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Teva Pharmaceuticals v. Novartis Pharmaceuticals

United States Court of Appeals, Federal Circuit
482 F.3d 1330 (2007)
ELI5:

Rule of Law:

An actual controversy sufficient to establish declaratory judgment jurisdiction exists when, under the totality of the circumstances, the dispute is definite and concrete, touching the legal relations of parties with adverse legal interests. In the context of the Hatch-Waxman Act, such a controversy arises for all patents a generic manufacturer certifies against in an Abbreviated New Drug Application (ANDA) when the patentee sues for infringement on at least one of those patents.


Facts:

  • Novartis Pharmaceuticals Corporation (Novartis) holds five patents for its drug Famvir®, all of which are listed in the FDA's Orange Book.
  • One patent, the '937 patent, covers the active ingredient famciclovir, while the other four patents cover methods of therapeutic use for the drug.
  • Teva Pharmaceuticals USA, Inc. (Teva) filed an Abbreviated New Drug Application (ANDA) with the FDA to market a generic version of Famvir®.
  • In its ANDA, Teva included a Paragraph IV certification, asserting that its proposed generic drug either did not infringe any of Novartis's five listed patents or that the patents were invalid.
  • This Paragraph IV certification constituted a statutory act of patent infringement, giving Novartis a right to sue.
  • Within the statutory 45-day window, Novartis initiated a patent infringement lawsuit against Teva, but only on the '937 patent, omitting the four method-of-use patents.

Procedural Posture:

  • Novartis sued Teva in the U.S. District Court for the District of New Jersey for infringement of the '937 patent.
  • Teva filed a separate declaratory judgment action in the same district court, seeking a declaration that its generic drug would not infringe the four other patents held by Novartis and that those patents were invalid.
  • Novartis moved to dismiss Teva's declaratory judgment action for lack of subject matter jurisdiction, arguing there was no actual controversy regarding the four unsued patents.
  • The district court, applying the Federal Circuit's then-existing 'reasonable apprehension of imminent suit' test, granted Novartis's motion to dismiss.
  • Teva (appellant) appealed the dismissal to the U.S. Court of Appeals for the Federal Circuit, with Novartis as the appellee.

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Issue:

Does an actual controversy sufficient to support declaratory judgment jurisdiction exist when a generic drug manufacturer files an ANDA with Paragraph IV certifications for multiple patents, and the patent holder then sues for infringement on only one of those patents?


Opinions:

Majority - Judge Gajarsa

Yes, an actual controversy sufficient to support declaratory judgment jurisdiction exists. Following the Supreme Court's decision in MedImmune, which rejected this court's restrictive 'reasonable apprehension of imminent suit' test, the proper standard is whether the facts alleged, under all the circumstances, show a substantial controversy of sufficient immediacy and reality. Here, the combination of Novartis listing its patents in the Orange Book, Teva's ANDA filing (a statutory act of infringement), the statutory scheme of the Hatch-Waxman Act encouraging early resolution of disputes, and Novartis's decision to sue on one patent while holding the others in reserve creates a justiciable controversy for all patents included in Teva's Paragraph IV certification. Novartis's selective litigation creates the exact legal uncertainty and potential for 'gaming' the system that the Declaratory Judgment Act and the Hatch-Waxman amendments were designed to prevent.


Concurring - Senior Judge Friedman

Yes, an actual controversy exists. The Supreme Court's dicta in MedImmune made it clear that this court's 'reasonable apprehension of imminent suit' test is no longer valid, and the broader, general standards for declaratory judgment jurisdiction now apply to patent cases. Under these general standards, the combination of Novartis listing all five patents in the Orange Book (representing they could be asserted), Teva's Paragraph IV certification challenging all five patents, and Novartis's subsequent suit on one of those patents creates an existing, concrete controversy over the infringement and validity of the remaining four patents.



Analysis:

This decision officially marks the Federal Circuit's abandonment of its long-standing 'reasonable apprehension of imminent suit' test for declaratory judgment jurisdiction in patent cases, aligning its jurisprudence with the Supreme Court's 'totality of the circumstances' standard from MedImmune. The ruling significantly empowers ANDA filers by allowing them to seek 'patent certainty' and clear legal clouds created by patentees who strategically sue on only a subset of listed patents. This prevents brand-name drug companies from using the threat of future litigation on reserved patents to deter or delay generic market entry after an initial patent dispute is resolved.

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