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TEVA PHARMACEUTICALS USA, INC. v. ABBOTT LABORATORIES.

January 9, 2004.

TEVA PHARMACEUTICALS USA, INC., Plaintiff
v.
ABBOTT LABORATORIES, Defendant



The opinion of the court was delivered by: JOAN H. LEFKOW, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff, Teva Pharmaceuticals USA, Inc. ("Teva"), filed this action seeking a declaratory judgment that United States Patent Nos. 5,844,105 ("the `105 patent"), 5,945,405 ("the `405 patent"), and 5,858,986 ("the `986 patent") held by defendant, Abbott Laboratories ("Abbott"), are invalid and would not be infringed if Teva commercially marketed a generic version of Abbott's antibiotic BIAXIN. Before the court is Abbott's Motion to Dismiss for Lack of Subject Matter Jurisdiction, claiming that no case or controversy existed at the time Teva filed its suit. For the reasons stated below, Abbott's motion is denied.

I. Facts

  Abbott is the exclusive licensee of United States Patent No. 4,331,803 ("the `D803 patent"), a compound patent relating to clarithromycin, the active ingredient in Abbott's antibiotic BIAXIN. The `803 patent expires on May 23, 2005. In addition to the compound patent, Abbott is the current holder of the `105 patent, the `405 patent, and the `986 patent, all of Page 2 which relate to crystal forms of clarithromycin. Abbott is also the current holder of Canadian Patent 2,261,732 ("the `732 patent"), which relates to BLAXIN products marketed in Canada.

  On June 18, 2002, Novopharm Limited ("Novopharm"), a Canadian affiliate of Teva, served a "Notice of Allegation"*fn1 on Abbott and its Canadian Subsidiary, Abbott Laboratories Limited,*fn2 pertaining to an Abbreviated New Drug Submission ("ANDS") filed by Novopharm seeking regulatory approval to market a generic version of BIAXIN in Canada. In the Notice of Allegation, Novopharm asserted that the `732 patent was invalid and that Novopharm's clarithromycin product would not infringe the `732 patent. In response to the Notice of Allegation, Abbott filed a "Regulatory Application" in the Federal Court of Canada seeking an order prohibiting the Canadian Minister of Health from issuing a Notice of Compliance ("NOC") to Novopharm until the `732 patent expires.*fn3 Abbott has also filed Regulatory Applications against four other generic manufacturers who have challenged the `732 patent. On October 14, 2003, Novopharm agreed to withdraw its Notice of Allegation, and Abbott in turn agreed to discontinue its Regulatory Application.

  On December 17, 2002, Teva submitted an Abbreviated New Drug Application ("ANDA") to the United States Food and Drug Administration ("FDA") seeking approval to Page 3 market a generic version of BIAXIN in the United States. On August 6, 2003, the same day Teva filed the present action, Teva sent a letter informing Abbott of the lawsuit and asking Abbott to provide a covenant not to sue. Abbott has refused to provide Teva with a covenant not to sue.

  On three other occasions, Abbott has sued or maintained suit against Teva or its affiliate Novopharm for patent infringement relating to other drugs for which Teva has filed ANDAs: (1) Abbott Laboratories v. Novopharm Ltd., 00 CV 2141, 00 CV 5094, and 01 CV 1914 (N.D. Ill.), concerning fenofibrate; (2) Abbott Laboratories, Fournier Industrie at Sante & Laboratories Fournier SA v. Teva Pharmaceutical Co., Inc., C.A. 02-1512 (D. Del.), concerning fenofibrate; and (3) Knoll Pharmaceutical Co., Inc. and The John and Lois Arnold Family Ltd. Liab. P'Ship v. Teva Pharmaceuticals USA, Inc., 01 CV 1646 (N.D. Ill.), concerning vicoprofen.

 II. Requirements for Jurisdiction Under the Declaratory Judgment Act

  The Declaratory Judgment Act limits issuance of a declaratory judgment to cases of "actual controversy." 28 U.S.C. § 2201 (a). If no actual controversy exists between the parties regarding the subject on which declaratory judgment is sought, the court lacks subject matter jurisdiction. Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-40 (1937); Spectronics Corp. v. H.B. Fuller Co., 940 F.2d 631, 634 (Fed. Cir. 1991). A declaratory judgment "may not be a medium for securing an advisory opinion in a controversy which has not arisen." Coffman v. Breeze Corp., 323 U.S. 316, 324 (1945).

  In declaratory judgment actions involving allegations of patent noninfringement, invalidity, or unenforceability, an "actual controversy" exists where there is both (1) an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit, and (2) present activity by the Page 4 declaratory plaintiff which could constitute infringement or concrete steps taken with the intent to conduct such activity, Fina Research, S.A. v. Baroid Ltd., 141 F.3d 1479, 1481 (Fed. Cir. 1998). The declaratory plaintiff bears the burden to establish, by a preponderance of the evidence, that the two-part test for an actual controversy has been met. See McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936)("[T]he court may demand that the party alleging jurisdiction justify his allegations by a preponderance of evidence.").

  A. Reasonable Apprehension of Infringement Suit

  The first prong of the "actual controversy" test looks to whether the conduct of the patent holder created an objectively reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit. Spectronics, 940 F.2d at 634; Fina Research., 141 F.3d at 1481. To demonstrate a reasonable apprehension of suit, a declaratory plaintiff need not establish that the defendant has made an explicit threat. Kos Pharms., Inc. v. Barr Labs, Inc., 242 F. Supp.2d 311, 314 (S.D.N.Y. 2003). It must, however, demonstrate "conduct that rises to a level sufficient to indicate an intent [of the patentee] to enforce its patent, i.e. to initiate an infringement action." EMC v. Norand Corp., 89 F.3d 807, 811 (Fed. Cir. 1996). The subjective impressions of the plaintiff are insufficient to satisfy the requirement, Rather, the court must find objective facts indicating the intent of the patentee to enforce its patent, considering the totality of the circumstances at the time the complaint was filed. Arrowhead, 846 F.2d at 736.

  Teva contends that it reasonably apprehends a patent infringement suit by Abbott based on three factors: (1) Abbott commenced proceedings in Canada under the Patented Medicines (Notice of Compliance) Regulations ("the PM(NOC Regulations") against Novopharm, a Teva affiliate, in connection with Novopharm's attempt to. obtain approval to market generic versions Page 5 of BLAXIN in Canada; (2) Abbott has refused to covenant that it will not enforce its patent rights against Teva; and, (3) Abbott has a history of patent enforcement against Teva concerning Teva's efforts to market generic versions of Abbott's brand name drugs. Abbott denies that these factors give Teva any reasonable apprehension of a patent infringement suit. The court is persuaded that, when considered together, the Canadian proceedings and Abbott's history of patent enforcement against Teva rise to a ...


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