Patent Federal Circuit Update

KAYE SCHOLER FEDERAL CIRCUIT REVIEW

Inadequacy of Hatch-Waxman Notice Requirements Cannot be Enforced in a Patent Infringement Suit

In Minnesota Mining and Manufacturing Co. v. Barr Laboratories, Inc., Nos. 01-1369, 1370 (May 1, 2002), the Federal Circuit Court of Appeals affirmed the district court's grant of a dismissal with prejudice in favor of second abbreviated new drug application ("ANDA") filer Barr Laboratories ("Barr"), thus triggering the running of the 180-day Hatch-Waxman exclusivity period of the first ANDA filer Alphapharm Pty. Ltd. ("Alphapharm"), which was still in litigation with plaintiff/patentee Minnesota Mining and Manufacturing Co. (i.3Mlc). 3M and intervener Alphapharm argued that 3M's action against Barr should have been dismissed without prejudice, so that the 180-day exclusivity period would not be triggered, because Barr did not comply with the Hatch-Waxman Act notice requirements by failing to provide detailed noninfringement information to 3M in its paragraph IV certification. The court held that such alleged non-compliance with the Hatch-Waxman Act notice requirement does not give rise to a private right of action, and that the requirements of 21 U.S.C. § 355(j)(2)(B) cannot be enforced in an infringement suit.

3M owns U.S. Patent No. 4,642,384 (the it '384 patentl8), which claims intermediate compounds that result from a process used to produce the drug Tambocor®. The '384 patent is listed in the FDA's Orange Book. Alphapharm filed an ANDA and provided 3M with a Hatch-Waxman paragraph IV certification notice pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(IV), stating that Alphapharm's drug would not infringe the '384 patent. 3M sued Alphapharm for patent infringement. Pursuant to 21 U.S.C. § 355(j)(5)(B)(iii), initiation of that suit triggered a stay of FDA approval of Alphapharm's ANDA until the earlier of 30 months after receipt of Alphapharm's November 1998 paragraph IV certification notice, or termination of the lawsuit in favor of Alphapharm. That 30-month stay expired in May 2001, and the FDA approved Alphapharm's ANDA. Nonetheless, Alphapharm had not yet started marketing its version of the drug, preferring to wait until after the 3M infringement suit was resolved.

Barr also filed an ANDA based on 3M's new drug application and provided 3M with a paragraph IV certification notice, stating that Barr's version of the drug would not infringe the '384 patent. 3M sued Barr for patent infringement, and Alphapharm intervened in the action. As a subsequent ANDA filer, Barr was not only subject to the 30-month stay, but was also subject to a 180-day period of exclusivity in favor of the first ANDA filer (here Alphapharm) pursuant to 21 U.S.C. § 355(j)(5)(B)(iv) (the "180-day exclusivity period"), a period which begins on: (1) the date the Secretary receives notice from the first ANDA filer of the first commercial marketing of the drug under the first ANDA application; or (2) on the date of the decision of a court in an action described in 21 U.S.C. § 355(j)(5)(B)(iii) holding the applicable patent (here the '384 patent) invalid or not infringed.

During discovery, Barr disclosed information that convinced 3M that Barr did not infringe the '384 patent. Barr moved for summary judgment of non-infringement, and 3M moved to dismiss its suit without prejudice, so as not to trigger Alphapharm's 180-day exclusivity period. 3M argued that Barr had not provided the detailed factual and legal basis for its non-infringement positions in its paragraph IV certification notice, as required by Section 355(j)(2)(B)(ii), in order to "hoodwink") 3M into filing suit, so that Barr could obtain an early decision of non-infringement and thereby trigger Alphapharm's 180-day exclusivity period.

The district court granted Barr's motion for summary judgment of non-infringement because 3M did not object to the motion on the merits, and denied 3M's motion to dismiss the suit without prejudice. The court found that Barr had complied with the Hatch-Waxman notification requirements and that 3M's motion to dismiss was motivated by its desire to avoid an adverse judgment, one of the factors the Eighth Circuit considers to weigh against allowing a party to voluntarily dismiss without prejudice.

The Federal Circuit agreed with the predicate to 3M's arguments, that a dismissal with prejudice of an action brought against the second ANDA filer triggers the running of the 180-day exclusivity period in favor of the first ANDA filer. Otherwise, if the first ANDA filer is involved in protracted litigation, it could indefinitely block other generic manufacturers from marketing their drugs.

The court, extrapolating from two recent Federal Circuit cases, Mylan Pharmaceuticals, Inc. v. Thompson, 268 F.3d 1323 (Fed. Cir. 2001), and Andrx Pharmaceuticals, Inc. v. Biovail Corp., 276 F.3d 1368 (Fed. Cir. 2002), held that appellants cannot seek a judicial determination of whether a private party's paragraph IV certification notice in an infringement action under Hatch-Waxman complies with 21 U.S.C. § 355(j)(2)(B), and that Section 355(j)(2)(B) can be enforced, if at all, only in an Administrative Procedure Act (APA) proceeding. The Federal Circuit concluded that the district court did not abuse its discretion in denying 3M's motion to dismiss the case without prejudice, as 3M was "plainly seeking to avoid an adverse judgment."

In a lengthy opinion concurring in the judgment only, Judge Gajarsa stated that "[i]f the sufficiency of the notice cannot be considered, then the appropriate remedy is not to affirm the dismissal with prejudice but to remand to the district court to either stay the action pending administrative review of the sufficiency, or dismiss the action without prejudice so that it can be brought after the FDA has reviewed the sufficiency of the notice." He disagreed that compliance with Section 355(j)(2)(B) is the FDA's burden to arbitrate, noting the many occasions in which the FDA disclaimed such responsibility, and went on to explain how important it was iato make it clear that a declaratory judgment suit is available for ANDA filers who are not sued by the NDA patentee within the 45-day period" of Section 355(j)(5)(B)(iii) (which would eliminate the need for second ANDA filers to "hoodwink" plaintiffs into suing).

A Limitation Not Necessarily Disclosed by Prior Art Patent Is Not Inherently Disclosed; Genuine Issue of Material Fact Exists With Respect to Enablement Where the Patent Specification Contains Ambiguities and Inoperative Embodiments

In Crown Operations Int'l, Ltd. v. Solutia Inc., No. 01-1144 (May 13, 2002), the Federal Circuit Court of Appeals affirmed the district court's summary judgment of invalidity of Solutia's U.S. Patent No. 4,973,511 (the it "'511 patent"), and vacated the district court's holding regarding enablement of Solutia's U.S. Patent No. 5,091,258 (the "'258 patent").

The '511 patent and the '258 patent relate to layered films employed in safety and solar control glass. Such glass is used in automobile windshields. The '511 patent is directed to windows having a solar/safety film that masks certain distortion from detection by the human eye by limiting visible reflectance to two percent or less. The '258...