Cephalon Inc. v. Sandoz, Inc.

Case Name: Cephalon Inc. v. Sandoz, Inc., Civ. No. 11-CV-821-SLR, 2012 U.S. Dist. LEXIS 26494 (D. Del. March 1, 2012) (Robinson, J.) (Listing patents in the Orange Book after receiving a Paragraph IV certification notice letter on other already-listed patents does not divest a court of jurisdiction over infringement claims associated with the late-listed patents.).

Drug Product and Patent(s)-in-Suit: Fentora^® (fentanyl citrate buccal tablets); U.S. Pat. Nos. 6,200,604 ("the '604 Patent"), 6,974,590 ("the '590 patent"), 7,862,832 ("the '832 patent"); 7,862,833 ("the '833 patent")

Nature of the Case and Issue(s) Presented:  In conjunction with the approval of its NDA for Fentora, Cephalon listed the '604 and '590 patents in the Orange Book.  In January 2010, Cephalon received a Paragraph IV certification notice letter from Sandoz, notifying Cephalon that Sandoz had filed an ANDA alleging that the '604 and '590 patents were invalid and/or not infringed by Sandoz's proposed generic product.  On February 16, 2010, Cephalon filed suit against Sandoz alleging patent infringement ("Sandoz I").  On May 5, 2011, the Court granted Cephalon's motion to stay Sandoz I pending the appeal of Cephalon, Inc. v. Watson, another lawsuit in which Cephalon alleged infringement of the '604 and '590 patents.  On January 4, 2011, one year after Sandoz filed its ANDA, the '832 and '833 patents issued.  But Cephalon did not list those new patents in the Orange Book until April 25, 2011.  Pursuant to 21 C.F.R. § 314.94(a)(12)(vi)(1995), if a patent on the listed drug is issued and the holder of the NDA for the listed drug does not submit the required information on the patent within thirty days of issuance of the patent, an ANDA applicant for that drug that contained an appropriate patent certification before the submission of the patent information is not required to submit an amended certification.  Sandoz, therefore, was not required to file an amended Paragraph IV certification as to the '832 and '833 patents.

On June 3, 2011, Cephalon advised Sandoz of its intent to assert the '832 and '833 patents and asked if Sandoz would stipulate to amend the pleadings in Sandoz I to add those patents.  Sandoz declined, and on September 15, 2011, Cephalon filed the instant litigation alleging that Sandoz infringes the ‘832 and ‘833 patents.  Sandoz filed a motion to dismiss on jurisdictional grounds, as well as for failure to state a claim. Sandoz argued that a district court did not have subject matter jurisdiction over an infringement action against an ANDA application under 35 U.S.C. § 271(e)(2) where the asserted patents were late-listed in the FDA's Orange Book and the defendant's ANDA does not contain a Paragraph IV certification with respect to those patents.  Jurisdiction under the Declaratory Judgment Act was therefore not available under those circumstances.  Cephalon responded that the court has jurisdiction pursuant to the Declaratory Judgment Act regardless of whether § 271(e)(2) is applicable to the facts of record.  The Court agreed, and denied Sandoz's motion to dismiss.

Why Cephalon Prevailed:  The Court held that where an ANDA application is filed for a drug, and a patentee belatedly lists patents on FDA's Orange Book that may potentially cover that drug, that patentee is not precluded from bringing a declaratory judgment action even if the ANDA applicant did not amend the Paragraph IV certification.

The Court ruled that substance, not form, controls the issue.  Initially, it recognized that the Hatch-Waxman Act's purpose is "to guard against infringement of patents relating to pioneer drugs."  Toward this end, it observed that Hatch-Waxman allowed generic manufacturers to develop drugs freely without the threat of infringement, but considered the filing of an ANDA to be an act of infringement to allow patent owners to efficiently enforce their patents.  Here, Sandoz certified against two of Cephalon's patents in its initial Paragraph IV certification.  Cephalon listed two additional patents in the Orange Book, but eighty-one days after the administrative deadline.  This tardiness relieved Sandoz of its duty to amend its Paragraph IV certification, but the Court rejected Sandoz's argument that because the drugs were not certified properly, subject matter jurisdiction did not exist under the Hatch-Waxman Act.

Paragraph IV certifications were meant to protect the patentee, not the generic manufacturer.  Here, Sandoz was on notice of the '832 and '833 patents, and therefore had the opportunity to amend the certification.  It chose not to.  The Court rejected to follow Eisai Co. v. Mutual Pharm. Co., Civ. No. 06-3613, 2007 U.S. Dist. LEXIS 93585 (D.N.J. Dec. 20, 2007) (holding that the absence of a Paragraph IV certification limits, as a matter of law, the court's subject matter jurisdiction under both 35 U.S.C. § 271(e)(2) and 28 U.S.C.§ 2201) because, here, the jurisdictional trigger was properly pulled by the filing of an ANDA and the initial Paragraph IV certification by Sandoz.  The court's jurisdiction should not be confined simply because Sandoz was not required to filed an amended Paragraph IV certification.

The Court went further, stating that even jurisdiction was inappropriate under provisions of the Hatch-Waxman Act, it would be proper under 28 U.S.C. § 2201, because there was an actual controversy.  The Court noted that even though Sandoz was not yet manufacturing the proposed drug, jurisdiction would still be imminent where Sandoz was preparing to do so.