Holding that jurisdiction existed under MedImmune's "all the circumstances" test, the U.S. Court of Appeals for the Federal Circuit recently reversed a lower court's finding of no jurisdiction in a Hatch-Waxman declaratory judgment action in which the pharmaceutical patentee had provided the Abbreviated New Drug Application (ANDA) filer a covenant not to sue for the patent-in-suit. Caraco Pharm. Labs., LTD. v. Forest Labs., Inc., Case No. 07-1404 (Fed. Cir., April 1, 2008) (Gajarsa, J.; Friedman, J. dissenting).
As part of obtaining Food and Drug Administration (FDA) approval for its anti-depression drug Lexapro®, Forest listed U.S. Patent Nos. Re. 34,712 and 6,916,941 in the FDAs Orange Book. After Caraco filed its May 2006 ANDA for generic Lexapro®, which included Paragraph IV certifications for both patents, Forest responded by suing Caraco for infringement of only the '712 patent. Caraco separately filed a declaratory judgment (DJ) action for non-infringement, but not invalidity, of the '941 patent.
For Caraco to receive FDA approval for its ANDA, the 180-day exclusivity period belonging to the first ANDA filer, Ivax Pharmaceuticals, must first be triggered by either Ivax's first commercial marketing or a court decision holding the listed patents invalid or not infringed. Ivaxs ANDA was previously found to infringe the '712 patent, which was also upheld as valid by the Federal Circuit.
Having already enjoined Ivaxs market entry until the 2012 expiration of the '712 patent, Forest further attempted to prevent Caraco from gaining approval by eliminating the possibility of any court decision on the merits regarding the '941 patent by granting Caraco an irrevocable covenant not to sue for the '941 patent. Applying the now overruled "reasonable apprehension of suit" test, the district court dismissed Caraco's case as moot.
Citing to its earlier post-MedImmune decision in Teva v. Novartis (See IP Update, Vol. 10, No. 4), the Federal Circuit held that the controversy between Caraco and Forest resulted from Forests attempts to block the FDA from approving Caraco's ANDA, preventing Caraco's entry into the market. According to the court, because the dispute was "not premised only upon a threat of an infringement suit," Forest's covenant not to sue did not divest the district court of Article III jurisdiction.
In dissent, Judge Friedman, who concurred in Teva v. Novartis, disagreed that declaratory judgment jurisdiction existed because Caraco's ability to gain FDA approval was contingent upon events that would not be resolved by the DJ action. For one, Caraco still has the hurdle of prevailing in its co-pending infringement suit for the '712 patent, which is directed toward the escitalopram compound.
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