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Merck Sharp & Dohme Corp. v. Actavis Laboratories FL, Inc.

United States District Court, D. New Jersey

March 24, 2017

MERCK SHARP & DOHME CORP. Plaintiff,
v.
ACTAVIS LABORATORIES FL, INC., et al. Defendants.

          MEMORANDUM & ORDER

          PETER G. SHERIDAN, U.S.D.J.

         This matter comes before the Court on defendant Actavis, Inc. n/k/a Allergan Finance LLC's (“Allergan Finance”) motion to dismiss plaintiff Merck Sharp & Dohme Corp.'s (“Merck”) complaint for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1) (“Rule 12(b)(1)”). Defendants Actavis Laboratories FL, Inc., Andrx Corporation, & Actavis Pharma, Inc. (collectively, “Teva Defendants”), consent to this motion. (See Defs.' Br. at 1; Dkt. No. 114-1).

         Allergan Finance argues that Merck's complaint lacks subject matter jurisdiction against Allergan Finance because it divested its interests in an Abbreviated New Drug Application (“ANDA”) upon acquiring of its business by Teva Pharmaceuticals USA. The ANDA application is directed to posaconazole drug, which is protected by U.S. Pat. 5, 661, 151 (the “'151 patent”). Because of its divestiture of the ANDA application, Allergan Finance argues that it lacks the involvement in the marketing, distribution, or sale of Teva Defendants' ANDA products. As a result, extinguishing this Court's jurisdiction conferred by 35 U.S.C. § 271(e)(2).

         In opposition, Merck argues that the subject matter jurisdiction under Rule 12(b)(1) was satisfied at the time of filing of the complaint. In the complaint, Merck alleged that Allergan Finance submitted the ANDA application for purposes of engaging in commercial manufacture, use, or sale of the posaconazole (i.e., the ANDA product) prior to the expiration of the '151 patent. As such, Merck purports that this Court does have subject matter jurisdiction over Allergan Finance.

         Based on the arguments made in the briefs, arguments presented on the record on March 20, 2016, and for the reasons set forth below, this Court denies Allergan Finance's motion to dismiss Merck's complaint for lack of subject matter jurisdiction under Rules 12(b)(1).

         I.

         On June 25, 2015, Merck received a letter from Actavis Laboratories FL, Inc. (“Actavis Florida”), which indicated that Actavis Florida had submitted the ANDA application 207355 to the Food and Drug Administration (“FDA”). The ANDA application sought approval to engage in the manufacture, use or sale of a generic version of the tablet formulation of Merck's drug NOXAFIL®. This letter is on Actavis Florida's letter head, signed by Janet Vaugh, Director of Regulatory Affairs of Actavis Florida. (See Pl.'s Opp. Br., Dkt. No. 119 (“Pl.'s Opp. Br.”) at 5, citing Declaration of Charles H. Chevalier, Dkt. No. 119-1 (“Decl. of Chevalier”) at Ex. 1).

         On August 6, 2015 Merck initiated this suit alleging infringement of the '151 Patent against Actavis Florida, Actavis, Inc., and two other Actavis entities, which Merck believed were also actively involved in the preparation or submission of the ANDA application. (See Defs.' Br., Dkt. No. 114-1 (“Defs.' Br.”) at 6; citing Complaint (“Compl.”) at Dkt. No. 1). In its complaint, Merck alleged that-(i) Actavis, Inc. ultimately controlled Actavis Florida and other Actavis entities (Compl. at ¶ 12); (ii) defendants filed or caused the ANDA application to be filed, with the intent to seek to market and sell the ANDA product prior to the expiration of the '151 patent (Id. at ¶ 19); and (iii) thereby committing the tort of infringement under 35 U.S.C. § 271(e)(2) (Id. at ¶ 26).

         On October 16, 2015, defendants filed their answer in which they admitted that-(i) they did file the ANDA application; (ii) they did send the letter on or about June 25, 2015 to Merck; and (iii) that “Actavis” (a term defined to include all defendants) sought approval to market the Actavis ANDA product. (Pl.'s Opp. Br. at 7, citing Defendants' Answer, Defenses, and Counterclaims (Dkt. No. 16)). Further, defendants' stipulated that filing of the ANDA application would constitute infringement under 35 U.S.C. § 271(e)(2) if the asserted claims the '151 patent are found valid and enforceable. (See Decl. of Chevalier, Ex. 4 at ¶ 1).

         During the initiation of this suit, Actavis, Inc. was a parent company of Teva Defendants, which includes Actavis Florida; and was a subsidiary of Allergan plc (f/k/a Actavis plc). At that time Actavis Florida submitted the ANDA application. (See Declaration of Brian Anderson, Dkt. No. 114-2 (“Decl. of Anderson”) at ¶ 3).

         About a year after this lawsuit was filed, Allergan plc divested its generic pharmaceutical business to Teva Pharmaceutical USA (“Teva”), and as such Teva acquired Actavis Florida. At the oral argument, Merck did not contest this point. Thereafter, Actavis, Inc. changed its name to Allergan Finance, and remains a wholly owned subsidiary of Allergan plc. (Decl. of Chevalier, Ex. 3). Accordingly, the documents submitted indicate that Allergan Finance does not retain any interest in the ANDA application, and it submits that it has no plans to market, distribute, or sell the posaconazole drug described in the ANDA application. (Decl. of Anderson at ¶¶ 5-6).

         As part of the divestment of its generic pharmaceuticals business, Teva Pharmaceutical Industries, Ltd. assumed all the liabilities of Allergan plc's generic pharmaceuticals business, including liabilities for infringement. (Id. at ¶ 9; citing Exhibit A: Master Purchase Agreement between Allergan plc and Teva Pharmaceutical Industries, Ltd., dated July 26, 2015).

         II.

         Pursuant to the Federal Rules of Civil Procedure, Rule 12(b)(1), a claim can be dismissed for “lack of jurisdiction over the subject matter.” This motion to dismiss may be asserted at any time in a case. In re Kaiser Group Int”l, Inc., 399 F.3d 558, 565 (3d Cir.2005). The court, when faced with a Rule 12(b)(1) motion to dismiss, usually determines jurisdiction based on the date the complaint is filed. 28 U.S.C.A. § 1338 (“The district ...


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