Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-05-05401/USCOURTS-caDC-05-05401-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 9, 2006 Decided March 16, 2006

Nos. 05-5401 & 05-5460

TEVA PHARMACEUTICALS USA, INC.,

APPELLEE

v.

FOOD & DRUG ADMINISTRATION, ET AL.,

APPELLANTS

APOTEX INC.,

APPELLANT

Appeals from the United States District Court

for the District of Columbia

(No. 05cv01469)

Jeffrey S. Bucholtz, Deputy Assistant Attorney General,

U.S. Department of Justice, argued the cause for federal

appellants. With him on the briefs were Peter D. Keisler,

Assistant Attorney General, Eugene M. Thirolf, Director, and

Andrew E. Clark, Attorney.

William A. Rakoczy argued the cause for appellant

Apotex Inc. With him on the briefs were Christine J. Siwik,

Lara E. Monroe-Sampson, and Arthur Y. Tsien.

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1

 Congress eliminated the court decision trigger in 2003. See

Medicare Prescription Drug, Improvement, and Modernization Act of

2003, Pub. L. No. 108-173, § 1102(a), 117 Stat. 2066, 2457-60

(codified as amended at 21 U.S.C. § 355(j)(5)(B)(iv), (D)). This

amendment does not apply here because the application was filed

before the amendment entered into force. Id. § 1102(b).

2 See Mova Pharm. Corp. v. Shalala, 140 F.3d 1060 (D.C. Cir.

1998); Purepac Pharm. Co. v. Friedman, 162 F.3d 1201 (D.C. Cir.

1998); Teva Pharms., USA, Inc. v. FDA, 182 F.3d 1003 (D.C. Cir.

1999) (“Teva I”); Teva Pharms., USA, Inc. v. FDA, No. 99-5287, 2000

WL 1838303 (D.C. Cir. Nov. 15, 2000) (“Teva II”). 

Jay P. Lefkowitz argued the cause for appellee. With

him on the brief was Steven A. Engel, John C. O’Quinn, and

Michael D. Shumsky.

Before: RANDOLPH and TATEL, Circuit Judges, and

WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge: The Federal Food, Drug, and

Cosmetic Act grants a 180-day exclusive marketing period to

the first generic drug manufacturer to file an Abbreviated New

Drug Application (“application”) that contains a challenge to the

patents protecting a brand name drug. This exclusivity period

begins to run either upon “notice [to the FDA] of the first

commercial marketing of the drug” or on “the date of a decision

of a court . . . holding the patent [to the branded drug] to be

invalid or not infringed, whichever is earlier.” 21 U.S.C.

§ 355(j)(5)(B)(iv) (2000).1

 The meaning of the court decision

trigger is before this court for the fifth time.2

We will assume familiarity with the statutory scheme

governing generic drug approval, which we have described in

previous opinions. See Teva Pharms., USA, Inc. v. FDA, 182

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3

 The product patent itself expired on October 20, 2005. The

FDA granted Bristol-Myers an additional six months of exclusivity

because Pravachol was tested for pediatric indications. See 21 U.S.C.

§ 355a. Bristol-Myers’s exclusivity with respect to the pravastatin

sodium molecule therefore expires on April 20, 2006.

F.3d 1003, 1004-05 (D.C. Cir. 1999) (“Teva I”); Purepac

Pharm. Co. v. Friedman, 162 F.3d 1201, 1202-04 (D.C. Cir.

1998); Mova Pharm. Corp. v. Shalala, 140 F.3d 1060, 1063-65

(D.C. Cir. 1998). As to the facts, Bristol-Myers Squibb Co.

manufactures and sells pravastatin sodium tablets under the

brand name “Pravachol.” Pravachol is a cholesterol-reducing

medication that had $2 billion in domestic sales in 2004.

Bristol-Myers owns or holds licenses to four patents covering

Pravachol. The patent on the molecule itself (the “product

patent”) expires on April 20, 2006.3 The remaining patents,

which protect particular formulations of the drug and methods

for its use, expire in several years. 

On December 20, 2000, Teva Pharmaceuticals USA, Inc.

filed the first application to market generic pravastatin sodium

in 10, 20, and 40 mg tablets. Teva certified that it would not

market its generic version of Pravachol until after the product

patent expired. See 21 U.S.C. § 355(j)(2)(A)(vii)(III) (2000).

Teva challenged the remaining patents by filing a certification

that they are “invalid or will not be infringed” by the generic

product. See id. § 355(j)(2)(A)(vii)(IV) (2000). Such

“paragraph IV” certifications are acts of patent infringement, see

35 U.S.C. § 271(e)(2)(A), (5), and they trigger statutory notice

requirements to allow the patentholder to bring suit. See 21

U.S.C. § 355(j)(2)(B), (5)(B)(iii) (2000). They also confer upon

the first filer the 180 days of marketing exclusivity that are

disputed in this case. Id. § 355(j)(5)(B)(iv) (2000). 

 Bristol-Myers did not sue Teva or any of the other seven

generic drug manufacturers that filed applications containing the

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 The FDA tentatively approved Teva’s application, subject to

expiration of the product patent, on May 15, 2002. The agency took

the same action on intervenor Apotex’s application on September 30,

2003.

identical patent certifications.4 Intervenor Apotex Inc., one such

generics manufacturer, nevertheless sued Bristol-Myers in the

Southern District of New York in October 2003. Apotex sought

a declaration that Bristol-Myers’s three patents covering

Pravachol’s formulation and method of use were invalid or not

infringed by Apotex’s generic pravastatin sodium product.

Bristol-Myers did not answer the complaint; it instead moved to

dismiss the complaint for lack of subject matter jurisdiction.

The district court ultimately did not rule on this motion. On July

23, 2004, the court entered a “stipulation and order” signed by

the parties. The stipulation and order stated that because

“[Bristol-Myers] repeatedly represented and assured Apotex

that, notwithstanding any disagreement on the scope or

interpretation [of the disputed patents], it had no intention to

bring suit against Apotex for infringement,” Apotex stipulated

that its complaint be dismissed “for lack of subject matter

jurisdiction.” Apotex Inc. v. Bristol-Myers Squibb Co., No. 04

CV 2922, at 3 (S.D.N.Y. July 23, 2004) (“Apotex”).

With this stipulation in hand, Apotex asked the Food and

Drug Administration to rule that Apotex’s New York litigation

produced a “decision of a court” that triggered Teva’s

exclusivity period for generic pravastatin sodium. Cf. Minn.

Mining & Mfg. Co. v. Barr Labs., Inc., 289 F.3d 775, 780 (Fed.

Cir. 2002) (holding termination of second filer’s litigation can

trigger first filer’s exclusivity and citing Teva I, 182 F.3d at

1010). In a letter to Teva and the other generic pravastatin

sodium applicants, the FDA concluded that the Apotex

“stipulation and order” qualified as a “decision of a court” under

21 U.S.C. § 355(j)(5)(B)(iv)(II) (2000), and that Teva’s period

of exclusivity therefore began to run on the date the stipulation

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and order became final, August 22, 2004. See Letter from Gary

Buehler, Director, FDA Office of Generic Drugs, to Philip

Erickson, Teva Pharms. USA (June 28, 2005) (“Letter”),

reprinted in Joint Appendix (J.A.) 990. Under the FDA’s

decision, Teva’s period of exclusivity would run out before the

product patent expired, thereby allowing all manufacturers to

enter the market at the same time in April 2006.

Teva challenged the FDA’s decision in the instant case.

The district court granted Teva’s requests for a declaration that

the FDA’s conclusions were contrary to law and for injunctive

relief preventing the FDA from approving any other generic

pravastatin sodium application sooner than 180 days after Teva

begins marketing its product. Teva Pharms. USA, Inc. v. FDA,

398 F. Supp. 2d 176, 192-93 (D.D.C. 2005). The district court

concluded that the voluntary dismissal of Apotex’s declaratory

judgment action did not meet the statutory definition of a

“decision of a court.” Id. at 190-91. 

The district court consolidated Teva’s motion for a

preliminary injunction with a final decision on the merits, FED.

R. CIV. P. 65(a)(2), and treated it as “akin [to a motion for]

summary judgment.” 398 F. Supp. 2d at 181 & n.1. We

therefore review the district court’s legal determination de novo.

See SEC v. Bilzerian, 29 F.3d 689, 695 (D.C. Cir. 1994). “[I]n

effect,” we “review directly the decision of the [Agency]” under

the familiar standards of the Administrative Procedure Act, 5

U.S.C. § 706(2). Lozowski v. Mineta, 292 F.3d 840, 845 (D.C.

Cir. 2002). 

The FDA treated the Apotex dismissal as a “decision of

a court . . . holding the patent . . . invalid or not infringed,” 21

U.S.C. § 355(j)(5)(B)(iv)(II) (2000), solely because it thought

our decisions in Teva I and Teva Pharms., USA, Inc. v. FDA,

No. 99-5287, 2000 WL 1838303 (D.C. Cir. Nov. 15, 2000)

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(“Teva II”), compelled that result. The FDA stated that “under

the rule of Teva, [the Apotex] dismissal qualifies as a court

decision.” It understood “the rule of Teva” to be “that a

dismissal of a declaratory judgment action . . . can qualify as a

‘decision of a court’ . . . if the dismissal estops a future action

against the [applicant] for infringement of the patent with

respect to that drug product.” Letter at 2.

Our decisions never announced such a rule. In Teva I,

we considered the FDA’s determination that a district court’s

dismissal of a patent declaratory judgment action for lack of

subject matter jurisdiction was not a “decision of a court.” We

found the FDA’s conclusion to be “arbitrary and capricious

inasmuch as the FDA [took] an inconsistent position in another

case and failed to explain adequately the inconsistency.” Teva

I, 182 F.3d at 1004. The Teva I court found the FDA’s

reasoning inadequate for three reasons. The court first held that

the terms “decision” and “holding” in 21 U.S.C.

§ 355(j)(5)(B)(iv)(II) (2000) were ambiguous. Id. at 1007-08.

Although the court stated that the statute could be interpreted to

include dismissals of declaratory judgment actions as triggering

events, id. at 1008-09, it left the final decision to the FDA: “The

. . . dismissal would appear to meet the requirements of a ‘court

decision’ under § 355(j)(5)(B)(iv)(II). On remand, of course,

the FDA will have the opportunity to explain why it fails to meet

them.” Id. at 1009 (emphasis added). Second, the court found

the terms “invalid” and “not infringed” to be ambiguous, and

faulted the FDA for failing to reconcile its decision in the case

with its own regulation. Id. at 1009-10. Third, the court found

that the FDA acted contrary to its own published “Guidance for

Industry” and prior decisions. Id. at 1010. We declined to

evaluate the reasonableness of the FDA’s statutory interpretation

because the agency provided no explanation why it thought

dismissals for lack of jurisdiction were or were not triggering

events. Id. at 1011-12. In sum, the court stated that its

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“decision . . . rest[ed] on the FDA’s failure to explain adequately

its refusal to treat the . . . dismissal as a triggering ‘court

decision.’” Id. at 1012.

When the case returned to this court after remand, we

affirmed this understanding of Teva I: “In Teva I, we remanded

the case . . . to afford the agency the opportunity to address the

merits of Teva’s contention that the . . . dismissal satisfies the

court decision requirement.” Teva II, 2000 WL 1838303, at *1

(internal quotation marks and citations omitted); see also id. at

*3 (Edwards, C.J., concurring in part and dissenting in part)

(noting that the Teva I court “did not . . . purport to render a final

judgment on” the correct interpretation of the statute). “The

FDA did not meaningfully address [the] question on remand,”

however, and the court once again found that the FDA’s

decision “fail[ed] for want of reasoned decisionmaking.” Id. at

*1-2.

Teva I’s approach was consistent with longstanding

practice in this circuit. In a suit challenging agency action, “it

is not for the court ‘to choose between competing meanings’” of

an ambiguous statute when the agency charged with its

administration has not weighed in first. PDK Labs., Inc. v. DEA,

362 F.3d 786, 798 (D.C. Cir. 2004) (quoting Alarm Indus.

Commc’ns Comm. v. FCC, 131 F.3d 1066, 1072 (D.C. Cir.

1997)). When a statute is ambiguous, Congress has left a gap

for the agency to fill. See Chevron USA Inc. v. Natural Res.

Def. Council, 467 U.S 837, 843-44 (1984). A court’s

interpretation prevails only if it “follows from the unambiguous

terms of the statute and thus leaves no room for agency

discretion.” Nat’l Cable & Telecomms. Ass’n v. Brand X

Internet Servs., 125 S. Ct. 2688, 2700 (2005). We therefore

generally remand for an agency to make the first interpretation

of an ambiguous statutory term when it has failed to do so

previously. PDK Labs., 362 F.3d at 797-98; see also Arizona v.

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 The FDA states that in the absence of any perceived Teva I

constraint, it would employ a “textual” approach to interpreting the

statute, and would take the position that dismissals of declaratory

judgment actions are not court decisions holding a patent to be invalid

or not infringed. Br. for the Fed. Appellants 26-27. The agency took

a similar position in Teva I but failed to provide adequate explanation.

In this litigation the FDA still has not answered the questions put to it

by the Teva I court.

Thompson, 281 F.3d 248, 253-54 (D.C. Cir. 2002); Transitional

Hosps. Corp. of La., Inc. v. Shalala, 222 F.3d 1019, 1028-29

(D.C. Cir. 2000); Prill v. NLRB, 755 F.2d 941, 956-57 (D.C. Cir.

1985). Teva I found the court decision trigger to be ambiguous,

but the FDA provided no interpretation of its own. Teva I, 182

F.3d at 1007. There is no indication that the Teva I court

intended to depart from this norm and establish its own binding

interpretation.

We follow the same practice in this case. The FDA

mistakenly thought itself bound by our decisions in Teva I and

Teva II. This error renders its decision arbitrary and capricious.

See Astroline Commc’ns Co. L.P. v. FCC, 857 F.2d 1556, 1573

(D.C. Cir. 1988). “[A]n order may not stand if the agency has

misconceived the law.” SEC v. Chenery Corp., 318 U.S. 80, 94

(1943). The FDA’s “stated rationale for its decision is

erroneous” and “we cannot sustain its action on some other basis

[it] did not mention.” PDK Labs., 362 F.3d at 798. While the

statute may preclude treating voluntary dismissals (or, for that

matter, dismissals under FED. R. CIV. P. 12(b)(1), see Teva I,

182 F.3d at 1008) as triggering events, we express no opinion on

the matter. See id. at 1007-08. It is up to the agency to “bring

its experience and expertise to bear in light of competing

interests at stake” and make a reasonable policy choice. PDK

Labs., 362 F.3d at 797-98. The FDA has not yet done so.5 

Although the district court did not consider whether Teva

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I established a binding interpretation of the statute, that issue

was fully briefed below. See EEOC v. Aramark Corp., Inc.v,

208 F.3d 266, 268 (D.C. Cir. 2000). We therefore vacate the

district court’s judgment and remand with instructions to vacate

the FDA’s decision and remand to the agency for further

proceedings. The mandate shall issue forthwith.

So ordered.

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