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DR. REDDY'S LABORATORIES, LTD. v. PFIZER INC.

July 7, 2003

DR. REDDY'S LABORATORIES, LTD. AND DR. REDDY'S LABORATORIES, INC. PLAINTIFFS,
v.
PFIZER INC. DEFENDANT.



The opinion of the court was delivered by: Joel A. Pisano, District Judge.

OPINION [ Page 2]

Defendant Pfizer Inc. ("Pfizer") moves to dismiss this Complaint for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. Plaintiff Dr. Reddy's Laboratories ("DRL") seeks a declaratory judgment pursuant to 28 U.S.C. § 2201 that its generic version of setraline hydrochloride does not infringe upon U.S. Patent No. 5,248,699 (the "`699 patent"). Defendant Pfizer currently markets the brand name version of setraline hydrochloride. Zoloft, which is covered both by the `699 Patent and U.S. Patent No. 4,356,518 (the "`518 patent").

I. Statement of Facts

Zoloft, which has been approved by the FDA for the treatment of mood and anxiety disorders. is covered by two different United States patents; the `518 patent and the `699 patent. The `518 patent is directed towards the compound setraline itself, and this patent expires on December 30, 2005. The `699 patent covers setraline in a particular crystalline form ("Form I polymorph") and expires on September 28, 2010. Pfizer has filed both of these patent numbers and expiration dates in the "Orange Book," properly known as Approved Drug Products with Therapeutic Equivalence Evaluations.*fn1 Because FDA has granted a six month extension on exclusivity for the Zoloft product for the treatment of the pediatric population, any generic version of setraline hydrochloride product may not be marketed and sold to the public until June 30, 2006.

Plaintiff DRL has filed an Abbreviated New Drug Application ("ANDA") and seeks to market and sell a generic version of setraline in tablet form. By filing the ANDA, the maker of [ Page 3]

the generic version of the drug must demonstrate that the new drug is bioequivalent to the brand name version of the drug already approved by FDA through a New Drug Application ("NDA"). 21 U.S.C. § 355(j)(2). A party that files an ANDA seeking approval to market a generic version of a drug covered by patents listed in the Orange Book must include a certification with respect to every listed patent. 21 U.S.C. § 355(j)(2)(A)(vii); 21 C.F.R. § 314.94.

DRL made a "paragraph III certification" with respect to the `518 patent. 21 U.S.C. § 355(j)(2)(A)(vii)(III). The paragraph III certification indicates that the `518 patent covers the drug, will expire in December 2005, and that DRL will not market its generic product until the expiration of the patent. Because the FDA has granted a six month exclusivity extension to Pfizer for the Zoloft product, DRL may not receive FDA final approval to market its setraline tablets until June 30, 2006, at the earliest.

DRL made a "paragraph IV certification" with respect to the `699 patent, which expires on September 28, 2010. DRL's certification regarding the `699 patent is a representation that this patent is invalid, unenforceable. and/or will not be infringed by DRL's generic setraline product. 21 U.S.C. § 355 (j)(2)(A)(vii)(IV). The basis of this certification is DRL's representation that its generic setraline tablets are a particular crystalline form ("Form II polymorph") that is not covered by the claims in the `699 patent (covering Form I polymorphs). Based on this ANDA submission, DRL would not be required to wait until the expiration of the `699 patent in 2010 before marketing its generic setraline product.

In 1999, Ivax (a manufacturer of generic drugs) submitted an ANDA application to the FDA to market a generic setraline tablet, and filed a paragraph IV certification with respect to the `699 patent, and a paragraph III certification with respect to the `518 patent. Ivax (then Zenith [ Page 4]

Goldline) notified Pfizer on December 17, 1999 of this ANDA application and the paragraph IV certification with respect to the `699 patent. Within 45 days of this notification, Pfizer filed suit against Ivax alleging infringement of the `699 patent,*fn2 and the parties eventually settled this dispute.*fn3 The terms of the settlement agreement itself neither advance nor delay the date on which Zenith sought to market its generic product. Pfizer did not file an infringement action against DRL within 45 days after being notified of the paragraph IV certification regarding the `699 patent.

II. Standard for Declaratory Judgment

The Declaratory Judgment Act permits a court in a case of actual controversy within its jurisdiction to "declare the rights and other legal relations of any interested party seeking such declaration." 28 U.S.C. § 2201 (a). Even when an actual controversy exists, the assumption of this jurisdiction rests within "the unique and substantial discretion" of federal courts, as the "statute provides that a court `may declare the rights and other legal relations of an interested party[.]'" Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995) (citing 28 § 2201(a)). In any event, the Declaratory Judgment "may not be a medium for securing an advisory opinion in a controversy which has not arisen." Coffman v. Breeze Corps. Inc., 323 U.S. 316, 324 (1945) (citations omitted). [ Page 5]

The Federal Circuit has held jn patent cases that an actual controversy exists where there is "both (1) an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit, and (2) present activity which could constitute infringement or taken with the intent to conduct such activity." Amana Refrigeraton, Inc. v. Quadlux, Inc., 172 F.3d 852, 855 (Fed. Cir. 1999) (quoting BP Chems. v. Union Carbide Corp., 4 F.3d 975, 978 (Fed Cir. 1993)).*fn4 In showing a reasonable apprehension of facing an infringement suit, the plaintiff does not need to demonstrate an actual or expressly threatened lawsuit, but must demonstrate "conduct that rises to a level sufficient to indicate an intent [of the patentee] to enforce its patent, i.e., to initiate an infringement action." EMC Corp. v. Norand Corp., 89 F.3d 807, 811 (Fed. Cir. 1996) (citations omitted). However, subjective impressions of the plaintiff are insufficient to satisfy the requirement, and the court must find objective facts considering the "totality of the circumstances" at the time the complaint was filed. Arrowhead Indus. Water v. Ecolochem, 846 F.2d 731, 736 (Fed. Cir. 1988).

The second prong of this test requires infringement activity, or meaningful preparation along with the intent to commit infringing activity. The allegations supporting such a declaratory action must demonstrate an "immediate and real controversy" that would convey jurisdiction under the Declaratory Judgment Act. Telectronic's Pacing Sys. v. Ventritex, Inc., 982 F.2d 1520, 1527 (Fed. ...


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