TEVA PHARMACEUTICALS USA, INC., Plaintiff-Appellant, v. PFIZER INC., Defendant-Appellee.
04-1186
United States Court of Appeals for the Federal Circuit
April 4, 2005
Appealed from: United States District Court for the District of Massachusetts, Judge Richard G. Stearns
Dimitrios T. Drivas, White & Case LLP, of New York, New York, filed an opposition to the petition for defendant-appellee. With him on the opposition were Jeffrey J. Oelke and Adam Gahtan.
Brian T. Moriarty, filed an amicus curiae brief for the Generic Pharmaceutical Association.
William L. Mentlik, Lerner, David, Littenberg, Krumholz & Mentlik, LLP, of Westfield, New Jersey, filed an amicus curiae brief for IVAX Pharmaceuticals, Inc. With him on the brief was Roy H. Wepner.
Lawrence DeMille-Wagman, Attorney, Federal Trade Commission, of Washington, DC, filed an amicus curiae brief for the Federal Trade Commission. With him on the brief were John D. Graubert, Acting General Counsel; Susan A. Creighton, Director, Bureau of Competition; John F. Daly, Deputy General Counsel for Litigation; and Lore A. Unt, Counsel for Intellectual Property.
Theodore Case Whitehouse, Willkie Farr & Gallagher LLP, of Washington, DC, filed an amici curiae brief for United States Senators Edward M. Kennedy, John S. McCain, and Charles E. Schumer.
ON PETITION FOR PANEL REHEARING AND REHEARING EN BANC
Before MICHEL, Chief Judge, NEWMAN, MAYER, LOURIE, CLEVENGER, RADER, SCHALL, BRYSON, GAJARSA, LINN, DYK, and PROST, Circuit Judges.
ORDER
A combined petition for panel rehearing and rehearing en banc was filed by the Appellant, and a response thereto was invited by the court and filed by the Appellee.1 The petition for rehearing was referred first to the merits panel that heard the appeal. Thereafter, the petition for rehearing en banc, response, and the amici curiae briefs were referred to the circuit judges who are authorized to request a poll whether to rehear the appeal en banc. A poll was requested, taken, and failed.
Upon consideration thereof,
IT IS ORDERED THAT:
(1) The petition for panel rehearing is denied.
(3) The mandate of the court will issue on April 11, 2005.
MAYER, GAJARSA, and DYK, Circuit Judges, would rehear the appeal en banc.
GAJARSA, Circuit Judge, with whom DYK, Circuit Judge, joins, dissents in a separate opinion.
DYK, Circuit Judge, with whom GAJARSA, Circuit Judge, joins, dissents in a separate opinion.
FOR THE COURT
April 4, 2005 s/ Jan Horbaly
Date Jan Horbaly Clerk
cc: Henry C. Dinger, Esq. Dimitrios T. Drivas, Esq. William L. Mentlik, Esq. Sarah Lenz Lock, Esq. Lawrence DeMille-Wagman, Esq. Brian T. Moriarty, Esq. Theodore Case Whitehouse, Esq.
TEVA PHARMACEUTICALS USA, INC., Plaintiff-Appellant, v. PFIZER, INC., Defendant-Appellee.
04-1186
United States Court of Appeals for the Federal Circuit
The Court has denied the petition to review this case en banc. I must respectfully dissent from that denial. This is a critical issue under the Hatch-Waxman Act.1 The failure of this court by en banc action to correct the Teva court‘s decision, 395 F.3d 1324 (Fed. Cir. 2005), allows the statutory procedures to be manipulated by the patent holders to the clear and foreseeable detriment of the generic drug industry.
The Teva court‘s reasonable apprehension analysis is the wrong test for a concrete, actual, or imminent injury in fact when considering the problem of a generic
I.
The question is whether Teva has shown a justiciable case or controversy within Article III. Congress unambiguously swept aside any additional limitation on jurisdiction potentially introduced by the Declaratory Judgment Act,
[T]he courts of the United States shall, to the extent consistent with the Constitution, have subject matter jurisdiction in any action brought by such person under section 2201 of title 28 for a declaratory judgment that such patent is invalid or not infringed.
The cases treat the controversy requirements of Article III and
The difference between an abstract question and a ‘controversy’ contemplated by the Declaratory Judgment Act is necessarily one of degree, and it would be difficult, if it would be possible, to fashion a precise test for determining in every case whether there is such a controversy. Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.
Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941). The Supreme Court,3 this court,4 and our sister circuits5 consistently apply this holding by looking to all the circumstances surrounding a controversy.
A.
The Teva majority opinion does not, and its reasons for failing to do so are not convincing. In far more difficult factual contexts the courts have nonetheless found “a concrete, actual or imminent injury in fact” satisfying Article III. In Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S. 59 (1978), for example, the appellees challenged the constitutionality of the Price-Anderson Act. By that Act, Congress limited the aggregate tort liability of nuclear power plant operators for a single nuclear “incident.” The appellant was a utility that was constructing nuclear power plants. The appellees, including persons “who live within close proximity of the planned facilities,” challenged the statute under the Fifth Amendment. Id. at 67 (emphasis added). Their theory was that ”in the event of a nuclear accident their property would be ‘taken’ without any assurance of just compensation.” Id. at 69 (emphasis added). The court concluded that this theory stated a justiciable Article III controversy. See id. at 81 (“[A]ppellees will sustain immediate injury from the operation of the disputed power plants.“).
The breadth of Article III standing in environmental cases sharply contrasts with the Teva court‘s narrow construction in this ANDA context. The Supreme Court has held that a concrete injury in fact, for Article III, is shown where a non-profit‘s members allege that a polluter‘s discharges, “and the affiant members’ reasonable concerns about the effects of those discharges, directly affected those affiants’ recreational, aesthetic, and economic interests.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 183-84 (2000) (emphasis added). The Court expressly ruled that conditional statements – that members would use a river for recreation if Laidlaw stopped discharging pollutants into it – sufficed to show concrete injury in fact under Article III. Id. at 184. Teva‘s injury in this case, by comparison, is far more immediate.
The facts showing Teva‘s “concrete, actual or imminent injury” are far easier to identify. Ivax filed the first ANDA on the active ingredient for Zoloft; Teva filed a subsequent or second ANDA. Teva certified that its proposed formulation would not infringe Pfizer‘s U.S. Patent No. 5,248,699, or that the patent was invalid. Pfizer had 45 days to sue Teva for this patent infringement,
By settling with Ivax, Pfizer leveraged the Hatch-Waxman exclusivity to insulate the ‘699 patent from any validity challenge. Pfizer also insulated itself from any judicial determination of the metes and bounds of its ‘699 patent claim scope in relation to a design-around, a determination central to the proper function of our patent system. Because of this insular effect, Pfizer effectively extended – as against all but Ivax – the
This ties up Teva‘s investment in its proposed generic until at least 2010, precludes it from testing a potentially weak patent, precludes it from triggering the statutory exclusivity period with a successful validity challenge, and precludes it from introducing an effective design-around, as is its right and as the patent law encourages. The live controversy is found on the face of this bottleneck under the statute.7 Any of this defines a concrete, actual or imminent injury in fact within the meaning of Article III, and on that basis Teva states a justiciable controversy under
B.
None of these problems can be found in the typical patent infringement context, in which this court has regularly tested immediate injury in fact by the reasonable apprehension test. Consistent with Maryland Casualty, this court has never held that Article III required that analysis. Quite to the contrary, this court has repeatedly observed that reasonable apprehension was simply a functional approach to typical patent infringement problems under
The contextual differences between the second ANDA filer and the typical patent infringement case make the reasonable apprehension test inappropriate for this action. By guiding the patentee‘s conduct in the typical case, the reasonable apprehension analysis allows the patentee to avoid litigation. Identifying a justiciable controversy in terms of a threat of infringement litigation, the doctrine establishes the circumstances in which the uncertainty of legal rights materially harm a potential infringer in the marketplace. The injury facing Teva in this case is different in kind, but no less actionable.
Teva‘s injury does not depend on threats from the incumbent. In view of the statute, the injury exists independent of any threat, and the policy motivation for applying the reasonable apprehension test is completely lacking. There is no sense in the court demanding the incumbent to brandish the threat of infringement actions, even beyond the act of listing a patent in the Orange Book, given a statutory system that encourages the incumbent to do everything possible to prevent its patents from being put in play. No incumbent will ever make the threat, if it can simply ride out the term in
II.
The language of
The statute specifically provides that the courts “shall, to the extent consistent with the Constitution, have subject matter jurisdiction in any action.” The court, therefore, has a Congressional directive to refrain from applying any jurisdictional limitation crafted by the courts or found in
The Teva court further focuses on the language originally introduced for
The Teva court also focuses on a Committee Report accompanying the modified 2003 Act. The language in the Report cannot contradict the plain language of
Ultimately, the idea that
III.
The Teva court‘s Article III analysis distorts longstanding Supreme Court jurisprudence and misapplies the decisions of this court. Teva has presented a
TEVA PHARMACEUTICALS USA, INC., Plaintiff-Appellant, v. PFIZER, INC., Defendant-Appellee.
04-1186
United States Court of Appeals for the Federal Circuit
This case presents an important question under the Hatch-Waxman Amendments, which were enacted as part of the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (codified at
The Declaratory Judgment Act,
I
The plain language of the 2003 Medicare Amendments requires that in the Hatch-Waxman context the federal courts allow declaratory judgment actions to the full extent allowed by Article III.
There are relatively few Supreme Court cases dealing with Article III and declaratory judgments, but the few cases that do exist provide no support for a reasonable apprehension of imminent suit requirement. The declaratory judgment statute was designed to deal with a situation in which the declaratory judgment defendant declined to bring suit, i.e., in which there was no reasonable apprehension of imminent suit. The Supreme Court case upholding the statute involved just such a situation—one in which there was no imminent risk of suit because the potential plaintiff
Likewise, the Ninth Circuit, in a case in which the plaintiff faced a risk of liability rather than suit, has held that “[a]n action for a declaratory judgment . . . is a case or controversy if the plaintiff has a real and reasonable apprehension that he will be subject to liability,” not suit. Societe de Conditionnement en Aluminium v. Hunter Eng‘g Co., Inc., 655 F.2d 938, 944 (9th Cir. 1981) (emphasis added).1 The First Circuit has even more directly addressed the issue in Sallen v. Corinthians Licenciamentos LTDA, 273 F.3d 14 (1st Cir. 2001), and adopted a view that conflicts with the panel decision in this case. There, a World Intellectual Property Organization (“WIPO“) panel found
CL claims that a reasonable apprehension of suit is required to meet Article III‘s case or controversy requirement. But this is not the only way to establish the existence of a case for purposes of Article III. The reasonable apprehension of suit doctrine exists to cabin declaratory judgment actions where the only controversy surrounds a potential, future lawsuit. That is not this case.
Id. at 25 (internal citations omitted and emphasis added). The court found that United States law “provides a registrant who has lost a domain name . . . with a cause of action for an injunction returning the domain name if the registrant can show that she is in compliance with” United States law. Id. at 26. Thus, the court found that the controversy in issue was certain and that “a certain controversy renders the ‘reasonable apprehension’ question irrelevant.” Id.
In my view, the First Circuit is correct: the proper test under Article III is whether there is a present concrete controversy, and the panel here applied an incorrect test. The panel here also reached the wrong result in this case by relying on that erroneous test.
II
Here it seems to me that there are three potential controversies:
1. There is a potential controversy over whether the ANDA filing itself was an infringement. I doubt whether this, standing alone, satisfies Article III because Pfizer seems not to care whether such an infringement occurred. Textron Lycoming Reciprocating Engine Div., AVCO Corp. v. UAW, 523 U.S. 653, 661 (1998) (finding no constitutional controversy where the declaratory judgment defendant had no “interest in defending the binding nature of the contract“).
2. There is also a potential controversy over whether Teva should be allowed to manufacture and market the drug without incurring damages for infringement. The problem here is that Teva has not alleged that it intends to market or sell the drug at any time in the near future or that it is being prevented from doing so by the risk of infringement damages. Instead, Teva alleges only that the filing of its ANDA constituted technical infringement; that Pfizer did not file suit within the 45-day period; that Pfizer included the ‘699 patent in the Orange Book; and that Pfizer tends to enforce its patents through litigation. (J.A. at 52.) Unless Teva actually is about to manufacture or sell the drug, there would seem to be no case or controversy under this theory. Societe de Conditionnement, 655 F.2d at 944.
3. The third potential controversy is over whether Teva‘s ANDA should be approved earlier than 180 days after Ivax commences marketing. In my view, there is a present and concrete controversy over Teva‘s right to such an approval, which satisfies the requirements of Article III. The Hatch-Waxman Amendments provide for the right to secure resolution of the controversy through a declaratory judgment.
Normally, one would expect that the approval issue would be litigated between Teva and the FDA, but, as we recognized in Minnesota Mining and Manufacturing Co. v. Barr Laboratories, Inc., 289 F.3d 775, 778 (Fed. Cir. 2002), Congress provided that approval would depend on the outcome of litigation between private parties (the patent owner and the potential infringer) over the questions of infringement and validity.3 There is certainly a concrete controversy between Pfizer (and Ivax) and Teva over when Teva‘s ANDA should be approved. Both Pfizer and Ivax want the approval of Teva‘s application delayed. Teva wants to avoid delay. The question of delay turns on
