Although the Hatch-Waxman Act was passed by Congress decades ago, it still produces new questions. Despite vigorous argument by the patent owner, a district court dismissed a count alleging that the ANDA-filer infringed under 35 U.S.C. § 271(e)(2)(A), leaving in place the unchallenged count for infringement under § 271(a). Ferring B.V. v. Actavis, Inc., Civil Action No. 15-4222 (D.N.J. May 26, 2016).
The FDA approved Ferring’s NDA for tranexamic acid formulations on November 13, 2009. Defendant Watson Laboratories filed its Abbreviated New Drug Application (ANDA) on July 23, 2010, seeking FDA approval to market generic tranexamic acid. The United States Patent and Trademark Office published Ferring’s patent application on May 7, 2012, but it did not issue the patent until June 23, 2015, three and a half years after the FDA approved Watson’s ANDA and Watson began marketing its generic product on January 3, 2013. After Ferring filed its complaint alleging infringement under § 271(e)(2)(A) and seeking damages under § 271(a) for Watson’s sale of its generic product, the defendants moved to dismiss the claim for infringement under § 271(e)(2)(A) under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim. The court denied the motion under Rule 12(b)(1) and granted the motion under Rule 12(b)(6).
The court first addressed the motion to dismiss for lack of subject matter jurisdiction. Relying on the Federal Circuit’s holding in AstraZeneca Pharms. LP v. Apotex Corp., 669 F.3d 1370, 1377 (Fed. Cir. 2012) that “the requirements for jurisdiction in the district courts are met once a patent owner alleges that another’s filing of an ANDA infringes its patent under § 271(e)(2), and this threshold jurisdictional determination does not depend on the ultimate merits of the claims,” the court denied the motion to dismiss for lack of subject matter jurisdiction because “Plaintiffs have alleged that Defendants’ ANDA infringes . . ., no matter the merits of Plaintiffs’ claim.”
Not so for the motion to dismiss for failure to state a claim. The court found determinative that the patent in suit issued after Watson’s ANDA was filed and approved. The court reasoned that the statute created an artificial act of infringement “to permit a pioneer drug patent holder to enforce their rights before the generic company’s product has been approved by the FDA and brought to market,” citing Eli Lilly & Co. v. Metronic Inc., 496 U.S. 661, 677-78 (1990). The court therefore reasoned as follows:
As an important purpose of § 271(e)(2)(A) is to provide patentees with a cause of action for infringement during the period of time in which the generic company has not actually infringed the patentee’s patent, it is illogical to conclude that the facts of this case should give rise to a § 271(e)(2)(A) claim. . . . Based on the facts Plaintiffs have pled, they no longer need an artificial act of infringement claim under § 271(e)(2)(A) to enforce their patent rights. Instead, Plaintiffs can bring actual infringement claims against Defendants under § 271(a) based on Defendants’ alleged marketing of a generic version . . . .
The court relied heavily on the statute’s declaring that submission of an ANDA “for a drug claimed in a patent or the use of which is claimed in the patent” is an act of infringement. The court reasoned that “Congress’s inclusion of the phrase ‘claimed in a patent’ in the statute indicates that a § 271(e)(2)(A) claim must be based upon a patent that has already been issued at the time the infringing ANDA is filed.”
In that connection, the court may have gone further than necessary, because the patent in suit issued not only after the allegedly infringing ANDA was filed but also after it was approved. Indeed, in their reply memorandum in support of their motion to dismiss, the defendants emphasized that “[n]o court has ever permitted a party to file a § 271(e) infringement action based on an approved ANDA.” Thus, whether a claim can be based on a patent that issues after an allegedly infringing ANDA is filed but while it is still pending presents a different question.
One may question why the plaintiffs asserted infringement under § 271(e)(2)(A) when they unquestionably stated a claim for infringement under § 271(a) based on the defendants’ manufacture and sale of the generic product. One possible reason is that § 271(e)(4)(A) provides, in the case of infringement under subparagraph (2), “the court shall order the effective date of any approval of the drug . . . involved in the infringement to be a date which is not earlier than the date of the expiration of the patent which has been infringed.” Thus, proving infringement under § 271(e)(2)(A) effectively enjoins marketing of the generic product until the patent in suit expires without the patent owner’s having to satisfy the usual standards for injunctive relief under eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (2006). See Endo Pharms. Inc. v. Amneal Pharms. LLC, 2016 WL 1732751 (S.D.N.Y. April 29, 2016). Indeed, Ferring argued that its claim for infringement under § 271(e)(2)(A) was “specifically tailored to the protection Congress intended . . ., including resetting the approval date of Defendants’ ANDA to bar further infringing activities before the [patent in suit] expires.” Unfortunately for Ferring, the court rejected its arguments and dismissed the claim for infringement under § 271(e)(2)(A). The lesson: make sure your patent issues before any ANDA is approved, and preferably before any ANDA is filed.