Opposition Brief — Eisai Co. v. Teva Pharmaceuticals USA, Inc.

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No. 10-1070

IN THE

Supreme Court of the United States

EISAI CO. LTD AND

EISAI MEDICAL RESEARCH, INC.,

Petitioners,

Vv.

TEVA PHARMACEUTICALS USA, INC., through its

GATE PHARMACEUTICALS Division,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

States Court oF APPEALS FOR THE FEDERAL CIRCUIT

eer ao ee

BRIEF IN OPPOSITION

Francis C. LYNCH

Counsel of Record

Henry C. DINGER

LAURIE S. GILL

GOODWIN Procrer LLP

Exchange Place

53 State Street

Boston, MA 02109

flynch@goodwinprocter.com

Attorneys for Respondent

Teva Pharmaceuticals USA, Inc.

April 27, 2011

235924 g

COUNSEL PRESS

(800) 274-3321 + (800) 359-6859

RESPONDENT TEVA’S RULE 29.6 STATEMENT

Pursuant to this Court’s Rule 29.6, counsel for

respondent Teva Pharmaceuticals USA, Inc. certifies

that respondent Teva Pharmaceuticals USA, Inc. is an

indirect wholly owned subsidiary of Teva Pharmaceutical

Industries Ltd. through the following parent companies: (i)

Orvet UK Unlimited (majority shareholder), which in turn

is directly owned by Teva Pharmaceuticals Europe B.V.,

which in turn is directly owned by Teva Pharmaceutical

Industries Ltd; and Gi) Teva Pharmaceutical Holdings

Cooperatieve U.A. (minority shareholder), which in turn

is directly owned by IVAX LLC, a direct subsidiary of

Teva Pharmaceuticals USA, Inc. Teva Pharmaceutical

Industries, Ltd. is the only publicly-traded direct or

indirect parent company of Teva Pharmaceuticals USA,

Inc. and no other publicly traded company owns more

than 10 % of the stock of Teva Pharmaceuticals USA, Inc.

TABLE OF CONTENTS

Page

RESPONDENT TEVA'S RULE 29.6

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RPE GAPEUEIGING SS 20... 0. cece ewe ii

TABLE OF CITED AUTHORITIES ........... iii

COUNTERSTATEMENT OF THE CASE...... 1

REASONS FOR DENYING THE PETITION... 6

The Petition should be denied because

Kisai lacks standing to seek resolution of

ce cena resented. .... 1... ccc cues esen 6

NN a on ee ee eee stele e eee een 11

222

TABLE OF CITED AUTHORITIES

Page

CASES

Arizona Christian School Tuition Org. v. Winn,

ee 7

Caraco Pharm. Labs., Lid. v. Forest Labs., Inc.,

ee eee eee Cee, Car. SOUS)... 2... ee 4

Lujan v. Defenders of Wildivfe,

I oo ec cc aw ce cc cee 7

MedImmune, Inc. v. Genentech, Inc.,

occu bec casscdscccccces 3,4

Super Sack Mfg. Corp. v.

Chase Packaging Corp.,

oe ee See Ce. Car. GOO). ................ 4

Teva Pharms. USA, Inc. v. Eisai Co., Lid.,

620 F.3d 1341 (Fed. Cir. 2010) ................ 2,4

Teva Pharms. USA, Inc. v.

Novartis Pharms. Corp.,

482 F.3d 1330 (Fed. Cir. 2007)................ 4

Teva Pharms. USA, Inc. v. Pfizer Inc.,

395 F.3d 1324 (Fed. Cir. 2005)................ 3

U.S. Bancorp Mortgage Co. v.

Bonner Mall Partnership,

Oe 10

Cited Authorities

United States v. Moser,

Be Se I Once dc cudcuacaxsoosedexs

United States v. Munsingwear, Inc.,

er RN I I 5s sa ah an 5 0 dase te EE

STATUTES AND RULES

Ti UO. BOON) oo oe ok os oes cence en ccana.

Bis Tce | (| ae rs

21 U.S.C. § 355(j)(2)(a)iiM(IV) .. 2002.02.

21 U.S.C. § 355(j)(5)(Biv) .. 2. eee eee.

OG ULE ROTI. oe woe oe ee ee es

Wee 8 Oe Fe

OTHER AUTHORITIES

Approved Drug Products with Therapeutic

Equivalence Evaluations ...................

RESTATEMENT (SECOND) OF JUDGMENTS § 28.......

As requested by this Court, Respondent Teva

Pharmaceuticals USA, Inc. (“Teva”) hereby responds

to a petition for a writ of certiorari filed by Petitioners

(collectively “Eisai”). This Court should deny the Petition

because there is no longer any case or controversy under

Article III of the Constitution to resolve the question

presented by Eisai for review. Because of the particular

circumstances presented here, whether or not this Court

directs the Federal Circuit to vacate its judgment in this

litigation can have no practical impact on the parties. Eisai

therefore lacks standing to seek this Court’s review. The

Petition invites this Court to assume jurisdiction to render

a mere advisory opinion. This Court should decline that

invitation.

COUNTERSTATEMENT OF THE CASE

The procedural history of this case is complex but

largely immaterial for purposes of deciding whether to

grant the Petition. The essential facts are these.

Eisai sells Aricept®, a drug used in the treatment of

Alzheimer’s Disease. The active ingredient in Aricept® is

the compound donepezil. In its New Drug Application to

sell Aricept®, Eisai identified five patents that it claimed

covered either donepezil or methods of using it, as required

by 21 U.S.C. $355(b)(1). One of those patents, U.S. Patent

No. 4,895,841 (the ““841 patent”), covered donepezil itself.

The other four patents covered either different crystalline

forms (or “polymorphs”) of donepezil or pharmaceutical

formulations that contained donepezil. The FDA listed

those five patents in the publication Approved Drug

Products with Therapeutic Equivalence Evaluations,

usually referred to as the “Orange Book.”

In 2005, respondent, Teva Pharmaceuticals USA,

Inc., acting through its Gate Pharmaceuticals division

(“Teva”), filed an Abbreviated New Drug Application

(“AN DA”) seeking FDA approval for a generic donepezil

product (the “Gate Product”). See 21 U.S.C. §355()).

Teva later amended this ANDA to include a certification

under 21 U.S.C. §355(j)(2)(a)(viiX TV) (a “Paragraph IV

certification”) that the five Eisai patents listed in the

Orange Book with respect to Eisai’s donepezil product

were either invalid or would not be infringed by Teva’s

proposed generic product. The submission of this

certification constituted an act of infringement of all five

patents sufficient to support an infringement action by

Eisai against Teva. 35 U.S.C. §271(e)(2).

Eisai sued Teva, but only for infringing the ’841

patent. Eisai refrained from claiming infringement of the

four other patents for reasons explained in the Federal

Circuit’s decision below. See Teva Pharms. USA, Inc. v.

Eisai Co., Ltd., 620 F.3d 1341, 1344-45 (Fed. Cir. 2010).

Another generic company, Ranbaxy Laboratories Ltd.

(“Ranbaxy”) was tne first generic company to submit

a Paragraph IV certification as to those four patents.

However, Ranbaxy had not me a Paragraph IV

certification as to the ’841 patent. Federal law rewarded

Ranbaxy for being the first to challenge the other four

patents with a lucrative 180-day period of “exclusivity”

during which period the FDA would approve no other

company to sell generic donepezil. See 21 U.S.C. §355(j)

(5)(B)(iv). Under the provisions of 21 U.S.C. §355 in

effect at the time, Ranbaxy’s 180-day period of generic

exclusivity would be triggered by the earlier of Ranbaxy’s

commencement of commercial sales or the entry of a court

judgment that the four patents were either invalid or not

infringed. Teva v. Eisai, 620 F.3d at 1344 & n.2.

Because it had not challenged the ’841 patent, Ranbaxy

could not obtain FDA approval to begin commercial

sale until that patent expired in late 2010. As a result,

Ranbaxy’s 180-day exclusivity period, which blocked FDA

approval of the Gate Product, could not begin to run until

that expiration. Thus, even if Teva were correct that all

five of Eisai’s Orange Book patents were either invalid

or not infringed by Teva’s generic drug product, Teva

could not launch the Gate Product because Ranbaxy, the

first Paragraph IV filer as to four other patents, had not

challenged the ’841 patent. However, if Eisai had sued

Teva on all five patents, and Teva obtained a favorable

judgment on those four patents before the expiration

of the ’841 patent, that judgment would have triggered

Ranbaxy’s exclusivity period even though Ranbaxy itself

could not take advantage of it because it had declined to

challenge the ’841 patent. If Ranbaxy’s exclusivity had

run before the expiration of the ’841 patent, then when

that patent did expire, Eisai would face competition not

just from Ranbaxy for 180 days, but from multiple generic

competitors simultaneously. The downward pressure on

pricing from such competition could be dramatic.

Accordingly, Eisai declined to sue Teva on the other

four patents, in the hope that the absence of any threat

of an infringement suit on those four patents would

preclude Teva from initiating a declaratory judgment

_ action to obtain a judgment that would trigger Ranbaxy’s

exclusivity period. See Teva Pharms. USA, Inc. v.

Pfizer Inc., 395 F.3d 1324, 1338 (Fed. Cir. 2005). But in

MedImmuzne, Inc. v. Genentech, Inc., 549 U.S. 118 (2007),

this Court recognized that federal courts could exercise

subject matter jurisdiction over declaratory judgment

actions in patent cases even in the absence of a threat of

litigation. See id. at 132 n.11; Teva Pharms. USA, Inc. v.

Novartis Pharms. Corp., 482 F.3d 1330, 1345-46 (Fed.

Cir. 2007).

Eisai also delivered to Teva a covenant not to sue on

two of the four patents. Since Eisai had earlier disclaimed

the other two patents outright, Eisai argued that the

elimination ef any possible liability for infringing any

of the four patents precluded Teva from maintaining

its declaratory judgment action. See Super Sack Mfg.

Corp. v. Chase Packaging Corp., 57 F.3d 1054 (Fed. Cir.

1995) (patentee’s covenant not to sue destroys Article

III jurisdiction over suit for declaration of invalidity and

non-infringement).

However, in Caraco Pharm. Labs., Ltd. v. Forest

Labs., Inc., 527 F.3d 1278 (Fed. Cir. 2008), cert. denied, 129

U.S. 1316 (2009), the Federal Circuit ruled that under the

unusual circumstances created by the Hatch-Waxman Act,

a generic drug company seeking a declaration of invalidity

or non-infringement could satisfy the justiciability

requirements articulated by this Court in Med/mmune,

even though the patentee had given a covenant not to

sue on the patent-in-suit. The District Court in this case

deemed Caraco not controlling and dismissed Teva’s

declaratory judgment action for want of subject matter

jurisdiction.

On Teva’s appeal from the dismissal, the Federal

Circuit reversed, concluding that Caraco did control Eisai

suggests that this ruling was “a decision of wide-ranging

significance to the pharmaceutical industry,” Pet. at 3, but

the Federal Circuit itself viewed this case as presenting

a straight-forward application of its own precedent. See

Teva v. Eisai, 620 F.3d at 1348-50.

Although the Federal Circuit in this case ruled that

Teva could challenge the four patents-in-suit in order

to obtain a judgment sufficient to trigger Ranbaxy’s

exclusivity period, time ran out on Teva before it could

take advantage of the ruling. While Eisai’s petition to

the Federal Circuit for rehearing en banc was pending,

the ’841 patent expired and Ranbaxy launched its generic

donepezil product. With that launch, Ranbaxy’s 180-

days of exclusivity commenced, and that left Teva with

nothing to gain by continuing its declaratory judgment

action. Because Teva’s goal in the litigation was to trigger

Ranbaxy’s exclusivity period, the underlying patent

dispute became moot, and Teva promptly filed a suggestion

of mootness with the Federal Circuit.

Eisai moved the Federal Court to vacate its judgment.

The Federal Circuit denied that motion without opinion,

and the mandate issued. However, because Ranbaxy’s

launch had mooted Teva’s claim for declaratory relief,

on December 20, 2010, Teva filed a notice of voluntary

dismissal of its complaint in the District Court on

mootness grounds, as it was entitled to do under Fed. R.

Civ. P. 41(a)(1) because Eisai had neither answered nor

filed a motion for summary judgment. Teva’s declaratory

judgment complaint is thus no longer pending.

Eisai petitioned this Court for a writ of certiorari to

review the denial of its motion to vacate. Because Teva

no longer had a stake in the outcome, it waived its right

to submit an opposition to Eisai’s petition. However, this

Court requested that Teva submit a response to the

petition.

REASONS FOR DENYING THE PETITION

The Petition should be denied because Eisai lacks

standing to seek resolution of the question presented.

The parties agree that Teva’s claim for declaratory

relief became moot after the Federal Circuit’s decision

because Ranbaxy launched its generic donepezil product

and thereby triggered its exclusivity period. Eisai argues

that, as a result, the Federal Circuit was obliged to grant

its motion to vacate its judgment reversing the dismissal of

Teva’s claim for a declaratory judgment. Eisai insists that

this Court’s decision in United States v. Munsingwear,

Inc., 340 U.S. 36 (1950), required the Federal Circuit to

grant that motion, even as it acknowledges that there is

a conflict in the circuits as to the proper application of

Munsingwear.

However, this case does not present a suitable vehicle

for resolving the question presented. Simply put, there is

no justiciable case or controversy that would permit this

Court to resolve whether the Federal Circuit properly

denied BHisai’s motion to vacate because Eisai lacks

standing to seek a vacatur order from this Court.

It is well-settled that to seek relief from this or any

other court, the party seeking relief

“must have suffered an ‘injury in fact’ — an

invasion of a legally protectable interest

which is (a) concrete and particularized, and

(b) ‘actual or imminent, not “conjectural”

or “hypothetical.’” Second, there must be a

causal connection between the injury and thie

conduct complained of — the injury has to be

‘fairly ... trace[able] to the challenged action

of the defendant, and not ... thfe] result [of]

the independent action of some third party not

before the court.’ Third, it must be ‘likely,’ as

opposed to merely ‘speculative,’ that the injury

will be ‘redressed by a favorable decision.”

Arizona Christian School Tuition Org. v. Winn, 131

S. Ct. 1486, 1442 (2011) (quoting Lujan v. Defenders of

Wildlife, 504 U.S. 555, 560-61 (1992)). Eisai cannot satisfy

this standard. As explained below, the Federal Circuit’s

denial of Eisai’s motion to vacate its judgment causes Eisai

no actual, concrete injury, and an order from this Court

directing the Federal Circuit to vacate its judgment will

redress no such injury.

Kisai posits that the denial of that motion has “unfairly

saddled” it “with a preclusive judgment ».f suspect merit

in an important area of federal jurisprudence.” Pet. at 4.

Preclusion from litigating an issue in some future litigation

does constitute an injury that may support standing. In

Munsingwear, for example, the government requested

that this Court vacate a moot judgment because rulings

made in connection with that judgment precluded the

government from pursuing a damages claim.' But Eisai

does not identify any actual preclusive harm that the

Federal Circuit’s judgment causes, and no such harm

exists.

1. This Court denied the government’s motion to vacate, but

only because the government had slept on its rights, not because

+e government lacked standing to pursue the motion. 340 U.S.

at 41.

The “preclusive judgment” with which Eisai is

“saddled” is the Federal Circuit’s ruling that the district

court had jurisdiction over Teva’s claim seeking a

declaration that four of Eisai’s patents are invalid or not

infringed by Teva’s proposed generic donepezil product.

Hisai might have been harmed by an inability to contest

that jurisdictional determination if Teva continued to

press its claim for declaratory relief. However, it is

perfectly clear that Teva is not pressing that claim and

cannot press that claim because Teva no longer has

standing to do so.

Nor is Eisai precluded in some future case from

arguing that the Federal Circuit erred in this case or in

Caraco in ruling that a generic drug company may be

able to assert a declaratory judgment action even after

receiving a covenant not to sue on the patents that are the

subject of the action. This Court has recognized that the

doctrine of issue preclusion does not apply to such pure

legal issues. See United States v. Moser, 266 U.S. 236, 242

(1924) (“[res judicata] does not apply to unmixed questions

of law. Where, for example, a court in deciding a case

has enunciated a rule of law, the parties in a subsequent

action upon a different demand are not estopped from

insisting that the law is otherwise, merely because the

parties are the same in both cases.”). It is also black letter

law that issue preclusion does not apply to an issue of

law where the second action is “substantially unrelated”

to the judgment giving rise to the preclusion, or a fresh

consideration is “warranted in order to take account of an

intervening change in the applicable law or otherwise to

avoid inequitable a¢ministration of the laws,” or “[t}Jhere

is a clear and convincing need for a new determination of

the issue ... because of the potential adverse impact of

the determination on the public interest or the interests

of persons not themselves parties in the initial action.”

RESTATEMENT (SECOND) OF JUDGMENTS §28.?

Once Ranbaxy launched its donepezil product, the

declaratory relief that Teva sought in 2008 could no

longer have any practical effect. Even if Teva could obtain

a judgment that all four of the challenged patents were

invalid or not infringed before Ranbaxy’s exclusivity

period expires on May 29, 2011 (180 days after Ranbaxy

launched) — a highly questionable assumption — it would

not accelerate the FDA’s approval of Teva’s ANDA by a

single day. The combination of Eisai’s patent disclaimers

and covenants not to sue Teva have eliminated any

exposure to patent infringement liability once Teva

receives final FDA approval. Accordingly, even though

the Federal Circuit concluded that there was subject

matter jurisdiction over Teva’s claim when Teva brought

the claim in 2008, there is no subject matter jurisdiction

over that claim today.

Thus, it no longer matters that Eisai might be

precluded from denying that there was jurisdiction over

Teva’s claim for declaratory relief in 2008 because that

claim no longer exists. Indeed, only days after the Federal

Circuit’s mandate issued, Teva’s claim was dismissed on

jurisdictional grounds —the same result that Eisai had

earlier requested from the District Court — without

Eisai having to take any action at all. There can be no

2. Eisai asserts that “[t]here was a reasonable likelihood that

this Court would have granted certiorari to review the underlying

judgment had it not become moot.” Pet. at 31. That speculation

may or may not be true, but it is irrelevant since the case did

become moot.

future proceeding in which the issue on which Eisai fears

“preclusion” can ever arise.

Accordingly, Eisai’s inability to challenge the Federal

Circuit’s judgment or any of its findings cannot possibly

visit any actual, concrete, particularized harm on Eisai,

and an order from this Court vacating that judgment will

remedy no such harm. Eisai, therefore, has no standing

to request that this Court vacate that judgment.

This Court’s decision in U.S. Bancorp Mortgage Co. v.

Bonner Mall Partnership, 513 U.S. 18 (1994), is not to the

contrary. In that case, this Court recognized that if a case

becomes moot after it has been accepted for review, the

Court retains jurisdiction to direct the proper disposition

of the case in light of the changed circumstances, and

in that context may direct that the decision accepted

for review be vacated if such “extraordinary” relief is

equitably warranted. See zd. at 21-22. Once the Court has

granted review, Article III does not prevent the Court

from directing an orderly and equitable final disposition.

But here, the Court has not granted review. The

question here is whether the Court should grant review

at all. The indisputable fact is that neither party here

has any concrete interest in the resolution of the question

presented. Denying Eisai’s Petition will leave Eisai in

exactly the same position that it would face if the Court

granted the petition and either directed that the Federal

Circuit’s judgment be vacated or declined to do so. Eisai

has no standing to seek review and its Petition asks this

Court to issue a purely advisory opinion. Article III does

not authorize this Court to grant such a request.

CONCLUSION

For the foregoing reasons, this Court should deny

the petition.

Respectfully submitted,

FRANCIS C, LYNCH

Counsel of Record

Henry C. DINGER

LaAuRIE S. GILL

GOODWIN PrRocTER LLP