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April 07, 2008

Comments

"After Caraco, even agreeing not to sue a generic manufacturer will not be enough to prevent continued challenges to their exclusive positions."
But the whole point of the CAFC decision, as I read it, is that Forest was determined to have its cake and eat it too. By not suing, it kept Caraco off the market (because of IVAX's exclusivity): if it had sued, it would have risked Caraco entering the market (if Caraco had prevailed on either noninfringement or invalidity/unenforceability). It's certainly good sense to allow Caraco to attack both patents, rather than let Forest keep the 941 patent as a block precisely by not enforcing it.

I'm going to have to read this again more carefully, but it seems that a distinguishing feature between this case and the legislative history is that, here, there is more than one patent involved. I understand your citation to the history, but I don't know that it completely addresses the situation.

"We fully expect that, in almost all situations where A generic applicant has challenged A patent and not been sued for patent infringement, a claim by THE generic applicant seeking declaratory judgment on THE patent will give rise to a justiciable "case or controversy" under the Constitution. We believe that the only circumstance in which a case or controversy might not exist would arise in the rare circumstance in which the patent owner and brand drug company have given THE generic applicant a covenant not to sue, or otherwise formally acknowledge that the generic applicant's drug does not infringe [THE patent]."

In other words, the history seems to suggest that there would be no DJ when the only obstacle to production is a single patent, and only a single generic producer. Here, however, it looks like there are multiple patents and multiple prospective producers. In this case, a "blocking" situation seems possible, and the only way out of the "block" is the filing of a DJ action by one who (in this case) is also covered by a covenant not to sue.

Anyway, first impressions. I'll need to read this again when I'm not supposed to be working on other things.

I agree, Derek. The case was rightly decided, in order to discourage patentees from gaming the system. I believe the majority is in line with the flexibility that the S/Ct espouses.

The dissent's application would have been too "rigid" for the S/Ct. In fact, there are parts of the dissenting opinion that could lead to the conclusion that Judge Friedman really didn't "get it" here. He seems to have confused certain aspects of H-W, which points to a lack of understanding of what is going on.

In short, one policy of H-W is to eliminate any inappropriate patent barriers to market entry, in the quickest manner possible. Forest's actions provided a barrier to market entry, which was only due to the H-W regime. (In any other context, a covenant not to sue would allow the recipient to enter the market; here, it has the opposite effect.)

The CAFC decision reinforces the H-W policy, instead of encouraging Forest's actions by a "wooden" application of the CAFC's old jurisprudence. I believe the S/Ct would approve.

Consistent with the logic of this decision, Caraco should be able to sue for a DJ that IVAX's ANDA didn't infringe. If the sole objective is obtaining a "decision of non-infringement" then who cares which ANDA the DJ addresses.

Soon you'll have consumers filing DJ's to invalidate patents in order to trigger ANDA approvals.

For example, as a consumer of Lipitor, why should't I be able to sue Pfizer for a DJ to invalidate their Lipitor patents in order to trigger Ranbaxy's ANDA approval?

This may set-up a whole new paradigm of lawsuits.

This ruling is plainly wrong, because the parties do not have "adverse legal interests", rather they have "adverse economic interests". Each party stands at the other end of a faulty H-W provision which requires a "judgement" to trigger the exclusivity period and thus second-filer ANDA approval. But is that "adverse legal interests"? Is there anything to adjudicate here?

This decision makes little sense. But its equally clear that this kind of unfair stalemate calls into question the constitutionality of the H-W Act, especailly the provisions regarding how the 180-day execlusivity period is triggered.

All:

While I see the policy piece of the decision (and why most of you think this is the "correct" result), the question is whether this is the Federal Circuit's version of judicial activism, and whether the question is best left to Congress to address. The Supreme Court has ruled in this area that Congress must be taken at its word, even when the Federal Circuit had a legitimate and compelling policy argument (supported expressly by the legislative history) to support its decision (see Merck v. Integra). Here, I think the Federal Circuit is on much less firm ground in letting jurisdiction stand (which may be why they hinted to Forest that there was a way out of the procedural problem by stipulating Caraco didn't infringe the '941 patent).

The Court's decision makes sense, but it may be an improper use of the Court's power. We will see what thw Supreme Court thinks if it gets the opportunity to decide.

Thanks for the comments.

Kevin,
I think the CAFC would respond to your "let Congress do it" concerns with its footnote 2, where it noted that Congress saw this problem in the language of the Act and has now fixed it. Unfortunately for Caraco, the Act had an effective date after Ivax filed its ANDA, and Ivax was not grandfathered in. Thus, the CAFC would argue (I think correctly) that its decision is supported by the new language in the Act and, thus, follows the language of the current law.

Alan, have you personally filed an ANDA for a generic Lipitor? If so, perhaps you should press your new legal theory. After all, under H-W, "any person" may file an ANDA.

Until then, you don't have a legal interest in invalidating the patent, only an economic one. (And to address that, you could always stop buying Lipitor.)

If you need to see a "legal interest" for Caraco, how about this -- in the absence of the covenant, they (probably) had the right to bring a DJ action. Therefore, the unsolicited actions of Forest deprived them of a legal right.

H-W comes at least under Congress' constitutional power to regulate commerce, so good luck with that argument.

Sean,

I am not sure why you think Caraco does have a "legal interest" in invalidating the patent. After all, Forest has agreed never to sue Caraco over this patent (probably because they agree that Caraco does not infringe). The "only" reason Caraco wants to maintain the DJ is in order to obtain a judgement that would ultimately trigger an early approval of their ANDA (by bringing forward IVAX's 180 day exclusivity period). The parties have no "adverse legal interests". There's nothing to adjudicate here. Their only dispute is whether a judgment should be entered, because they stand at different economic ends, depending on whether a judgment is entered or not. But if an economic interest is enough to warrant entry of a judgment, then as a buyer of Lipitor, I should have the same standing.

I fail to see your distinction.

Bryan:

I don't think so. The text of footnote 2:

In 2003, Congress replaced the provisions governing the commencement of the 180-day exclusivity period with a new regime under which the first Paragraph IV ANDA filer can forfeit its exclusivity period if it fails to market its drug within a certain time. See 21 U.S.C. § 355(j)(5)(D); see also Pfizer, 395 F.3d at 1329. The amendment was part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066 (2003) (“Medicare Modernization Act” or “MMA”), which was enacted on December 8, 2003. Pfizer, 395 F.3d at 1328-29. Despite these changes, the MMA contained a grandfather provision specifying that the amendments do not apply to Paragraph IV ANDAs filed before the date of enactment of the MMA. See MMA § 1102(b). The amendments also do not apply if another generic drug company had filed a Paragraph IV ANDA for the same listed drug before the date of enactment of the MMA. Id. In this case, a generic drug company, namely Ivax Pharmaceuticals, Inc., filed a Paragraph IV ANDA in August 2003, before the December 2003 enactment of the MMA. Thus, the MMA amendments to the provisions governing the commencement of 180-day exclusivity period are inapplicable to this case.

was about delay caused by the first ANDA filer; I don't think that delay is occasioned by a court determining the first ANDA filer infringes. For example, in the omeparzole litigations one party, Kudco, was found not to infringe, but because they were not the first ANDA filer they had to obtain a license from the first, infringing ANDA filer. If the first filer had refused the license, then I think the provisions the court references in footnote 2 would have applied.

Here, it's about jurisdiction, and I think Congress still needs to address the issue (at least, Congress in the first instance should be the branch to address the issue).

Thanks for the comment

Alan,

1) you haven't filed an ANDA, so you have no legal relationship to Pfizer. Caraco filed an ANDA, and the statute creates a legal relationship.

2) Pfizer didn't deprive you of any rights by giving you an unsolicited covenant. Forest gave Caraco a covenant, an action Forest took of its own volition, and that action deprived Caraco of a legal right.

Sean,

You write: "Pfizer didn't deprive you of any rights by giving you an unsolicited covenant. Forest gave Caraco a covenant, an action Forest took of its own volition, and that action deprived Caraco of a legal right."

Is this a joke? Are you suggsting that Caraco was deprived of the "right to be sued by Forest"???! You are probably the first person to argue that every ANDA has a "right to be sued" by the NDA holder. The NDA is not required to sue anyone, and especially parties that they consent do not infringe on their partent.

I think you are just a bit confused.

Alan, H-W provides the ANDA filer the right to bring a DJ action (under certain circumstances) if not sued by the NDA holder. Forest was attempting to deprive Caraco of that right.

It has nothing to do with a right to be sued, but a right to bring an action.

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