Federal Circuit Clarifies Declaratory Judgment Jurisdiction in Unusual Fact Pattern

Yesterday’s precedential decision in Apotex v. Daiichi Sankyo, Inc. et al. v. Mylan Pharmaceuticals, Inc., 2014-1282, 2014-1291, dealt with the questions of whether declaratory judgment jurisdiction permits a second-filer to challenge a disclaimed Orange Book patent for purposes of triggering the first-filer’s exclusivity.

Daiichi markets Benicar®, a drug to treat hypertension. It listed two patents (the ‘599 and ‘703) in the Orange Book. Mylan was the first ANDA filer, and challenged both Orange Book patents. After receiving Mylan’s certifications, Daiichi disclaimed all claims in the later-expiring ‘703 patent. The parties thereafter went to trial on the other patent, and the court held that Mylan infringed the patent. As a result, the earliest Mylan could launch a generic is after expiration of the ‘599 patent and the earliest any other generic could launch is after Mylan’s six-month exclusivity runs out.

Apotex filed its own ANDA on Benicar®, including a PIII certification as to the ‘599 patent and a PIV certification as to the later-expiring, but disclaimed ‘703 patent. Apotex then filed a declaratory judgment action challenging infringement of the ‘703 patent. If successful in obtaining a judgment of non-infringement, and if Apotex was granted tentative approval, a 75-day period would begin during which Mylan would either have to launch or would lose its exclusivity.

Daiichi moved to dismiss the action for lack of a case or controversy. The district court granted the motion, holding that because a disclaimed patent cannot be infringed, there was no case or controversy sufficient to confer declaratory judgment jurisdiction.

The Federal Circuit reversed on both issues, holding that “Apotex has a concrete, potentially high-value stake in obtaining the judgment it seeks; and Daiichi has a concrete, potentially high-value stake in denying Apotex that judgment and thereby delaying Apotex’s market entry—as does Mylan Pharmaceuticals, Inc., the first applicant for approval of a generic version of Benicar®.”

The Federal Circuit rejected Daiichi’s argument that the case was too speculative for jurisdiction because the FDA had not granted tentative approval, concluding tentative approval was not required by either the statute or prior case law. Then, after considering the statutory forfeiture provisions and policy considerations, the Federal Circuit held that Apotex had alleged sufficient facts to support a case or controversy.

This case illustrates the importance of second-filers considering new ways to trigger forfeiture of a first-filer’s exclusivity.