Last week I spoke at the Europe Life Sciences IP Summit in Amsterdam. While there were many topics discussed — I presented on the continuing controversy over 35 USC 101 and life science inventions — IPR (inter partes review) continues to be the number one topic on everyone’s minds in relation to the United States. Given this focus, interested practitioners should pay attention to a case I learned about while attending the Summit. The case is challenging whether generic drug companies that rely on paragraph IV certifications in pursuing ANDAs (abbreviated new drug applications) may also challenge a patent under the IPR provisions. The case is pending in the District of New Jersey and is captioned as Senju Pharm. Co., Ltd., et al v. Metrics Inc., et al, No. 1:14-cv-03962-JBS-KMW (D.N.J.).
In the case, the plaintiffs have filed a motion seeking to enjoin an IPR filed by defendants. Defendants are ANDA applicants who submitted paragraph IV certifications to the FDA challenging the validity of plaintiffs’ patents. Before the FDA accepted their ANDAs, defendants unofficially notified plaintiffs about their ANDAs and that they intended to file IPR petitions on the relevant patents. Apparently, defendants wished to discuss a business deal and said they would refrain from filing their IPRs should an agreement be reached. During those settlement discussions, the FDA accepted the ANDAs, thus starting the clock for defendants to provide official notice to the plaintiffs of their ANDAs. Before receiving those notifications, plaintiffs initiated suit in New Jersey, as the Hatch-Waxman Act specifically contemplates. Defendants then filed their IPRs, shortly thereafter.
Notably, defendants are not first-filers for the drug at issue—Prolensa—and thus are not eligible for the 180-day generic exclusivity the Hatch-Waxman Act provides. According to court papers, that status is held by Lupin Pharmaceuticals.
In their motion, plaintiffs argue that the defendants’ IPRs run afoul of the bar against IPRs by parties that have challenged the patents through declaratory judgment actions. 35 U.S.C 315(a)(1). While defendants in the case have not filed such actions, plaintiffs argue that a paragraph IV certification (and notice) challenging validity is the functional equivalent of such an action under the Hatch-Waxman Act. Plaintiffs note that the Hatch-Waxman Act forbids a first-filed action for declaratory judgment by generic filers, in preference for the patentee’s infringement suit under the Hatch-Waxman Act. Thus, defendants have “availed themselves” of the Hatch-Waxman Act’s provisions by filing a paragraph IV certification, as opposed to the AIA (American Invents Act). Plaintiffs note numerous apparent conflicts between a Hatch-Waxman Act proceeding and an IPR proceeding, including differing burdens of proof, differing evidentiary provisions, as well as the critical fact that no stay can realistically be granted in a Hatch-Waxman Act case because of the short timeline inherent in Hatch-Waxman Acts due to the 30-month stay. Plaintiffs note that what will result is a “race to the Federal Circuit” between the Hatch-Waxman Act case and an IPR, which they say that Congress did not intend. Finally, plaintiffs resort to the so-called “first-filed rule” and state that their action for infringement is entitled to precedence over defendants’ later-filed IPR to invalidate the patents.
For their part, defendants argue that nothing in the AIA’s text says that a paragraph IV challenge is a “civil action” under section 315(a)(1), and argue that should be the end of the matter. They note that the Hatch-Waxman Act does, in fact, permit declaratory judgment actions by a generic filer in the event that the patent holder does not file suit within 45 days of receiving the generic applicant’s paragraph IV notification. They further argue that the AIA contains other provisions that recognize the paragraph IV process as a potential bar to, for example, supplemental examination, and that the absence of such a provision from 315(a)(1) further supports their plain language argument. They note that several other Hatch-Waxman actions are pending with concurrent IPR proceedings, and that plaintiffs’ relief is unprecedented and would have a wide-ranging impact. They also assert that the District of New Jersey lacks personal jurisdiction over them.
Oral arguments on the motion were held on October 3, 2014, and a decision should be forthcoming shortly. Whatever that decision is will make for necessary reading for all who work on Hatch-Waxman litigation. While it appears the plaintiffs’ arguments are a bit of a long shot, they raise powerful questions about the fairness of an IPR in light of the Hatch-Waxman Act, as well as the mushrooming behavior of litigants who are using IPRs as a leverage tool in an attempt to extract favorable settlements, while at the same time trying to undo the 180-day exclusivity afforded to first generic applicants. Whatever the result, stay tuned, and expect more brand-generic battles on the IPR front soon.