CASE COMMENT ? Barry E Bretschneider, Morrison and Foerster, reports on a Court of Appeals order which could create a legal limbo for generic pharmaceutical companies

t least one generic drug maker, Teva The court’s rationale for denying Teva Pharmaceuticals, is feeling that its chance to challenge Pfizer’s patent The case Athere is no way out, with the full was that Teva did not have a “reasonable court refusal by the US Court of Appeals apprehension” that Pfizer would sue it for K Teva Pharmaceuticals v Pfizer for the Federal Circuit last month to allow patent infringement for Teva’s ANDA filing, US Court of Appeals for the Federal Teva’s declaratory judgment action against even though Pfizer had listed the ‘699 Circuit Pfizer to proceed. In advance of its entry patent in the Orange Book, had announced 11 April 2005 into the market with its version of Pfizer’s its intention to assert the patent popular anti-depressant ZOLOFT, Teva aggressively and had even sued another had tried to get judgment that its product generic drug company, Ivax, with which report the congressional conferees stated did not infringe patents listed by Pfizer in Pfizer later settled. The Federal Circuit their expectation that the courts would the “Orange Book”. The upshot of this majority found that although Teva had find jurisdiction, where appropriate, decision is that owners of pharmaceutical established the second prong of the two- and act to prevent improper delays patents embodied in products have a means prong test for establishing the existence of in infringement litigation between generic of putting generic competitors in a legal an actual controversy, that there was drug manufacturers and pioneer limbo, with no clear way out of the dilemma present activity by Teva that could drug companies. of whether to proceed with generic constitute patent infringement, the The generic drug industry will argue that drug marketing, simply by essentially Paragraph IV certification, Teva had not the court’s reasoning that the Medicare doing nothing. shown “an explicit threat or other action by amendments did nothing to change the Teva filed an Abbreviated New Drug the patentee” which would reasonably have reasonable apprehension analysis renders Application (ANDA) on its version of led Teva to believe Pfizer would sue the amendments meaningless and deprives ZOLOFT antidepressant, including a imminently. The court dismissed Teva’s the generic drug companies of the ability to “Paragraph IV certification” that either its arguments that Pfizer had already refused to remove patent clouds where the pioneer generic version did not infringe Pfizer’s ‘699 grant Teva a covenant not to sue and that drug companies choose, for tactical reasons, patent or the ‘699 patent was invalid. Under Pfizer had a history of asserting patents as not to bring suit in the face of a Paragraph the Hatch-Waxman Amendments to the not being immediate enough to lead Teva IV certification. They will also argue Food, Drug and Cosmetic Act, filing an reasonably to believe it might be sued for that the court’s decision flies in the face of ANDA with a Paragraph IV certification infringement of the ‘699 patent. reality and the purpose of declaratory constitutes an act of patent infringement. In 2003, amendments to the Medicare judgment actions: Pfizer, for example, Performing the acts necessary to prepare law came into effect that purported to grant refrained from suing not because it thought the ANDA, however, does not constitute an ANDA filer making a Paragraph IV Teva was not infringing but simply to keep infringement. If Pfizer had brought suit for certification the right to bring a declaratory Teva in permanent apprehension of suit and patent infringement within 45 days of its judgment action “consistent with the to stunt its marketing of its version of receipt of Teva’s Paragraph IV certification, Constitution” if the patentee did not sue Pfizer’s drug. the Food and Drug Administration (FDA) during the initial 45-day period. Although Counterbalanced against the generics is the would have imposed a 30-month stay, during the court found these amendments to argument, with which the Federal Circuit which it could not approve Teva’s ANDA be applicable to this case, it found agreed, that patentees have the right to sue or unless the suit was resolved or the patent that the amendments did not create not, as they choose, and that refusing to sue expired, but Pfizer did not. After the jurisdiction in the absence of a case under the circumstances presented by Teva passage of the 45-day period, Pfizer still had or controversy. attracts little attention in other, less- the option of suing Teva for infringement, The impact of this decision is to put regulated industries. To accept Teva’s but without the benefits of the stay. Since generic drug makers in a position that position would put a pioneer drug company Teva wanted to lift the cloud of Pfizer’s the US Congress did not intend in the under a compulsion to sue once it receives a patent from its marketing plans, it Medicare amendments; in the conference Paragraph IV certification. K sued Pfizer for a declaratory judgment of non-infringement and invalidity of the ‘699 patent. About the author The district court dismissed the action on the ground that Teva had failed Barry Bretschneider ([email protected]) is a partner to demonstrate the existence of the “case in the Northern Virginia office of Morrison and Foerster. His practice or controversy” necessary to establish is concentrated in patent infringement litigation in the district courts jurisdiction in federal court. The Federal and before the International Trade Commission, patent interferences, Circuit panel affirmed. The full court patent licensing and related transactional work, patent prosecution subsequently denied rehearing, leaving the and trademark litigation and prosecution. district court’s dismissal in place. Three judges dissented from the denial of rehearing, The information in the article reflects the author’s opinions. two of them writing opinions.

12 | June 2005 | Patent World #173 www.ipworldonline.com