Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-99-05027/USCOURTS-caDC-99-05027-0/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 April 26, 1999 Decided July 20, 1999

No. 99-5022

Teva Pharmaceuticals, USA, Inc.,

Appellant

v.

United States Food and Drug Administration, et al.,

Appellees

Consolidated with

No. 99-5027

Appeals from the United States District Court

for the District of Columbia

(No. 99cv00067)

Geoffrey M. Levitt and James N. Czaban argued the cause

for appellant. With them on the briefs was David M. Malone.

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Robert A. Dormer, James R. Phelps and Douglas B. Farquhar were on the brief for appellant Purepac Pharmaceutical Company.

Andrew E. Clark, Attorney, U.S. Department of Justice,

argued the cause for the federal appellees. With him on the

brief were David W. Ogden, Acting Assistant Attorney General, Eugene Thirolf, Jr., Director, Office of Consumer Litigation, and Drake S. Cutini, Attorney.

James D. Miller argued the cause for intervenors-appellees

TorPharm, a Division of Apotex, Inc., et al. With him on the

brief were Eugene M. Pfeifer, Peter M. Todaro, Donald O.

Beers and David E. Korn.

Before: Edwards, Chief Judge, Rogers, Circuit Judge and

Buckley, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge Rogers.

Rogers, Circuit Judge: Teva Pharmaceuticals and Purepac

Pharmaceutical Company appeal the denial of injunctive relief

requiring the Food and Drug Administration ("FDA") to

recognize the dismissal of a declaratory judgment complaint

for patent infringement as a "court decision" under the

Abbreviated New Drug Application ("ANDA") statute. See

21 U.S.C. s 355(j)(5)(B)(iv)(II) (Supp. III 1997). Appellants

are "subsequent" ANDA applicants hoping to market ticlopidine tablets, a generic version of the name-brand drug "Ticlid," used to treat stroke victims.1 To meet the require-

__________

1 Purepac has joined in the argument presented in the brief

filed by Teva, having been unsuccessful in a previous challenge to

the FDA's interpretation of the ANDA statute in Purepac Pharmaceutical Co. v. Friedman, 162 F.3d 1201 (D.C. Cir. 1998). Purepac

now seeks reversal of the district court's denial of injunctive relief

and a remand for entry of an order directing the FDA to make all

approved ANDAs for generic ticlopidine products, including Purepac's, effective as of February 10, 1999. Teva seeks a similar

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ments of the ANDA statute, Teva sued the patent holder2 in

the Central District of California in order to obtain a "court

decision" that would start, or trigger, a 180-day period of

market exclusivity for the first ANDA applicant, and thereafter allow appellants to market their generic drug. The

California court dismissed the complaint for lack of subjectmatter jurisdiction after finding, based on the patent holder's

admission of non-infringement, that Teva lacked a reasonable

apprehension of suit by the patent holder. The FDA nevertheless refused to recognize the dismissal as a triggering

"court decision" under the ANDA statute. Because we conclude that the FDA's refusal was arbitrary and capricious

inasmuch as the FDA has taken an inconsistent position in

another case and failed to explain adequately the inconsistency, we reverse and remand the case to the district court to

determine anew whether injunctive relief is appropriate.

I.

The statutory background is succinctly summarized as follows. In 1984, Congress amended the Food and Drug Act in

order to expedite the approval of generic versions of namebrand drugs that already have FDA approval, thus making

available more low-cost generic drugs. See Drug Price Competition & Patent Term Restoration Act of 1984, Pub. L. No.

98-417, tit. I, 98 Stat. 1585 (1984) (codified as amended at 21

U.S.C. s 355 (1994 & Supp. III 1997)); see also H.R. Rep.

No. 98-857, pt. 1, at 14 (1984), reprinted in 1984 U.S.C.C.A.N.

__________

remedy: reversal and remand, with the district court ordering the

FDA to make Teva's ANDA effective as of February 10th.

2 Syntex (U.S.A.), Inc., the holder of Patent No. 4,591,592

(" '592 patent" or "patent") that covers a finished dosage formulation of a ticlopidine tablet, but not the active pharmaceutical ingredient ticlopidine hydrochloride, and Hoffmann-LaRoche Laboratories Inc., which markets ticlopidine tablets under the brand-name

"Ticlid," are two of the intervenors. For ease of reference we refer

to Syntex and Hoffmann-LaRoche collectively as "Syntex." Also

intervening is TorPharm, which has identified itself as the first

applicant to file its ANDA.

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2647, 2647. Under the so-called Hatch-Waxman amendments, an abbreviated new drug application process allows

applicants, upon meeting certain requirements, to proceed

more quickly to the marketplace. The ANDA applicant must

show that: (i) the use of the drug has been previously

approved; (ii) the new drug contains the same active ingredient(s) as the previously approved drug, or document the

differences; (iii) the new drug has the same route of administration, dosage form, and strength of the previously approved

drug, or document the differences; (iv) the new drug is the

bioequivalent or has the same therapeutic effect as the previously approved drug; (v) the new drug has the same labeling

as the previously approved drug, or the differences are

approved; and (vi) it has complied with other statutory

requirements, which include providing a full list of articles

used as components, a full statement of composition, samples

of the drug, labeling specimens, and a description of manufacturing, processing, and packaging. See 21 U.S.C. s 355(j)(2).

To avoid the patent infringement problems inherent in such

a statutory scheme, the ANDA applicant must provide the

FDA with a certificate establishing that the marketing of the

generic drug will not infringe the patent for the listed drug.

To this end, the applicant must certify that: (I) the patent

information has not been filed, (II) the patent has expired,

(III) the patent will expire on a specified date, or (IV) the

"patent is invalid or will not be infringed by the manufacture,

use, or sale of the new drug for which the application is

submitted." Id. s 355(j)(2)(A)(vii). As part of a certification

under Paragraph IV, the ANDA applicant must notify the

patent holder and approved applicants of its application and

include a statement of the factual and legal basis for the

applicant's opinion that the patent is not valid or will not be

infringed. See id. s 355(j)(2)(B). Under FDA regulations,

the applicant may also certify that the patent is unenforceable. See 21 C.F.R. s 314.94(a)(12)(i)(A)(4) (Westlaw 1999).

ANDA applicants who submit Paragraph IV certifications

are subject to a "market-exclusivity provision," see 21 U.S.C.

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s 355(j)(5)(B)(iv), under which previous applicants are granted 180 days during which subsequent applications cannot be

approved.3 This period is started, or triggered, by the earlier

of (1) the date the Secretary of Health and Human Services

receives notification from the previous applicant of the first

commercial marketing of its drug or (2) the date of a "decision of a court" in a patent or declaratory judgment action

"holding" that the patent is either "invalid or not infringed."

Id.; see also id. s 355(j)(5)(B)(iii) (describing suits for patent

infringement or declaratory judgment).

Heretofore, the court invalidated the FDA's "successful

defense" requirement, whereby the first ANDA applicant

could obtain 180 days of market exclusivity only after successfully defending a patent lawsuit. See Mova Pharm. Corp. v.

Shalala, 140 F.3d 1060, 1076 (D.C. Cir. 1998). Accord

Granutec, Inc. v. Shalala, No. 97-1873, 1998 WL 153410, at

*7 (4th Cir. April 3, 1998). In response, the FDA issued a

"Guidance for Industry" announcing its intention to promulgate new regulations on market exclusivity and "until such

time as the rulemaking process is complete," to "regulate

directly from the statute, and ... make decisions on 180-day

generic drug exclusivity on a case-by-case basis." See Guidance for Industry: 180-Day Generic Drug Exclusivity Under

the Hatch-Waxman Amendments to the Federal Food, Drug

and Cosmetic Act 4 (June 1998) ("Guidance for Industry").

The court upheld this approach in Purepac Pharmaceutical

Co. v. Friedman, 162 F.3d 1201, 1204-05 (D.C. Cir. 1998): the

FDA may regulate directly from the statute and is not

required to maintain any litigation requirement in determining the first applicant's entitlement to 180 days of market

exclusivity.

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3 As interpreted by the FDA, the statute does not guarantee

the first ANDA applicant a 180-day period of exclusivity. The

court-decision trigger can be activated by any subsequent ANDA

applicant's litigation whether or not the first applicant has enjoyed

a period of exclusivity. See Guidance for Industry: 180-Day Generic Drug Exclusivity Under the Hatch-Waxman Amendments to

the Federal Food, Drug and Cosmetic Act 5 (June 1998).

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II.

Teva challenges the denial of injunctive relief on the principal ground that the FDA's refusal to treat the dismissal of

Teva's declaratory judgment action as a triggering "court

decision" is inconsistent with the ANDA statute and hence,

the district court erred in ruling that Teva had failed to

demonstrate a likelihood of success on the merits. Basically,

Teva contends that the California dismissal is functionally

equivalent to a final decision of noninfringement and unenforceability on the merits because it was based on the patent

holder's express representation to Teva and the California

court that Teva's formulation did not infringe the patent and

that the patent holder would not sue Teva for infringement.

Indeed, Teva goes so far as to maintain that its interpretation

of the statute is the only possible alternative to the FDA's

impermissible construction under the circumstances of this

case; otherwise, subsequent ANDA applicants' efforts to use

the Hatch-Waxman procedure could be thwarted anytime a

patent holder stated that it did not intend to enforce its

patent, thus preventing the courts from exercising subject

matter jurisdiction to issue the holding of noninfringement

that the FDA's position requires.

According to Teva's complaint, on June 20, 1997, Teva filed

its ANDA to market ticlopidine, a generic version of the drug

"Ticlid." While it awaited tentative approval of its application, Teva sued Syntex, seeking a declaratory judgment of

noninfringement of Syntex's patent for a finished dosage

formulation of ticlopidine tablets.4 On the same day, Syntex

sent Teva a letter expressing the opinion that Teva would not

infringe Syntex's patent, declaring: "We will make no claim

of patent infringement based on the sale of ticlopidine hydrochloride tablets having the formulation you have disclosed to

us." Thereafter, Teva prepared a joint motion for entry of

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4 Syntex had previously sued Teva and others for possible

infringement of its process patent for ticlopidine, but voluntarily

dismissed its complaint against Teva without prejudice once Teva

revealed its process. That litigation was unrelated to the formulation patent at issue in the declaratory judgment action.

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consent judgment that would hold Syntex's patent not infringed; but Syntex instead moved to dismiss the complaint for

lack of subject-matter jurisdiction, explaining:

Given Syntex's express assurance that it would not bring

suit against Teva on the '592 patent, Teva can have no

reasonable apprehension that it will face a lawsuit for

infringement of the '592 patent. Without such reasonable apprehension, no actual case or controversy exists of

sufficient immediacy or reality to base jurisdiction over

Teva's declaratory judgment claim.

Accompanying the motion was a declaration by John Parise,

counsel for Syntex, referring to the June 8, 1998, letter that

Syntex sent Teva stating that Syntex would make no claim of

patent infringement against Teva. Noting that under Federal Rule Civil Procedure 12(b)(1) the district court could

consider materials outside of the pleadings, see Dreier v.

United States, 106 F.3d 844, 847 (9th Cir. 1997), Syntex

attached a proposed order with three findings, including that

Teva "lacked and lacks a reasonable apprehension of suit by

Syntex for infringement of [the] ... [p]atent." The district

court granted Syntex's motion, adopting its findings, specifically that Teva "lacks a reasonable apprehension of suit by

Syntex for infringement of [the patent];" hence there was "no

justiciable case or controversy between the parties concerning

any infringement by Teva of the '592 [p]atent," and consequently the court lacked subject matter jurisdiction over the

action.

On October 29, 1998, the FDA tentatively approved Teva's

ANDA to market ticlopidine. However, the FDA informed

Teva that because there was a previous ANDA applicant and

neither commercial marketing nor a court decision had occurred, its application was ineligible for final approval. Teva

attempted to persuade the FDA that the California dismissal

satisfied the "court decision" requirement, but the FDA did

not respond to Teva's request for an effective approval date

and on December 2, 1998, notified Teva that it refused to

meet to discuss the issue. Teva then filed the instant lawsuit

in district court for a declaratory judgment that Teva is

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entitled to have its ANDA become effective on February 10,

1999 (180 days after the California dismissal), an injunction

making Teva's ANDA effective on that date, and a temporary

restraining order to forestall the FDA from approving the

first ANDA application if such approval would give the first

applicant any exclusive marketing beyond February 10, 1999.

The district court declined to award injunctive relief. It

concluded for three reasons that Teva could not demonstrate

a likelihood of success on the merits. First, the district court

ruled that the California dismissal did not fall within the plain

language of s 355(j)(5)(B)(iv)(II), and, second, that even if

Teva could show that the statute was ambiguous, it was

unlikely to succeed in showing that the FDA's interpretation

was impermissible, or that Teva's interpretation was the only

permissible alternative. The district court concluded, third,

that Teva's reliance on patent law decisions of the Federal

Circuit was misplaced because they had no direct bearing on

the "court decision" provision in ANDA. Consequently, the

district court reasoned, in view of language in decisions of this

court,5 that the triggering "court decision" provision required

nothing less than a decision on the merits. The district court

was also unpersuaded by Teva's arguments concerning irreparable harm, injury to the other parties, and the public

interest.6

III.

On appeal, Teva contends that the district court erred in

denying injunctive relief because the California dismissal

qualified as a "court decision" under s 355(j)(5)(B)(iv)(II) and

the FDA's refusal to recognize the dismissal as such was

arbitrary and capricious, an abuse of discretion, and based on

an unreasonable and impermissible interpretation of the statute. Our review of the denial of injunctive relief is for abuse

of discretion, but we review de novo the district court's

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5 See Purepac, 162 F.3d at 1205 n.6; Mova, 140 F.3d at 1073 &

n.18.

6 See Mova, 140 F.3d at 1066 (outlining standard for preliminary injunctions).

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conclusion of law, namely that Teva was unlikely to prevail in

its challenge to the FDA's refusal to treat the California

dismissal as a triggering "court decision." See Mova, 140

F.3d at 1066 (citing CityFed Financial Corp. v. Office of

Thrift Supervision, 58 F.3d 738, 746 (D.C. Cir. 1995)).

The FDA maintains that its interpretation of the "court

decision" provision is entitled to deference under Chevron

U.S.A., Inc. v. Natural Resources Defense Counsel, Inc., 467

U.S. 837, 842-44 (1984). In fact, however, the FDA has

offered no particular interpretation of that provision, relying

instead on its authority to interpret the provision narrowly

until it promulgates a new rule. Without regard to how the

FDA should address the issue in its next rulemaking, it is

clear that the FDA, consistent with its statement that it

would "regulate directly from the statute" on a "case-by-case

basis," see Guidance for Industry at 4; see also Purepac, 162

F.3d at 1205, cannot avoid the merits of Teva's contention

that the California dismissal satisfies the "court decision"

requirement under s 355(j)(5)(B)(iv)(II). We review the

FDA's response to Teva's claim guided by settled principles

of administrative law. See 5 U.S.C. s 706 (1994); Southwestern Bell Tel. Co. v. FCC, 168 F.3d 1344, 1352 (D.C. Cir. 1999).

Upon a review of the record, we conclude that the FDA's

response was arbitrary and capricious.

First, the FDA concedes that its refusal to recognize the

California dismissal as a triggering "court decision" is not

compelled by the statutory language. The statute requires a

"decision of a court holding the patent ... invalid or not

infringed." See 21 U.S.C. s 355(j)(5)(B)(iv)(II). A "decision"

can take several forms, including final judgment after a full

trial, summary judgment or partial summary judgment, or

even a dismissal for failure to state a cause of action. The

term "holding," most often contrasted with the term "dicta,"

is also susceptible to interpretation. See, e.g., Seminole Tribe

of Fla. v. Florida, 517 U.S. 44, 66-67 (1996); Wilder v. Apfel,

153 F.3d 799, 803-04 (7th Cir. 1998); Gersman v. Group

Health Ass'n, 975 F.2d 886, 897 (D.C. Cir. 1992). Furthermore, the significance of a court's "decision" or "holding"

often lies in its preclusive effect. Of course, as intervenors

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maintain, not every court action can be construed as a

"decision" with a "holding"; for example, a dismissal for lack

of personal jurisdiction is not a decision on the merits and has

no preclusive effect.

But the California dismissal cannot be classified as a typical

dismissal for lack of subject matter jurisdiction. Although, as

a general rule, such a dismissal has no preclusive effect

because the court lacked authority or competence to hear and

decide the case, see Prakash v. American Univ., 727 F.2d

1174, 1182 (D.C. Cir. 1984) (citing 5 C. Wright & A. Miller,

Federal Practice s 1350, at 554 (1969)),7 here the dismissal

was based exclusively and necessarily on Syntex's declaration

that Teva's product would not infringe its patent and its

express disavowal of an intent to sue. Syntex expressly

sought to have the California court consider more than the

pleadings, notwithstanding its request for dismissal for lack of

subject matter jurisdiction, noting in its motion papers that

the court could grant a motion to dismiss under Federal Rule

of Civil Procedure 12(b)(1) based on materials in addition to

the pleadings themselves. Before the California court was

Syntex's June 8th letter stating that Teva's "formulation ...

does not infringe" the patent, and the declaration of Syntex's

counsel that Teva's "formulation did not warrant bringing a

patent infringement action." It also had express findings of

fact proposed by Syntex, including the one necessary for a

finding of no case or controversy, namely that Teva lacked a

reasonable apprehension of suit by Syntex for infringement.

Syntex not only remained silent after receiving Teva's notice

of its ANDA filing and failed to file an infringement suit

within 45 days after receiving Teva's Paragraph IV notification, but it also sought to have Teva's complaint dismissed for

lack of subject matter jurisdiction. It was able to file such a

motion, however, only because of its own statements and

actions eliminating any case or controversy about the enforceability of the patent against Teva. Its motion was granted on

the basis of an express finding of fact by the California court

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7 See also 5A Charles Alan Wright & Arthur R. Miller,

Federal Practice and Procedure s 1350, at 225 (2d ed. 1990).

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regarding Teva's reasonable nonapprehension of suit, as Syntex itself had proposed as part of its motion to dismiss.

From the perspective of the California court, then, Syntex's

declaration and conduct eliminated the need for a declaratory

judgment because Syntex would be estopped from challenging Teva's marketing of its generic drug on the ground of

patent infringement.

The FDA and intervenor TorPharm (the first ANDA filer)

conceded at oral argument that the California dismissal prevents Syntex from suing Teva for infringement. The conclusion that the California dismissal has estoppel effect is supported by the decisions of the United States Court of Appeals

for the Federal Circuit. That court has recognized that a

dismissal of a declaratory judgment action for lack of a case

or controversy due to the patent holder's disavowal of any

intent to sue for infringement has preclusive effect. See

Super Sack Mfg. Corp. v. Chase Packaging Corp., 57 F.3d

1054, 1059 (Fed. Cir. 1995); Spectronics Corp. v. H.B. Fuller

Co., 940 F.2d 631, 636-38 (Fed. Cir. 1991); see also Fina

Research, S.A. v. Baroid Ltd., 141 F.3d 1479, 1483-84 (Fed.

Cir. 1998) (discussing Super Sack and Spectronics). Although the district court here correctly noted that the Federal Circuit was confronted only with cases in which the plaintiff sought a declaratory judgment in order to avoid litigation

and liability for infringement, and did not consider whether

such a decision would have any collateral effect or additional

significance under the ANDA statute, the relevant consideration is the estoppel of the patent holder from later claiming

that the ANDA applicant is liable for patent infringement.

Put otherwise, the California dismissal appears to meet the

requirements of a triggering "court decision" because that

court had to make a predicate finding with respect to whether

Syntex would ever sue Teva for infringement in order to

conclude that there was no case or controversy between the

parties. In dismissing Teva's complaint for lack of subject

matter jurisdiction, the California court expressly found that

Teva "lacks a reasonable apprehension of suit by Syntex for

infringement of [its patent]." According to Syntex's motion

to dismiss Teva's complaint, that finding could only have been

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based on the patent holder's declaration of counsel and its

June 8th letter to Teva. Although the dismissal was not a

judgment on the merits after consideration of evidence presented by the parties, there was no need for such a procedure

here because the dismissal sufficed to estop Syntex from

suing Teva for patent infringement. See Super Sack, 57 F.3d

at 1059; Spectronics Corp., 940 F.2d at 638. This is the

result that appears to be the purpose of the triggering "court

decision" provision. A contrary view, as Teva contends,

means that the patent holder could manipulate the system in

order to block or delay generic competition by stating that

the patent holder will not enforce its patent against the

Paragraph IV challenger. See Mova, 140 F.3d at 1073 &

n.18. For these reasons, the California dismissal would appear to meet the requirements of a "court decision" under

s 355(j)(5)(B)(iv)(II). On remand, of course, the FDA will

have the opportunity to explain why it fails to meet them.

Second, it is unclear that a triggering "court decision" need

explicitly hold the patent at issue is "invalid" or is "not

infringed" in order to trigger the 180-day period of market

exclusivity. Both the FDA and the Federal Circuit recognize

that a certification that a patent is "unenforceable" suffices

for purposes of the Paragraph IV certification, see 21 C.F.R.

s 314.94(a)(12)(i)(A)(4); Merck & Co. v. Danbury Pharmacal,

Inc., 694 F. Supp. 1, 2-3 (D. Del. 1988), aff'd, 873 F.2d 1418

(Fed. Cir. 1989), even though the statute provides that such

certification must state that the patent is "invalid" or "will not

be infringed," see 21 U.S.C. s 355(j)(2)(A)(vii)(IV). When it

promulgated the final regulations on ANDA applications, the

FDA explained that it included "unenforceability" because

"[t]he alternative interpretation, precluding applicants challenging patents as unenforceable from filing certifications

under paragraph IV, would be contrary to Congress' obvious

intent in allowing patent challenges under [ANDA] and would

lead to absurd results." 59 Fed. Reg. 50,338, 50,339 (1994).

Likewise reflecting the same concerns, see id. at 50,353, the

FDA regulations provide that a "court decision" need not hold

the patent is "invalid" or "not infringed" but alternatively

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may hold the patent unenforceable, see 21 C.F.R.

s 314.107(c)(1)(ii) (Westlaw 1999).

Intervenors' attempt to assert that unenforceability, which

is included in the regulation, and estoppel, which is presented

here, should be treated differently under s 355(j)(5)(B)(iv)(II)

is unpersuasive. Although it is true that a determination of

unenforceability, such as for inequitable conduct, applies generally, preventing the patent holder from enforcing the patent

against any entity, see Elk Corp. of Dallas v. GAF Bldg.

Materials Corp., 168 F.3d 28, 30, 32 (Fed. Cir. 1999), and the

estoppel arising from the California dismissal operates only

against Syntex as to Teva, see generally 18 Charles Alan

Wright et al., Federal Practice and Procedure s 4443, at

381-91 (1981); see also Cotton v. Heyman, 63 F.3d 1115, 1119

(D.C. Cir. 1995), this appears to be a distinction without

difference for purposes of the "court-decision" requirement.

To start, or trigger, the period of market exclusivity by a

"court decision," an ANDA applicant need only obtain a

judgment that has the effect of rendering the patent invalid

or not infringed with respect to itself; the statute does not

require, nor does any party contend that it requires, the

patent to be invalidated as to any and all ANDA applicants.

See 21 U.S.C. s 355(j)(5)(B)(iv)(II). As the FDA and TorPharm concede, Syntex cannot sue Teva for patent infringement as a result of the California dismissal. In its regulations, the FDA added "unenforceability" to the list of what

qualifies as a "court decision" because it concluded that

implementing the statute in any other way would be contrary

to Congress' intent and produce absurd results. See 59 Fed.

Reg. at 50,353 (referring to 59 Fed. Reg. at 50, 339). However, the situation presented here appears no less absurd

because Teva can never be sued by Syntex for patent infringement, but the FDA has nevertheless concluded that the

California dismissal cannot satisfy the "court decision" requirement of the statute. Thus, the FDA's application of the

statute to this case runs counter to its explanation for permitting unenforceability to qualify as a "court decision."

Third, the FDA's treatment of the California dismissal

appears contrary to the FDA's "Guidance for Industry" in

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two respects. Cf. Cherokee Nation of Okla. v. Babbitt, 117

F.3d 1489, 1499 (D.C. Cir. 1997) ("An agency is required to

follow its own regulations.") First, the FDA has effectively

declined to proceed on a "case-by-case basis," proposing

instead to consider Teva's interpretation as part of the rulemaking process. Although the FDA generally has discretion

to determine whether to proceed by adjudication or rulemaking, see Mobil Oil Exploration & Producing Southeast Inc. v.

United Distribution Cos., 498 U.S. 211, 230 (1991); SEC v.

Chenery Corp., 332 U.S. 194, 203 (1947); Arkansas Power &

Light Co. v ICC, 725 F.2d 716, 723 (D.C. Cir. 1984), litigants

also have a right to adjudication of their claims, see AT&T v.

FCC, 978 F.2d 727, 731-33 (D.C. Cir. 1992). The FDA has

been mute in response to Teva's request for a complete

explanation of the rejection of its interpretation. Noting the

language of the statute, its purposes, and ambiguities, the

FDA has recognized in its brief to this court, as the court in

Mova did, see 140 F.3d at 1073 n.18, that a dismissal could be

sufficient to satisfy the "court decision" requirement. See

Federal Appellee's Br. at 20-21. Yet, the FDA says in its

brief that it is "not at this time prepared to conclude that

dismissal of Teva's declaratory judgment action for lack of

subject matter jurisdiction is a 'decision of a court' under

section 355(j)(5)(B)(iv)(II)." Id. at 20. Contrary to the

FDA's view, nothing in our decision in Purepac, 162 F.3d

1201, relieved the FDA of its obligation to abide by the

commitments it made in the "Guidance for Industry" as to

how it would proceed until a new rulemaking was completed.

How the FDA can justify this approach to Teva's interpretation of the California dismissal in light of its treatment of

other cases remains a mystery; presumably in a "case-bycase" analysis the FDA is obligated to explain such differences. See ANR Pipeline Co. v. FERC, 71 F.3d 897, 901

(D.C. Cir. 1995); Pontchartrain Broad. Co. v. FCC, 15 F.3d

183, 185 (D.C. Cir. 1994). Specifically, the FDA has not

explained why it would recognize a grant of partial summary

judgment, based on the patent holder's admission of noninfringement, as a "court decision" in Granutec, 1998 WL

153410, at *5, but decline to give similar effect to a dismissal

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based on a finding of no reasonable apprehension of suit

arising from the patent holder's admission of noninfringement. In Granutec, the FDA argued that the partial

grant of summary judgment in a prior case satisfied the

"court decision" requirement. See id.; see also Glaxo, Inc. v.

Boehringer Ingelheim Corp., 954 F.Supp. 469 (D. Conn.1996),

final judgment entered, 962 F. Supp. 295 (D. Conn.1997),

aff'd, 119 F.3d 14 (Fed. Cir. 1997) (unpublished opinion).

That Boehringer involved a judgment on the merits, while

Teva's complaint was dismissed for lack of subject-matter

jurisdiction, does not detract from the fact that both proceedings prevent the patent holder from suing the ANDA applicant for patent infringement. Given that the California dismissal supports estoppel to the same extent as the grant of

partial summary judgment at issue in Granutec, it is unclear

why the California dismissal would not satisfy the "court

decision" requirement of s 355(j)(5)(B)(iv)(II). At least the

FDA has not provided an explanation wherein there is a

material difference for purposes of triggering the "court

decision" provision.

Second, the FDA's response to Teva's interpretation of the

"court decision" requirement is not easily viewed as "regulat[ing] directly from the statute," as the FDA committed to

do in its "Guidance for Industry." The FDA "acknowledges

that its current interpretation of the court decision trigger is

narrower than the statute may be able to support.... [and]

that Teva's interpretation of the court decision trigger may be

permissible." Yet if the FDA's interpretation of section

355(j)(5)(B)(iv)(II) is "narrower than the statute [is] able to

support," then its interpretation cannot stand without justification because the FDA must interpret the statute to avoid

absurd results and further congressional intent. See Robinson v. Shell Oil Co., 519 U.S. 337, 346 (1997); R.G. Johnson

Co. v. Apfel, 172 F.3d 890, 895 (D.C. Cir. 1999). A narrow

interpretation cannot be reasonable simply because it is narrower than it could be; to the contrary that interpretation

may in fact be narrower than it should be given the purposes

of the statutory scheme and congressional intent. See Process Gas Consumers Group v. United States Dep't of AgriculUSCA Case #99-5027 Document #450287 Filed: 07/20/1999 Page 15 of 17
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ture, 694 F.2d 778, 792 (D.C. Cir. 1982) (in banc); see

generally Oil, Chemical & Atomic Workers Int'l Union v.

NLRB, 46 F.3d 82, 90 (D.C. Cir. 1995); Association of

Civilian Technicians v. FLRA, 22 F.3d 1150, 1153 (D.C. Cir.

1994). It is the narrowness of the interpretation that must be

justified, and the court can only review that choice of narrowness based on the reasons provided by the FDA, see Chenery,

332 U.S. at 196; here, it has provided none.

As a result of the FDA's current construction of the "court

decision" requirement and its treatment of Teva's application,

generic ticlopidine tablets were not available in the marketplace for a number of months despite the fact that appellants

both stood ready to market them. Syntex remained the

exclusive manufacturer of "Ticlid," and the first ANDA applicant's market exclusivity period had not begun because the

FDA had yet to approve that applicant's filing. On July 1,

1999, the FDA finally approved TorPharm's ANDA, and

TorPharm commenced marketing on July 6, so now at least

one generic version of ticlopidine tablets is available.8 Yet,

this series of events may well not have been what Congress

contemplated in enacting the Hatch-Waxman amendents to

expedite generic drug approvals. See H.R. Rep. No. 98-857,

pt. 1, at 14-15, reprinted in 1984 U.S.C.C.A.N. 2647, 2647-48;

cf. Mova, 140 F.3d at 1073. Be that as it may, our decision to

reverse the denial of injunctive relief rests on the FDA's

failure to explain adequately its refusal to treat the California

dismissal as a triggering "court decision" under

s 355(j)(5)(B)(iv)(II), particularly in view of its announcement

in its "Guidance for Industry" of how it would proceed

pending a new rulemaking. Although the FDA is likely

__________

8 The FDA's approval of TorPharm's ANDA does not moot this

appeal because Teva sought a preliminary injunction against the

FDA compelling it to deem Teva's application effective as of February 10, 1999. Though Teva will be able to market its ticlopidine

tablet 180 days after July 6 without fail, in the interim Teva and

Purepac face continued harm because of their denied access to the

market, see Byrd v. EPA, 174 F.3d 239, 244 (D.C. Cir. 1999), harm

potentially heightened because of TorPharm's period of market

exclusivity.

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correct that Teva's interpretation is not the only permissible

construction of the "court decision" requirement, Teva has

demonstrated that the FDA's refusal to treat the California

dismissal as a trigger was arbitrary and capricious in light of

the FDA's response in another case.

Accordingly, we reverse, and because our conclusion could

well affect the district court's evaluation of appellants' other

arguments concerning harm, injury, and the public interest,

we remand the case to the district court to consider anew the

request for injunctive relief.

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