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Palo alto, Ca  ■   N EW Yo R K, NY  ■   SaN D i Eg o, Ca  ■   SaN F R aN C i S C o, Ca  ■   R ESto N, Va  ■   B R o o m F i E lD, C o  ■   WaS H i N gto N, D C  ■   WWW.C o o lEY.C o m News from our IP Litigation Group
Teva v. Novartis: Federal Circuit Expands the Ability of
Generic Drug Companies to Sue Pioneer Drug Companies
for Declaration of Patent Noninfringement and Invalidity
A new Federal Circuit decision promises to drug until the patents expire, or (IV) the Genentech ruling earlier this year, regis- lead to more patent suits between generic patents are invalid or will not be infringed tering its weighty support on the side of generic companies.7 Evaluating the right nies. Following the Supreme Court's explicit generic applicant's drug.4 As is often the of a patent licensee in good standing to direction in its MedImmune v. Genentech case, if a generic company files certification bring a declaratory judgment suit challeng- opinion, the Federal Circuit has overturned ing patent invalidity against the licensor, its prior restrictive test for the right of pany will bring suit within 45 days, thereby generic drug companies to bring declaratory obtaining a 30 month stay of the FDA's Circuit's "reasonable apprehension of suit" judgment actions against pioneer drug com- standard. Furthermore, although the issue panies. In Teva v. Novartis, issued March was not squarely before the Court, it speci- 30, 2007, the Federal Circuit has opened the fied in a lengthy footnote that this standard, is not motivated to bring suit within the as applied in Teva v. Pfizer, contradicted 45 days, leaving the generic drug company nies that wish to establish certainty regard- with the unfavorable option of launching its ing patent rights; generic companies can product in the face of unresolved patent lia- now more easily bring declaratory judgment The Teva v. Novartis Case
bility (so-called "at risk" launches). In rec- suits against pioneer drug companies.1 To ognition of this problem, Congress amended get into court, generic companies will no (NDA) for Famvir®, an antiviral medication. the patent statute in 2003 to provide generic longer need to prove "reasonable apprehen- The active ingredient in Famvir® is famci- sion of imminent suit," but now need only clovir. Novartis listed five patents relating declaratory judgment suit after the 45 days to establish an "actual controversy."2 to Famvir® in the Orange Book: one patent expires in order to establish certainty as to its rights prior to launching its product.5 Background
Despite this explicit attempt by Congress to establish declaratory judgment jurisdiction Michelle Rhyu . 650/843-5505 for generic companies, the Federal Circuit held in Teva v. Pfizer (2005) that declara- Tom Poché .202/842-7839 Drug Application ("ANDA"), which relies tory judgment jurisdiction did not exist on clinical data previously submitted for because Teva had not proven a "reasonable Tom Friel . 415/693-2162 apprehension of imminent suit."6 This deci- filing an ANDA, the generic company must sion essentially eviscerated Congress's prior certify that, with respect to each patent of act, and generic drug companies remained This information is a general description of the law; it is not intended to the pioneer company that is listed in the provide specific legal advice nor is it intended to create an attorney-client "Orange Book" which claims the drug or relationship with Cooley Godward Kronish LLP. Before taking any action pany in order to resolve their rights as to the on this information you should seek professional counsel.
which claims a use for the drug for which Copyright 2007 Cooley Godward Kronish LLP, 3000 El Camino Real, the applicant seeks approval, (I) no patent Palo Alto, CA 94306. Permission is granted to make and redistribute, without charge, copies of this entire document provided that such copies information has been filed, (II) the patents But the scales tipped again when the U.S. are complete and unaltered and identify Cooley Godward Kronish LLP as have expired, (III) it will not market the Supreme Court issued its MedImmune v. the author. All other rights reserved.
the patent owner's actions frustrate the four patents directed to methods of its ther- pany. Against this backdrop, pioneer com- apeutic use. In 2004, Teva filed an ANDA to panies will need to consider their options (4) Novartis filed suit against Teva on the produce a generic famciclovir. To satisfy its carefully when confronted with a paragraph ANDA certification requirements, Teva cer- IV certification, lest they find themselves tified under paragraph IV that its drug did (5) Novartis' failure to sue on all five Orange defending a declaratory judgment suit in an not infringe any of the five Novartis patents Book-listed patents left open the possibil- listed in the Orange Book or that the patents ity of future litigation, subjecting Teva to If you have questions or would like to dis- multiple infringement suits based on the cuss any issues concerning patent infringe- Novartis filed suit within 45 days, assert- ment suits, please feel free to contact one of ing that Teva infringed its single listed pat- The Court rejected Novartis' arguments (a) that because it has not filed suit or threat- 1 Teva Pharms. USA, Inc. v. Novartis Pharms. Corp., No. 06- no injury and thus no controversy existed 1181, slip op. (Fed. Cir. Mar. 30, 2007). Recent Federal Circuit clovir. Teva responded with a declaratory and (b) that the method patents constitute judgment action against Novartis, asserting an entirely different controversy from the 2 The Federal Circuit separately applied the MedImmune v. noninfringement and invalidity of the four compound patent infringement controversy. Genentech standard to find declaratory judgment jurisdiction stemming from extensive cross-licensing discussions between edential Teva v. Pfizer case, the district court the parties in SanDisk Corp. v. STMicroelectronics, Inc., No. company failing in its obligation to cooper- 05-1300, slip op. (Fed. Cir. Mar. 26, 2007). Overturning its prior found no reasonable apprehension of suit ate reasonably in expediting the challenge "reasonable apprehension of imminent suit" test, the Court held and dismissed Teva's declaratory judgment that "where a patentee asserts rights under a patent based action relating to the four method patents. on certain identified ongoing or planned activity of another The Federal Circuit's emphasis on "all the party, and where that party contends that it has the right to With the benefit of MedImmune v. Genen- circumstances" and the particular facts of engage in the accused activity without license, an Article I I tech, the Federal Circuit revisited the right Teva v. Novartis arguably may limit the case or controversy wil arise and the party need not risk a suit of a generic company to obtain a declara- for infringement by engaging in the identified activity before holding to the situation where the pioneer seeking a declaration of its legal rights." Id. at 15. The Court tion of patent invalidity and noninfringe- company has initiated an infringement suit found that the unequivocal statement by the patentee that against the generics company on only some "ST [STMicroelectronics] has absolutely no plan whatsoever ment standard discussed in MedImmune, of the patents listed in the Orange Book. to sue SanDisk," did not moot the actual controversy created the Federal Circuit required that a declara- by ST's acts, which included presenting to SanDisk a thorough infringement analysis detailing the manner in which ST believed It still remains uncertain whether a generic SanDisk's products infringed the specific claims of each of ST's considering "all the circumstances," there exists "an actual or imminent injury caused jurisdiction where the pioneer company has by the defendant that can be redressed by not brought suit at all, as was the case in 4 21 U.S.C. § 355(j)(2)(A)(vi )(I-IV).
judicial relief" that is of "sufficient imme- Teva v. Pfizer. It is noteworthy that at least diacy and reality to warrant the issuance of the first three of the five circumstances cited 5 35 U.S.C. § 271(e)(5) (stating that federal courts "shal , to the extent consistent with the Constitution, have subject mat er by the court to establish injury occur in all paragraph IV certifications.10 Beyond that, jurisdiction in any action brought…under § 2201 of title 28 The Court proceeded to identify five circum- for a declaratory judgment that such patent is invalid or not any additional evidence that the pioneer stances that in totality demonstrated injury: company is attempting to delay the appli- 6 Teva Pharms. USA, Inc. v. Pfizer, Inc., 395 F.3d 1324, 1333 (1) Novartis listed its method patents in the cant's ANDA approval or delay resolution of patent liability issues would tend to sup- 7 MedImmune v. Genentech, 127 S. Ct. 764 (2007); see port a finding of actual or imminent injury (2) Teva's submission of its ANDA and para- and declaratory judgment jurisdiction. The graph IV certification created a justicia- Court's emphasis on the legislative intent ble controversy for Novartis, and should 8 MedImmune v. Genentech, 127 S. Ct. 764, 774 n.11 (2007).
and the purpose of the statute to "enable 9 Teva Pharms. USA, Inc. v. Novartis Pharms. Corp., No. 06- competitors to bring cheaper, generic drugs 1181, slip op. at 9 (Fed. Cir. Mar. 30, 2007).
(3) The Hatch-Waxman Act intended to cre- 10 The fifth category would arguably also be met, because by ate declaratory judgment jurisdiction for gests that the Court may well be inclined refraining to sue, the pioneer company leaves open the possibil- generic companies in the situation where to find jurisdiction in the absence of any ity of future litigation, absent a covenant not to sue.

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