Section VIII Statement Does Not Create “a Case or Actual Controversy” to Establish Subject Matter Jurisdiction for Declaratory Judgment Counterclaim

Judge Richard Andrews of the District of Delaware dismissed counterclaims lodged by two generic drug manufacturers, finding that no justiciable declaratory judgment controversy arises for an ANDA filer who only submits statements pursuant to 21 U.S.C. § 355(j)(2)(A)(viii) (“Section viii statements”). In re: Entresto (Sacubitril/Valsartan) Patent Litigation, No. 20-md-02930 (D. Del. Sept. 27, 2022).

This multidistrict patent litigation case concerns Novartis’ heart medication sold under the brand name Entresto (sacubitril/valsartan). After Plaintiffs received notice that Hetero USA Inc., Hetero Lab Limited, and Hetero Labs Limited Unit III (“Hetero”) and Torrent Pharma Inc. and Torrent Pharmaceuticals Ltd. (“Torrent”) filed ANDA applications for generic versions of Entresto, Novartis sued Hetero and Torrent alleging patent infringement. Defendants responded with counterclaims seeking declaratory judgment as to three patents not asserted in the complaint. Although defendants supplemented their ANDA applications to include Section viii statements (affirming that their ANDA products will omit from their labeling any methods of use that infringe patents), they did not certify pursuant to 35 U.S.C. § 355(j)(2)(A)(vii)(IV) (“Paragraph IV certification”) that those three patents will not be infringed and/or are invalid.

Novartis moved to dismiss defendants’ counterclaims. One of its main arguments was that defendants were barred by statute because under 21 U.S.C. § 355(j)(5)(C)(i) of the Hatch Waxman Act and 35 U.S.C. § 271(e)(5) of the Patent Act, an ANDA applicant is restricted from filing a declaratory judgment action unless the applicant filed a Paragraph IV certification and the patent owner was first given 45 days to bring an infringement action. Because these statutes are specific to situations where a Paragraph IV certification is filed, the court disagreed that defendants were statutorily barred. Nevertheless, the court ultimately granted Novartis’ motion to dismiss defendants’ counterclaims as to those three non-asserted patents for lack of subject matter jurisdiction because the statutes do not provide a statutory basis for defendants’ counterclaims. The court rejected defendants’ argument based on a statement from Teva Pharms. USA, Inc. v. Novartis Pharms. Corp., 482 F.3d 1330 (Fed. Cir. 2007) that submitting an ANDA application alone creates a justiciable controversy for both parties and provides a two-way street for declaratory judgment jurisdiction, finding that the cited language from Teva was limited to the context of an ANDA applicant that submitted a Paragraph IV certification. An ANDA applicant that submits a Section viii statement does not create an “actual controversy” because the applicant does not face the imminent threat of an infringement action. Consequently, the court did not have subject matter jurisdiction over Hetero and Torrent’s declaratory judgment counterclaims as to those three non-asserted patents.

Although ANDA filers who have not served a Paragraph IV notice letter are technically not statutorily barred from asserting declaratory judgment, at least this court has found there is no statutory basis for such claims. This decision highlights an issue that ANDA filers should consider when deciding whether to forego or submit Paragraph IV certifications.