Novartis Pharms Corp. v. Crystal Pharm. (Suzhou) Co., Ltd.

Case Name: Novartis Pharms Corp. v. Crystal Pharm. (Suzhou) Co., Ltd., No. 20-md-2930-RGA, 2022 WL 16921985 (D. Del. Nov. 14, 2022) (Andrews, J.) 

Drug Product and Patent(s)-in-Suit: Entresto® (sacubitril/valsartan); U.S. Patents Nos 9,517,226 (“the ’226 patent”), 9,937,143 (“the ’143 patent”), and 11,135,192 (“the ’192 patent”)

Nature of the Case and Issue(s) Presented: Defendant submitted an ANDA seeking approval to market a generic version of Entresto. Defendant’s ANDA originally included Paragraph IV certifications to the patents-in-suit, but in May 2022, Defendant informed Plaintiff that it had converted its Paragraph IV certifications to a Section viii carve-out statement. The Section viii statement confirms that Defendant’s ANDA product will not infringe any of the methods of use claimed in the ’226, ’143, and ’192 patents. In response, Plaintiff moved to dismiss without prejudice its infringement claims in the ANDA suits as well as Defendant’s counterclaims. The court granted Plaintiff’s motion.

Why Novartis Prevailed: Plaintiff argued that an Article III case and controversy no longer existed between the parties because Defendant’s Section viii statement meant that it was no longer seeking FDA approval for any method recited in the patents-in-suit. As a result, Plaintiff argued that dismissal without prejudice under Rule 41(a)(2) was warranted because: (i) it would not result in substantial prejudice to Defendant; and (ii) Defendant’s counterclaims could not remain pending for independent adjudication.

The court found that dismissal would not prejudice Defendant because the ANDA litigation was at a very early stage, and Plaintiff was diligent in moving to dismiss. Defendant argued that it would be prejudiced by the specter of Plaintiff reasserting the patents-in-suit, but the court found that whether Defendant may (or may not) face a lawsuit in the future does not give rise to prejudice.

Further, the court found that Defendant’s counterclaims could not remain pending for independent adjudication because the court lacked subject-matter jurisdiction. Because the ANDA applicant submitted a Section viii statement, it no longer sought FDA approval for uses covered by the patents-in-suit. In other words, the court lacked subject-matter jurisdiction over Defendant’s counterclaims because Plaintiff’s infringement claims were no longer of any “actual controversy.”