In Apotex Inc. v. Daiichi Sankyo, Inc., the Federal Circuit held that Apotex has standing to seek a declaratory judgment that it does not infringe Daiichi Sankyo’s patent, even though Daiichi Sankyo has disclaimed the patent such that there can be no infringement as a matter of law. The court reached this decision because only a judgment of non-infringement could open the door for Apotex to enter the market earlier than it otherwise could as a subsequent ANDA filer. 

The Patent (Not) At Issue 

The patent purportedly at issue was Daiichi Sankyo’s U.S. Patent 6,878,703, which is listed in the Orange Book for its Benicar® (olmesartan medoxomil) product for treating hypertension. The patent originally was set to expire in 2021, but Daiichi Sankyo disclaimed all claims in 2006. The second patent listed in the Orange Book for Benicar® (U.S. Patent 5,616,599) expires April 25, 2016. The pediatric exclusivity period for the product expires October 25, 2016.

The ANDA Framework: First Filer vs. Subsequent Filer 

This case involves complicated aspects of the ANDA framework relating to the rights of a first ANDA filer against subsequent ANDA filers.

In order to incentivize generic manufacturers to challenge possibly invalid patents, the Hatch-Waxman Act awards a first ANDA filer who has made a paragraph IV certification with a 180 day exclusivity period.  That is, the FDA will not approve a subsequent ANDA until 180 days after first ANDA filer has commercially marketed the drug product at issue.

The 180 day exclusivity period can be forfeited if, for example, the generic manufacturer fails to enter the market within 75 days of a final judgment that the relevant patent(s) is(are) invalid or not infringed, whether that judgment is obtained in a litigation involving the first ANDA filer or a subsequent ANDA filer. Thus, a subsequent ANDA filer can force the first ANDA filer to enter the market (or forfeit its exclusivity period) by challenging the Orange Book listed patents (or infringement thereof) itself.

The Benicar® ANDAs

Mylan was the first company to file an ANDA seeking approval of a generic version of Benicar®, in April of 2006. Mylan’s ANDA included a Paragraph IV certification alleging that the ‘599 and ‘703 patents were invalid or would not be infringed by its product. In response, Daiichi Sankyo asserted the ‘599 patent in an infringement action, but disclaimed the ‘703 patent. The validity of the ‘599 patent was upheld, such that Mylan’s earliest market entry date can be October 25, 2016.

Apotex filed its ANDA in June of 2012. Apotex’s ANDA included a Paragraph III certification for the ‘599 patent and a Paragraph IV certification for the ‘703 patent. (In 2006, Daiichi Sankyo had asked the FDA to de-list the ‘703 patent, but it did not do so.)

When Daiichi Sankyo did not bring suit to enforce the disclaimed ‘703 patent, Apotex brought the declaratory judgment action at issue. Apotex based its standing on the theory that a judgment of non-infringement could force Mylan to enter the market earlier, under the forfeiture provisions of 21 USC § 355(j)(5)(D)(i)(I)(bb)(AA). The district court disagreed that there was jurisdiction, noting that “Daiichi [Sankyo] and Apotex no longer hold any meaningful interest in the now disclaimed patent” and that the FDA’s continuing to list the ’703 patent in the Orange Book ‘does not create a case or controversy.'”

The Federal Circuit Decision

The Federal Circuit decision was authored by Judge Taranto and joined by Judges Mayer and Clevenger. The court decided four main issues.

First, the court decided that Mylan had a right to intervene, because it has a “strong, concrete interest” that “exists apart from that of Daiichi [Sankyo].”

Second, the court determined that the disclaimed status of the patent did not resolve all adversity between the parties.

 The patent disclaimer eliminates one, but only one, potential legal barrier to Apotex’s ability to make [its] sales sooner rather than later. The listing of the patent, with its current consequence of preventing FDA approval during Mylan’s presumptive exclusivity period, is another, and the parties have adverse concrete interests in the truncation or preservation of that period

Third, the court rejected Daiichi Sankyo’s argument that Apotex’s injury was not “fairly traceable” to Daiichi Sankyo.

It is only Daiichi’s original listing of that patent—which Daiichi has disclaimed— that now supports Mylan’s exclusivity period, which Apotex filed this action to bring to an end.

Fourth, the court determined that tentative approval of Apotex’s product was not “too speculative” to support jurisdiction and that the statute did not require Apotex to obtain tentative approval before bringing suit. In reaching those conclusions, the Federal Circuit first noted that the Hatch-Waxman Act does not condition the patent owner’s right to bring suit against an ANDA filer on the ANDA filer having obtained tentative approval. (Rather, the statute requires the patent holder to bring suit within 45 days of receiving notice of an ANDA with a Paragraph IV certification in order to be entitled to a 30-month stay of ANDA approval.) Turning to the specific provision at issue, the court noted that 21 USC § 355(j)(5)(D)(i)(I)(bb)(AA) was enacted with other provisions that limited the first ANDA filer’s rights to the 180-day exclusivity period.

The provision relevant to this case reads in part:

(bb) with respect to the first applicant or any other applicant (which other applicant has received tentative approval), the date that is 75 days after the date as of which, as to each of the patents with respect to which the first applicant submitted and lawfully maintained a certification qualifying the first applicant for the 180-day exclusivity period under subparagraph (B)(iv), at least 1 of the following has occurred:

(AA) In an infringement action brought against that applicant with respect to the patent or in a declaratory judgment action brought by that applicant with respect to the patent, a court enters a final decision from which no appeal (other than a petition to the Supreme Court for a writ of certiorari) has been or can be taken that the patent is invalid or not infringed.

The court read this as setting forth “two requirements for forfeiture:”

1. a court must have entered a final decision of non-infringement that is no longer appealable and

2. the second (or later) filer must have received tentative approval.

However, the court found no basis in the statute for requiring a subsequent ANDA filer (such as Apotex) to have received tentative approval before it even can bring suit to challenge validity or infringement. Instead, the court found that its reading “serves the evident congressional policy of triggering forfeiture when a second filer is ready to launch.”

Thus, the Federal Circuit reversed the district court’s dismissal of Apotex’s action.

What Now?

As the Federal Circuit noted, “non-infringement of the ’703 patent follows as a matter of law from the fact that Daiichi [Sankyo] has formally disclaimed it.” Thus, it appears that Apotex could move for judgment as a matter of law and quickly obtain a final judgment such that the 75-day clock would start running against Mylan as soon as Apotex receives tentative approval of its product.