DYK, Circuit Judge.
Dey Pharma, LP and Dey Inc. ("Dey") brought suit against Sunovion Pharmaceuticals, Inc. ("Sunovion") seeking a declaratory judgment that Dey's generic pharmaceutical product does not infringe Sunovion's U.S. Patent No. 6,451,289 ("the '289 patent"), and that the '289 patent is invalid. The district court concluded that it had subject-matter jurisdiction over the action, and the parties thereafter stipulated to a final judgment of noninfringement. See Dey Pharma, L.P. v. Sunovion Pharms. Inc., No. 08-372 (D.Del.June 20, 2011) (final judgment); Dey LP v. Sepracor Inc., No. 08-372, 2009 WL 1043892 (D.Del. Apr. 16, 2009) (denying motion for certification); Dey, L.P. v. Sepracor, Inc., 595 F.Supp.2d 355 (D.Del. 2009) (denying motion to dismiss).
This declaratory judgment action involves the Drug Price Competition and Patent Term Restoration Act of 1984, Pub.L. No. 98-417, 98 Stat. 1585 ("Hatch-Waxman Act"), in which "Congress struck a balance between two competing policy interests: (1) inducing pioneering research and development of new drugs and (2) enabling competitors to bring low-cost, generic copies of those drugs to market," Andrx Pharms., Inc. v. Biovail Corp., 276 F.3d 1368, 1371 (Fed.Cir.2002). Under the Hatch-Waxman framework, a brand-name company seeking FDA approval of a new drug must file a new drug application ("NDA") with the Food and Drug Administration ("FDA"), which must include information about patents "with respect to which a claim of patent infringement could reasonably be asserted." 21 U.S.C. § 355(b)(1). The FDA publishes this patent information, see id., in a publication known as the "Orange Book."
A generic company may then seek FDA approval using an abbreviated new drug application ("ANDA") with a certification for each patent in the Orange Book, such as a "paragraph III certification" (that approval is not sought until the patent expires) or a "paragraph IV certification" ("that such patent is invalid or will not be infringed"). Id. § 355(j)(2)(A)(vii). If an
Before the 2003 amendments to the Hatch-Waxman Act, the first generic filer's 180-day exclusivity period was triggered by either its "first commercial marketing" or a court judgment "holding the patent which is the subject of the certification to be invalid or not infringed." 21 U.S.C. § 355(j)(5)(B)(iv) (2000). Under the 2003 amendments, the exclusivity period is only triggered by the first-filing generic's first commercial marketing, but the exclusivity period can be forfeited under certain conditions, including failure to launch after a final court judgment of noninfringement or invalidity. See Medicare Prescription Drug, Improvement, and Modernization Act of 2003 ("MMA"), Pub.L. No. 108-173, § 1102, 117 Stat.2066, 2457-60. For example, if a second ANDA filer obtained a final judgment that the patents were invalid or not infringed, then the first ANDA filer would forfeit its 180-day exclusivity period if it did not market the drug within 75 days. See 21 U.S.C. § 355(j)(5)(D). This change in the statutory trigger makes no difference to the issues in this case, and for simplicity we refer to a final judgment that triggers the 75-day countdown to forfeiture of the exclusivity period as a "trigger" of the 180-day exclusivity period.
Also before the 2003 amendments, "NDA holders employed several methods of delaying the early resolution of patent disputes." Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353, 1357 (Fed.Cir.2008). "For example, the brand drug company might have several patents listed in the . . . Orange Book with respect to a particular drug. It could be in the company's interest to bring suit within 45 days on one patent and to hold the others in reserve." Teva Pharms. USA, Inc. v. Novartis Pharms. Corp., 482 F.3d 1330, 1343-44 (Fed.Cir.2007) (quoting 149 Cong. Rec. 31,784 (2003) (statement of Sen. Edward Kennedy)). The benefits of this strategy were noted in the legislative history, including the threat of an infringement suit on the reserved patent against the first ANDA filer after it secured FDA approval, and the ability to delay triggering the first ANDA filer's exclusivity period by preventing adjudication of noninfringement or invalidity of the reserved patent. See 149 Cong. Rec. 31,784.
To address this problem, Congress specified that an ANDA filer who is not sued within 45 days could bring a declaratory judgment action under 28 U.S.C. § 2201 against the NDA holder, see 21 U.S.C. § 355(j)(5)(C), and that the federal courts would have declaratory judgment jurisdiction "to the extent consistent with the Constitution," 35 U.S.C. § 271(e)(5). Under this amended Hatch-Waxman framework, if the first ANDA filer "parked" its 180-day exclusivity under an agreement with the brandname company, a subsequent ANDA filer could independently trigger the first filer's exclusivity period through a declaratory judgment action leading to a final judgment of invalidity or
This case involves such a declaratory judgment claim by the second ANDA filer (Dey) against the patent holder and NDA filer (Sunovion), designed to trigger the first ANDA filer's (Breath's) exclusivity period. The FDA approved Sunovion's NDA 20-837 for Xopenex in 1999. Sunovion listed three patents relating to Xopenex in the Orange Book: U.S. Patent No. 5,362,755 ("the '755 patent"), U.S. Patent No. 5,547,994 ("the '994 patent"), and the '289 patent.
In June 2005, Breath filed the first ANDA for generic Xopenex, which contained paragraph IV certifications for all three patents. In October 2005, Sunovion sued Breath for infringement of all three patents in a case that was transferred to the U.S. District Court for the District of Massachusetts. In May 2008, the suit was dismissed based on a settlement agreement between Sunovion and Breath. Sepracor Inc. v. Breath Ltd., No. 06-10043 (D.Mass. May 1, 2008). Under the settlement, Breath, by paying a license fee, may sell generic Xopenex under its ANDA starting on August 20, 2012 (or on the date of an earlier third-party commercial launch). See J.A. 187-88.
In July 2005, Dey filed a second ANDA for generic Xopenex, which also contained paragraph IV certifications for all three Orange Book patents. In February 2006, Sunovion sued Dey over two of the patents in the District Court for the District of Delaware, but Sunovion did not assert the '289 patent. Dey later filed a different ANDA on a "concentrate" version of Xopenex, and after Sunovion again sued Dey with respect to the two patents but not the '289 patent, the actions were consolidated in district court in December 2006. On June 20, 2008, Dey brought this declaratory judgment action, seeking a declaration that the '289 patent is invalid or not infringed by either ANDA product. In response, Sunovion provided Dey with a covenant not to sue on the '289 patent and moved to dismiss the declaratory judgment action for lack of subject-matter jurisdiction.
On January 30, 2009, the district court denied Sunovion's motion to dismiss in a thorough and well-reasoned opinion. Dey, 595 F.Supp.2d at 362-63. In accordance with our precedent, the court held that the covenant not to sue did not defeat declaratory judgment jurisdiction. See id. at 360, 362. The court also agreed with Dey that even if it invalidated the two Orange Book patents asserted by Sunovion, the '289 patent would remain a legal barrier to its ANDA approval, and that this potential barrier was a cognizable injury that could be redressed through the declaratory judgment action under our decisions in Caraco and Janssen, discussed below. See id. at 358-62 (citing Caraco Pharm. Labs., Ltd. v. Forest Labs., Inc., 527 F.3d 1278 (Fed.Cir.2008); Janssen, 540 F.3d 1353).
Pursuant to a stipulation of the parties, the district court entered a final judgment of noninfringement on June 20, 2011. Dey Pharma, L.P. v. Sunovion Pharms. Inc., No. 08-372 (D.Del. June 20, 2011). Sunovion timely appealed solely on jurisdictional grounds. This court has jurisdiction
Sunovion's Delaware suit against Dey over the '755 and '994 patents is still pending. On February 14, 2012, the district court entered judgment following a jury verdict in favor of Sunovion on the infringement and invalidity claims. See Sunovion Pharms. Inc. v. Dey Pharma, L.P., No. 06-113 (D.Del. Feb. 14, 2012), ECF No. 581. The district court is currently considering post-trial motions.
Whether an "actual controversy" exists that is sufficient to sustain federal jurisdiction under the Declaratory Judgment Act, 28 U.S.C. § 2201(a), is a question of law that we review de novo. Teva v. Novartis, 482 F.3d at 1336. In the Hatch-Waxman context, Congress extended declaratory judgment jurisdiction to ANDA paragraph IV disputes, 21 U.S.C. § 355(j)(5)(C), and has directed federal courts to exercise jurisdiction over these disputes "to the extent consistent with the Constitution," 35 U.S.C. § 271(e)(5). Under the Supreme Court's decision in MedImmune, Inc. v. Genentech, Inc., declaratory judgment jurisdiction is created when "the facts alleged, under all the circumstances, 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." 549 U.S. 118, 127, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007) (quoting Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 85 L.Ed. 826 (1941)) (internal quotation mark omitted).
In a number of past cases we have considered the scope of declaratory jurisdiction in this context. Most pertinent are our decisions in Caraco and Janssen. In Caraco, 527 F.3d at 1286, the patents listed in the Orange Book were U.S. Patent No. RE34,712 ("the '712 patent"), which expired in 2012, and U.S. Patent No. 6,916,941 ("the '941 patent"), which expires in 2023. The first ANDA filer (Ivax) was entitled to launch upon the expiration of the '712 patent.
In Janssen, 540 F.3d at 1357-58, the patents listed in the Orange Book were U.S. Patent No. 4,804,663 ("the '663 patent"), which expired in 2008, and U.S. Patent Nos. 5,453,425 and 5,616,587 ("the '425
We first address the question whether, under our decisions in Caraco and Janssen, declaratory judgment jurisdiction existed when Dey first brought this action on June 20, 2008. We agree with the district court that Dey has done "nothing equivalent to Apotex's stipulation to the infringement and validity of the [first-expiring] patent [in Janssen]." Dey, 595 F.Supp.2d at 362. Just as in Caraco, the second ANDA filer (Dey) brought a declaratory judgment action over the last-expiring Orange Book patent (the '289 patent) after the NDA holder (Sunovion) only sued for infringement of the other Orange Book patents (the '755 and '994 patents). And like the second ANDA filer in Caraco, Dey "alleges it is being excluded from selling a non-infringing product," and this injury is "fairly traceable" to Sunovion and "redressible by a declaratory judgment that the ['289 patent] is not infringed." 527 F.3d at 1291-93.
As Sunovion conceded at argument, its only argument against finding that declaratory jurisdiction existed in June 2008 is that success in the declaratory judgment action alone is insufficient to redress Dey's injury because Dey would still need to succeed in the separate infringement litigation over the other Orange Book patents. See Oral Argument at 30:52-31:28. But this was also true in Caraco. We concluded that "only a judgment of invalidity or noninfringement with respect to both the '712 and '941 patents can trigger [the first ANDA filer's] exclusivity period." Caraco, 527 F.3d at 1295 (emphasis added).
Id. at 1293. Similarly, a favorable declaratory judgment for Dey on the '289 patent will eliminate the potential for that patent to exclude Dey from the market, and Dey would then only need a judgment of invalidity or noninfringement on the other Orange Book patents to trigger Breath's exclusivity period.
Under Sunovion's logic, if the Orange Book patents were divided between two declaratory judgment actions, then each case would preclude a finding of jurisdiction in the other. But the only reason there are two cases here is that Sunovion declined to sue Dey on all the Orange Book patents, and there is no reason to deny jurisdiction over the second action until the initial litigation has been resolved. As we held under materially identical facts in Caraco, simply eliminating one barrier is sufficient for declaratory jurisdiction, so long as litigation is also pending that could eliminate the other barriers. See 527 F.3d at 1293.
Having concluded that jurisdiction existed when Dey filed its declaratory judgment action in June 2008, we turn to Sunovion's argument that jurisdiction no longer exists. Sunovion does not attempt to argue that its covenant not to sue Dey over the '289 patent moots this case, as that argument is foreclosed by our contrary holding in Caraco. See 527 F.3d at 1297. Rather, Sunovion's argument has two parts: (1) It urges that as a practical matter, the separate litigation over the '755 and '994 patents cannot be concluded by a final judgment before Breath is entitled to launch its generic product on August 20, 2012;
The problem with Sunovion's view is that its last assumption is incorrect. The district court will not lose jurisdiction simply because the period of possible first generic market entry arrives. Even after Breath is entitled to launch, the possibility remains that Breath will not do so. Breath has not announced plans to launch on August 20, and it is well known that the first generic often elects to delay entry for various reasons, including possible payments from the brand-name manufacturer to delay the launch. In the debate leading up to the 2003 Hatch-Waxman amendments, Congress was concerned by the Federal Trade Commission ("FTC") report
Sunovion urges, however, that we held in Janssen that "a possible delay in the future of a first Paragraph IV ANDA filer in launching its generic product does not give rise to declaratory judgment jurisdiction." Appellant's Br. 34 (quoting Janssen, 540 F.3d at 1363). What Sunovion ignores is that there is a difference between finding that a controversy exists to initiate a suit and determining that the controversy has become moot. While Article III requires that "an actual controversy must be extant at all stages of review, not merely at the time the complaint is filed," the question of whether a controversy exists at a later stage of the proceeding is governed by mootness doctrine. Arizonans for Official English v. Arizona, 520 U.S. 43, 67, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997) (quoting Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 45 L.Ed.2d 272 (1975)). As the Supreme Court explained in Cardinal Chemical Co. v. Morton International, Inc.:
508 U.S. 83, 98, 113 S.Ct. 1967, 124 L.Ed.2d 1 (1993). As we noted in Benitec Australia, Ltd. v. Nucleonics, Inc., 495 F.3d 1340, 1345 (Fed.Cir.2007), Cardinal Chemical requires that the party arguing that a case has become moot bears "[t]he
We conclude that Sunovion has not met this burden. Indeed, Sunovion conceded at argument that this case will not be moot until Breath actually goes on the market in a way that would trigger its 180-day exclusivity period. See Oral Argument at 10:50; see also Eisai Co. v. Teva Pharms. USA, Inc., ___ U.S. ___, 131 S.Ct. 2991, 180 L.Ed.2d 818 (2011) (remanding a case with instructions to dismiss as moot where the first ANDA filer launched prior to a final judgment in the second ANDA's declaratory judgment action). It is uncontested that Breath has not yet marketed generic Xopenex, and that its failure to do so, absent a triggering event, could delay Dey's ability to market until 2021, when the '289 patent expires. Since there was jurisdiction when Dey filed this declaratory judgment action in June 2008, this case may proceed until rendered moot. We affirm the district court's judgment of noninfringement.
Costs to appellees.