Teva v. Eisai

October 13, 2010 – Blog Post

The Federal Circuit ruled on Wednesday, October 6 in Teva v. Eisai (Fed. Cir. Docket No. 2009-1593) that subsequent ANDA filers may have a legally cognizable interest in challenging the patent holder over validity, infringement, or enforceability that may trigger the first ANDA filer’s 180 day exclusivity period.

In this case, Eisai holds the NDA for donepezil, which Eisai markets as Aricept®. Ranbaxy Labs filed the first ANDA having a Paragraph IV certification for Eisai’s later expiring patents, but filed a Paragraph III certification with respect to Eisai’s first expiring patent. Eisai did not sue Ranbaxy. Despite the lack of a suit, Ranbaxy could not obtain approval to market its product in the United States, given its Paragraph III certification, until the expiration of Eisai’s first to expire patent. Because Ranbaxy was entitled to a 180 day period of exclusivity as the first ANDA holder, no other company could obtain approval prior to the expiration of Ranbaxy’s exclusivity period.[1]

Subsequently, Teva Pharmaceuticals also filed a Paragraph IV certification with respect to all of the patents listed in the Orange Book for donepezil. Eisai only sued Teva for infringement of the earliest to expire patent. Accordingly, Teva filed a declaratory judgment action for a finding of noninfringement on the later expiring patents to trigger Ranbaxy’s 180 day exclusivity period.

Courts can issue a declaratory judgment of noninfringement for filers of Paragraph IV ANDAs where there is an “actual controversy.” 28 U.S.C. § 2201. Eisai moved to dismiss Teva’s declaratory judgment action for lack of a constitutional case or controversy. The district court agreed and dismissed the action. Teva appealed to the Federal Circuit.

The Federal Circuit reversed, finding that Teva’s case provided such a controversy between Teva as a subsequent ANDA filer and Eisai as the NDA holder who listed patents in the Orange Book. In its opinion, the Federal Circuit cited its decision in Caraco Pharmaceutical Laboratories, Ltd. v. Forest Laboratories, Inc., 527 F.3d 1278 (Fed. Cir. 2008), which states that an NDA holder listing a patent in the Orange Book can give rise to injury-in-fact for ANDA applicants excluded from FDA approval. The Federal Circuit also distinguished Teva from Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353 (Fed. Cir. 2008), in which a subsequent Paragraph IV ANDA filer stipulated to validity, infringement, and enforceability of one of multiple patents listed in the Orange Book for the drug at issue. Because, even with a favorable judgment, the subsequent filer in Janssen would not have been able to market its drug at least until the expiration of the patent related to the stipulation, the Federal Circuit found that the alleged harm of being kept out of the drug market in that case was not “fairly traceable” to Orange Book listing of the patents subject to suit. However, in Teva, there was nothing other than the Orange Book listing that prevented Teva from obtaining FDA approval. Thus, the declaratory judgment would effectively redress the alleged injury of exclusion from the market for generic donepezil.

For NDA holders with valuable patent portfolios, this decision may mean increased challenges from ANDA applicants. NDA holders may have to defend their patents from challengers filing subsequent Paragraph IV ANDAs if successful challenges to those patents would leave ANDA filers open to possible FDA approval and market entrance.

[1] The first Paragraph IV ANDA filer for a given drug is entitled to a 180-day period of exclusivity, in which no subsequent Paragraph IV filer will receive FDA approval for that drug, beginning when the first filer starts commercially marketing the drug or when a court holds that the relevant listed patents are invalid or not infringed. 21 U.S.C. § 355(j)(5)(B)(iv). Because neither of these events had occurred for Ranbaxy’s ANDA, its 180-day exclusivity period had not started. While Congress altered the statute in 2003 so that a first Paragraph IV filer loses its exclusivity period if it fails to market its drug within a certain amount of time after specific triggering events, the Ranbaxy application predated that provision, so the provision does not apply here.