Chief Judge Stark Dismisses Hatch-Waxman Case after Paragraph IV to Paragraph III Conversion


On June 26, 2020, Chief Judge Leonard Stark dismissed a Hatch-Waxman case without prejudice after Defendant Sandoz Inc. ("Sandoz") converted its Paragraph IV certifications for certain asserted patents to Paragraph III certifications.[1] H. Lundbeck A/S et al v. Apotex Inc., et al., C.A. No. 18-88-LPS (D. Del. Jun. 26, 2020). Chief Judge Stark denied Sandoz's motion to dismiss for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1), but granted Sandoz's motion for partial judgment on the pleadings under Fed. R. Civ. P. 12(c).

Case Background

Plaintiffs H. Lundbeck A/S, Takeda Pharmaceutical Company Ltd., Takeda Pharmaceuticals U.S.A., Inc., Takeda Pharmaceuticals International AG, and Takeda Pharmaceuticals America, Inc. ("Plaintiffs") brought a patent infringement case against Sandoz based on Sandoz's Abbreviated New Drug Applications ("ANDA") and Paragraph IV certifications. On June 6, 2019, Plaintiffs filed a Second Amended Complaint alleging that Sandoz infringed Plaintiffs' crystal polymorph patents "under 35 U.S.C. § 271(e)(2)(A) by submitting Defendants' ANDA with a Paragraph IV certification and thereby seeking FDA approval of generic versions of TRINTELLIX® prior to the expiration of the [crystal polymorph] Patent[s]."

On June 26, 2019, Sandoz converted its Paragraph IV certifications for the polymorph patents to Paragraph III certifications and subsequently requested Plaintiffs agree to a stipulated dismissal. Sandoz notified Plaintiffs that by converting to Paragraph III certifications, Sandoz no longer sought ANDA approval before the last of the crystal polymorphs patents expire, more than 10 years away from the time of Sandoz's motion. Sandoz, however, refused to stipulate to Plaintiffs' request that it would not re-convert to Paragraph IV certifications in the future. Plaintiffs declined to dismiss Sandoz from the suit, and Sandoz filed a motion to dismiss for lack of subject matter jurisdiction, and, alternatively, for partial judgment on the pleadings.

Motion to Dismiss for Lack of Subject Matter Jurisdiction

Sandoz argued that the conversion from Paragraph IV to Paragraph III divested the Court of subject matter jurisdiction. Chief Judge Stark disagreed, noting the Court obtained subject matter jurisdiction when Plaintiffs alleged that Sandoz's ANDA filing with Paragraph IV certifications infringed the polymorph patents. The Court was "not deprived of jurisdiction under 35 U.S.C. § 271(e)(2) and 35 U.S.C. § 1338(a) because it is sufficient that the case was initially certified under Paragraph IV." Further, the conversion did not moot the case because Sandoz could not meet "the formidable burden of showing that it is absolutely clear the alleged wrongful behavior could not reasonably be expected to recur." On the contrary, Sandoz expressly refused to stipulate that it will not re-convert, adding that it "simply cannot state with any certainty what its business strategy will be nearly seven years from now." Thus, the Court retained subject matter jurisdiction even though re-conversion was merely "hypothetical."

In holding that the Court retained subject matter jurisdiction, Chief Judge Stark relied on two Hatch-Waxman opinions from the District of Delaware, Astrazeneca AB v. Aurobindo Pharma Ltd., C.A. No. 14-664-GMS (D. Del. Sept. 15, 2016) (Sleet, C.J.), and Sanofi v. Lupin Atlantis Holdings Sa, C.A. No. 15-415-RGA (D. Del. Jan. 26, 2017 (Andrews, J.). Both cases held that a Paragraph IV to Paragraph III conversion did not divest the Court of subject matter jurisdiction, particularly where the risk existed that the generic defendant could switch back to a Paragraph IV certification in the future.

Judgment on the Pleadings

Sandoz alternatively moved for judgment on the pleadings with respect to the polymorph patents on the ground that Plaintiffs failed to state a claim on which relief may be granted.  Here, Chief Judge Stark agreed. Plaintiffs sought relief under 35 U.S.C. § 271(e)(2), which deems it "an act of infringement" to submit an ANDA "if the purpose of such submission is to obtain approval . . . to engage in the commercial manufacture, use, or sale of a drug . . . claimed in a patent or the use of which is claimed in a patent before the expiration of such patent." Chief Judge Stark found it was "clear from the pleadings that Sandoz no longer seeks FDA approval of its ANDA product 'before the expiration of the [polymorph] patent[s]' . . . . Therefore, it is presently clear that Plaintiffs cannot obtain relief on their claim for infringement under § 271(e)(2)."

Chief Judge Stark found this conclusion was supported by Plaintiffs' requested relief. Plaintiffs sought an injunction under 35 U.S.C. § 271(e)(4) delaying approval of Sandoz's ANDA until the polymorph patents expire. By converting from Paragraph IV to Paragraph III, Sandoz had "essentially given Plaintiffs what they asked for from the Court" and there was no additional relief the Court could provide.

In addressing Plaintiffs' arguments, Chief Judge Stark stated that "any argument about Sandoz's initial certification speaks only to the Court's subject matter jurisdiction — not to whether Plaintiffs any longer have a claim to relief under § 271(e)(2)." Further, Chief Judge Stark held that Plaintiffs did not have a live infringement claim: "Sandoz seeks authorization to market its ANDA product only after the polymorph patents expire. At that point, Sandoz will not be committing "an act of infringement" under § 271(e)(2)." Chief Judge Stark also held that "Plaintiffs' suggestion that Sandoz might reconvert to Paragraph IV and, therefore might infringe during the term of the polymorph patents, does not give rise to a claim under § 271(e)(2). Rather, 'the ANDA must be judged on its face for what an accused infringer seeks the FDA's approval to do.'" Lastly, Chief Judge Stark stated that it would be inappropriate to enjoin Sandoz from re-converting back to Paragraph IV, because the claim was not ripe for adjudication.

We will continue to monitor development in this area and update accordingly.

[1] A generic applicant is required to file with its ANDA a certification for every patent listed in the Orange Book for the Reference Listed Drug. A Paragraph IV certification indicates that the generic applicant believes the Orange Book-listed patent is invalid, unenforceable, or not infringed and seeks to market its ANDA product before the expiration of that patent. A Paragraph III certification indicates that the generic applicant does not seek to market its generic product until the Orange Book-listed patent expires.

Authors: Geoff Biegler, Megan Chacon, Cheryl Wang