Opinion
04 Civ. 0757 (SAS).
October 21, 2004
Dimitrios T. Drivas, Esq, Jeffrey J. Oelke, Esq., Catherine Lacavera, Esq., White Case LLP, New York, New York, for Plaintiffs.
Frank D. Rodriguez, Esq., Vijayant Pawar, Esq., Budd Larner, P.C., Short Hills, New Jersey, for Defendants.
OPINION AND ORDER
I. INTRODUCTION
Novartis Corporation, Novartis Pharmaceuticals Corporation and Novartis International AG (collectively, "Novartis") bring this patent infringement suit against Dr. Reddy's Laboratories, Ltd. and Dr. Reddy's Laboratories, Inc. (collectively, "DRL"). Novartis claims that DRL's New Drug Application ("NDA") to the United States Food and Drug Administration ("FDA") seeking approval to market amlodipine maleate and benazepril hydrochloride combination capsules ("DRL's Combination Capsules") infringes on a patent owned by Novartis. DRL now moves for an order staying these proceedings pending the decision by the FDA on its Administrative Stay of Action (the "FDA Stay") concerning DRL's New Drug Application for its amlodipine maleate product (AmVaz®), which may moot this action. Novartis opposes DRL's motion to stay the litigation. For the reasons set forth below, DRL's motion to stay these proceedings is granted.
See Complaint ¶ 20.
See id.
See Memorandum of Law in Support of DRL's Motion for Stay ("DRL Mem.") at 1. See also 2/4/04 Food and Drug Administration Administrative Stay of Action ("FDA Stay"), Ex. A to Pawar Decl.
See Novartis' Opposition to DRL's Motion to Stay the Case ("Novartis Opp.") at 9.
II. BACKGROUND
A. New Drug Applications Under 21 U.S.C. § 355(b)(2)
Section 355 of Title 21 of the United States Code authorizes abbreviated new drug applications which shorten the time and effort needed to obtain marketing approval from the FDA. An abbreviated application may be filed for a generic drug that is the same as a drug previously approved (referred to as a "pioneer drug") or that differs from the pioneer drug in specified ways. The abbreviated application allows an applicant to substitute bioequivalence data for the extensive animal and human studies of safety and effectiveness that must accompany a full new drug application.
See Eli Lilly Co. v. Medtronic, Inc., 496 U.S. 661, 676 (1990).
See id.
See id.
In order to protect against patent infringement, applicants must file with the FDA the patent number and expiration date of any patent which claims the drug that is the subject of the application or which claims a method of using such drug with respect to which a claim of patent infringement could reasonably be asserted. Upon approval of a NDA or receipt of supplemental patent information, the FDA publishes this information in a listing called "Approved Drug Products with Therapeutic Equivalence Evaluations" (commonly known as the "Orange Book") pursuant to 21 U.S.C. § 355(b)(1).
[Abbreviated applications] are required to contain one of four certifications with respect to each patent named in the pioneer drug application: (i) that such patent information has not been filed, (ii) that such patent has expired, (iii) the date on which such patent will expire, or (iv) that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted."
See id.; see also 21 U.S.C. § 355(b)(1).
See Del Greco v. CVS Corp., No. 03 Civ. 1262, 2004 WL 2211600 at *15 (S.D.N.Y. Sept. 22, 2004).
Medtronic, 496 U.S. at 677 (quotation marks omitted). See also 21 U.S.C. §§ 355(b)(2)(A)(i)-(iv).
This certification determines the date on which approval of the new drug application can take effect. An applicant who makes the fourth certification (a "Paragraph (iv) Certification") is required to give notice to the holder of the patent alleged to be invalid or not infringed, stating that an application has been filed seeking approval to engage in the commercial manufacture, use, or sale of the drug before the expiration of the patent and including a detailed statement of the factual and legal basis for the applicant's opinion that the patent is not valid or will not be infringed. If the patent owner brings a lawsuit for infringement within forty-five days of receiving notice of the certification, then approval of the NDA may only be made "upon the expiration of the thirty-month period beginning on the date of the receipt of the notice" unless there is a court determination that "the patent is invalid or not infringed (including any substantive determination that there is no cause of action for patent infringement or invalidity)." If the patent owner does not initiate a lawsuit within forty-five days, approval of the NDA may become effective immediately.
See Medtronic, 496 U.S. at 677. "If the applicant makes either the first or the second certification, approval can be made effective immediately. If the applicant makes the third certification, approval of the application can be made effective as of the date the patent expires." Id.
21 U.S.C. § 355(c)(3)(C). See also Medtronic, 496 U.S. at 678 (stating that section 271(e)(2) of Title 35 of the United States Code creates "a highly artificial act of infringement" consisting solely of submitting a NDA containing a Paragraph (iv) Certification that is in error as to whether the new drug violates the relevant patent).
B. Novartis' '802 Patent
The United States Patent and Trademark Office issued U.S. Patent No. 6,162,802 (the "'802 Patent") on December 19, 2000. The '802 Patent, entitled "Synergistic Combination Therapy Using Benazepril and Amlodipine for the Treatment of Cardiovascular Disorders and Compositions Therefor," covers a range of ratios of specified amounts of benazepril and amlodipine (or pharmaceutically acceptable salts of either or both), used for treating hypertension in humans. The '802 Patent has been assigned to Novartis Corporation, the current owner of the patent. Novartis Corporation exclusively licensed the '802 Patent to Novartis International AG, which in turn exclusively licensed the '802 Patent to Novartis Pharmaceuticals Corporation. The '802 Patent is listed in the Orange Book.
See Complaint ¶ 10.
See id. ¶¶ 10, 12.
See id. ¶ 11.
See id.
See id. ¶ 14.
C. DRL's New Drug Application for Amlodipine Maleate
In December 2001, DRL filed a NDA under 21 U.S.C. § 355(b)(2) seeking approval to market AmVaz®, a heart medicine, whose active ingredient is a chemical commonly known as amlodipine maleate. Pfizer, Inc. ("Pfizer") sued DRL on June 12, 2002 in the District of New Jersey alleging that AmVaz® infringed U.S. Patent No. 4,572,909, which covers Pfizer's amlodipine besylate product. The FDA initially approved DRL's amlodipine maleate product. Then Pfizer sued the FDA in the District of Columbia to overturn the approval. DRL intervened in that action.
See 7/23/04 Declaration of Vijayant Pawar in Support of DRL's Motion for a Stay of Proceedings ("Pawar Decl.") ¶ 2; DRL Mem. at 2.
See Pawar Decl. ¶ 3.
See id. ¶ 10.
See id.
See id.
On February 4, 2004, in light of questions raised about the data used in DRL's NDA for the amolodipine maleate product, the FDA issued the FDA Stay. The FDA action stays the effective date of the FDA's approval of the amlodipine maleate product, and prohibits DRL from marketing any such product until the FDA has reevaluated the application and determined that the drug has been shown to be safe and effective. Both Pfizer's suit against DRL in the District of New Jersey and Pfizer's suit against the FDA in District of Columbia have been stayed pending the lifting of the FDA Stay.
See id. ¶ 11. See also FDA Stay.
See Pawar Decl. ¶¶ 12-14; 5/25/04 Order of the United States District Court for the District of New Jersey, Ex. C. to Pawar Decl.; 4/6/04 Order of the United States District Court for the District of Columbia, Ex. B. to Pawar Decl.
D. Novartis' Dispute with DRL
On December 23, 2003, Novartis received notice that DRL had filed a NDA with the FDA seeking approval to market DRL's Combination Capsules. On February 2, 2004, Novartis brought the present suit against DRL alleging that DRL's Combination Capsules (containing amlodipine maleate and benazepril hydrochloride) infringe on Novartis' Lotrel® (a combination of amlodipine besylate and benazepril hydrochloride), which is covered by the '802 patent. Novartis' suit triggered the thirty-month stay of approval by the FDA of the NDA for DRL's Combination Capsules. DRL counterclaimed seeking a declaration that DRL's filing of a NDA seeking FDA approval of DRL's Combination Capsules does not infringe any valid and enforceable claim of Novartis' '802 patent. DRL now moves to stay these proceedings pending the completion of the FDA's reevaluation of the safety and efficacy of DRL's amlodipine maleate product.
See Complaint ¶ 17.
See id. ¶ 20.
See Answer of DRL to Novartis' Complaint and Counterclaims ¶ 65.
III. LEGAL STANDARD
"[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance." When faced with a motion to stay patent infringement litigation pending an administrative decision, courts have considered (1) whether a stay will simplify the issues in question and promote judicial economy; (2) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; and (3) how far the litigation has already progressed.
Landis v. North Am. Co., 299 U.S. 248, 254 (1936).
See Aerotel, Ltd. v. IDT Corp., No. 03 Civ. 6496, 2003 WL 23100263 (S.D.N.Y. Dec. 30, 2003).
IV. DISCUSSION
A. A Stay Will Simplify the Issues and Promote Judicial Economy
A stay of these proceedings pending the completion of the FDA's reevaluation will simplify the issues before this Court and promote judicial economy. If the FDA Stay remains in effect or if the FDA withdraws its approval of DRL's amlodipine maleate product, DRL would not be permitted to market its Combination Capsules, which contain amlodipine maleate. Thus, the FDA's decision may moot the case before this Court. DRL is requesting this stay relatively early in the litigation, as discovery has just begun. A stay of this case will therefore conserve judicial and party resources by avoiding potentially needless and expensive discovery.
See Alberta Gas Chems., Ltd. v. Celanese Chem. Co., 650 F.2d 9, 14 (2d Cir. 1981) (remanding case to the trial court with a direction for a stay pending an administrative agency's decision) ("We believe that the Commission's decision . . . will materially affect, or perhaps definitively conclude, the federal action now before us.").
See Aerotel, 2003 WL 23100263 at *2 (finding that a stay of litigation is warranted where "litigation has just begun"); ASCII Corp. v. STD Entertainment USA, Inc., 844 F. Supp. 1378, 1381 (N.D. Cal. 1994) (granting a stay of litigation pending the outcome of the U.S. Patent and Trademark Office's reexamination or reissuance proceedings where the parties were in "the initial stages of the lawsuit").
See SmithKline Beecham Corp. v. Apotex Corp., No. Civ.A. 99-CV-4304 et. al., 2004 WL 1615307 at *8 (E.D. Pa. July 16, 2004) ("If we decline to stay these proceedings, there is substantial risk that the parties will engage in costly, time-consuming discovery that might ultimately be unnecessary.").
B. A Stay Will Not Unduly Prejudice Novartis If Novartis Is Granted a Commensurate Extension of the Thirty-Month Stay of Approval
Novartis contends that a stay of these proceedings will be prejudicial to its right to seek a court determination of its patent rights within the thirty-month period provided for by section 355(c)(3)(C), unless Novartis is given a commensurate extension of that period. Novartis argues that it would be an abuse of the statutory scheme to allow a new drug applicant making a Paragraph (iv) Certification to benefit from a stay of litigation by letting the clock run on the thirty-month stay of FDA approval of the NDA.
DRL does not object to tolling the thirty-month stay of approval of DRL's Combination Capsules during the pendency of a stay of these proceedings. Further, the Court has the discretion to extend the thirty-month period if "either party to the action failed to reasonably cooperate in expediting the action." DRL cannot feasibly argue that it is reasonably cooperating in expediting the action when it has asked the court to stay the proceedings. Therefore, the thirty-month period will be tolled during the stay of these proceedings.
See DRL's Reply to Novartis' Opposition to Motion for Stay ("DRL Reply") at 2.
21 U.S.C. § 355(c)(3)(C). See also Eli Lilly Co. v. Zenith Goldline Pharm., Inc., No. IP99-0038-C-H/G, 2001 WL 238090 (S.D. Ind. March 8, 2001) (granting extension of thirty-month stay until the entry of final judgment where drug applicant that made a Paragraph (iv) Certification failed to meet the case management deadline for serving its expert witness reports).
With an extension of the thirty-month period, Novartis will not be disadvantaged by a stay of these proceedings. Novartis argues that there is no evidence concerning when the FDA is likely to take action and that DRL's Paragraph (iv) Certification challenge to the '802 Patent "cast[s] a cloud over [the] patent that Novartis is anxious to clear." However, DRL is prohibited from marketing any product containing amlodipine maleate during the FDA Stay, thereby protecting Novartis from suffering economic harm during the pendency of a stay of these proceedings. Also, it is in DRL's interest to obtain quick approval to market its product. Consequently, there is no justification for requiring the parties to move forward with discovery when the FDA's decision regarding its reevaluation of the drug may moot these proceedings.
Novartis Mem. at 10, 13.
V. CONCLUSION
For the foregoing reasons, DRL's motion for a stay pending the completion of the FDA's reevaluation of DRL's amlodipine maleate product is granted. The parties are to immediately advise the Court of any action taken by the FDA regarding the NDA for DRL's amlodipine maleate product. Further, the thirty-month limitation on FDA approval of DRL's Combination Capsules is tolled during the pendency of this stay. The Clerk of the Court is directed to close this motion [# 14 on the docket sheet] and transfer this action to the suspense docket pending further order of the Court.
SO ORDERED.