Apotex Inc. v. Daiichi Sankyo, Inc. et al.


Docket No. 2014-1282, 2014-1291

TARANTO, MAYER, CLEVENGER
March 31, 2015

Brief Summary: Contrary to the DC decision, the Court found Apotex had alleged a “substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”

Summary: In connection with its request for marketing approval of a generic equivalent to Daiichi’s hypertension drug Benicar®, Apotex appealed DC dismissal of its request for a judgment of non-infringement of Daiichi’s disclaimed patent. The DC dismissed the request for lack of a case or controversy. While Apotex cannot infringe the patent, it “claims a concrete interest in obtaining a judgment” as it would enable it to obtain FDA approval and “enter the market sooner than otherwise.” Daiichi listed two patents on the Orange Book: US 5,616,599 covering the active ingredient effective under October 25, 2016 (extended from April 25, 2016 based on data related to children) and US 6,878,703 covering methods of treatment that expires on November 19, 2021. Mylan was the first to file an ANDA and “after receiving notice of Mylan’s paragraph IV certification, Daiichi disclaimed all claims of the ‘703 patent” although, the Court noted, “[t]he record does not tell us why…whether, for example, Daiichi recognized the invalidity…or, even, that it never should have been listed under §355(b)(1)’s ‘could reasonably be asserted’ standard.” Litigation regarding the ‘599 patent resulted in a decision of validity and infringement; Mylan’s earliest date it can market the generic is therefore October 25, 2016. Apotex filed its ANDA two years after the ‘599 litigation was over including a paragraph III certification regarding the ‘599 patent and a paragraph IV certification for the ‘703 patent. It is undisputed that “non-infringement of the ‘703 patent follows as a matter of law from the fact that Daiichi has formally disclaimed it” (citing Altoona Publix, US 1935; Guinn, FC 1996). Daiichi also: 1) stated in a letter to the FDA: “The effect of the disclaimer is that the 6,878,703 patent no longer exists”; and, 2) wrote to Apotex stating that it “cannot…sue any entity…for infringement of the patent.” But the FDA did not remove the ‘703 patent despite Daiichi’s request (Teva, DC Cir. 2010 (patent owner’s unilateral request to remove patent from Orange Book is not a sufficient basis for the FDA to do so)). Apotex sued for a DJ of non-infringment, Mylan moved to intervene, and Daiichi moved to dismiss Apotex’s complaint; the DC granted Daiichi’s motion.

The Court first reversed the dismissal of Mylan’s motion to intervene, finding it had “a strong, concrete interest in defending the dismissal” of Apotex’s request (“entry by Apotex would produce prices noticeably lower than those Daiichi and Mylan would charge during a duopoly period”). It also reversed the dismissal of Apotex’s request since “[t]he patent disclaimer eliminates one, but only one, potential legal barrier…The listing of the patent…is another” since FDA approval is prevented “during Mylan’s presumptive exclusivity period”. Daiichi also argued “the delayed entry of Apotex…is not ‘fairly traceable’” to it but the opinion explained that “[i]t is only Daiichi’s original listing…that now supports Mylan’s exclusivity period, which Apotex filed this action to bring to an end…Daiichi is therefore responsible….” The opinion also explained that tentative approval is not necessary to support the DJ request (“the statute authorizing litigation upon the filing of an ANDA nowhere requires tentative FDA approval”). It also reviewed the statutory provisions governing forfeiture under the MMA which “altered the exclusivity scheme in two fundamental ways”: 1) “[i]t expressly conditioned the first filer’s eligibility for exclusivity on its ‘lawfully maintain[ing]’ a paragraph IV certification” which Mylan lost by losing its litigation challenge to the ‘599 patent (as the ‘703 patent was disclaimed); and, 2) it “added…an elaborate new forfeiture provision” including “the first filer’s ‘failure to market’” by “the earlier of 75 days after the first filer’s effective date for approval or 30 months after the first filer submitted its application” (in this case October 2008) or 75 days after a final, non-appealable decision of non-infringment (“certiorari aside”) and tentative approval of the second filer’s ANDA (“Apotex can trigger forfeiture in this case by obtaining the judgment it seeks here and by obtaining tentative approval, if it does both early enough in relation to Mylan’s market entry.”) Mylan’s different interpretation of the statute was rejected. Thus, the Court determined Apotex had alleged a “substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” The DC decision was therefore reversed.

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