# Amicus Curiae Brief — Teva Pharmaceuticals USA, Inc. v. Pfizer, Inc.

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386007_1657%3A4

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2005
- **Citation:** 546 U.S. 958

## Text

6-

149 Cong. Rec. $15882-03 at S15884 (Nov. 25, 2003)
(remarks of Sen. Kennedy during consideration of the
Conference Report on the MMA).

Second, in § 1102, Congress restructured the 180-day
exclusivity period granted to a generic company when it was
the first to file an ANDA challenging a patent (known as
paragraph IV certification) and it established that its product
did not infringe. Congress now requires the generic
company to forfeit exclusivity if it does not begin producing
the product within 75 days of an event resolving the patent
dispute, either through settlement, court decision or
dismissal. This eliminated the incentive under the old law
for name-brand and generic manufacturers to “park’’ the
exclusivity period granted to first-to-apply generics through
an agreement not to market the generic thereby blocking all
other generic companies from coming tc the market. 149
Cong. Rec. $15670-03 at S15746 €Nov. 24, 2003)(remarks
of Sen. Schumer during consideration of the Conference
Report for the MMA).

Third, in § 1101(a)(C) of Title XI, Congress clarified
that generic manufacturers could bring a declaratory
judgment action to “seek a prompt resolution of . . . patent
issues” where the patent holder has not initiated a patent
infringement action within 45 days after receiving notice of a
patent challenge. 149 Cong. Rec. $15882-03 at $15884-5
(Nov. 25, 2003)(remarks of Sen. Kennedy during
consideration of the Conference Report for the MMA). This
is an essential provision because it is the legal proceedings
surrounding resolution of the patent issues which trigger all
of the other threshold events under the Federal Food, Drug
and Cosmetic Act that determines when and whether a
generic can come to market. Leaving the initiation of such
proceedings solely to the discretion of the patent holder

By

allows the patent holder to control when competition could
commence, and to defer commencement as long as possible.

B. Congress Intended That Courts Should Exercise
their Declaratory Judgment Jurisdiction to the
Limits of their Article III Power.

The language, structure, and history of § 1101(a)(C)
reveal Congress’ intent that couris favor declaratory
judgment jurisdiction to promptly resolve patent issues that
might delay generic competitors to brand name drugs. While
general declaratory judgment authority for federal courts was
already authorized under 28 U.S.C. § 2201 to resolve “a case
of actual controversy,” § 1101(a)(C) of the MMA expressly
provides for “a civil action to obtain patent certainty” where
the patent owner or brand name manufacturer has not
brought suit within 45 days of the generics’ challenge to the
patent. Section 1101(a)(C)(i), “Declaratory Judgment
Absent Infringement” corrects an imbalance created by
Hatch-Waxman provisions which allowed the brand name
~ drug company to extend patent life and control competition
by controlling the timing of infringement/invalidity disputes.
Section 1101(d) provides that “the courts of the United
States shall, to the extent consistent with the Constitution,
have subject matter jurisdiction . . . [over] a declaratory
judgment that such patent is invalid or not infninged.” 35
U.S.C. § 271(e)(5). The new provisions simply make clear
what the old law implied: that courts should resolve patent
disputes whether or not the patent holder has initiated suit.
The Joint Explanatory Text to the Conference Agreement on
the law explains that:

The conferees expect that courts will find
jurisdiction, where appropniate, to prevent an
improper effort to delay infringement litigation

-8-

between generic drug manufacturers and pioneer drug
companies. . . .The conferees expect the courts to
examine as part of their analysis the particular
policies served by the Hatch-Waxman Act....
H.R. Conf. Rep. No. 108-391, at 836 (2003). Congress
made explicit that the courts should exercise their authority
to resolve patent disputes to the limit of their Article I
power specifically recognizing that an ANDA has been filed
with a paragraph iv certification and that the patentee has not
filed an infringement suit -- the very circumstances of this
case -- in determining jurisdiction. Jd As Senator Kennedy
recognized, the “clarification of a generic applicants nght to
bring a declaratory judgment action is crucial to ensuring
prompt resolution of patent issues, which is essential to
achieve our goal of speeding generic drugs to market.” 149
Cong. Rec. $15882-03 at $15885 (Nov. 25, 2003).

~ As of August 1, 2005, generic drug manufactures

have 303 pending ANDAs containing paragraph IV patent
certifications, certifying that their generic version will not
infringe a brand name manufacturer’s listed patent or that
such patent is invalid.” While we do not know the factual
background on each of these patent disputes and the various
incentives the patent holder has to promptly bring suit or not,
~ we do know well enough that this scenario results in concrete

> Section § 1101(d), codified at 35 U.S.C. § 271(e)(5). The
constitutional authority of the federal courts to decide declaratory
judgment actions where there has been a paragraph IV ANDA
certification was discussed extensively in the Congressional] Record. 149
Cong. Rec. $15751-55 (Nov. 24, —

© U.S. Food & Drug Administration, Center for Drug Evaluation and
Research, Paragraph IV Patent Certifications As of August 1, 2005
at www.fda.gov/cder/ogd/ppiv.htm.

-9-

controversies where an affirmative remedy is needed. See, In
re Cardizem CD Antitrust Litigation, 332 F.3d 896 (6" Cir.
2003); Valley Drug Co. v. Geneva Pharm. Inc., 344 F.3d
1294 (11 Cir. 2003); In re Ciprofloxacin Hydrochloride
Antitrust Litigation, 166 F.3d 740 (E.D. N.Y. 2001). The
sooner the invalidity or non-infringement can be conclusively
established for any of these drugs, the sooner consumers
benefit from lower cost generics. But if a court does not
resolve the issue of patent validity because the patent holder
does not initiate suit, it effectively blocks generic entry.”

In this case, there has been an assertion by the patent
holder that it intends to exclude al] those who would seek to
copy its product, made in the form of a representation to the
government by its listing its patent in the FDA’s Orange
book.” There is a challenge to the legitimacy of those patent

” See 149 Cong. Rec. $15885-86 (Nov. 25, 2003)(Sens. McCain,
Schumer and Kennedy discussing courts exercising jurisdiction over
declaratory judgments actions involving paragraph IV ANDA
certifications and introducing letter from the Federal Trade Commission
to Sen. Hatch stating “‘[w]ithout the right to seek a declaratory judgment,
a subsequent generic applicant that develops a clearly non-infringing
product cannot trigger the first generic applicant’s exclusivity because the
subsequent generic applicant will not be sued for patent infringement by
the brand-name company.”’)

© See 21 U.S.C. § 355(b)(1) (requiring that a new drug applicant “shall
file with the application the patent number and the expiration date of any
patent which claims the drug for which the applicant submitted the
application or which claims a method of using such drug and with respect
to which a claim of patent infringement could reasonably be asserted if a
person not licensed by the owner engaged in the manufacture, use, or
sale of the drug.””)(emphasis added). See also Minnesota Mining and
Mfg. v. Barr Labs., 289 F.3d 775, 791(Fed. Cir. 2002)(Gajarsa, J.
concurring in the judgment) (stating a declaratory judgment suit is
available for ANDA filers not sued by the NDA patentee within the 45-
day period and “[t)he two acts of (1) a patentee listing a patent in the

-10-

claims made by a would-be competitor, who has prepared to
come to market, made 1 in the form of a certification to the
FDA that the generic does not infringe the listed patent. The
parties’ legal positions are in conflict; both businesses have
taken steps averring that the other has no nght to do what it
seeks to do. Despite this, the Federal Circuit found there was
no actual controversy because Teva does not have a
reasonable apprehension that Pfizer will bring suit
imminently if Teva attempts to market the generic. Teva
Pharmaceuticals, Inc. v. Pfizer, 395 F.3d 1324 (Fed. Cir.
2005.

As the following discussion makes clear, where
generic competition is likely to result in the brand name drug
losing substantial market share, the economics of the
situation compels the conclusion that Teva not only has a
reasonable apprehension of suit, but that it has every basis to
believe that Pfizer will bring a patent infringement action at a
time designed to protect its lucrative product as long as
possible. If the drug patent existed in a vacuum, the court’s
decision below might make some sense. However, under the
legal framework of drug approval, and the realities of the
pharmaceutical industry’s profitability and pricing structure,
there is more than a theoretical question before the court.

cs Pharmaceutical Economics Demonstrate Why
Congress Sought to Encourage the Exercise of -
Declaratory Judgment Jurisdiction.

Legislation was badly needed: “[a]s the Federal
Trade Commission has shown, however, in recent years both

Orange Book through the filing of a NDA, and (2) a generic manufacturer
filing an ANDA, together meet the case or controversy requirement so as
to allow a declaratory judgment action of non-infringement.”)

xy

brand-name and generic drug companies have exploited
certain aspects of the Hatch-Waxman Act to delay generic
competition.” 149 Cong. Rec. $15882-03 at S$15884 (Nov.
25, 2003) (remarks of Sen. Kennedy during consideration of
the Conference Report on the MMA). According to IMS
Health (a large pharmaceutical market research firm), the
generic drug share of the total number of prescriptions rose
steadily from 18.6 % in 1984 to 42.4 % in 1996, but declined
in 1998 to 41.3 %. Michie I. Hunt, BlueCross BlueShield
Association, Prescription Drug Costs: Federal Regulation of
the Industry 51 (2000){Hunt (BlueCross)]. Generic drugs’
market share as a percentage of total dollar sales slipped
from a high of 12.2% in 1995 to 8.6% in 1998. Id. The
significance of the decline in generic penetration is a loss for
consumers because the greatest price reduction for a
particular drug only comes with competition among multiple
generic competitors. The more generic versions of the same
drug that are on the market, the lower the price consumers
pay for a generic version, regardless of which generic
company is marketing the drug product.” Studies of pricing
and market share of innovator drugs and their generic
counterparts confirm that substantial savings to the consumer
occur as soon as the generic is substituted for the brand name

/ : . ¢ :
- 2 David A. Balto, Pharmaceutical Patent Settlements: The Antitrust

Risk, 55 Food & Drug L.J. 321, 325-6; see also Keith B. Leffler &
Cristofer I. Leffler, Want to Pay a Competitor to Exit the Market? Settle
a Patent Infringement Case: An Argument for Per Se Condemnation of
Payments by the Patent Holder, ABA Economics Committee Newsletter
35 (Spring 2002); Congressional Budget Office, How Increased
Competition from Generic Drugs Has Affected Prices and Returns in the
Pharmaceutical Industry, Chapter 3 (July 1998) available at
http://www.cbo.gov/showdoc.cfm?Index=655&sequence=0 [CBO];
Henry Grabowski and John Vernon, Longer Patents for Increased
Generic Competition in the US: The Waxman-Hatch Act After One
Decade, 10 PharmacoEconomics 110, 115 (1996); Hunt (BlueCross),
supra, at 61.

-12-

drug, and that even more savings occur over time as other

- generic versions of the drug enter the market.’ Because of
this, the name brand manufacturer has a strong incentive to
limit the number of generic competitors by forestalling any
challenge to its patent monopoly. The fewer the competitors,
the less the cost differential, and therefore, the name brand
keeps a greater market share. But if courts decline to
exercise jurisdiction where name brand manufacturers delay
resolution of patent disputes, Congresses’ intent to balance
the playing field between name brand and generic drug
manufactures in order to bring down escalating prescription

drug costs will be frustrated.
CONCLUSION

The decision over the justiciability over prescription
drug patent disputes is a public policy matter impacting many
people’s health and welfare because it directly affects the
cost of pharmaceuticals. AARP urges the Court to grant the
petition for a writ of certiorari because this important
question of federal law should be settled by this Court.

1°’ Bureau of Competition & of Policy Planning, Federal Trade
Commission, Jn the Matter of 180-Day Generic Drug Exclusivity for
Abbreviated New Drug Applications 4-5 (Nov. 4, 1999) available at
http://www. ftc.gov/be/v990016.htm; CBO, “‘Competition Among Generic
Drugs”; Grabowski, supra, at 115; see also In re Cardizem CD, 200
F.R.D. 326, 327-8 (E.D. Mich. 2001).

-13-
September 7, 2005 Respectfully submitted,

Sarah Lenz Lock*
Bruce Vignery
AARP Foundation Litigation

Michael Schuster
AARP
601 E Street, NW
Washington, DC 20049
(202) 434-2060
Counsel for Amicus Curiae
AARP

*Counsel of Record

FILED

® | SEP 7- 2005.
. 05-48
cashes OFFICE OF THE CLERK

. IN THE is i sie
Supreme Court of the Hnited States

Teva Pharmaceuticals USA, Inc.,
Petitioner,

Pfizer, Inc.

On Petition for a Writ of Certiorari
to the United States Court of Appeals
for the Federal Circuit

BRIEF AMICUS CURIAE OF THE GENERIC
PHARMACEUTICAL ASSOCIATION IN SUPPORT
OF PETITIONER

Thomas C. Goldstein
(Counsel of Record)
Amy Howe
Kevin K. Russell
GOLDSTEIN & Howe, P.C.
4607 Asbury PI., NW
Washington, DC 20016
(202) 237-7543
September 7, 2005

s
WILSON-EPES PRINTING CO., INC. — (202) 789-0096 -— WASHINGTON, D.C. 20001

TABLE OF CONTENTS

Pe Eee RPT A NIUE ids casesitnsnhasnnsnsincchstbibetenitvsstinciensiescestihagia i
Ee DURE TOME MEM osscicsasdénscesescasnstschspdnsvssscintaasientcasaben il
SOR. OOF AMICUS. CURIA. 0.scscscssncsivcescisiavessosssosncictesses 1
Re RUE CRE SBOE Me acs diicdiccceccctsisspenstesunittedanbiogacesdeben I
I. Background to the Statutory Scheme ...............cceeeeeeeeeeees ]
II. The Instant Litigation And The Lower Court Rulings ........ 4
REASONS FOR GRANTING THE WRIT...............c:ccccceeseeseees 7

I. The Decision Below Is Contrary To This Court’s
Precedents Defining The “Case Or Controversy”
Required By Article III Of The U.S. Constitution And

Conflicts With The Precedent Of Other Circuits................. 9
Ii. The Question Presented Is Vitally Important To
Phharmiaceutical Competition...........:csccsssesscscsesecsnsenseceeesees 16

STG hai varcesniitanseshusisasingivasicesinesxesuassvensnesstnlenincentne 20

li

TABLE OF AUTHORITIES

Cases
Aetna Life Insurance Co. v. Haworth, 300 U.S. 227 (1937).... 11

Apotex v. Pfizer, 125 Fed. Appx. 987 (CAFC Apr. 1],
2005), vacating and remanding as moot Torpharm, Inc.
v. Pfizer, No. 03-CV-990, 2004 U.S. Dist. LEXIS

11,930 (D. Del. Jume 28, 2004).........cccccccescssacsenceesee sicecbaiieases 19
Apotex v. Pfizer, No. 04-CV-02539 (S.D.N.Y. Apr. 1,

2004), appeal pending, No. 05-1199 (CAFC) ....... cee 18
Arrowhead Industrial Water v. Ecolochem, 846 F.2d 731

EPP. RIED Geishncesdiniesseiniicesiinisssdileniiegsmsitetntsierinntenmolaniiienss 10, 15

Bio-Technology Gen. Corp. v. Duramed Pharms., Inc.,
174 F. Supp. 2d 229 (D.N.J. 2001), rev'd, 323 F.3d

Be CdR Ge NEB snisthassacktosnentidcgisdicttiastuamdonmasuminomasocas 17
BP Chems. v. Union Carbide Corp., 4 F.3d 975 (CAFC

og / | oN AACE. ROR IR FTE ONCE HEE IENS DO 8: VOOR 3,15
Cardinal Chemical Co. v. Morton International, 508 U.S.

BF Gi iv inascsbisidcissachipdicatbcabaandusephidnlccatadienusuededaniaanaionidcasacics 10
Chesebrough-Pond’s, Inc. v. Faberge, Inc., 666 F.2d 393 ;

Ie TI aaeisstitesnccanaeaniieac ea eiennn 12
Dr. Reddy’s Laboratories v. Pfizer, No. 03-726, 2003 U.S.

Dist. LEXIS 24,351 (D.N.J. July 8, 2003).............cceeeseeee 18
Eli Lilly & Co. v. Medtronic, 496 U.S. 661, reh’g denied,

TAs ds SE CP iiciiinniicaniaiiasibtianmmatinadndtain 16

EMC Corp. v. Norand Corp., 89 F.3d 807 (CAFC 1996)........ 14

Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.,
535 U.S. 722 (2002), vacating and remanding 234 F.3d

Fe Is I silences saiigcisahscondacpatsacehca tabinicaimanteinabichetia sauces 8
Geneva Pharm. v. GlaxoSmithKline, 213 F. Supp. 2d 597
(E.D. Va. 2002), aff'd, 349 F.3d 1373 (CAFC 2003)........... 17

Holmes Group v. Vornado Air Cir. Sys., 535 U.S. 826
(2002), vacating and remanding 13 Fed. Appx. 961
Ee I a cnhsacineicadcuianineinniciaadlacidetionnenn 8, 11

ill
Janssen Pharm. N.V. v. Eon Labs, 374 F. Supp. 2d 263
(E.D.N.Y. 2004), aff'd, 134 Fed. Appx. 425 (CAFC

I iin svaleckssisncsiiiges ecb Vedirseiislctcdani spac ucdscunpia Eaaekcaacamaeilbagdoaisibeab 17
Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S.
GS nf § WORDA Rees micbt Re TORR RraLaraT tsrD 2 RONEN D SEER OPP MOI ET 6

Merck KGaA v. Integra Lifesciences I, 125 S. Ct. 2372
(2005), vacating and remanding 331 F.3d 860 (CAFC

Bh eae seater ioeashicis ted nacaadedecegsekae nesses 8
Mutual Pharm. Co. v. Pfizer, No. 03-CV-1116, 2004 U.S.

Dist. LEXIS 4846 (D.D.C. Mar. 24, 2004)...........ceeseeseeeeees 19
Mylan v. Merck & Co., No. 05-cv-1416 (SHR) (M.D. Pa.)..... 19
Purdue Pharma L.P. v. Endo Pharmaceuticals, 410 F.3d

FP I ID sisiasipicccdecesinganbids iuansadepidiadaedetidinasbsaensin 17
Bean ST, SAE TB BEE CET vviscsccscsicisisvnkcvennesaasincans 15
Sallen v. Corinthians, 273 F.3d 14 (CAI 2001)..........cceeeseeee 13
Sherwood Medical Indus., Inc. v. Deknatel, Inc., 512 F.2d

Fe IND FIRE ata pietinn patihasicaronusiccehiiatiac wen 12
Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1988)...... 9

United Christian Scientists v. Christian Science Bd. of
Directors, First Church of Christ, Scientist, 829 F.2d

eas I iis sticiclanbhebinauhs ck ncasiiciadsckiieasdddesniantecctian 12

- Statutes
21 U.S.C. 355(b)(1) I a 2,13
OSLER Sit (nC IEee Sm eo p eee grea alee era ae On ere 443
a. l
Be ie. Be PD esis cashes esa es cedlastdaisices : ae
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Re GL de Rie: RRR ar RR OIE Oe RDP ET UI SO 3
Be a a 2,13

Be eee PID Petia vdasnbhcec pic tichapee casa edekakcanbanbaniibs 4,9, 15

iv

Other Authorities
AARP, Prescription Drug Costs And The Role Of Generic
Drugs (Oct. ‘ 2002), available at
http://assets.aarp.org/rgcenter/health/rx_generic.pdf............ 20
MMMM POUR: FS. BERNIE CLUS) in ccc ccnasaiicicsssscecscicaasancasapececqnensenies 3

Dep’t of Health and Hum. Servs. Task Force on Drug
Importation, REPORT ON PRESCRIPTION DRUG
IMPORTATION (Dec. 2004), available at
http://www.hbhs.gov/importtaskforce/Report1220.pdf

UE MIF BINIEED cic oscasapchencisicncen.annpdssahestiinsaicsngessbacenbeiien 20
Generics Key To Cost Control, UPI, May 19, 2005.............04. 20
Generics: FDA Announces Measures To Improve Generic

Drug Access, DRUG WEEK, Mar. 26, 2004 ....2......ccsessseeseeeees 20

Nat’l Inst. For Health Care Management, A Primer:
Generic Drugs, Patents, and the Pharmaceutical
Marketplace (June 2002), available at
http://www.nihcm.org/GenericsPrimer. pdf ............sccecceeeesees 20

Steven Findlay, Easy Way To Cut Costs Of Drugs:
Generics, USA ToDAY, May 13, 2004, at 23A .......ececeeeeees 20

INTEREST OF AMICUS CURIAE'

Amicus curiae Generic Pharmaceutical Association
(“GPhA”) represents over 120 companies that manufacture
more than ninety percent of all affordable prescriptions dis-
pensed in the United States each year, accounting for more
than one billion prescriptions annually. GPhA accordingly
has a significant interest in the proper construction of the so-
called Hatch-Waxman scheme, which Congress enacted to
speed the marketing of generic drugs while protecting the le-
gitimate patent rights of brand-name drug companies.

STATEMENT OF THE CASE
I. Background to the Statutory Scheme

In the 1984 Hatch-Waxman Amendments to the federal
patent and drug laws, Congress sought to ameliorate two sub-
stantial obstacles to the efforts of generic pharmaceutical
manufacturers to compete against brand manufacturers. First,
Congress created a streamlined process for FDA approval of
generic drug products through which generic manufacturers
may submit an Abbreviated New Drug Application (ANDA)
demonstrating the bioequivalence of the so-called “pioneer”
product and its generic equivalent. 21 U.S.C. 355(j)(2)(A).

Second, Congress adopted a scheme to expedite the liti-
gation of patent disputes. Generic manufacturers, which seek
to compete with a brand product already in the marketplace,
often face the prospect of a patent infringement suit by the
brand company. Such a suit, if successful, could result in de-
bilitating liability if the generic drug were marketed but later
found to infringe the patent. Thus, as Congress well knew, in
cases of genuine doubt, generic manufacturers may decline to

' Pursuant to S. Ct. R. 37.6, amicus states that no counsel to a
party authored this brief in whole or in part and that no person other
than amicus curiae and its members made a financial contribution
towards the preparation and submission of the brief. Letters re-
flecting the consent of the parties have been lodged with the Court.

2

launch their less-expensive products, even if the brand com-
pany’s patent claims would ultimately have been rejected.

Congress accordingly created a statutory mechanism to
permit early resolution of potential patent infringement claims
against a new generic drug prior to its marketing. Under
Hatch-Waxman, brand manufacturers must identify any pat-
ent for which “a claim of patent infringement could reasona-
bly be asserted” against the maker of a generic equivalent. 21
U.S.C. 355(b)(1), (c)(2). FDA publishes that patent informa-
tion in its “Orange Book.” In turn, a generic manufacturer’s
submission of an ANDA challenging the validity, enforceabil-
ity, or infringement of an Orange Book-listed patent consti-
tutes a statutory act of patent infringement, vesting the federal
courts with subject matter jurisdiction over an infringement
suit. 35 U.S.C. 271(e)(2).

Congress contemplated that these provisions would re-
solve patent disputes soon after the ANDA is filed. To en-
courage generic companies to avail themselves of these new
statutory provisions, Congress amended the statutory scheme
in other ways as well. For example, Congress created an in-
centive for brand companies to bring a patent infringement
claim promptly after learning of the ANDA filing. If a brand
company initiates patent litigation within forty-five days of
receiving notice of an ANDA applicant’s challenge to its pat-
ent, FDA must defer approval of the generic product for thirty
months. 21 U.S.C. 355(j)(5)(B)iii).

Congress also encouraged generic drug development by
providing that the owner of the first ANDA containing a chal-
lenge to a listed patent receives a 180-day period of marketing
exclusivity against other generic competitors. 21 U.S.C.
355(j)(S)(B\(iv). Specifically, the FDA must defer approval
of later-filed applications until 180 days after the earlier of
two specified dates. /bid. Particularly relevant here, a later
generic applicant can trigger the start of this 180-day period
by obtaining a judgment declaring the listed patent invalid,
unenforceable, or not infringed. /bid.

3

The Hatch-Waxman provisions were only a partial suc-
cess, however. Through various tactics, brand manufacturers
could use the exclusivity period granted to first ANDA filers
to dlock later generic competitors out of the marketplace for
years. Despite the thirty-month stay that would result if a
brand company initiated suit within the forty-five-day Hatch-
Waxman window, brand companies often had a substantial
incentive to refrain from instituting litigation before the ge-
neric drug was brought to market. A judicial determination
could backfire by producing a finding of non-infringement
that would trigger the start of the 180-day exclusivity period,
thereby allowing more generic companies to enter the market
sooner. Moreover, declining to institute patent litigation
could leave in place a cloud of patent uncertainty that delayed
generic market entry longer than a patent suit itself.

District courts have often ruled that declaratory judgment
actions must be dismissed for failure to satisfy the Federal
Circuit’s “reasonable apprehension” test. Even though Con-
gress clearly contemplated that generic manufacturers would
be permitted to resolve patent claims through a declaratory
judgment suit against the patentee, the Federal Circuit, which
has exclusive jurisdiction over patent appeals, has held that a
declaratory judgment suit was impermissible unless the plain-
tiff itself faced a reasonable apprehension of suit from the pat-
entee. E.g., BP Chems. v. Union Carbide Corp., 4 F.3d 975,
978 (1993). That rule rested on that court’s “pragmatic” con-
cern that merely obtaining a patent should not subject the pat-
entee to litigation. Ibid.

In response to these continuing impediments, Congress
enacted further legislation in 2003 “to prevent an improper
effort to delay infringement litigation between generic drug
manufacturers and pioneer drug companies.” Conf. Rep. No.
108-391, at 836 (2003). As amended, the legislation provides
that, if the brand manufacturer does not bring suit within the
forty-five-day Hatch-Waxman period, the generic competitor
may itself institute a declaratory judgment action. 21 U.S.C.
355G)(S\(C). Recognizing its power to remove the Federal

4

Circuit’s prudential standing barrier, Congress further pro-
vided that the district courts would have jurisdiction over
such a suit to the fullest “extent consistent with the Constitu-
tion.” 35 U.S.C. 271(e)(5).

Il. The Instant Litigation And The Lower Court Rulings

1. This case arises from petitioner Teva’s intention to
market a generic equivalent to respondent Pfizer’s antidepres-
sant Zolofi® (the trade name for the drug sertraline). As is
relevant here, Pfizer listed in the Orange Book two patents
that it claimed could reasonably be asserted against a com-
petitor to Zoloft®. According to Pfizer, one expires in 2006;
the other (known as the “*699 patent”) expires in 2010.

In 2002, Teva filed an ANDA for a generic equivalent to
Zoloft®. The ANDA stated that Teva intended to begin mar-
keting as soon as Pfizer’s first patent expired in 2006. Teva
maintained that the ‘699 patent either would not be infringed
or was invalid.

Teva’s ANDA submission constituted a statutory act of
infringement of the ‘699 patent. Pfizer did not, however, sue
Teva. Pfizer knew that its refusal to bring suit would impede
and delay competition from Teva in two ways. First, it would
leave a cloud of patent uncertainty, threatening Teva with the
prospect of massive patent liability if it brought its drug to
market before the ‘699 patent expired in 2010.

Second, by avoiding a resolution of the patent dispute,
Pfizer prevented FDA from approving Teva’s product until at
least 180 days after Pfizer’s first patent expired in 2006. This
distinct, categorical approval prohibition arose from a side
agreement between Pfizer and another generic manufacturer,
Ivax, which had filed the first ANDA for sertraline and thus
had a right to generic exclusivity for its sertraline product.
Pfizer had sued Ivax for patent infringement in response to
the latter’s ANDA, but then settled in exchange for a share of
the revenues from Ivax’s sales. Teva could avoid or limit this
additional 180-day delay, however, if it secured a court judg-
ment that Pfizer’s ‘699 patent was either invalid or not in-

5

fringed prior to the expiration of Pfizer’s first patent. See 21
U.S.C. 355(j(S5)(B)iii).

2. To remove the cloud of patent uncertainty over its
product, and to avoid the delay in FDA approval occasioned
by the Ivax application and agreement with Pfizer, Teva
brought this declaratory judgment action against Pfizer. The
district court, however, deemed itself bound to hold that
Teva’s claim was not ripe because Teva itself faced no immi-
nent suit from Pfizer. Pet. App. 37a-47a. The district court
notably did not dispute that Pfizer was refusing to sue pre-
cisely to limit generic competition. Instead, it concluded that
this fact ironically deprived Teva of standing, for “Pfizer’s
self-interest in” deferring the resolution of the patent dispute
only “makes the prospects of [it bringing} a lawsuit against
Teva (or anyone else) even more remote.” /d. 46a.

3. Teva appealed, supported by the Federal Trade Com-
mission as amicus curiae.“ The FTC emphasized the “impor-
tant role” this case would play “in furthering competitive
pharmaceutical markets and in lowering health care cost[s].”
FTC Panel Br. 3. “The issue has important ramifications for
the operation of Hatch-Waxman because such a declaratory
judgment” may be “the only means by which a generic drug
maker may be able to” bring a competing product to market.
Ibid. (emphasis added). The FTC explained: “If the district
court’s decision is upheld, it will enable first generic appli-
cants and brand-name drug manufacturers to delay substan-
tially entry by other generic firms, and indeed by any generic
firm (including one that has done a better job of designing
around the patent), into the marketplace for a drug.” Jd. 3-4
(emphasis in original).

A divided panel of the Federal Circuit nonetheless af-
firmed. Pet. App. la-36a. The panel majority acknowledged
this Court’s prior holding that the existence of an “actual con-

? The FTC’s brief (FTC Panel Br.) is available at
http://www. ftc.gov/oge/briefs/teva_v_pfizer.pdf.

6

troversy” sufficient io bring a declaratory judgment action
depends on “whether the facts alleged, under all the circum-
stances, show that there is a substantial controversy, between
parties having adverse legal interests, of sufficient immediacy
and reality to warrant the issuance of a declaratory judgment.”
Pet. App. 12a (quoting Maryland Cas. Co. v. Pacific Coal &
Oil Co., 312 U.S. 270, 273 (1941)).

Teva’s brief demonstrated that there is indeed a concrete
controversy between it and Pfizer. For example, by listing its
patents in the Orange Book, Pfizer had declared that Zoloft®
was protected by the ‘699 patent, whereas Teva contends that
the ‘699 patent did not preclude its market entry. Pfizer had
moreover previously invoked that very patent to sue Ivax
when it sought to introduce a generic equivalent for Zoloft®.
Notwithstanding that Teva’s ability to bring its product to
market was directly precluded by Pfizer’s conduct, Pfizer had
refused Teva’s request for a covenant not to sue.

Despite these undisputed facts, the Federal Circuit con-
cluded that its so-called “reasonable apprehension” test is a
constitutional threshold for bringing a declaratory judgment
action. Pet. App. 20a. The court held that a declaratory
judgment action is justiciable only if there is “an explicit
threat or other action by the patentee which creates a reason-
able apprehension on the part of the declaratory judgment
plaintiff that it will face an infringement suit.” /d. 13a. In-
deed, the plaintiff must “demonstrate that it has a reasonable
apprehension of imminent suit.” Id. 16a.

The panel majority concluded that Teva could not meet
this rigorous standard because the very point of Teva’s claim
is that Pfizer seeks to avoid a court adjudication of the dis-
pute: “Significantly, Teva virtually concedes that Pfizer will
not bring immediate suit for infringement of the ‘699 patent.
According to Teva, Pfizer does not wish to expose the patent
to the possibility of a noninfringment or invalidity determina-
tion * * *.” Pet. App. 16a. The majority found it irrelevant
that Teva was injured by this state of affairs:

7

The fact that Teva is disadvantaged from a business
standpoint * * * and the fact that Pfizer’s decision
not to sue Teva creates an impediment to Teva’s re-
moving that disadvantage are matters separate and
distinct from whether an Article III controversy ex-
ists between Teva and Pfizer. The injury about
which Teva complains is the product of the Hatch-
Waxman scheme and the fact that Pfizer has acted in
a manner permitted under that scheme. /t is not the
product of a threat of suit by Pfizer. That is the
problem that Teva faces in seeking to establish dis-
trict court jurisdiction.

Id. 26a (emphasis added). It continued:
{I}n order to rule in Teva’s favor, we would have to
hold that the Article III requirement of an actual con-
troversy is satisfied, not because Teva is under an
imminent threat of suit by Pfizer, but because the
combined circumstances of the Hatch-Waxman
scheme and Pfizer’s lawful conduct under that
scheme have created a situation in which Teva finds
itself at a competitive disadvantage * * *. Those cir-
cumstances do not amount to an actual controversy
between Teva and Pfizer, however.

Ibid.

4. Teva petitioned for rehearing en banc, again sup-
ported by the FTC as amicus curiae.’ The petition was de-
nied over the dissenting votes of three judges who issued two
dissenting opinions. See Pet. App. 48a.

REASONS FOR GRANTING THE WRIT

The petition for certiorari should be granted for several
reasons. The court of appeals’ decision is flatly contrary to
this Court’s precedents identifying the “case or controversy”

> The FTC’s brief (FTC En Banc Br.) is available at
http://www. fic.gov/oge/briefs/050208teva.pdf.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386007_1657%3A4. Public record. Not legal advice.