastal’s ANDA filing.