Blog March 31, 2023
Federal Circuit to Consider the Relevance of an Alleged Infringer’s “Intent” in a Hatch-Waxman Safe Harbor Analysis
As part of the Hatch-Waxman Act, given the lack of information on the allegedly infringing product, courts have found that patentees can satisfy the pleading requirements of Twombly/Iqbal without having access to the accused products when alleging infringement of Orange Book-listed patents. One recent District Court decision has clarified that non-Orange Book-listed patents are subject to the same pleading standard as listed patents in a Hatch-Waxman infringement suit.
Pleading Standards and Motions to Dismiss
Pleading standards are governed by Rule 8 of the Federal Rules of Civil Procedure. It states: “A pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief.”[i] Failure to meet this standard exposes a party to a motion to dismiss under Rule 12(b)(6). The seminal Supreme Court cases Bell Atl. Corp. v. Twombly[ii] and Ashcroft v. Iqbal[iii] further define this pleading standard.
As explained in Twombly, “[f]actual allegations [in the pleadings] must be enough to raise a right to relief above the speculative level on the assumption that all of the complaint’s allegations are true.”[iv] This standard does not require the factual allegations to be detailed, but they must provide more than mere labels or conclusions; “a formulaic recitation” of the elements of the action will not suffice.[v] Instead, the facts as pled must state a facially plausible claim to relief.[vi] Iqbal further explains that “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”[vii]
Still, courts have recognized that pleading “on information and belief” is available when “essential information lies uniquely within another party’s control.”[viii] At least one court has found that a unique pleading standard applies in Hatch-Waxman cases asserting an Orange Book-listed patent where a patentee may not know details of a proposed generic product.[ix] Recently, the District of Delaware considered the standard of pleading in a Hatch-Waxman case alleging infringement of a non-Orange Book-listed patent.
Novartis Pharms. Corp. v. Alembic Pharms. Ltd., et al.
Judge Andrews of the United States District Court for the District of Delaware presides over the Novartis Pharms. Corp. v. Alembic Pharms. Ltd. case. This present dispute arises out of series of actions surrounding Novartis’ patented heart failure product Entresto® (sacubitril and valsartan).[x] Beginning in October 2019, Novartis filed patent infringement actions against several defendants’ Abbreviated New Drug Application products, asserting two Orange Book patents, which were later consolidated into a multidistrict litigation.[xi] In September 2021, Novartis filed another patent infringement suit against a subset of the defendants in a multidistrict litigation (“Entresto MDL”), asserting that the same ANDA products would infringe U.S. Patent No. 11,096,918 (the “’918 patent”), a non-Orange Book-listed patent.[xii] In October 2022, Novartis filed the present suit against additional defendants, again alleging infringement of the ’918 patent.[xiii] Novartis’ most recent case alleges on “information and belief” that the various ANDA products will infringe the ’918 patent.[xiv] Noratech Pharmaceutical Co. (“Noratech”), one of the recently added defendants, moved to dismiss the patent infringement claim for failure to state a claim under Rule 12(b)(6), arguing that pleading on information and belief does not satisfy the Twombly/Iqbal standard.[xv]
Judge Andrews began his analysis by first addressing access to and use of confidential information. Noratech is a party to the Entresto MDL. Through that litigation, Novartis gained access to information on Noratech’s ANDA product, including testing data.[xvi] Novartis, however, is bound by a protective order in the Entresto MDL that prevents the use of any confidential information in initiating other suits.[xvii]
Judge Andrews next noted that Novartis’ allegations on “information and belief” were supported predominantly by a previous District of Delaware decision, Belcher Pharms., LLC v. Int’l Medication Sys., Ltd (“Belcher”).[xviii] There, Belcher accused International Medication Systems of infringing its Orange Book-listed patent based on IMS’ submission of a paper New Drug Application pursuant to 35 U.S.C. § 355(b)(2) for epinephrine injections and IMS’s paragraph IV notification, which argued that Belcher’s patent was invalid or would otherwise not be infringed.[xix] Under 35 U.S.C. § 271(e)(2)(A), IMS’ NDA filing constituted an “artificial” act of patent infringement.[xx] In that case, Belcher and IMS worked out an offer of confidential access, giving Belcher access to IMS’ paper NDA submission three weeks before the 45-day deadline to file suit to obtain a 30-month stay of Food and Drug Administration approval.[xxi] Belcher’s allegations in its complaint included that IMS submitted an NDA to the FDA, IMS provided Belcher with a paragraph IV notice letter, the manufacture of IMS’ NDA product is covered by claims of Belcher’s patent, and IMS submitting an application constitutes a statutory act of infringement.[xxii] Based on Belcher’s allegations, IMS moved to dismiss for failure to state a claim under Rule 12(b)(6).[xxiii]
Defendant IMS argued that Belcher’s complaint was “fatally flawed” because it “merely state[d] legal conclusions without alleging any facts that could make a plausible case for patent infringement against IMS.”[xxiv] IMS argued that Belcher’s recitation of the facts leading up to the complaint were insufficient to satisfy the Twombly/Iqbal standard and Belcher was required to include facts that could lead to “the reasonable inference that defendant [was] liable for the misconduct alleged.”[xxv] IMS also argued that Belcher had full access to IMS’ NDA and, thus, should have been required to allege specific facts that support Belcher’s infringement allegations.[xxvi]
The Belcher court, however, found Belcher’s pleading was enough: “Orange Book-listed patents may state a claim for infringement by alleging its interest in the patent, its receipt of the paragraph IV certification, the filing of the ANDA or NDA, and its contention that the defendant’s proposed product will infringe.”[xxvii] The court further explained that the purpose and structure of the Hatch-Waxman Act is advanced by allowing a patentee to develop a particularized theory of infringement through discovery rather than prior to filing suit.[xxviii] Given that a patentee in receipt of a paragraph IV letter must act within a limited time to bring suit — just 45 days — the court found that it was not reasonable to require a developed level of specificity.[xxix] The Belcher court continued, identifying a list of reasons to support its finding:
Plaintiff may not know much about the details of a proposed product and may, again, not be able to plead infringement with specificity. Nor, of course, may the plaintiff go out and purchase the accused product and test it for itself since, in these cases, the product does not yet actually exist (and if samples have been created, they cannot, by law, be available for purchase).[xxx]
In Novartis, Judge Andrews found this list of reasons compelling for all Hatch-Waxman cases, including those where a patent owner asserts a non-Orange Book patent.[xxxi] As the court explained, owners of non-Orange Book patents “still face the same difficulties in retrieving information about the accused products at the pleading stage” — most notably, the inability to purchase and test the accused product — difficulties that are absent in other patent infringement cases.[xxxii] The court found the case law cited by Noratech differentiable, as the cases described scenarios where allegations were made on information and belief despite the patentee having access to the information in question.[xxxiii]
Judge Andrews also rejected Noratech’s argument that Belcher is limited in applicability.[xxxiv] While the Belcher court focused on the statutory language of the Hatch-Waxman Act, nothing in the decision limited the holding to its exact facts (i.e., dealing with an Orange Book-listed patent).[xxxv] In fact, Judge Andrews found that Belcher applied a pleading standard that had regularly been adopted by other courts when “essential information lies uniquely within another party’s control.”[xxxvi] Judge Andrews was explicit in his expansion of Belcher: “I find ANDA infringement suits outside the Hatch-Waxman Act to be such a situation and choose to apply the relaxed standard from Belcher here.”[xxxvii]
Given that Novartis is bound by a protective order and unable to allege facts in more detail than information and belief, and further that what Novartis has alleged meets the relaxed pleading standard of Belcher, the court denied Noratech’s motion to dismiss.[xxxviii]
ANDA litigation contains inherent imbalances in learnable information prior to fact discovery. Given these disparities in the Hatch-Waxman context, a prior District of Delaware decision interpreting the Act found that the Twombly/Iqbal pleading standard was met with less factually detailed allegations of infringement for Orange Book-listed patents in order to facilitate ANDA litigation prior to the approval and entry of a generic drug product. As shown by this recent decision from the District of Delaware, at least one court has held that an NDA holder can benefit from a “lower level of specificity” of pleading in a Hatch-Waxman suit even when the patents-in-suit are not Orange Book-listed.
[i] Fed. R. Civ. P. 8(a)(2).
[ii] 550 U.S. 544 (2007).
[iii] 556 U.S. 662 (2009).
[iv] Twombly, 550 U.S. at 555.
[v] Id. at 555.
[vi] Id. at 570 (“Here, in contrast, we do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face.”).
[vii] Iqbal, 556 U.S. at 678.
[viii] E.g., Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1330 (Fed. Cir. 2009).
[ix] See Belcher Pharms., LLC v. Int’l Medication Sys., Ltd., 379 F. Supp. 3d 326, 331-32 (D. Del. 2019).
[x] Novartis Pharms. Corp. v. Alembic Pharms. Ltd., No. 22-1395-RGA, D.I. 112, 2023 WL 6387975, at *1 (D. Del. Sept. 29, 2023) (Andrews, J.).
[xi] In re Entresto Patent Litigation, No. 20-2930-RGA (D. Del. filed Mar. 27, 2020).
[xii] Novartis Pharms. Corp. v. Alkem Lab’ys Ltd., No. 21-1330-RGA (D. Del. filed Sept. 20, 2021).
[xiii] Novartis, 2023 WL 6387975, at *1.
[xiv] Novartis, No. 22-1395-RGA, D.I. 1 (Complaint).
[xv] Novartis, No. 22-1395-RGA, D.I. 31, at *7-9 (Redacted Motion to Dismiss).
[xvi] Novartis, 2023 WL 6387975, at *3.
[xviii] Belcher Pharms., LLC v. Int’l Medication Sys., Ltd., 379 F. Supp. 3d 326, 331-32 (D. Del. 2019).
[xix] Id. at 328.
[xx] Id.; see also 35 U.S.C. § 271(e)(2)(A) (“It shall be an act of infringement to submit . . . an application under section 505(j) of the Federal Food, Drug, and Cosmetic Act or described in section 505(b)(2) of such Act for a drug claimed in a patent or the use of which is claimed in a patent.”); Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 676 (1990).
[xxi] Belcher Pharms., 379 F. Supp. 3d at 328.
[xxii] Id. at 329.
[xxv] Id. at 330.
[xxvii] Id. at 331.
[xxx] Id. at 331-32.
[xxxi] Novartis, 2023 WL 6387975, at *3.
[xxxii] Id. at *4.
[xxxiii] Id. (citing North Star Innovations, Inc. v. Micron Tech., Inc., No. 17-0506-CJB, 2017 WL 5501489, at *2 (2017) (finding plaintiff failed to plead sufficient facts to bring a direct infringement claim against defendant’s commercially available device)).
[xxxvi] Id. (citing Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1330 (Fed. Cir. 2009)).
[xxxviii] Id. at *5.
The opinions expressed are those of the authors on the date noted above and do not necessarily reflect the views of Fish & Richardson P.C., any other of its lawyers, its clients, or any of its or their respective affiliates. This post is for general information purposes only and is not intended to be and should not be taken as legal advice. No attorney-client relationship is formed.
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