In a recent decision of interest, the Southern District of New York interpreted the term "submit" in 35 U.S.C. § 271(e)(2) to find that an entity that did not formally submit the ANDA could nevertheless be held liable for infringement under the Hatch-Waxman Act. In re Oxycontin Antitrust Litigation, 04-MD-1603 (SHS) (S.D.N.Y. October 19, 2012). Read the court's decision here.
Plaintiffs, makers of OxyContin® brand oxycodone hydrochloride extended release tablets, sued Defendants, Varam, Inc. ("Varam") and KVK-Tech, Inc. ("KVK"), for infringement under § 271(e)(2) after Varam submitted an ANDA to FDA containing a Paragraph IV certification against Plaintiffs' Orange Book patents. KVK moved to dismiss Plaintiffs' infringement claims arguing that the court lacked subject matter jurisdiction and that Plaintiffs failed to state a claim because only Varam had submitted the ANDA under § 271(e)(2). See Slip Op. at 6.
In denying KVK's motions to dismiss, the court cited various facts demonstrating KVK's substantial involvement in the preparation of the ANDA. For example, the court found that KVK "ha[d] taken every relevant action save for the final review, signing and mailing of the ANDA." Id. at 8. Varam's sole employee and shareholder had "no scientific or technical expertise" and "relied on KVK's assurance" that the ANDA was "in order" before submitting it to FDA. Id. at 4. KVK, as Varam's official agent, had also communicated with FDA about the ANDA, and KVK was entitled to receive monetary benefit if, by KVK's efforts, the ANDA was approved. Id. at 4, 8.
The court discussed two lines of Hatch-Waxman cases in which plaintiffs have attempted to add as parties entities connected to the ANDA filer. The court distinguished the first line of cases, which included SmithKline Beecham Corp. v. Geneva Pharm., Inc., 287 F. Supp. 2d 576 (E.D. Pa. 2002) and SmithKline Beecham Corp. v. Pentech Pharm, Inc., No. 00-cv-2855, 2001 U.S. Dist. LEXIS 1935 (N.D. Ill. Feb. 16, 2001), wherein the Eastern District of Pennsylvania and the Northern District of Illinois found that API suppliers could not be liable for infringement under § 271(e)(2) even though their drug master files were referenced in the respective defendants' ANDAs. The court noted that the API manufacturers in those cases "provided ingredients and information that were used in the ANDA, as specifically protected by section 271(e)(1), but they did not take the extra step of handling the ANDA process for the named applicant ... nor did they have [a] direct financial stake in the ANDA ... ." Slip Op. at 9.
The court agreed with the reasoning of the second line of cases, including In re Rosuvastatin Calcium Patent Litigation, 719 F. Supp. 2d 388 (D. Del. 2010), which found that active participation in preparing the ANDA rendered the defendant a "submitter" under § 271(e)(2), stating "to find Varam but not KVK has €Üsubmit[ted]' the ANDA pursuant to section 271(e)(2) would be to elevate form over substance." Slip Op. at 10.
This decision continues a trend among courts interpreting provisions of the Hatch-Waxman Act in a manner that prevents parties who developed the ANDA product, prepared the ANDA, or have a significant financial stake in the outcome of an ANDA's approval from escaping the court's jurisdiction. See In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 693 F. Supp. 2d 409, 417-18 (D. Del. 2010) (denying defendants' motions to dismiss because plaintiffs alleged that defendants actively participated in preparation of the ANDA); Cephalon, Inc. v. Watson Pharm., Inc., 629 F. Supp. 2d 338, 349 (D. Del. 2009) (holding that defendants "submit[ted]" the ANDA under § 271(e)(2) because of their "active involvement in the preparation of the ANDA"); Wyeth v. Lupin Ltd., 505 F. Supp. 2d 303, 306-307 (D. Md. 2007) (denying defendant's motion to dismiss because defendant was "actively involved" in filing the ANDA with FDA); Aventis Pharma Deutschland GMBH v. Lupin Ltd., 403 F. Supp. 2d 484, 492-494 (E.D. Va. 2005) (denying defendant's motion to dismiss because defendant "submit[ted]" the ANDA within the meaning of § 271(e)(2) by acting as an agent of its parent company). Accordingly, this case is another important weapon for innovator companies to use against generics that attempt to forum shop by creating holding companies for the sole purpose of owning and submitting ANDAs in venues perceived to be favorable for the generic.
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