The opinion of the court was delivered by: RONALD GUZMAN, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiffs Abbott Laboratories and Central Glass Company Ltd.
have sued Defendant Baxter Healthcare Corp. for alleged
infringement of U.S. Patent No. 6,677,492 ("the '492 patent") and
U.S. Patent No. 6,444,859 ("the '859 patent"). Defendant has
moved to dismiss the complaint pursuant to Federal Rule of Civil
Procedure ("Rule") 12(b)(1), or in the alternative, to stay this
case pending the outcome of case no. 01 C 1867. For the reasons
provided in this Memorandum Opinion and Order, the Court denies
Defendant's motion to dismiss for lack of subject matter
jurisdiction and denies Defendant's motion to stay.
This complaint arises out of an Abbreviated New Drug
Application ("ANDA") filed by Defendant in June 2000 seeking
approval to sell generic sevoflurane in aluminum containers lined
with an epoxyphenolic liner. Sevoflurane is a fluorine-based inhalation anesthetic first developed by Defendant in the
mid-1960s. It is used as a general anesthesia for patients
undergoing surgery and accounted for more than fifty percent of
sales of all anesthetics capable of being inhaled in 2000. The
original patent on sevoflurane has long since expired, and due to
a complicated licensing agreement, Abbott Laboratories is the
sole seller of sevoflurane in the United States. However, Abbott
has several patents for inhibiting degradation of liquid
sevoflurane by Lewis acids, which can result in harmful
by-products. In order to prevent degradation, Abbott determined
that a Lewis acid inhibitor (one of which is water) could be
added to the sevoflurane. Abbott's U.S. Patent No. 5,990, 176
("the '176 patent") teaches that to stop degradation, an
effective stabilizing amount of Lewis acid inhibitor must be
added to the sevoflurane. The '176 patent is at issue in pending
case no. 01 C 1867, in which Abbott filed for infringement under
the Hatch-Waxman Act.
This case stems from two separate patents the '492 patent and
the '859 patent. The '492 patent claims a method for storing
sevoflurane in a container having an interior wall coated with a
Lewis acid inhibitor. The '859 patent claims a method of
preventing degradation of sevoflurane by using at least 150 parts
per million of a Lewis acid inhibitor. Defendant's ANDA was
approved on July 2, 2002 for a generic sevoflurane product with a
water content of 130 parts per million or less, and the
specification states that the generic sevoflurane will be sold in
aluminum containers lined with an epoxyphenolic liner. The '492
patent was issued on January 13, 2004, and the '859 patent was
issued on September 3, 2002. Plaintiff in this case seeks a
declaratory judgment under 28 U.S.C. § 2201 that Defendant will
infringe the '492 patent and the '859 patent in December 2005,
the earliest that Defendant can market sevoflurane as a result of
an arbitral ruling, which was subsequently challenged by Defendant
and upheld by this Court. See Abbott Labs. v. Baxter Int'l,
Inc., Nos. 01 C 4809, 01 C 4839, 2002 WL 467147, at *5-6
(N.D.Ill. Mar. 27, 2002), aff'd, 315 F.3d 829 (7th Cir. 2003),
cert. denied, 124 S. Ct. 387 (2003). This case was filed on
February 2, 2004, almost twenty-two months before Defendant would
be able to market its generic product.
A defendant can move to dismiss under Rule 12(b)(1) by
challenging the subject matter jurisdiction of the court based on
the sufficiency of the allegations in the complaint (a facial
attack), or by challenging the factual basis for subject matter
jurisdiction (a factual attack). Cedars-Sinai Med. Ctr. v.
Watkins, 11 F.3d 1573, 1583 (Fed. Cir. 1993). When a facial
attack is made, the allegations in the complaint are accepted as
true and all reasonable inferences are drawn in favor of the
plaintiff. Ezekiel v. Michel, 66 F.3d 894, 897 (7th Cir. 1995).
If the motion denies or contradicts the allegations of
jurisdiction in the complaint, the movant is making a factual
attack. Cedars-Sinai, 11 F.3d at 1583. When a factual attack is
made, the court may look beyond the allegations in the complaint
to determine whether subject matter jurisdiction exists.
Ezekiel, 66 F.3d at 897.
Defendant launches a factual attack on jurisdiction because it
argues that Plaintiffs' characterization of this case as
reviewable by this Court under the Declaratory Judgment Act,
28 U.S.C. § 2201, is incorrect.
In the patent arena, potential infringers, to "clear the air of
infringement charges," have historically used declaratory
judgments under 28 U.S.C. § 2201 to declare that the patent will not be infringed or that the patent itself is
invalid. Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1362 (Fed. Cir.
2001). However, patentees can also attempt to declare their
rights under § 2201 against parties that will allegedly infringe
in the future. Lang v. Pacific Marine & Supply Co. Ltd.,
895 F.2d 761, 763 (Fed. Cir. 1990). Under § 2201, an "actual
controversy" must exist between the parties, and Lang outlines
two elements required for a patentee against an alleged infringer
to satisfy this requirement: 1) the alleged infringer "must be
engaged in activity directed toward making, selling, or using
. . . or be making meaningful preparation for such activity"; and
(2) the alleged infringer "must indicate a refusal to change the
course of its actions in the face of acts by the patentee
sufficient to create a reasonable apprehension that a suit will
be forthcoming." Id. at 764. The first element looks to the
alleged infringer's conduct to determine whether the controversy
is sufficiently real and substantial and has been labeled the
"reality" element, while the second element requires that the
controversy is of "sufficient immediacy" and has been labeled the
"immediacy" element. Id.; see Amgen, Inc. v. Hoechst Marion
Roussel, Inc., 3 F.Supp. 2d 104, 112 (D. Mass. 1998).
The "reality" element is met if the design of the potentially
infringing product has been substantially fixed, especially the
features that would potentially infringe, at the time the
complaint was filed. Sierra Applied Scis., Inc. v. Advanced
Energy Indus., Inc., 363 F.3d 1361, 1379 (Fed. Cir. 2004). The
greater the variability of a potentially infringing feature, the
more likely the suit will be advisory and "detached from eventual
reality." Id. For a decision to be anything other than an
advisory opinion, it must be established "`that the product
presented to the court is the same product which will be produced
if a declaration of noninfringement is obtained.'" Id. (quoting
Int'l Harvester Co. v. Deere & Co., 623 F.2d 1207, 1216 (7th Cir. 1980)).
Moreover, the possibility that the design of a product might
change is not alone enough to defeat jurisdiction. Lang,
895 F.2d at 764; Interdigital Tech. Corp. v. OKI Am., Inc.,
845 F. Supp. 276, 284 (E.D. Penn. 1994).
Defendant contends that the "reality" element is not met
because there is no guarantee that it will ultimately market a
sevoflurane product in the United States, and even if it did
market sevoflurane, the packaging may change between the filing
of the complaint and December 2005, when it would be permitted to
enter the market.
Defendant cites Abbott Laboratories v. Zenith Laboratories,
Inc. ("Zenith") in support of its contention that it may not
ultimately market sevoflurane in the United States.
934 F. Supp. 925 (N.D. Ill. 1995). In that case, the plaintiff was claiming
that the defendant was taking action toward making, selling, or
using of a generic form of HYTRIN because the defendant sought
FDA approval to market generic HYTRIN. Id. at 937-38. However,
the court specifically noted that FDA approval was not granted at
the time declaratory judgment was requested, and there was no
guarantee that FDA approval would be granted on any particular
date in the future. Id. at 938. Accordingly, the court stated
that a request for FDA approval does not necessarily mean that
the defendant will not change its course of actions and decide
against marketing the drug, thereby failing to meet the "reality"
element of the Lang test. Id.
Zenith can be distinguished from our case because the
Defendant Baxter had already received approval of its ANDA at
the time that the complaint was filed. Plaintiffs cite Glaxo
Group Ltd. v. Apotex, Inc. ("Apotex"), in which the district
court stated that the filing of an ANDA for an antibiotic "means
that defendant is ready or has at least made meaningful preparations to be ready to market the
allegedly infringing product." 130 F. Supp. 2d 1006, 1008 (N.D.
Ill. 2001). In addition, the Federal Circuit in Glaxo, Inc. v.
Novopharm, Ltd. ("Novopharm") noted that "systematically
attempting to meet the applicable regulatory requirements" by
filing an ANDA indicated an intent to enter the market.
110 F.3d 1562, 1571 (Fed. Cir. 1997). Novopharm also states that
declaratory relief "is directed to the time after the ANDA is
approved, when § 271(e)(1) no longer provides a shelter against
infringement liability." Id. at 1571. Apotex and Novopharm
both support the proposition that the filing of an ANDA
indicates intent to enter the market, and Novopharm further
indicates that the approval of an ANDA is sufficient to trigger
an action for declaratory relief. See also Amgen,
3 F. Supp. 2d at 113 (noting that the issuance by the FDA of a product license
would show good cause to reopen declaratory judgment claim);
Andrx Pharms. Inc. v. Biovail Corp. Int'l, 256 F.3d 799, 808
(D.C. Cir. 2001) (indicating in an antitrust suit that a party
"could have alleged its intent and preparedness to enter the
market by claiming that FDA approval was probable" even without
ANDA approval itself). Moreover, Defendant challenged the
findings of an arbitration panel that would prevent entry into
the market until December 2005, further evidence of its intent to
enter the market. Abbott Labs. v. Baxter Int'l, Inc., 2002 WL
467147, at *5-6.
Defendant suggests that even if it does enter the generic
sevoflurane market, the packaging used may not be a lined
container, and therefore the controversy would not meet the
"reality" prong of the Lang test. To support this contention,
Defendant cites Telectronics Pacing Systems, Inc. v. Ventritex,
Inc. a case in which the Federal Circuit held that a
defibrillator device that had only begun clinical trials did not
satisfy the "reality" requirement because there was no certainty that the
device approved would be the same device being used for clinical
trials. 982 F.2d 1520, 1527 (Fed. Cir. 1992). Venitrex, pursuant
to an Investigational Device Exemption from the FDA, began
clinical trials in July 1989 and sold defibrillator devices at
cost in order to obtain data for pre-market FDA approval. Id.
at 1521. Telectronics sought a declaratory judgment that
Venitrex's activity would infringe Telectronic's patents when its
clinical testing exception ended. Id. at 1522. The court found
that the ...