Apotex V Daiichi
Apotex V Daiichi
e.g., Gilead Scis., Inc. v. Natco Pharma declaratory judgment that it would not
Ltd., 753 F.3d 1208, 1212 (Fed.Cir.2014). infringe patent owned but disclaimed by
Patent misuse is also a defense. See, competitor if it manufactured or sold ge-
e.g., Brulotte v. Thys Co., 379 U.S. 29, 85 neric bioequivalent of competitors hyper-
S.Ct. 176, 13 L.Ed.2d 99 (1964) (holding tension drug. The United States District
that charging royalties beyond life of the Court for the Northern District of Illinois,
patent impermissibly enlarges monopoly Sharon Johnson Coleman, J., 2014 WL
of the patent); Princo Corp. v. Intl 114127, dismissed complaint, and denied
Trade Commn, 616 F.3d 1318, 132629 another generic manufacturers motion to
(Fed.Cir.2010) (describing patent misuse intervene. Manufacturer and other manu-
and calling it mainly a judicially created
facturer appealed.
defense). The shop rights doctrine is
also a judicially created defense to pat- Holdings: The Court of Appeals, Taranto,
ent infringement that applies when an Circuit Judge, held that:
employer is sued for patent infringement
(1) other manufacturer was entitled to in-
by an employee who created the patented
tervene as of right;
invention with the employers resources
while under its employment, even though (2) competitors statutory disclaimer of
the employer otherwise has no legal patent did not preclude suit;
rights to the resultant invention. Ber-
iont v. GTE Labs., Inc., 535 Fed.Appx. (3) delay in manufacturers ability to man-
919, 923 (Fed.Cir.2013). These other ufacture and sell drug was fairly trace-
cases cannot be so easily distinguished able to patent owner;
from the situation in Aristocrat itself. (4) fact that manufacturer would need to
In the future, en banc action to reconsid- obtain tentative approval from Food
er Aristocrat may be appropriate. and Drug Administration (FDA) did
not render prospect of concrete relief
trix Laboratories, which is now Mylan) ing, rather than disputing, the result of the
was the first to seek approval: it filed an 20062010 litigation. That certification
Abbreviated New Drug Application states that the 8599 patent is valid and that
(ANDA) with the FDA, under 21 U.S.C. Apotexs product would infringe, thereby
355(j), in April 2006. In that applica- barring an effective date of FDA approval
tion, Mylan certified under paragraph IV any earlier than October 25, 2016. See
of 355(j)(2)(A)(vii) that both the 8599 and 355(j)(5)(B)(ii). Apotexs other certifica-
8703 patents were invalid or would not be tion was a paragraph IV certification stat-
infringed by Mylans proposed drug. ing that Apotexs product would not in-
In early July 2006, after receiving notice fringe the 8703 patent.
of Mylans paragraph IV certification, Dai- As is undisputed here, non-infringement
ichi disclaimed all claims of the 8703 pat- of the 8703 patent follows as a matter of
ent. See 35 U.S.C. 253. The record does law from the fact that Daiichi has formally
not tell us why. We have no information disclaimed it. See Altoona Publix The-
about whether, for example, Daiichi recog- atres, Inc. v. American TriErgon Corp.,
nized the invalidity of the patent or, even, 294 U.S. 477, 492, 55 S.Ct. 455, 79 L.Ed.
that it never should have been listed under 1005 (1935); Guinn v. Kopf, 96 F.3d 1419,
355(b)(1)s could reasonably be assert- 1422 (Fed.Cir.1996). Indeed, in its July
ed standard. 2006 letter asking the FDA to remove the
Having disclaimed the 8703 patent, Daii- 8703 patent from the Orange Book, Daiichi
chi sued Mylan for infringing the 8599 stated: The effect of the disclaimer is
patent, invoking the declaration of 35 that the 6,878,703 patent no longer exists.
U.S.C. 271(e)(2)(A) that the submission J.A. 99. And in July 2012, it wrote to
of a paragraph IV certification constitutes Apotex stating that, because of its dis-
an act of infringement. Only validity was claimer of the 8703 patent, it cannot TTT
disputed in the case, and after a full trial, sue any entity TTT for infringement of that
the district court upheld the validity of the patent. J.A. 104.
8599 patent and entered judgment of in- Daiichi did not sue Apotex for infringing
fringement against Mylan. Daiichi Sank- the 8703 patent, and the FDA has not
yo Co. v. Mylan Pharm. Inc., 670 removed the 8703 patent from the Orange
F.Supp.2d 359, 387 (D.N.J.2009). We af- Book, despite Daiichis 2006 request. See
firmed. Daiichi Sankyo Co. v. Matrix Teva Pharm. USA, Inc. v. Sebelius, 595
Labs., Ltd., 619 F.3d 1346 (Fed.Cir.2010). F.3d 1303, 131718 (D.C.Cir.2010) (patent
With the 8703 patent disclaimed and the owners unilateral request to remove pat-
8599 patent upheld, Mylans earliest date of ent from Orange Book is not a sufficient
market entrythe earliest effective date basis for FDA to do so). But Apotex sued
of any FDA approval for Mylanis Octo- Daiichi in the United States District Court
ber 25, 2016, six months after the expira- for the Northern District of Illinois under
tion date of the 8599 patent. 21 U.S.C. 355(j)(5)(C)(i) and 35 U.S.C.
In June 2012, four years before that 271(e)(5), seeking a declaratory judg-
date and roughly two years after the 8599 ment that its product would not infringe
litigation was over, Apotex filed its own the disclaimed 8703 patent. Mylan moved
ANDA for generic olmesartan medoxomil. to intervene, and both it and Daiichi moved
Apotex included two different certifications to dismiss Apotexs complaint. Given the
under 21 U.S.C. 355(j)(2)(A)(vii). One non-infringement consequence of the Daii-
was a paragraph III certification accept- chi disclaimer, the dispute in the district
1360 781 FEDERAL REPORTER, 3d SERIES
court was not over the merits of infringe- Apotex and, because of the greater compe-
ment. Rather, the dispute was over tition, reduce the price Daiichi and Mylan
whether, precisely because non-infringe- would charge.
ment is indisputable, the district court Daiichi and Mylan did not dispute that
must deny the requested declaratory judg- an earlier-than-otherwise Apotex entry
ment for lack of a case or controversy.
into the market would likely have the iden-
Apotex asserted that it has a concrete tified effects, to Apotexs benefit and Daii-
stake in securing the requested declarato- chis and Mylans detriment. But Daiichi
ry judgment because, under the governing argued that no controversy exists because
statutory provisions, the requested judg- it could not now assert the disclaimed 8703
ment would allow it to enter the market patent against Apotex. Mylan added ar-
earlier than it could without the judgment. guments based on the fact that Apotex
Two statutory provisions are key. First: lacked (and lacks) a tentative approval
Under 355(j)(5)(B)(iv), because Mylan from the FDA for its ANDA.1 Specifically,
was the first to file an ANDA for generic Mylan argued that redress of Apotexs de-
olmesartan medoxomil and has maintained layed-market-entry injury is unduly specu-
a paragraph IV certification regarding the lative before tentative approval is in hand.
8703 patent, Mylan is presumptively enti- Mylan also made an argument based on
tled to a period of 180 days of exclusivity the fact that tentative approval is a neces-
starting whenever, after October 25, 2016, sary statutory condition for the forfeiture
it enters the marketbefore facing compe-
of Mylans presumptive exclusivity period
tition from another seller of generic olmes-
based on the declaratory judgment re-
artan medoxomil. That exclusivity period
quested here. 355(j)(5)(D). It argued
would end no earlier than April 23, 2017.
that the forfeiture provision should be read
Second: Under 355(j)(5)(D), the exclu-
to mean that, for a declaratory judgment
sivity period may be forfeited in certain
brought by a second ANDA filer to cause
specified circumstances. According to
forfeiture, the second ANDA filer must
Apotex, a court judgment of non-infringe-
have had tentative FDA approval when it
ment would cause Mylan to forfeit the
brought the declaratory-judgment action.
exclusivity period if Mylan has not market-
Under that interpretation, Mylan contend-
ed its drug 75 days after appeal rights are
ed, the present action cannot provide Apo-
exhausted (certiorari aside) and Apotex
tex forfeiture reliefeven if Apotex could
has obtained tentative approval for its ge-
file an identical declaratory-judgment ac-
neric product from the FDA.
tion as soon as it obtains tentative approv-
355(j)(5)(D)(i)(I)(bb)(AA). If that is cor-
rect, and the judgment comes soon al.
enough, Apotex could enter the market The district court granted Daiichis mo-
substantially before April 23, 2017 (even tion. It reasoned that both Daiichi and
longer before a later end of Mylans exclu- Apotex no longer hold any meaningful in-
sivity period if Mylan delays entry past terest in the now disclaimed patent and
October 25, 2016); such entry would likely that the FDAs continuing to list the 8703
transfer sales from Daiichi and Mylan to patent in the Orange Book does not cre-
1. Congress has defined tentative approval valence to the listed drug) but that final ap-
to mean the FDAs determination that the proval by the FDA is blocked by other barri-
ANDA has met the substantive requirements ers, such as a live patent, a 30month stay
for obtaining generic marketing approval (by caused by ongoing litigation, or certain exclu-
demonstrating, among other things, bioequi- sivity periods. 355(j)(5)(B)(iv)(II)(dd)(AA).
APOTEX, INC. v. DAIICHI SANKYO, INC. 1361
Cite as 781 F.3d 1356 (Fed. Cir. 2015)
ate a case or controversy by which Apotex crete monetary interest in retaining such
may seek a declaratory judgment regard- exclusivitysix months of more sales
ing a nonexistent patent. Apotex, Inc. v. and/or higher prices than are likely when
Daiichi Sankyo, Inc., No. 12CV9295, Apotex enters the market. Although Daii-
2014 WL 114127, at *4 (N.D.Ill. Jan. 9, chi likely benefits from the 180day exclu-
2014). The court denied Mylans motion to sivity period as well, Mylans interest ex-
intervene as moot in light of its grant of ists apart from that of Daiichi, which, as a
Daiichis dismissal motion. Id. rival of Mylans, has its own incentives
Apotex appeals, and Mylan cross-ap- affecting decisions about how to conduct
peals the denial of its motion to intervene. this litigation. Keith v. Daley, 764 F.2d
We have jurisdiction under 28 U.S.C. 1265, 1268 (7th Cir.1985) (interest must
1295(a)(1). belong[ ] to the proposed intervenor rath-
er than to an existing party in the suit).
DISCUSSION Mylans interest here is of such a direct
[1, 2] We review de novo a district and immediate character that [Mylan] will
courts dismissal of a declaratory-judgment either gain or lose by the direct legal
action for lack of subject-matter jurisdic- operation and effect of the judgment
tion. Sandoz Inc. v. Amgen Inc., 773 F.3d sought by Apotex. Am. Mar. Transp.,
1274, 1277 (Fed.Cir.2014). Where, as Inc. v. United States, 870 F.2d 1559, 1561
here, no timeliness issue is present, we (Fed.Cir.1989) (emphases removed) (quot-
review denial of intervention as of right de ing United States v. AT & T Co., 642 F.2d
novo. See Stauffer v. Brooks Bros., Inc., 1285, 1292 (D.C.Cir.1980)). And Apotex
619 F.3d 1321, 1328 (Fed.Cir.2010) (denial does not defend the district courts conclu-
of intervention reviewed under regional sion that Mylans interest in the case was
circuits law); Sokaogon Chippewa Cmty. rendered moot by the dismissal of the
v. Babbitt, 214 F.3d 941, 945 (7th Cir.2000) case, where, as here, Apotex is seeking to
(de novo review of denial of motion to reverse the dismissal. Mylan has a
intervene). strong, concrete interest in defending the
dismissal on this appeal. Accordingly, we
A reverse the denial of Mylans motion to
[3] We begin by confirming Mylans intervene.
right to be a party in this case because of
its obvious stake in the dispute. Rule B
24(a) of the Federal Rules of Civil Proce- We also reverse the district courts dis-
dure establishes a right to intervene when missal of Apotexs complaint for lack of a
a person claims an interest relating to the case or controversy. The stakes over
property or transaction that is the subject which the parties are vigorously fighting
of the action, and is so situated that dis- are concrete and substantial: the amount
posing of the action may as a practical of revenue there will be from sales of
matter impair or impede the movants abil- olmesartan medoxomil, and who will get
ity to protect its interest, unless existing what portions of it, during a period of at
parties adequately represent that inter- least six months. We conclude that the
est. Mylan readily meets that standard. facts alleged, under all the circumstances,
In this action, Apotex seeks to cause a show that there is a substantial controver-
forfeiture of Mylans presumed market- sy, between parties having adverse legal
exclusivity period, and Mylan has a con- interests, of sufficient immediacy and reali-
1362 781 FEDERAL REPORTER, 3d SERIES
ty to warrant the issuance of a declaratory statutory disclaimer of the 8703 patent it-
judgment. MedImmune, Inc. v. Genen- self means that there is no adversity be-
tech, Inc., 549 U.S. 118, 127, 127 S.Ct. 764, tween it and Apotex over stakes of a con-
166 L.Ed.2d 604 (2007) (internal quotation crete character. See Hollingsworth v.
marks and citation omitted). Perry, U.S. , 133 S.Ct. 2652, 2662,
[4, 5] The case-or-controversy analysis, 186 L.Ed.2d 768 (2013) (To have standing,
as relevant here, has borrowed from deci- a litigant TTT must possess a direct stake
sions on standing and ripeness. See San- in the outcome of the case.) (quoting
doz, 773 F.3d at 127778; Prasco, LLC v. Arizonans for Official English v. Arizona,
Medicis Pharm. Corp., 537 F.3d 1329, 520 U.S. 43, 64, 117 S.Ct. 1055, 137
133536 (Fed.Cir.2008). Standing under L.Ed.2d 170 (1997)); Warth v. Seldin, 422
Article III of the Constitution requires U.S. 490, 49899, 95 S.Ct. 2197, 45 L.Ed.2d
that an injury be concrete, particularized, 343 (1975). The concrete stakes over
and actual or imminent; fairly traceable to which Daiichi and Apotex are fighting are
the challenged action; and redressable by the revenues to be earned through selling
a favorable ruling. Monsanto Co. v. olmesartan medoxomil. The patent dis-
Geertson Seed Farms, 561 U.S. 139, 149, claimer eliminates one, but only one, po-
130 S.Ct. 2743, 177 L.Ed.2d 461 (2010). tential legal barrier to Apotexs ability to
Where, as here, no further facts are need- make such sales sooner rather than later.
ed for the requested adjudication (non- The listing of the patent, with its current
infringement is beyond dispute, given the consequence of preventing FDA approval
disclaimer), ripeness depends on any harm during Mylans presumptive exclusivity pe-
to the plaintiff from delaying adjudication riod, is another, and the parties have ad-
and the degree of uncertainty about verse concrete interests in the truncation
whether an adjudication will be needed. or preservation of that period.
Sandoz, 773 F.3d at 127778. In this case,
these overlapping formulations have led Apotex, Daiichi, and Mylan are all likely
the parties to focus on (1) whether Daii- affected, though not in perfect mirror-im-
chis disclaimer of the patent means that age ways, by whether Apotex can cause
the parties lack concrete stakes in the the forfeiture of Mylans exclusivity period.
dispute over the declaratory judgment; (2) Until that period ends, Apotex cannot
whether the alleged harm is traceable to make sales, and delay of entry may have
Daiichi; (3) whether the real-world impact lingering adverse effects on market share.
is too contingent on future eventsspecifi- See Teva Pharm., USA, Inc. v. FDA, 182
cally, FDA tentative approval of Apotexs F.3d 1003, 1011 n. 8 (D.C.Cir.1999) (sec-
ANDA; and (4) whether Apotexs alleged ond-filing generic manufacturers face con-
harm would not be redressed even if Apo- tinued harm because of their denied access
tex receives the requested judgment be- to the market TTT, harm potentially
cause ultimate relief is independently heightened because of [the first filers] pe-
blocked by the statutory standards for riod of market exclusivity). Once Apotex
triggering forfeiture of Mylans exclusivity enters, Daiichi and Mylan can expect to
period. We address those issues in turn. lose sales they otherwise would have made.
It is plausible, too, that entry by Apotex
1 would produce prices noticeably lower than
[6] We first reject Daiichis contention, those Daiichi and Mylan would charge dur-
adopted by the district court, that Daiichis ing a duopoly period (with Mylan the ex-
APOTEX, INC. v. DAIICHI SANKYO, INC. 1363
Cite as 781 F.3d 1356 (Fed. Cir. 2015)
clusive generic seller).2 Daiichi and Mylan them of what they say is their legal entitle-
will thereby be harmed by Apotexs entry ment to hold onto the benefits of delaying
(even if the lowered prices benefit consum- Apotexs entry. We discuss those ques-
ers as much as or more than Apotex). tions infra. But Daiichi is wrong in its
In these circumstances, by any common- threshold argument that its disclaimer of
sense measure, the parties have substan- the 8703 patent itself eliminates a case or
tial, concrete stakes in whether Apotex controversy.
secures the non-infringement judgment it
seeks to advance its entry into the market. 2
If the judgment issues, there is every like- [7] Daiichi is also wrong to the extent
lihood that Daiichi and Mylan will lose it contends that the delayed entry of Apo-
substantial revenues, and Apotex will gain tex at issue here is not fairly traceable to
substantial revenues. This case is quite Daiichi. Allen v. Wright, 468 U.S. 737, 751,
different from cases in which a case or 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). If
controversy has been held missing because Daiichi had not listed the 8703 patent in
the plaintiffs had mere generalized or by- the Orange Book in the first place, the
stander interests in others compliance 8599 patent would be the only listed patent,
with law. and Mylan undisputedly would have no
Of course, other requirements for a case exclusivity period at present, because it
or controversy have to be met: most sig- lost its challenge to the 8599 patent. Since
nificantly, the desired advancing of FDA 2003, the statute has expressly conditioned
approval and of Apotexs market entry a first filers eligibility for marketing ex-
must not be too speculative a consequence clusivity on its ability to lawfully main-
of the requested non-infringement judg- tain[ ] a Paragraph IV certification. 21
ment. Lujan v. Defenders of Wildlife, 504 U.S.C. 355(j)(5)(B)(iv)(II)(bb). Where,
U.S. 555, 56061, 112 S.Ct. 2130, 119 as here, a first ANDA filer lists a patent in
L.Ed.2d 351 (1992). And Daiichi and My- a paragraph IV certification and loses in
lan argue that the advancing of approval litigation through a judgment that con-
and entry actually cannot follow because, firms infringement and rejects invalidity,
under the governing statutory provisions, that applicant may no longer lawfully
the present Apotex lawsuit cannot strip maintain its paragraph IV certification.3
2. See FDA, Center for Drug Evaluation and 3. FDA regulations provide that [a]n appli-
Research, Generic Competition and Drug cant who has submitted a [paragraph IV cer-
Prices (last updated Mar. 1, 2010), www.fda. tification] and is sued for patent infringement
gov/AboutFDA/CentersOffices/OfficeofMedical TTT shall amend the certification if a final
ProductsandTobacco/CDER/ucm129385.htm judgment TTT is entered finding the patent to
(On average, the first generic competitor be infringed. In the amended certification,
prices its product only slightly lower than the the applicant shall certify under paragraph
brand-name manufacturer. However, the ap- [III] that the patent will expire on a specific
date. Once an amendment or letter for the
pearance of a second generic manufacturer
change has been submitted, the application
reduces the average generic price to nearly
will no longer be considered to be one con-
half the brand name price.); Teva Pharm.
taining a [Paragraph IV certification]. 21
USA, Inc. v. Pfizer Inc., 405 F.3d 990, 993
C.F.R. 314.94(a)(12)(viii)(A) (2015). The
(Fed.Cir.2005) (Gajarsa, J.) (dissenting from
required application amendment causes the
denial of rehearing en banc) (exclusivity peri- first filer to forfeit its eligibility for any market
od creates a comfortable duopoly for the exclusivity based on that certification. 21
NDA holder and the first ANDA filer). U.S.C. 355(j)(5)(D)(i)(III); see Letter from
G. Buehler, Director, Office of Generic Drugs,
1364 781 FEDERAL REPORTER, 3d SERIES
Thus, Mylan would currently not be eligi- requested judgment in these circum-
ble for an exclusivity period had Daiichi stances something other than the resolu-
never listed the 8703 patent. Oral Argu- tion of a case or controversyas long as it
ment at 2:3046 (Apotex), Apotex Inc. v. is likely, as opposed to merely specula-
Daiichi Sankyo, Inc., No. 20141282, tive, that the consequence would be the
1291; id. at 16:5017:10 (Daiichi). It is concrete one of advancing the date of ap-
only Daiichis original listing of that pat- proval by the FDA and market entry by
entwhich Daiichi has disclaimedthat Apotex. Lujan, 504 U.S. at 56061, 112
now supports Mylans exclusivity period, S.Ct. 2130 (internal quotation marks omit-
which Apotex filed this action to bring to ted). We turn to that critical question.
an end.
Daiichi is therefore responsible for the 3
current existence of Mylans exclusivity-
[8] One aspect of that question is
period rights. Importantly, by so stating,
whether, putting aside the statutory provi-
we are not asserting that such responsibili-
sions governing the exclusivity period, ten-
ty is a necessary condition for the case or
tative FDA approval for Apotexs proposed
controversy here. We do not decide, and
drug is a prerequisite for a case or contro-
do not have to decide, whether it would be
versy here. Specifically, exclusivity-period
enough, for a justiciable dispute, that a
provisions aside, is the prospect of con-
requested judgment of non-infringement
crete relief for Apotex too uncertain to
would lead the FDA to allow a market
support an adjudication of the request for
entry that would have concrete revenue-
a non-infringement judgment until Apotex
transferring effects on all parties. In this
obtains tentative approval? We conclude
case, Daiichis act of listing the 8703 patent
in the Orange Book created the entry bar- that the answer is no.
rier that Apotex, through a declaratory The general principle governing the in-
judgment, seeks to eliminate. quiry, including in situations where ulti-
Relatedly, for case-or-controversy pur- mate relief from harm depends on the
poses, it is immaterial whether Daiichi act- action of a third party (here, the FDAs
ed contrary to the statutory standard in approval of the ANDA to allow market-
listing the 8703 patent in the Orange ing), is whether there is too high a degree
Bookwhich we do not know, one way or of uncertainty about whether the judicial
the other. Daiichi is causally responsible resolution, if in the plaintiffs favor, will
for the current existence of the exclusivity matter in alleviating the harm alleged by
period; Apotex seeks a judgment of non- the plaintiff. See Lujan, 504 U.S. at 560
infringement that does not depend on 61, 112 S.Ct. 2130 (likely, as opposed to
whether the original listing was proper; speculative); Warth, 422 U.S. at 504, 507,
and there has been no suggestion that, 95 S.Ct. 2197 (substantial probability,
under the statute, the forfeiture of the not remote possibility); Linda R.S. v.
exclusivity period depends on the original Richard D., 410 U.S. 614, 618, 93 S.Ct.
listings propriety. Neither the logic nor 1146, 35 L.Ed.2d 536 (1973) (not too spec-
precedents controlling the Article III de- ulative). That context-dependent stan-
termination would make the entry of the dard has been applied to allow adjudica-
to ANDA Applicant regarding 180day exclu- at 56 (Oct. 28, 2008), available at www.
sivity for dorzolamide/timolol ophthalmic so- regulations.gov (Dorzolamide/Timolol Letter).
lution, Docket No. FDA2008N04830017
APOTEX, INC. v. DAIICHI SANKYO, INC. 1365
Cite as 781 F.3d 1356 (Fed. Cir. 2015)
tion to remove one legal barrier to the L.Ed.2d 248 (2007); see Consumer Watch-
plaintiffs obtaining the concrete alleviation dog v. Wis. Alumni Research Found., 753
of harm it seeks, notwithstanding potential F.3d 1258, 1261 (Fed.Cir.2014). By deem-
independent barriers to achieving that re- ing certain series of links from conduct to
sult, as long as such other potential barri- harm or from judgment to alleviation of
ers are not unduly likely to deprive the harm not to be unduly speculative, Con-
adjudication of concrete effect. Thus, in gress may effectively creat[e] justiciabili-
Arlington Heights v. Metropolitan Hous- ty that attenuation concerns would other-
ing Development Corp., 429 U.S. 252, 97 wise preclude. Sandoz, 773 F.3d at 1281.
S.Ct. 555, 50 L.Ed.2d 450 (1977), the Court In the present context, the congressional
found that a developer and a would-be judgment embodied in the HatchWax-
resident had standing to challenge a zon- man Amendments to the Food, Drug, and
ing scheme that stood as an absolute bar- Cosmetic Act,4 as consistently implement-
rier to constructing the housing the de- ed in our case law, makes clear that tenta-
veloper sought to build, stating: If [the tive approval for Apotex is not a precondi-
developer] secures the injunctive relief it tion to adjudicating the patent issue.
seeks, that barrier will be removed. Id. When a generic manufacturer seeks to en-
at 261, 97 S.Ct. 555. Other barriers that ter the market, the concrete stakes are the
might doom actual development, such as market sales upon entry. See Caraco
inability to obtain financing, though real, Pharm. Labs., Ltd. v. Forest Labs., Inc.,
were not so certain as to bar standing to 527 F.3d 1278, 1292 (Fed.Cir.2008) (ex-
obtain removal of the barrier at issue, id. clud[ing] non-infringing generic drugs
at 261 & n. 7, 97 S.Ct. 555, because there from the market TTT is a sufficient Article
was a substantial probability that the III injury-in-fact). Yet Congress, in 35
project w[ould] materialize if the adjudi- U.S.C. 271(e)(2), defined an artificial
cation occurred, id. at 264, 97 S.Ct. 555. act of infringement, Eli Lilly & Co. v.
As a result, the injuries to the developer Medtronic, Inc., 496 U.S. 661, 678, 110
and would-be resident were likely to be S.Ct. 2683, 110 L.Ed.2d 605 (1990), that
redressed by a favorable decision. Id. at allows litigation to take place well before
262, 97 S.Ct. 555 (quoting Simon v. East- any product is actually placed on the mar-
ern Ky. Welfare Rights Org., 426 U.S. 26, ket and before any FDA regulatory ap-
38, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976)); proval, the litigation serving to remove one
id. at 264, 97 S.Ct. 555. barrier to such approval and marketing.
Because the likelihood of ultimate allevi- See Glaxo, Inc. v. Novopharm, Ltd., 110
ation of harm involves a judgment call F.3d 1562, 1569 (Fed.Cir.1997) (under
about a causal chain, congressional action HatchWaxman, the focus of infringement
is relevant. The Supreme Court and our litigation is on what the ANDA applicant
court have recognized the potential signifi- will likely market if its application is ap-
cance of congressional action in articu- proved, an act that has not yet occurred )
lat[ing] chains of causation that will give (emphases added); cf. Amgen Inc. v. Intl
rise to a case or controversy where none Trade Commn, 565 F.3d 846, 85152 (Fed.
existed before. Massachusetts v. EPA, Cir.2009) (noting that the Supreme Court
549 U.S. 497, 516, 127 S.Ct. 1438, 167 has stressed the congressional purpose of
4. Drug and Price Competition and Patent 355, 28 U.S.C. 2201, and 35 U.S.C.
Term Restoration Act of 1984, Pub.L. No. 98 156, 271, & 282).
417, 98 Stat. 1585 (codified at 21 U.S.C.
1366 781 FEDERAL REPORTER, 3d SERIES
5. See Pozen Inc. v. Par Pharm., Inc., 696 F.3d 276 F.3d 1368 (Fed.Cir.2002); Minn. Mining
1151 (Fed.Cir.2012); SanofiAventis v. Apotex And Mfg. Co. v. Barr Labs., Inc., 289 F.3d 775
Inc., 659 F.3d 1171 (Fed.Cir.2011); Ortho (Fed.Cir.2002). See also Teva Pharm. USA,
McNeil Pharm., Inc. v. Mylan Labs., Inc., 520 Inc. v. EISAI Co., 620 F.3d 1341, 1350 (Fed.
F.3d 1358 (Fed.Cir.2008); SanofiSynthelabo Cir.2010), judgment vacated for mootness,
v. Apotex, Inc., 550 F.3d 1075 (Fed.Cir.2008); U.S. , 131 S.Ct. 2991, 180 L.Ed.2d 818
Apotex, Inc. v. Thompson, 347 F.3d 1335 (Fed. (2011).
Cir.2003); Andrx Pharm., Inc. v. Biovail Corp.,
APOTEX, INC. v. DAIICHI SANKYO, INC. 1367
Cite as 781 F.3d 1356 (Fed. Cir. 2015)
cific statutory provisions governing forfei- The provisions at issue are best read
ture of the exclusivity period. It is undis- with a little background and context. The
puted here that Mylan currently has an provisions were added to the statute by
exclusivity period available to it, based on the Medicare Prescription Drug, Improve-
the original listing of the now-disclaimed ment, and Modernization Act of
8703 patent and Mylans continued mainte- 2003(MMA), Pub.L. No. 108173, 1102,
nance of its paragraph IV certification re- 117 Stat.2066, 245760 (2003) (codified as
garding that patent. It is also undisputed
amended at 21 U.S.C. 355(j)).
that the only basis asserted for Apotex to
enter earlier than the end of the exclusivi- For ANDA applications filed before the
ty period is a forfeiture of the period un- December 2003 enactment of the MMA,
der 355(j)(5)(D)(ii)specifically, one the statute, as this court read it, was more
triggered by a forfeiture event defined protective of a first ANDA filers exclusivi-
by 355(j)(5)(D)(i)(I)(bb)(AA). The only ty period than it became under the MMA.
arguments presented to us are arguments In particular, and [s]ignificantly, the first
directly about those provisionsspecifical- Paragraph IV ANDA filer [was] entitled to
ly, whether they permit Apotex to trigger
the 180day exclusivity period regardless
forfeiture by the judgment requested in
of whether it establishe[d] that the Orange
this case. Daiichi and Mylan do not sug-
Book patents [were] invalid or not infring-
gest that, were a non-infringement judg-
ed by the drug described in its ANDA.
ment to issue in this case, the FDA would
Janssen Pharmaceutica, N.V. v. Apotex,
nonetheless consider it inadequate to trig-
ger forfeiture of Mylans exclusivity period Inc., 540 F.3d 1353, 1356 (Fed.Cir.2008);
based on a restrictive view of the forfeiture see Caraco, 527 F.3d at 1283; 21 U.S.C.
provisions that is entitled to judicial defer- 355(j)(5)(B)(iii), (iv) (2000).6 Moreover,
ence. Nor do they argue that any FDA the pre-MMA statute contained no express
approval would come too late to advance requirement that the first filer lawfully
Apotexs market entry in any event. We maintain its paragraph IV certification,
conclude that Apotex can trigger forfeiture and it offered no express path for subse-
by obtaining the non-infringement judg- quent ANDA filers to eliminate a first
ment it seeks in this case and, thus, that a filers exclusivity period, i.e., to trigger its
case or controversy exists here. forfeiture. The statute merely provided
6. This courts Janssen decision thus ruled that Thompson, 207 F.Supp.2d 476 (N.D.W.Va.
exclusivity was not defeated when a patent 2001) (rejecting the FDAs denial of exclusivi-
identified in a paragraph IV certification was ty based on treating first filers settlement
held valid and infringedeven though an with patent owner as effectively changing cer-
FDA regulation required alteration of the cer- tification); Mylan Pharm., Inc. v. Henney, 94
tification to become a paragraph III certifica- F.Supp.2d 36 (D.D.C.2000) (rejecting the
tion. 21 C.F.R. 314.94(a)(12)(viii)(A) FDAs refusal to interpret its regulation to
(2003). By 2003, the FDA had been moving deny exclusivity based on first filers agree-
toward denying exclusivity, as a regulatory
ment to change certification from paragraph
matter, in various circumstances where an
IV to III), vacated and dismissed as moot sub
initial paragraph IV certification lost its foun-
nom. Pharmachemie B.V. v. Barr Labs., Inc.,
dation, and the courts expressed different
276 F.3d 627 (D.C.Cir.2002); Mova Pharm.
views on the FDAs evolving position. See Dr.
Corp. v. Shalala, 140 F.3d 1060, 1071
Reddys Labs., Inc. v. Thompson, 302
F.Supp.2d 340 (D.N.J.2003) (upholding the (D.C.Cir.1998) (noting the FDAs view that
FDAs denial of exclusivity based on pre-ap- exclusivity is not lost upon certification
proval expiration of patent subject to para- change after adjudication of validity and in-
graph IV certification); Mylan Pharm., Inc. v. fringement).
1368 781 FEDERAL REPORTER, 3d SERIES
that, when a first filer had not activated its sion defines forfeiture event,
180day clock, a subsequent filer could do 355(j)(5)(D)(i), and one group of such
soeven where the first filer was blocked events is the first filers failure to mar-
from marketing its drug by a later-expir- ket by the later of two dates.
ing patentby securing a judgment of 355(j)(5)(D)(i)(I). One of those dates is
non-infringement or invalidity. See Jans- specified in (aa): the earlier of 75 days
sen, 540 F.3d at 1357; Caraco, 527 F.3d at after the first filers effective date for ap-
1284; 21 U.S.C. 355(j)(5)(B)(iv) (2000). proval or 30 months after the first filer
Notably, Janssen (like Caraco ) was decid- submitted its application.
ed under the pre-MMA scheme, see 540 355(j)(5)(D)(i)(I)(aa). In the present
F.3d at 1357 n. 2, and it was under that case, because Mylan filed in April 2006, the
scheme that Janssen concluded that the 30month date arrived in October 2008.
second filers inability to promptly launch The second of the later of dates is speci-
its generic product because of [the first fied in (bb), which is what is at issue
filers] 180day exclusivity period is not a here: 7
cognizable Article III controversy, but a
(bb) with respect to the first applicant
result envisioned by the HatchWaxman
or any other applicant (which other ap-
Act. Id. at 1361.
plicant has received tentative approval),
Section 1102 of the MMA altered the the date that is 75 days after the date as
exclusivity scheme in two fundamental of which, as to each of the patents with
ways. First: It expressly conditioned the respect to which the first applicant sub-
first filers eligibility for exclusivity on its mitted and lawfully maintained a certifi-
lawfully maintain[ing] a paragraph IV cation qualifying the first applicant for
certification, 355(j)(5)(B)(iv)(II)(bb). As
the 180day exclusivity period under
already described, a first filer may not
subparagraph (B)(iv), at least 1 of the
lawfully maintain an initial paragraph IV
following has occurred:
certification as to which it lost a litigation
challenge regarding infringement and va- (AA) In an infringement action
lidity. See supra p. 1363 & n. 3. In other brought against that applicant with
words, the exclusivity period is no longer respect to the patent or in a declara-
guaranteed just for the effort of challeng- tory judgment action brought by that
ing a patent (its scope or its validity), as applicant with respect to the patent, a
Janssen had said of the pre2003 statute. court enters a final decision from
Losing in the challenge eliminates the pat- which no appeal (other than a petition
ent from the group of patents that can to the Supreme Court for a writ of
support an exclusivity period. certiorari) has been or can be taken
that the patent is invalid or not in-
Second: The MMA added to the statute
fringed.
an elaborate new forfeiture provision that
declares that [t]he 180day exclusivity pe- (BB) In an infringement action or a
riod described in [ 355(j)(5)(B)(iv) ] shall declaratory judgment action described
be forfeited by a first applicant if a forfei- in subitem (AA), a court signs a settle-
ture event occurs with respect to that first ment order or consent decree that
applicant. 355(j)(5)(D)(ii). The provi- enters a final judgment that includes a
7. No one here disputes that the later of of the (aa)-specified dates is not itself enough
language applies only if one of the (bb)-speci- if no (bb) event has occurred. See also Teva
fied events occurs, i.e., that the arrival of one v. Sebelius, 595 F.3d at 131617.
APOTEX, INC. v. DAIICHI SANKYO, INC. 1369
Cite as 781 F.3d 1356 (Fed. Cir. 2015)
finding that the patent is invalid or sivity if it has not entered 75 days after
not infringed. those two requirements are satisfied. Un-
(CC) The patent information sub- der that reading, Apotex can trigger forfei-
mitted under subsection (b) or (c) of ture in this case by obtaining the judgment
this section [ 355] is withdrawn by it seeks here and by obtaining tentative
the holder of the application approved approval, if it does both early enough in
under subsection (b) of this section relation to Mylans market entry.
[the NDA]. Mylan argues for a different interpreta-
355(j)(5)(D)(i)(I)(bb) (emphases added). tion of the statutethat the second filer
The first step in applying that provision (the other applicant in (bb)) must have
to the present case is to note that, al- tentative approval before it initiates the
though Mylan (the first applicant) initial- declaratory-judgment action. Mylan Br. 5,
ly made a paragraph IV certification for 2122. Mylan contends that the text of
both the 8599 and 8703 patents, the 8599 (bb) and (AA) taken together unambigu-
certification is no longer lawfully main- ously mandates that tentative approval is a
tained, because Mylan lost its litigation prerequisite for entry into court if the
over that patent. As a result, the only action is ultimately to have a forfeiture
lawfully maintained certification involves effect. We reject that reading of the pro-
the 8703 patent, and the (bb) standards vision.
must be applied only to that patent. As to The statutory text does not compel My-
that patent, then, (bb)(AA) specifies that lans interpretation. The provisions lan-
Mylan forfeits its exclusivity period if it guage, standing alone, leaves ambiguous
has not entered the market by the follow- the time at which the received tentative
ing date: with respect to Apotex, a second- approval requirement must be metat
filing applicant, which other applicant has the institution of the declaratory-judgment
received tentative approval, 75 days after action or at some later time. We must
what we may, for convenience, call the therefore look to the statutory context and
non-infringement finality datemore policy. That analysis points convincingly
precisely, when the appeal time ends with- against Mylans view.
out an appeal after the district court en- The textual contrast with another rele-
ters a non-infringement judgment, see 28 vant provision added to the statute by the
U.S.C. 2107(a) (30day period); Fed. MMA, namely, 355(j)(5)(C)under
R.App. P. 4, or when this court enters its which Apotex filed its declaratory-judg-
judgment affirming the non-infringement ment actionconfirms the facial ambiguity
judgment if there has been an appeal. of the (bb)(AA) language at issue and rein-
This provision, which separates the ten- forces our interpretation that tentative ap-
tative-approval phrase from its specifica- proval is not required at the outset of the
tion of certain forfeiture-triggering dates, action. Section 355(j)(5)(C) imposes clear
including the non-infringement-finality preconditions on an ANDA filers bringing
date of (AA), admits of a simple reading. of a declaratory-judgment action against
There are two requirements for forfeiture: the patent owner: No action may be
a court must have entered a final decision brought under [the Declaratory Judgment
of non-infringement that is no longer ap- Act] TTT unless the patent owner de-
pealable (certiorari aside), and the second clines to sue the ANDA applicant 45 days
(or later) filer must have received tentative after it gives notice of filing a paragraph
approval. The first filer forfeits its exclu- IV certification. Id. (emphasis added); see
1370 781 FEDERAL REPORTER, 3d SERIES
35 U.S.C. 271(e)(5). No such initiation- fit that Mylan has touted before us: clear-
focused mandatory language is found in ing the particular patent from the field of
the forfeiture provision at issue here. The potential competition.
contrast is significant. Not only does it make no sense to read
Indeed, it would be surprising to find an the forfeiture provision as requiring tenta-
entry-into-court prerequisite in the forfei- tive approval at the outset of the second
ture provision, given how the forfeiture filers declaratory-judgment action. It
provision is plainly intended to operate. makes good sense to read the provision as
The only role to be played by the declara- providing for forfeiture simply when there
tory-judgment action referred to in has been no entry 75 days after the non-
355(j)(5)(D)(i)(I)(bb)(AA) is a role played infringement finality date and the date of
at the end of the actiona final decision tentative approval. That reading serves
in the defined sense of completing as-of- the evident congressional policy of trigger-
right appealsnamely, forfeiture no earli- ing forfeiture when a second filer is ready
er than 75 days after that event. The to launch. See 149 Cong. Rec. 31,200
provision does not give the mere filing of (2003) (statement of Sen. Schumer) (If it
the action any effect. It makes no sense, forfeits, then the exclusivity is lost and any
where not compelled by the text or con- other generic applicant that is ready to be
text, to give the provision an interpretation approved and go to market can go.).
extraneous to its evident function. Tentative approval is required before a
Moreover, Mylans view that tentative second filer can actually trigger forfeiture,
approval is required for a second filer to because exclusivity should not be lost un-
be that applicant under (AA) would, for less the second filer is on the verge of
all we can tell, have to apply even when, as having an approved product to deliver the
(AA) expressly contemplates, the patent benefits of competition. It would be arbi-
owner brings an infringement action TTT trary, in terms of the discernible policy, to
against that applicant. For reasons we require tentative approval earlier. Thus,
have noted, such as preventing immediate for this case, the purpose of requiring
approval of an ANDA and triggering a 30 tentative approval has nothing to do with
month delay in the effectiveness of any Apotexs approval status at the time it
approval, 355(j)(5)(B)(iii), it is common- brought the declaratory-judgment action,
place and expected that the patent owner and it has everything to do with its ap-
will bring an infringement action under 35 proval status when forfeiture is triggered.
U.S.C. 271(e)(2) within 45 days of receiv- Our interpretationthe 75day clock for
ing notice of the ANDA, well before any Mylan starts to run when Apotex has both
tentative approval. It appears that, under tentative approval and a no-longer-appeal-
Mylans that applicant view, such a suit, able judgment of non-infringementfits
even when the second filer wins, would fall the concrete function of the provision,
outside the (AA) provision at issue here whereas Mylans does not.
and thus not have any forfeiture effect. Mylan argues that its view is required
Mylan has not shown us why that result is by the statutory policy underlying the ex-
a sensible one. Indeed, in that instance, clusivity period. But its argument is too
where the second filer has been responsi- detached from the particulars of the stat-
ble for winning a contested invalidity or ute. The exclusivity period,
non-infringement ruling, it would be the 355(j)(5)(B)(iv), rests on a balancing of
second filer that conferred the public bene- interests: encouraging early entry by ge-
APOTEX, INC. v. DAIICHI SANKYO, INC. 1371
Cite as 781 F.3d 1356 (Fed. Cir. 2015)
nerics into the market by providing a re- of a failure to market forfeiture. Id. at
ward to first filers (substantially higher 131718. So read, the Teva court held,
prices for a time and a first-mover advan- (CC) did not authorize forfeiture of the
tage, see Mova Pharm. Corp. v. Shalala, exclusivity period by unilateral action of
140 F.3d 1060, 1066 n. 6 (D.C.Cir.1998)), the NDA holder (even with FDA ratifica-
but only up to a point (as that reward tion) without judicial involvement. In the
creates higher prices for consumers, see present case, in contrast, the forfeiture
Teva, 595 F.3d at 1318). There is no a Apotex seeks to produce is not to be ef-
priori right balance. We must look to fected by Daiichis unilateral action but by
what Congress enactedspecifically, the a court judgment.
MMA provisions that reset the statutory The Teva rationale does not carry over
balance. See Teva Pharm. Indus. Ltd. v. to curtail the forfeiture effects prescribed
Crawford, 410 F.3d 51, 54 (D.C.Cir.2005) by (AA) and (BB), which require judicial
(Because the balance struck between involvement and which were not invoked
these competing goals is quintessentially a as forfeiture bases in Teva. The D.C. Cir-
matter for legislative judgment, the court cuit in Teva did not say that forfeiture is
must attend closely to the terms in which rendered unavailable, even with judicial
the Congress expressed that judgment.). involvement, just because the NDA hold-
Here, as we have explained, when Mylan er/patent owner has agreed to non-in-
lost its case regarding the 8599 patent, it fringement. Indeed, (BB) expressly pro-
lost its right to invoke that patent to sup- vides for forfeiture based on a settlement
port an exclusivity period. And there is order or consent decree signed by a court
no evident policy supporting mainte- where the judgment includes a non-in-
nance of that period based on the 8703 fringement or invalidity finding. As a stat-
patent once (it is 75 days after) Apotex utory matter, the judicial role is key in
secures a no-longer-appealable judgment distinguishing two situations, both of which
of non-infringement, no matter how quick may involve an NDA holder/patent owner
and easy the litigation, and has tentative that has given up on one of its patents.
approval, whenever that occurs.
CONCLUSION
The decision by the D.C. Circuit in Teva
v. Sebelius is not contrary to our interpre- For the foregoing reasons, we hold that
tation of tentative approval and its role Apotex has alleged facts supporting the
in (bb)(AA). 595 F.3d at 131718. That conclusion that there is a substantial con-
case addressed whether an NDA holders troversy, between parties having adverse
unilateral request to the FDA to delist a legal interests, of sufficient immediacy and
patent, if granted by the FDA, could ter- reality to warrant the issuance of a declar-
minate a first filers eligibility for exclusivi- atory judgment. MedImmune, 549 U.S.
ty under subparagraph (CC) of at 127, 127 S.Ct. 764 (internal quotation
355(j)(5)(D)(i)(I)(bb)without any judi- marks and citation omitted). We reverse
cial involvement, and indeed without a dis- the judgment of the district court dismiss-
claimer of the patent. 595 F.3d at 1315. ing the case, as well as the denial of My-
The court read the language of (CC), lans motion to intervene.
which provides for forfeiture upon the REVERSED.
withdrawal of an Orange Book listing by
the NDA holder, as of a piece with subpar-
agraphs (AA) and (BB), which specify judi- ,
cial actions as prerequisites for the causing