Court Opinion

ID: 9497941
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:04:15.2447+00
Date Added: 2024-06-11T17:58:31.187765
License: Public Domain

DYK, Circuit Judge,
with whom GAJARSA, Circuit Judge, joins, dissenting from the order denying rehearing en banc.
This case presents an important question under the Hatch-Waxman Amendments, which were enacted as part of the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L./No. 98-417, 98 Stat. 1585 (codified at 21 U.S.C. §§ 355, 360cc (2000) and 35 U.S.C. §§ 156, 271, 282 (2000)) — whether a patent holder can delay Food and Drug Administration (“FDA”) approval of an application for a competing generic drug by the simple expedient of refusing to sue for infringement. Here there is a present controversy over Teva’s right to secure approval of its Abbreviated New Drug Application (“ANDA”), plainly adequate to satisfy the requirements of Article III.
The Declaratory Judgment Act, 28 U.S.C. § 2201 (2000), and the 2003 Medicare Amendments, Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Title XI, Access to Affordable Pharmaceuticals, Pub. L. No. 108-173, 117 Stat. 2066, 2448-69 (codified in pertinent part at 21 U.S.C.A. § 355(j)(5)(C)(i) (West Supp.2004) and 35 U.S.C.A. § 271(e)(5) (West Supp.2004)), were designed to create a declaratory judgment remedy in circumstances permitted by Article III. The panel’s holding, relying on earlier decisions of our court, that Article III bars such a remedy unless “a reasonable apprehension of imminent suit” exists is incorrect. Teva Pharm. USA, Inc. v. Pfizer, Inc., 395 F.3d 1324, 1333 (Fed.Cir.2005). I dissent from the denial of rehearing en banc.
I.
The plain language of the 2003 Medicare Amendments requires that in the Hatch-Waxman context the federal courts allow declaratory judgment actions to the full extent allowed by Article III. 35 U.S.C.A. § 271(e)(5) (“[CJourts of the United States shall, to the extent consistent with the Constitution, have subject matter jurisdiction in any action brought ... under section 2201 of title 28 for a declaratory judgment that such patent is invalid or not infringed.”). Even if the legislative history could be read as approving our reasonable apprehension test, that history cannot overcome the plain language of the statute. So we must decide whether Article III is satisfied.
There are relatively few Supreme Court cases dealing with Article III and declaratory judgments, but the few cases that do exist provide no support for a reasonable apprehension of imminent suit requirement. The declaratory judgment statute was designed to deal with a situation in which the declaratory judgment defendant declined to bring suit, i.e., in which there was no reasonable apprehension of imminent suit. The Supreme Court case upholding the statute involved just such a situation — one in which there was no imminent risk of suit because the potential plaintiff declined to sue. Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617 (1937). In that case, the insured on several policies stopped making premium payments and made repeated claims for benefits on account of total and permanent disability. Id. at 237-38, 57 S.Ct. 461. Aetna refused to pay benefits because it contended that the insured was not disabled and that the policies had lapsed due to nonpayment. Id. at 238, 57 *997S.Ct. 461. The insured failed to bring suit, so Aetna filed for a declaratory judgment that the insured was not disabled and that the policies had lapsed. Id. at 239, 57 S.Ct. 461. The Court found that these facts gave rise to a controversy within the meaning of Article III, stating “[tjhere is here a dispute between parties who face each other in an adversary proceeding.... The dispute is defined and concrete, not hypothetical or abstract.... It calls, not for an advisory opinion upon a hypothetical basis, but for an adjudication of present right upon established facts.” Id. at 242, 57 S.Ct. 461.
Likewise, the Ninth Circuit, in a case in which the plaintiff faced a risk of liability rather than suit, has held that “[ajn action for a declaratory judgment ... is a case or controversy if the plaintiff has a real and reasonable apprehension that he will be subject to liability,” not suit. Societe de Conditionnement en Aluminium v. Hunter Eng’g Co., Inc., 655 F.2d 938, 944 (9th Cir.1981) (emphasis added).1 The First Circuit has even more directly addressed the issue in Sallen v. Corinthians Licenciamentos LTDA 273 F.3d 14 (1st Cir.2001), and adopted a view that conflicts with the panel decision in this case. There, a World Intellectual Property Organization (“WIPO”) panel found Sallen to be a cy-bersquatter and ordered his domain name transferred to Corinthians Licenciamentos LTDA (“CL”). Id. at 21-22. Sallen filed suit in federal district court seeking a declaration that under United States law (which allowed a challenge to the WIPO decision) he was entitled to the domain name. Id. at 22. The district court dismissed the case because CL had no intent to sue Sallen under United States law. Id. On appeal, the First Circuit rejected CL’s argument that a reasonable apprehension of suit is required to satisfy Article III:
CL claims that a reasonable apprehension of suit is required to meet Article Ill’s case or controversy requirement. But this is not the only way to establish the existence of a case for purposes of Article III. The reasonable apprehension of suit doctrine exists to cabin declaratory judgment actions ivhere the only controversy surrounds a potential, future lawsuit. That is not this case.
Id. at 25 (internal citations omitted and emphasis added). The court found that United States law “provides a registrant who has lost a domain name ... with a cause of action for an injunction returning the domain name if the registrant can show that she is in compliance with” United States law. Id. at 26. Thus, the court found that the controversy in issue was certain and that “a certain controversy renders the ‘reasonable apprehension’ question irrelevant.” Id.
In my view, the First Circuit is correct: the proper test under Article III is whether there is a present concrete controversy, and the panel here applied an incorrect test. The panel here also reached the wrong result in this case by relying on that erroneous test.
II.
Here it seems to me that there' are three potential controversies:
*9981. There is a potential controversy over whether the ANDA filing itself was an infringement. I doubt whether this, standing alone, satisfies Article III because Pfizer seems not to care whether such an infringement occurred. Textron Lycoming Reciprocating Engine Div., AVCO Corp. v. UAW, 523 U.S. 653, 661, 118 S.Ct. 1626, 140 L.Ed.2d 863 (1998) (finding no constitutional controversy where the declaratory judgment defendant had no “interest in defending the binding nature of the contract”).
2. There is also a potential controversy over whether Teva should be allowed to manufacture and market the drug without incurring damages for infringement. The problem here is that Teva has not alleged that it intends to market or sell the drug at any time in the near future or that it is being prevented from doing so by the risk of infringement damages. Instead, Teva alleges only that the filing of its ANDA constituted technical infringement; that Pfizer did not file suit within the 45-day period; that Pfizer included the ’699 patent in the Orange Book; and that Pfizer tends to enforce its patents through litigation. (J.A. at 52.) Unless Teva actually is about to manufacture or sell the drug, there would seem to be no case or controversy under this theory. Societe de Conditionnement, 655 F.2d at 944.
3. The third potential controversy is over whether Teva’s ANDA should be approved earlier than 180 days after Ivax commences marketing. In my view, there is a present and concrete controversy over Teva’s right to such an approval, which satisfies the requirements of Article III. The Hatch-Waxman Amendments provide for the right to secure resolution of the controversy through a declaratory judgment.
Ivax earlier filed a paragraph IV certification regarding the ’699 patent and then settled with Pfizer. Thus, Ivax will enjoy a 180-day exclusivity period beginning with the earlier of (1) the first day it markets its generic drug (which cannot be earlier than June 30, 2006) or (2) the date that the ’699 patent is held invalid or not infringed in the decision of a court.2 Because of the paragraph IV certification, Teva’s application cannot be approved by the FDA until after Ivax’s 180-day exclusivity period ends. Teva, 395 F.3d at 1328, 1330. In other words, the running of the exclusivity period could be triggered before Ivax’s first marketing date if Teva could secure a declaratory judgment of non-infringement or invalidity. Approval of Teva’s ANDA would follow 180 days thereafter.
Normally, one would expect that the approval issue would be litigated between Teva and the FDA, but, as we recognized in Minnesota Mining and Manufacturing Co. v. Barr Laboratories, Inc., 289 F.3d 775, 778 (Fed.Cir.2002), Congress provided that approval would depend on the outcome of litigation between private parties (the patent owner and the potential in-fringer) over the questions of infringement and validity.3 There is certainly a concrete controversy between Pfizer (and Ivax) and Teva over when Teva’s ANDA should be approved. Both Pfizer and Ivax want the approval of Teva’s application *999delayed. Teva wants to avoid delay. The question of delay turns on infringement and validity.4 Under these circumstances, I think there is a case or controversy within the meaning of Article III, and that the questions of infringement and validity should be addressed. The panel appears to recognize the existence of a controversy, but holds that the controversy is insufficient for purposes of Article III.5 I respectfully disagree. Under the panel’s decision Teva lacks any remedy to contest the delay in its ANDA approval. I agree with Judge Mayer and Judge Gajarsa that Article III does not require such unfairness.

. That case involved a manufacturer that filed for declaratory judgment of invalidity of the defendant's patent after a potentially unauthorized person working for the defendant threatened a third party with suit if the third party purchased the plaintiff’s equipment. Id. at 941,- 944-45. The third party purchased the equipment. Id. at 941. A hold harmless provision in the contract between the third party and the plaintiff placed the plaintiff in reasonable apprehension of liability. Id. at 945.

. To be sure, Pfizer’s failure to bring suit within the 45-day period specified in section 21 U.S.C. § 355(j)(5)(B)(iii) means that the approval of the ANDA will not be delayed under that section, but despite Pfizer's failure to sue, 21 U.S.C. § 355(j)(5)(B)(iv) will bar approval until 180 days after Ivax markets the drug unless there is an earlier holding of non-infringement or invalidity.

. See also Apotex, Inc. v. Thompson, 347 F.3d 1335 (Fed.Cir.2003); Mylan Pharm., Inc. v. Thompson, 268 F.3d 1323 (Fed.Cir.2001).

. While the '518 patent imposes an additional limitation on the approval of Teva’s ANDA such that it could not be approved until the ’518 patent expires (June 30, 2006), it is hardly premature to litigate the approval date since litigation over infringement and invalidity of the '699 patent could itself consume a significant time.

. The panel states that ”[t]he fact that Teva is disadvantaged from a business standpoint by Ivax's 180-day exclusivity period and the fact that Pfizer’s decision not to sue Teva creates an impediment to Teva’s removing that disadvantage are matters separate and distinct from whether an Article III controversy exists between Teva and Pfizer.” Teva, 395 F.3d at 1338.