Opinion ID: 209997
Heading Depth: 1
Heading Rank: 4

Heading: Caraco's Subsequent Challenge to Forest's Orange-Book-Listed Patents for Lexapro®

Text: In May 2006, Plaintiff-Appellant Caraco filed an ANDA for generic escitalopram that included a Paragraph IV certification for Forest's '712 and '941 patents for Lexapro®. Under 35 U.S.C. § 271(e)(2), this constituted a technical act of infringement of both patents. Forest sued Caraco for infringement of the '712 patent in a lawsuit filed in the Eastern District of Michigan, Forest Labs., Inc., v. Caraco Pharm. Labs., Ltd., Case No. 2:06-EV-13143-BAF-MKM. [7] As of the time of this writing, the parties' litigation with respect to the '712 patent is ongoing. Despite suing Caraco for infringement of the '712 patent, Forest did not sue Caraco on the '941 patent. However as discussed above, under the Hatch-Waxman framework Caraco has an economic interest in determining whether the '941 patent is invalid or not infringed by the drug described in its ANDA, because only a judgment of invalidity or noninfringement with respect to both the '712 and '941 patents can trigger Ivax's exclusivity period. See 21 U.S.C. § 355(j)(5)(B)(iv)(II) (2000). Accordingly, Caraco filed a separate action under the Declaratory Judgment Act, 28 U.S.C. §§ 2201, 2202, and the Hatch-Waxman provision establishing the CAPC, 21 U.S.C. § 355(j)(5)(C), seeking a declaratory judgment that the drug described in its ANDA does not infringe Forest's '941 patent. Caraco's declaratory judgment action with respect to the '941 patent is the case presently on appeal. Shortly after Caraco sued Forest for a declaratory judgment on the '941 patent, Forest filed a motion to dismiss Caraco's action pursuant to Fed.R.Civ.P. 12(b)(1) on the grounds that the action did not present a case or controversy as required by Article III of the Constitution. In its motion, Forest argued that there was no controversy because Caraco did not have a reasonable apprehension of suit on the '941 patent. At the time Forest filed its motion, this court's most recent precedent governing the justiciability of declaratory judgment suits applied the reasonable-apprehension-of-suit test to determine whether a justiciable controversy existed. See, e.g., Pfizer, 395 F.3d at 1332. However, as is discussed in more detail below, even before Forest filed its motion, the Supreme Court found the reasonable-apprehension-of-suit test inconsistent with its precedent. Medlmmune, Inc. v. Genentech, Inc., 549 U.S. 118, n. 11, 127 S.Ct. 764, 774 n. 11, 166 L.Ed.2d 604 (2007). The Court explained in Medlmmune that whether a declaratory judgment action presents an Article III controversy must be determined based on all the circumstances, not merely on whether the declaratory judgment plaintiff is under a reasonable apprehension of suit. Id. at 771. In addition, after Forest filed its motion to dismiss but before the district court made its ruling, this court issued its decision in Novartis, 482 F.3d 1330. As in the present case, the issue in Novartis was whether a Paragraph IV ANDA filer's declaratory judgment action against an NDA holder presented a justiciable Article III case or controversy. Id. at 1335. In Novartis, Teva Pharmaceuticals USA, Inc. (Teva) was the first ANDA applicant to file a Paragraph IV certification on all five Orange-Booklisted patents covering an FDA approved drug owned by Novartis Pharmaceuticals Corp. (Novartis). Id. at 1334. Although Teva had filed a Paragraph IV certification for all five of Novartis' Orange-Book-listed patents, Novartis only brought suit under 25 U.S.C. § 271(e)(2)(A) for infringement of one of those patents. [8] Id. After Novartis filed suit, Teva brought a separate action against Novartis on the four remaining Orange-Book-listed patents. Id. at 1335. However, the district court dismissed Teva's declaratory judgment action for lack of a justiciable controversy on the grounds that Teva had no reasonable apprehension of suit on the four remaining Orange-Book-listed patents. Id. This dismissal was the subject of the appeal in Novartis. Id. On appeal, the court observed that the Supreme Court's Medlmmune decision had abrogated the reasonable-apprehension-of-suit test, Novartis, 482 F.3d at 1339, and applying the Supreme Court's all-the-circumstances test, the court found that there was a justiciable controversy between the parties, id. at 1346. In reaching this decision, the court held that A justiciable declaratory judgment controversy arises for an ANDA filer when a patentee lists patents in the Orange Book, the ANDA applicant files its ANDA certifying the listed patents under paragraph IV, and the patentee brings an action against the submitted ANDA on one or more of the patents. The combination of these three circumstances is dispositive in establishing an actual declaratory judgment controversy as to all the paragraph IV certified patents, whether the patentee has sued on all or only some of the paragraph IV certified patents. Id. at 1344. In thus applying the all-the-circumstances test to a declaratory judgment action between an ANDA filer and a pharmaceutical patentee, the Novartis decision eliminates Forest's argument that Caraco's declaratory judgment action should be dismissed because Caraco had no reasonable apprehension of suit on the '941 patent. After the Novartis decision issued, Forest unilaterally granted Caraco an irrevocable covenant not to sue for infringement of the '941 patent. Forest's stated goal in granting the covenant to Caraco was to confirm that there was no case or controversy between the parties regarding the '941 patent. Forest's covenant provides, in relevant part: [Forest] hereby covenants itself and all successors in interest to the '941 patent not to sue Caraco for any alleged infringement (whether direct or indirect) or violation of the '941 patent based on Caraco's filing of ANDA 78-219 or any commercial manufacture, use, sale, offer for sale or importation of the generic products described by ANDA 78-219. Notably, despite giving Caraco this covenant not to sue, Forest refused to concede that the '941 patent was invalid or not infringed by the drug described in Caraco's ANDA. In fact, Forest hinged its entire argument for dismissal on the covenant not to sue, stating: There is no controversy because we gave a covenant not to sue. The district court agreed, stating from the bench that [t]here's a covenant not to sue on the '941 so there's not going to be any loss, there's no threat of lawsuit.  Transcript of Hearing on Motion to Dismiss at 31 (May 30, 2007) (emphasis added). On this basis, the district court ruled that there was no Article III controversy and granted Forest's motion to dismiss. Notably, there is no indication in the record that the district court considered either the Supreme Court's Medlmmune decision or this court's Novartis decision when making this ruling.