Mylan Pharms. Inc. v. Bayer Intellectual Property GmbH

Case Name: Mylan Pharms. Inc. v. Bayer Intellectual Property GmbH, C.A. No. 23-556-RGA, 2024 WL 359468 (D. Del. Jan. 31, 2024) (Hatcher, M.J.) 

Drug Product and Patent(s)-in-Suit: Xarelto® (rivaroxaban); U.S. Patents Nos. 7,157,456 (“the ’456 patent”), 9,415,053 (“the ’053 patent”), and 10,828,310 (“the ’310 patent”)

Nature of the Case and Issue(s) Presented: Mylan filed an ANDA with the FDA seeking approval to market generic rivaroxaban. Mylan obtained tentative approval and at the time of this opinion, final approval remained pending. Mylan certified under Paragraph IV against the ’053 patent, and the parties agreed that the ’053 patent should not bar FDA final approval because Bayer did not sue Mylan within 45 days of receiving Mylan’s Paragraph IV notice. Mylan certified under Paragraph III against the ’456 patent, and the parties agreed that the ’456 patent barred FDA final approval until its pediatric exclusivity expires on Feb. 28, 2025. Finally, the parties agreed that Mylan’s ANDA could be approved notwithstanding the ’310 patent. Therefore, only the ’456 patent operated to block final approval of Mylan’s ANDA.

Nevertheless, Mylan was concerned that the ’053 patent would stall final approval. The ’053 patent expires on Nov. 13, 2024, during the ’456 patent’s pediatric exclusivity period. When the ’053 patent expires, Mylan argued that the FDA’s “longstanding practice” would be to convert Mylan’s Paragraph IV certification into a Paragraph II certification and cause a new pediatric exclusivity period to attach to the ’053 patent, foreclosing final approval until May 13, 2025, or 72 days after Mylan could have otherwise obtained approval—based on a patent that all parties agree Mylan does not infringe. Therefore, Mylan filed suit under the Hatch-Waxman Act’s “civil action to obtain patent certainty” (“CAPC”) to obtain a declaration of non-infringement of the ’053 patent. In response, Bayer granted Mylan a covenant not to sue effective Aug. 4, 2023, but has declined to waive pediatric exclusivity or stipulate to a consent judgment of non-infringement. Bayer then filed this motion claiming that the court lacks subject matter jurisdiction because Bayer declined to file suit within 45 days of receiving Mylan’s Paragraph IV letter and subsequently covenanted not to sue Mylan. The court recommended that Bayer’s motion be denied.

Why Mylan Prevailed: The report and recommendation first found that Bayer’s covenant did not divest the court of subject matter jurisdiction. Courts considering subject matter jurisdiction in the Hatch-Waxman context have consistently rejected the argument that a covenant not to sue renders a declaratory judgment action categorically non-justiciable. Even if Bayer’s covenant not to sue extinguished any reasonable apprehension of suit, the ’053 patent remains a barrier to Mylan’s market entry and accordingly gives rise to a justiciable case or controversy, particularly since Bayer has refused to stipulate to a consent judgment of non-infringement or selective waiver.

The report and recommendation next found that Mylan’s claim was not improperly speculative. According to Bayer, when the ’053 patent expires on Nov. 13, 2024, no statute or rule will compel FDA to forestall final approval either by converting Mylan’s Paragraph IV certification into a Paragraph II certification, or by enforcing the ’053 patent’s pediatric exclusivity period against Mylan. Therefore, according to Bayer, “Mylan’s jurisdictional assertion rests on its speculative and unsupported prediction about FDA’s discretionary actions.” But Hatch-Waxman caselaw tells a different story. Quoting from a D.D.C. decision, the court found that at the moment of patent expiry, “the Paragraph IV certification became invalid, and either converted as a matter of law to Paragraph II certifications or became inaccurate, thereby creating both an obligation on [the ANDA holder’s] part to amend its ANDAs to reflect patent expiry and an inability on the part of the FDA to approve the ANDAs in their inaccurate form.” Moreover, withholding consideration of Mylan’s declaratory judgment action has the “immediate and substantial impact” of forestalling Mylan’s ability to demonstrate to the FDA that it is a prevailing party in non-infringement litigation to avoid enforcement of the ’053 patent’s pediatric exclusivity period. Bayer’s argument that Mylan’s fight is with the FDA, not Bayer, was also unpersuasive. The parties have “substantial, concrete stakes in whether [Mylan] secures the non-infringement judgment it seeks to advance its entry into the market” because the judgment issues, “there is every likelihood that [Bayer] will lose substantial revenues” and [Mylan] will gain substantial revenues” by entering the market once the ’452 patent’s exclusivity period expires. Thus, Mylan’s action was ripe.