Opinion
No. 05 Civ. 0002 (LAP).
July 19, 2005
MEMORANDUM AND ORDER
Plaintiff Eon Labs, Inc., ("Plaintiff") brings the present suit pursuant to 28 U.S.C. § 2201, the Declaratory Judgment Act, against Defendant Pfizer, Inc. ("Defendant"). Defendant presently moves to dismiss Plaintiff's Complaint for lack of subject matter jurisdiction. Because Plaintiff has not established that it is in reasonable apprehension of suit, Defendant's motion is granted.
I. Background
Defendant manufactures and markets Zithromax brand azithromycin. Zithromax is covered by several United States patents, including U.S. Patent Nos. 5,605,889 (the "'889 Patent"), and 6,268,489 (the "'489 Patent"). The Patents are set to expire in November 2005. Plaintiff manufacturers and markets generic pharmaceuticals in the United States and has filed three Abbreviated New Drug Applications ("ANDAs") by which it seeks expedited approval to market generic versions of Zithromax brand azithromycin. Plaintiff filed a complaint for declaratory judgment seeking a declaration that Eon's generic version of azithromycin will not infringe upon any claim made by Pfizer on the '889 Patent or the '489 Patent.
Defendant asserts that Plaintiff: (1) has failed to allege an immediate and real controversy; and (2) has no reasonable apprehension of suit alleging copyright infringement against Plaintiff's '889 and '489 Patents. Plaintiff contends that reasonable apprehension of suit does exist, and it relies on: (1) Defendant's history of litigation in defending its patents; (2) Plaintiff's dependence on Teva Pharmaceuticals ("Teva") for its source of azithromycin; and (3) Defendant's refusal to grant a covenant not to sue.
II. Discussion
The Declaratory Judgment Act, 28 U.S.C. § 2201(a), provides:
[i]n a case of actual controversy within its jurisdiction . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.
As a threshold matter, the Declaratory Judgment Act "requires an actual controversy between the parties before a federal court may exercise jurisdiction over an action for a declaratory judgment."EMC Corp. v. Norand Corp., 89 F.3d 807, 810 (Fed. Cir. 1996). The actual controversy requirement is met 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 issue of a declaratory judgment." Id. (quoting Maryland Casualty Co. v. Pacific Coal Oil Co., 213 U.S. 270, 273 (1941)). This actual controversy must be in existence at all stages of the litigation and cannot merely be present at the filing of the complaint. Dr. Reddy v. aaiPharma, 66 U.S.P.Q. 2d 1878, 1884 (2002), (quoting Super Sack v. Chase 57 F.3d 1054, 1058 (Fed. Cir. 1995)). However, when an actual controversy does exist sufficient to warrant subject matter jurisdiction, "the district court is not required to exercise declaratory judgment jurisdiction, but has discretion to decline that jurisdiction."EMC Corp., 89 F.3d at 810.
In the classic patent declaratory judgment suit, i.e., where the declaratory plaintiff is laboring under the threat of litigation for alleged infringement of a patent, the `actual controversy' requirement means that there is a jurisdiction over the action if (1) the declaratory plaintiff has acted, or has made preparations to act, in a way that could constitute infringement, and (2) the patentee has created in the declaratory plaintiff a reasonable apprehension that the patentee will bring suit if the activity in question continues.Fina Oil v. John Ewen, 123 F.3d 1466, 1470 (Fed. Cir. 1997).
The first element of this test is satisfied if the declaratory plaintiff takes "concrete steps" towards activity that would constitute infringement. Kos Pharmaceuticals, Inc. v. Barr Laboratories, Inc. 242 F. Supp. 2d 311, 317 (S.D.N.Y. 2003). Here, the parties agree that the filing of an ANDA constitutes concrete steps towards infringement. " 35 U.S.C.S. § 271(e)(2) provides that a generic drug manufacturer infringes a patent by filing an ANDA to obtain approval for a generic drug product claimed by a valid and unexpired patent." Teva Pharms. USA, Inc. v. Pfizer Inc., 395 F.3d 1324, 1328 (Fed. Cir. 2005).
The second element of the test is satisfied if the defendant has engaged in conduct that creates on the part of the declaratory plaintiff a reasonable apprehension of suit. Jervis B. Webb Co. v. Southern Systems, Inc., 742 F.2d 1388, 1398 (Fed. Cir. 1984). This apprehension does not have to be the result of an express charge of infringement. "[T]he apprehension may be induced by subtler conduct if that conduct rises `to a level sufficient to indicate an intent [on the part of the patentee] to enforce its patent,' i.e., to initiate an infringement action."EMC Corp., 89 F.3d at 811 (quoting Shell Oil Co. v. Amoco Corp., 970 F.2d 885, 887 (Fed. Cir. 1992)). Without conduct amounting to an express charge of infringement, "the declaratory plaintiff must establish an actual controversy on the `totality of the circumstances.'" Dr. Reddy, 66 U.S.P.Q. 2d at 1884, (quoting Goodyear Tire and Rubber Co. V. Releasomers, Inc., 824 F.2d 953, 955 (Fed. Cir. 1987)).
Courts have specifically identified certain conduct as contributing to a declaratory plaintiff's reasonable apprehension. "[T]he fact that parties are engaged in litigation at the time the perceived threat is made or the fact that the patent holder has stated an intent to enforce its patent rights," may contribute to a declaratory plaintiff's apprehension. Dr. Reddy, 66 U.S.P.Q. 2d at 1884. The parties' prior and current litigation may also "demonstrate a significant legal history with respect to the manufacture of generic drugs." Id. at 1885. In addition, declaratory plaintiffs may point to the defendant's history of defending their patents and their failure to grant a covenant not to sue. However, "[a]lthough relevant to the analysis, neither of the factors . . . is dispositive." Teva Pharms. USA, Inc., 395 F.3d at 1333.
In the present case, Plaintiff asserts the existence of an immediate and real controversy. As a threshold matter, Plaintiff must establish an immediate and real controversy as a necessary step towards showing reasonable apprehension. See, e.g., id. In other words, Plaintiff must show that the alleged threat posed by Defendant is imminent. Here, Defendant's basic patent will expire in November 2005, and it takes approximately one month for an ANDA to be approved. Teva Pharmaceuticals USA, Inc. v. Pfizer Inc., Nos. 03-CV-7423 and 04-CV-4979, slip ops. (S.D.N.Y. July 27, 2004). Courts have routinely recognized imminence in cases where the marketing of generic pharmaceuticals will not take place for approximately two years. See, e.g., Kos, 242 F. Supp. 2d 311 at 318; Glaxo v. Apotex, 130 F. Supp. 2d 1006, 1009 (N.D. Ill, 2001). Accordingly, Plaintiff has established the existence of an immediate and real controversy.
Moving to the question of reasonable apprehension of suit, Plaintiff essentially lists three factors as contributing to its reasonable apprehension: (1) Defendant's past litigation behavior with respect to generic drug manufacturers; (2) Plaintiff's special relationship to another plaintiff before this Court in another case, Teva; and (3) Defendant's refusal to grant a covenant not to sue.
In describing Defendant's past litigation behavior, Plaintiff provides a history of infringement suits brought by Defendant against generic competitors, including foreign litigation concerning other patents. Plaintiff also references past patent infringement suits between these parties concerning different technologies. It is undisputed that Defendant has not initiated any proceedings, including foreign litigation, against Plaintiff with respect to the '889 or '489 patents or the technology generally.
While Plaintiff does argue that Defendant has sued Plaintiff in the past with regard to the drug Neurontin (unrelated to Zithromax), the Court of Appeals for the Federal Circuit has disclaimed the existence of reasonable apprehension where the patentee has sued the particular defendant in connection with different technologies. See Apotex, Inc. v. Pfizer, Inc., No. 04-CV-2539 (DC), 2005 WL 22849, at *7 (S.D.N.Y. Jan. 3, 2005). And while Defendant clearly has a history of defending its patents, such general history is insufficient to establish reasonable apprehension on the part of this declaratory plaintiff. See Teva Pharms. USA, Inc., 395 F.3d at 1333. Reasonable apprehension must be proved by objective evidence of the conduct of the patentee. "A purely subjective apprehension of an infringement suit is insufficient to satisfy the actual controversy requirement." Indium Corp. of Am. v. Semi Alloys, Inc., 781 F.2d 879, 883 (Fed. Cir. 1985).
Second, Plaintiff argues that the special relationship between itself and Teva, Inc. contributes to its reasonable apprehension of suit. Plaintiff relies upon this Court's reasoning in Teva Pharms. USA, Inc. v. Pfizer, Inc. (the "Teva Case") to conclude that the business relationship between Plaintiff and Teva (Plaintiff states that it is dependent upon Teva for its azithromycin and has identified Teva as its source of azithromycin in its ANDAs) confers upon the Plaintiff the same standing as Teva. However, Plaintiff provides no case law to support this novel contention. Absent such legal support, this Court can only accord the Teva Case the same precedential value it would any other relevant patent infringement case.
The Teva Case is also readily distinguishable from the present case. There, Pfizer had sued Teva for patent infringement in a foreign jurisdiction prior to Teva's declaratory judgment action; no such litigation history exists here. Defendant can only reference one past lawsuit where Defendant sued Plaintiff for patent infringement with regard to a different technology. A single lawsuit with respect to different technology does not create a history of litigation that can objectively give rise to reasonable apprehension. Teva Pharms. USA, Inc., 395 F.3d at 1333.
Finally, Plaintiff argues that Defendant's refusal to grant a covenant not to sue is further evidence of their reasonable apprehension. Notwithstanding the fact that Plaintiff's request for a covenant not to sue from Defendant was made two weeksafter the filing of the Complaint, "a refusal to grant a covenant not to sue . . . [a]lthough relevant to the analysis . . . is not dispositive." Teva Pharmaceuticals USA, Inc., 395 F.3d 1324, 1333 (Fed. Cir. 2005). In Teva Pharmaceuticals USA, Inc., the Court of Appeals for the Federal Circuit ruled that although Defendant Pfizer: (1) had a history of defending its intellectual property against Plaintiff Teva; (2) had refused to grant a covenant not to sue; and (3) had initiated previous lawsuits against a competitor of Plaintiff Teva concerning the same technology, no reasonable apprehension existed. Here, Plaintiff can only duplicate one of the three factors — the refusal to grant a covenant not to sue — that the Court of Appeals has already deemed insufficient to establish reasonable apprehension of suit.
III. Conclusion
Accordingly, Defendant's motion to dismiss (Docket No. 13) is granted as Plaintiff has failed to establish any reasonable apprehension of suit. The Clerk of the Court shall mark this action closed and all pending motion denied as moot.
SO ORDERED