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ABBOTT LABS. v. ZENITH LABS.

September 28, 1995

ABBOTT LABORATORIES, an Illinois corporation, Plaintiff,
v.
ZENITH LABORATORIES, INC., A New Jersey corporation, Defendant.



The opinion of the court was delivered by: NORDBERG

 Before the Court is Defendant Zenith Laboratories' Motion to Dismiss pursuant to Rule 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure and Motion for an Award of Attorney Fees and Expenses.

 I. BACKGROUND

 A. FACTS

 Plaintiff Abbott Laboratories ("Plaintiff"), in Count I of its Complaint dated June 5, 1995 ("Complaint"), has brought a patent infringement action against Defendant Zenith Laboratories ("Defendant") pursuant to 35 U.S.C. § 271(e)(2)(A). In Count II of the Complaint, Plaintiff seeks a declaratory judgment of infringement against Defendant pursuant to 28 U.S.C. § 2201.

 Plaintiff alleges that it has been selling terazosin hydrochloride under the trademark HYTRIN since 1987. (Complaint at P 6.) Plaintiff received approval on August 7, 1987 from the United States Food and Drug Administration ("FDA") for its New Drug Application ("NDA") to market HYTRIN. Id. at P 7. As a result, the Secretary of Health and Human Services ("the Secretary") added HYTRIN to its publically available list of drugs which have been approved for safety and effectiveness. Id. This is published as the FDA's "Approved Drug Products With Therapeutic Equivalence Evaluations" also known as the "Orange Book." According to Plaintiff, approved drugs may be used as the basis for a later applicant's Abbreviated New Drug Application ("ANDA") to obtain approval of the ANDA applicant's drug product under the provisions of 21 U.S.C. § 355(j). Id.

 Plaintiff alleges that it received a letter from Defendant dated September 9, 1994 stating that Zenith had filed an ANDA with the FDA requesting approval to market a generic version of Plaintiff's HYTRIN (terazosin hydrochloride). Id. at P 10. Defendant also sent Plaintiff samples of its proposed generic version of HYTRIN. Id. at P 11.

 Plaintiff claims that Defendant's sample includes the crystalline polymorph of terazosin hydrochloride and is a pharmaceutical composition as claimed in Plaintiff's United States Patent No. 5,294,615, entitled "Terazosin Polymorph and Pharmaceutical Composition" ("the '615 patent"). Id. at PP 5,8,12. The '615 patent claims (1) a crystalline polymorph of terazosin hydrochloride having a certain X-ray diffraction and (2) a pharmaceutical composition comprising a therapeutically effective amount of crystalline polymorph in a combination with a pharmaceutically acceptable carrier. Id. at P 8. The '615 patent was issued on March 15, 1994 and remains in full force and effect until March 15, 2011. Id. According to Plaintiff, its '615 patent is listed in the March, 1995 supplement to the "Orange Book." Id. at P 9 (emphasis added). As Defendant's ANDA application for approval to sell a generic form of HYTRIN does not address Plaintiff's '615 patent, Defendant's application constitutes an act of infringement under 35 U.S.C. § 271(e)(2)(A). Id. at P 13.

 In Count II of Plaintiff's Complaint, Plaintiff seeks a declaratory judgment under 28 U.S.C. § 2201. Plaintiff alleges that Defendant's threat to enter the market with its infringing product is imminent upon the expiration of Plaintiff's '097 patent on or about September 5, 1995. Id. at P 19. Plaintiff believes that Defendant is seeking FDA approval for its generic version of HYTRIN by as early as September 5, 1995, and that Defendant is taking action directed toward the making, selling, or using of its generic drug. Id. at PP 16,18. Furthermore, Plaintiff asserts that Defendant has never indicated, despite its opportunities to do so, that it does not plan to enter the market as soon as the FDA approves its generic form of HYTRIN. Id. at P 18. Plaintiff asserts that because Defendant's threat to enter the market is imminent, there is a substantial controversy between Plaintiff and Defendant of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. Id. at P 19.

 B. PROCEDURE

 Plaintiff brings its claim of patent infringement pursuant to 35 U.S.C. § 271(e)(2)(A) alleging that Defendant has infringed Plaintiff's '615 patent by filing an ANDA which seeks to obtain approval under the Federal Food, Drug, and Cosmetic Act "to engage in the commercial manufacture, use, or sale of a drug or veterinary biological product claimed in a patent or the use of which is claimed in a patent before the expiration of such patent." 35 U.S.C. § 271(e)(2). More specifically, Plaintiff charges that Defendant's filing of its ANDA requesting approval for the manufacture and sale of a generic version of HYTRIN infringes Plaintiff's '615 patent which does not expire until March 15, 2011.

 This is not the first time that Plaintiff has come before this Court claiming that Defendant infringed on its '615 patent pursuant to 35 U.S.C. § 271(e)(2)(A). Plaintiff brought a patent infringement action against Defendant pursuant to § 271(e)(2)(A) on November 14, 1994. In the Memorandum Opinion and Order issued by this Court on March 15, 1995 ("Prior Opinion"), this Court granted Defendant's Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) because Plaintiff failed to assert in its Complaint, dated November 14, 1994, that the '615 patent was listed in the "Orange Book." Abbott Labs. v. Zenith Labs., Inc., 1995 U.S. Dist. LEXIS 3256, no. 94 C 6792, 1995 WL 117984 (N.D. Ill., Mar. 15, 1995).

 When the Court issued its Prior Opinion, Plaintiff was granted leave to file an amended complaint by April 14, 1995. On April 6, 1995, Abbott filed a Motion for Final Order, which this Court granted, and a Motion to Preserve the Status Quo Pending Appeal, which this Court denied. Next, Plaintiff filed a motion on April 24, 1995 before the Federal Circuit for expedited review and to preserve the status quo pending appeal. On May 12, 1995, the Federal Circuit denied this motion in all respects. Subsequently, Plaintiff filed its Complaint in this Court on June 5, 1995. Plaintiff asked the Federal Circuit to stay the briefing schedule until this Court had an opportunity to consider the Complaint, or, in the alternative, to remand the case to this Court for consolidation.

 II. ANALYSIS

 A. RES JUDICATA

 Defendant asserts that this Court's Prior Opinion, Abbott Labs. v. Zenith Labs., Inc., 1995 U.S. Dist. LEXIS 3256, no. 94 C 6792, 1995 WL 117984 (N.D. Ill., Mar. 15, 1995), is res judicata to Plaintiff's claims. The test for applying the doctrine of res judicata has three elements. "There must be (1) a final judgment on the merits in a prior action; (2) identity of the cause of action in both the prior and subsequent suits; and (3) identity of parties or privies in these suits." Hawxhurst v. Pettibone Corp., 40 F.3d 175, 180 (7th Cir. 1994).

 In this case, there is identity of parties and identity of the cause of action. At issue is whether there was a final judgment on the merits. In the previous quit between Plaintiff and Defendant, Final Judgment was granted on April 18, 1995. In the Prior Opinion this Court granted Defendant's Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).

 A dismissal under Rule 12(b)(6) can be on the merits, in which case the principles of res judicata may bar an attempt to assert the same claim. Wade v. Hopper, 993 F.2d 1246, 1252 (7th Cir.), cert. denied, 510 U.S. 868, 126 L. Ed. 2d 151, 114 S. Ct. 193 (1993); Cannon v. Loyola Univ. of Chicago, 784 F.2d 777, 781 (7th Cir. 1986), cert. denied, 479 U.S. 1033, 93 L. Ed. 2d 834, 107 S. Ct. 880 (1987). However, when a Rule 12(b)(6) Motion is on the merits, it is on the merits of the plaintiff's complaint as it is currently pending before the court. In other words, this Court issued Final Judgement on the merits as presented in Plaintiff's November 14, 1994 complaint, not the merits as stated in Plaintiff's new Complaint. Plaintiff's Complaint now asserts an additional fact, a fact which this Court pin-pointed in its Prior Opinion as lacking.

 Wright and Miller cautioned against applying res judicata to a claim that was dismissed in the prior action on a Rule 12(b)(6) motion. 5A C. Wright, A. Miller, Federal Practice and Procedure § 1357 (2d ed. 1990). Wright and Miller explain:

 
It is doubtful that Rule 12(b)(6) normally should dispose of more than the question whether a particular statement constitutes a claim for relief. A court that thinks it convenient to test the merits under a preliminary motion should do so by converting the motion to dismiss into one for summary judgment, since this is the procedural device specifically designed to test the merits of the claim in advance of trial. Unless this has been done, application of res judicata seems to be a dubious path to follow.

 Id. In the Prior Opinion, this Court did not convert Defendant's Motion to Dismiss pursuant to Rule 12(b)(6) into a Motion for Summary Judgment. The court found that, because Plaintiff omitted a vital fact, the fact that the '615 patent was listed in the "Orange Book," it failed to assert a cause of action for which relief may be granted.

 This case can be distinguished from those cases cited by Defendant in which the court applied the doctrine of res judicata. In both Wade and Cannon, the plaintiffs presented the exact same set of facts to the court in their new complaints as they had asserted in their prior complaints. The court in Wade determined that, the second suit brought by the plaintiff was based on "the same set of operative fact" as well as being based on the same legal theory. Wade, 993 F.2d at 1252. In Cannon, the court held that although the plaintiff's theory for relief had changed slightly, "her complaint [was] based on the same facts as her previous suits." Cannon, 784 F.2d at 778.

 In sum, this Court's Prior Opinion is not res judicata of Plaintiff's claims now before the Court. Plaintiff has asserted a new statement of facts and this Court must determine whether Plaintiff's new Complaint is sufficient to state a claim upon which relief may be granted.

 B. RULE 12(b)(1)

 Defendant moves to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) and for failure to state a claim for which relief may be granted pursuant to Rule 12(b)(6). Fed. R. Civ. P. 12(b)(1), (b)(6). This court will decide the 12(b)(1) Motion before the 12(b)(6) Motion because "the court must assume jurisdiction to decide whether the allegation state a cause of action on which the court can grant relief. . . ." Bell v. Hood, 327 U.S. 678, 682, 90 L. Ed. 939, 66 S. Ct. 773 (1946); Winslow v. Walters, 815 F.2d 1114, 1116 (7th Cir. 1987).

 This Court has federal question jurisdiction of this suit pursuant to 28 U.S.C. § 1328(a) as it arises under an Act of Congress relating to patents, Title 35, United States Code Section 1 et seq. The Supreme Court has held that a District Court has jurisdiction if the complaint purports to state a claim under federal law, regardless of the actual validity of the claim. Wheeldin v. Wheeler, 373 U.S. 647, 649, 10 L. Ed. 2d 605, 83 S. Ct. 1441 (1963). Therefore, even if this Court determines that Plaintiff has failed to state a claim for which relief may be granted under the Patent Code, this Court nevertheless has federal question jurisdiction because Plaintiff purports in its Complaint to state a claim under 35 U.S.C. § 271(e)(2)(A).

 C. RULE 12(b)(6)

 When considering a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a court must view all of the facts alleged in the complaint, as well as any inferences reasonably drawn from them, in the light most favorable to the plaintiff. Caldwell v. City of Elwood, Ind., 959 F.2d 670, 671 (7th Cir. 1992) (citing Mosley v. Klincar, 947 F.2d 1338, 1339 (7th Cir. 1991). A court should only dismiss a claim if it appears beyond a doubt that the plaintiff cannot establish any set of facts which would entitle it to the relief requested. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957).

 
the patent number and the expiration date of any patent which claims the drug for which the applicant submitted the application or which claims a method of using such drug and with respect to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug.

 21 U.S.C. § 355(b)(1). The Act makes provisions for adding a patent to a NDA in § 355(c)(2) by providing that,

 
if the holder of an approved application could not file patent information under [§ 355(b)] because no patent had been issued when an application was filed or approved, the holder shall file such information under this subsection not later than thirty days after the date the patent involved is issued. Upon the ...

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