Purdue Pharm. Products, L.P. v. Actavis Elizabeth, LLC (D.N.J.)
Plaintiffs motion to dismiss counterclaims relating to two patents for which they have given a covenant not to sue was denied because covenant does not render counterclaims moot; defendant’s cross motion for judgment on the pleadings with regard the same two patents was denied as moot because plaintiffs were afforded leave to amend their claims.
Case Name: Purdue Pharm. Products, L.P. v. Actavis Elizabeth, LLC, Case No. 12-5311 (JLL), 2014 U.S. Dist. LEXIS 49857 (D.N.J. April 9, 2014) (Linares, J.)
Drug Product and Patent(s)-in-Suit: Intermezzo® (zolpidem tartrate); U.S. Pats. Nos. 7,658,945 (“the ’945 patent”), 7,682,628 (“the ’628 patent”), 8,242,131 (“the ’131 patent”), and 8,252,809 (“the ’809 patent”)
Nature of the Case and Issue(s) Presented: Plaintiffs hold an NDA covering tablets containing two strengths of zolpidem tartrate, which is used in the treatment of middle-of-the-night insomnia. In July 2013, TWi Pharms., Inc. (“TWi”) submitted an ANDA containing a paragraph IV certification, indicating that the patents covering the drug were invalid or not infringed by the proposed ANDA product. At least four other generic manufacturers had filed ANDAs seeking to manufacture and sell generic Intermezzo® before TWi filed its application. In response to TWi’s ANDA, plaintiffs filed a lawsuit in August of 2013 seeking declaratory judgment that TWi had infringed the ’131 and ’809 patents. But plaintiffs did not assert against TWi any claims from the ’945 or ’628 patents. In response, TWi filed counterclaims seeking declaratory judgment that all four patents covering Intermezzo were not infringed by TWi’s proposed ANDA product. Thereafter, in January 2014, plaintiffs tendered a covenant not to sue TWi under any claims of the ’945 or ’628 patents. Plaintiffs moved to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) TWi’s counterclaims seeking declaratory judgment of non-infringement with respect to the ’945 and ’628 patents. TWi opposed the motion and filed a cross-motion requesting judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c).
Two issues were presented: (i) whether a district court may assert declaratory judgment jurisdiction over counterclaims related to patents that are the subject of a covenant not to sue within the context of a Hatch-Waxman litigation; and (ii) whether TWi was entitled to judgment on the pleadings in the event that their counterclaims were determined to be ripe for adjudication.
Why Neither Party Prevailed: TWI’s counterclaims were particularly noteworthy because it had the potential to trigger the first ANDA filer’s 180-day exclusivity period, which would have the effect of expediting TWi’s ability to market its ANDA product. In order to support their position that the court could not properly assert jurisdiction over the matter, plaintiffs presented three separate arguments that no case or controversy existed and that the court lacked jurisdiction: first, the covenant not to sue rendered moot any such controversy; second, the court could not redress TWi’s alleged injury; and third, the dispute was not ripe in light of TWi’s inability to obtain tentative approval.
The court disagreed with the argument that TWi’s counterclaims were mooted by the covenant not to sue. The court found that that there was ample authority supporting the proposition that a later ANDA filer’s declaratory judgment claims involving patents covered by a covenant not to sue were justiciable. The court cited binding Federal Circuit precedent that compelled it to conclude that plaintiffs’ covenant not to sue TWi did not moot TWi’s counterclaims seeking declaratory judgment.
The court also found that TWi’s injury was redressable. Plaintiffs argued that even if TWi were able to obtain a favorable judgment in relation to the ’945 and ’628 patents, this would not redress any injury arising from a delay in TWi’s ability to market its ANDA product. Plaintiffs reasoned that such a judgment would not independently trigger the first ANDA filer’s exclusivity period because TWi had not yet received tentative approval from the FDA to market its ANDA product. Essentially, plaintiff’s position was that a non-first-filed ANDA holder could not trigger the first-filed ANDA holder’s exclusivity period through a declaratory judgment action unless it had first received tentative approval from the FDA. The court noted that whether a subsequent ANDA filer must have tentative approval to maintain a declaratory judgment action was an issue that had not yet been considered by the Federal Circuit. Despite the fact that it appeared to be an issue of first impression, the district court rejected plaintiffs’ argument, relying on case law that recognized that the Hatch-Waxman Act created a civil action to obtain patent certainty that could be brought by an ANDA applicant at a time when it likely would not have tentative approval, indicating that other declaratory judgment actions did not require that the ANDA filer have tentative FDA approval. The court ultimately determined that tentative FDA approval was not a condition precedent for TWi to maintain its counterclaim.
Next, the court concluded that the case was ripe for determination because delaying judicial consideration of TWi’s counterclaims could result in depriving TWi of the ability to trigger the first ANDA filer’s 180-day exclusivity period, thus causing TWi to lose profits during the period of time it is excluded from the market. Therefore, the court found that delay in resolving TWi’s counterclaims would have an immediate and substantial impact on TWi. Accordingly, the court determined that it had jurisdiction to consider the matter, and dismissed plaintiffs’ motion.
The court then turned its attention to TWi’s cross-motion for judgment on the pleadings. TWi based its motion on the fact that there were no disputed facts and nothing to resolve with respect to the ’628 and ’945 patents. Plaintiffs’ opposition requested leave to amend in the event that the court determined that TWi’s counterclaims were justiciable. The court found that there was no reason not to allow plaintiffs to amend their pleadings in light of its decision to assert jurisdiction over counterclaims related to the ’628 and ’945 patents. The court held that plaintiffs were permitted to amend their pleadings, and that TWi’s motion should be denied. The court did note that TWi could renew its motion for judgment on the pleadings if it were still warranted after the plaintiffs amended their complaint.
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