Intention to File an ANDA may be Sufficient to Establish Standing for a PGR Appeal

Around the same time the Federal Circuit decided that a prospective ANDA customer lacked declaratory judgment standing in AIDS Healthcare, reported on here, it held that a prospective ANDA filer has standing to appeal a PTAB decision.  In Altaire Pharmaceuticals, Inc. v. Paragon Bioteck, Inc., No. 2017-1487 (Fed. Cir. May 2, 2018), a sharply-divided panel found that Altaire demonstrated a concrete, particularized injury in fact because it would be subject to a lawsuit under Paragon’s patent in the future when it files an ANDA.

In 2011, Altaire and Paragon entered into a joint-operation agreement to pursue FDA approval, under which Paragon would submit an NDA for an ophthalmic drug manufactured by Altaire.  Paragon then filed a patent application without Altaire’s approval or consent, which issued as U.S. Patent No. 8,859,623.  Altaire sued Paragon for breach of contract and sought a declaratory judgment of invalidity and a post-grant review of Paragon’s claims, asserting that the claims were obvious.  Paragon filed a counterclaim seeking to end the agreement before its 2021 expiration date.  The PTAB found that the claims were not obvious, and Altaire appealed.

On appeal, Paragon argued that Altaire lacked Article III standing.  Altaire responded that it had standing because it could resume manufacturing without difficulties and that it intended to seek FDA approval of its own formulation immediately after the agreement terminates.  Because Paragon will inevitably sue Altaire upon Altaire’s filing of an ANDA, the invalidation of the ’623 patent in the PGR proceedings is necessary to “remov[e] that patent as an obstacle to the filing and approval of Altaire’s ANDA.”  Based on Altaire’s intent to file an ANDA once the agreement terminates and Paragon’s seeking of a declaratory judgment that it can terminate the agreement early, the majority found that Altaire’s injury was inevitable and imminent and would be compounded by the likelihood that Altaire would be estopped from arguing that the patent was obvious in district court litigation.

Judge Schall, dissenting, stated that Altaire’s injury was speculative and not imminent because Altaire cannot infringe until the agreement terminates, which is not currently set to occur until 2021.  He further stated that estoppel does not constitute an injury in fact when Altaire has not engaged in any activity that would give rise to a possible infringement suit.

The court might have been more lenient in its analysis to allow Altaire’s intention to file an ANDA to establish standing to appeal the PTAB decision as a result of the unique circumstances of this case.  It remains to be seen whether a potential ANDA-filer without any prior manufacturing relationship with the patent holder has standing to appeal a PTAB decision.

Thanks to Elvis Kim, Twin Cities Diversity in Practice Summer Rotation Clerk and law student at the University of Minnesota Law School, for his contributions to this post.