United States District Court, N.D. Illinois, Eastern Division
October 7, 2004.
TEVA PHARMACEUTICALS USA, INC., Plaintiff,
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"), 5,858,986 ("the '986 patent"), 6,010,718 ("the '718
patent"), and 6,551,616 ("the '616 patent") held by defendant,
Abbott Laboratories ("Abbott"), are invalid and would not be
infringed if Teva commercially marketed a generic version of
Abbott's extended release clarithromycin product, BIAXIN XL.
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 granted.
I. Factual and Procedural Background
Abbott is the exclusive licensee of United States Patent No.
4,331,803 ("the '803 patent"), a compound patent relating to
clarithromycin, the active ingredient in both BIAXIN IR, Abbott's
immediate release clarithromycin product, and BIAXIN XL,'s
extended release clarithromycin product. 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 which relate to different
crystal forms of clarithromycin. Abbott is also the current
holder of the '718 and '616 patents, which relate to extended
release formulations of clarithromycin.
On December 17, 2002, Teva, a developer, manufacturer, and
marketer of generic pharmaceutical products, filed an abbreviated
new drug application ("ANDA") seeking approval from the Food and
Drug Administration ("FDA") to release a generic version of
Abbott's immediate release clarithromycin product, BIAXIN IR. On
the same day, Teva filed an ANDA seeking approval to release a
generic version of Abbott's extended release clarithromycin
product, BIAXIN XL.
On August 6, 2003, Teva filed suit in this court seeking a
declaratory judgment that (1) the '105 patent, the '405 patent,
and the '986 patent ("the Teva I patents") are invalid under
35 U.S.C. § 101, and (2) Teva's generic version of Abbott's
immediate release clarithromycin product would not infringe those
patents. See Teva Pharmaceuticals USA, Inc. v. Abbott
Laboratories, 301 F. Supp. 2d 819 (N.D. Ill. 2004) ("Teva I").
Teva I did not involve, indeed did not mention, Teva's attempt
to gain approval to release an extended release clarithromycin
product, and Abbott did not learn of Teva's attempt to do so
until filing of the instant suit.
Abbott filed a motion to dismiss Teva I for lack of
jurisdiction, claiming that no case or controversy existed at the
time the suit was filed, which the court denied. On March 15,
2004, Abbott filed an answer and asserted compulsory
counterclaims for infringement of the Teva I patents. Teva
filed a reply to Abbott's counterclaims on April 5, 2004.
On August 6, 2003, the same day Teva filed Teva I, Teva sent
a letter informing Abbott of the lawsuit and asking Abbott to
provide a covenant not to enforce the Teva I patents against Teva's immediate release clarithromycin product. 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 Canadian affiliate Novopharm Limited
("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
In addition, on June 18, 2002, Novopharm 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
IR in Canada. In the Notice of Allegation, Novopharm asserted
that the Canadian counterpart of the Teva I patents ("the
Canadian patent") was invalid and that Novopharm's immediate
release clarithromycin product would not infringe the Canadian
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 Canadian
patent expires.*fn3 Abbott has also filed Regulatory
Applications against four other generic manufacturers who have
challenged the Canadian patent. On October 14, 2003, Novopharm
agreed to withdraw its Notice of Allegation, and Abbott in turn
agreed to discontinue its Regulatory Application.
II. Requirements for Jurisdiction Under the Declaratory
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). Furthermore, even if a justiciable
controversy has been shown to exist, federal courts have
discretion to decline to exercise their jurisdiction.
International Harvester Co. v. Deere & Co., 623 F.2d 1207,
1217 (7th Cir. 1980).
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
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.").
In Teva I, the court held that Teva's submission of an ANDA
under 35 U.S.C. § 355(j) for its immediate release clarithromycin
product constituted an act of infringement sufficient to satisfy
the second prong of the "actual controversy" test.
301 F. Supp. 2d at 830. Teva also submitted an ANDA for its extended release
clarithromycin product. Thus, for the reasons set forth in Teva
I, Teva has satisfied the second prong of the "actual
controversy" test in this case.
The only issue before the court, then, is whether Abbott's
actions created a reasonable apprehension on the part of Teva
that it will face an infringement suit regarding its extended
release clarithromycin product. 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 in connection with Novopharm's
attempt to obtain approval to market a generic immediate release
clarithromycin product in Canada; (2) Abbott has a history of
patent enforcement against Teva concerning Teva's efforts to
market generic versions of Abbott's brand name drugs, including
filing compulsory counterclaims alleging infringement in Teva
I; and (3) Abbott has refused to covenant that it will not
enforce its patent rights against Teva.
With the exception of the counterclaims Abbott filed in Teva
I, these are exactly the factors on which Teva relied to
establish a reasonable apprehension of suit in Teva I. There
is, however, a crucial difference between the two cases they
concern two different products. As Teva admits, "the formulations
for Teva's Biaxin [IR] and Biaxin XL equivalents are different
from each other. . . ." (Resp., at 2.) The Federal Circuit has
made it clear that a declaratory relief plaintiff must establish
a reasonable apprehension of suit with respect to each product
Where, as here, a declaratory-judgment plaintiff
attempts to ground jurisdiction on activities
involving distinct, technologically different
products, the court must carefully calibrate its
analysis to each of the products. To do otherwise
would risk issuing an advisory opinion on one product
or on a method of using that product based on an
actual controversy involving another product.
Sierra Applied Sciences v. Advanced Energy Industries,
363 F.3d 1361
, 1374 (Fed. Cir. 2004). Carefully calibrating its
analysis to Teva's extended release product, the court finds that
Teva has failed to establish that it has a reasonable
apprehension of suit on that product.
A brief review of the court's reasoning in Teva I reveals the
flaw in Teva's argument. In that case, the court held that Teva
reasonably apprehended an infringement suit based on two factors,
the Canadian proceedings and Abbott's history of enforcing its
patent rights against Teva. The court indicated that neither of these factors, taken
alone, was dispositive of a reasonable apprehension of suit.
301 F. Supp. 2d at 822 ("[F]oreign litigation, while not dispositive
of a reasonable apprehension of suit in the United States, is one
factor to be considered in the analysis."), 825-26 ("In
combination with the Canadian proceedings, Abbott's recent
history of enforcement of its patent rights against Teva and its
affiliates is sufficient to create a reasonable apprehension that
Abbott will initiate a patent infringement suit against Teva if
Teva attempts to market a generic version of BIAXIN.").
The Canadian proceedings between Abbott and Novopharm involved
the very same immediate release clarithromycin product that was
at issue in Teva I. The Canadian proceedings did not, however,
involve the extended release product at issue here. Thus, the
Canadian proceedings have far less relevance in this case than
they did in the earlier action. See International Harvester
Co., 623 F.2d at 1212 (The specific product at issue "was in no
way involved in the prior suit and thus that suit cannot be
viewed as anything more than a general indication that Deere
considers litigation a viable alternative once it has determined
that a competitor is producing a product which infringes the
patent at issue here.").
Similarly, Abbott's counterclaims in Teva I involve only the
immediate release product. The counterclaims, therefore, amount
to nothing more than an additional example of prior litigation
between the parties concerning different products from the one at
issue here. Again, such prior litigation between the parties is
relevant, but not dispositive, of a reasonable apprehension of
suit. See, e.g., International Harvester, 623 F.2d at 1212
("[A] prior suit is but one factors to be considered. . . .");
Dr. Reddy's Laboratories, Ltd. v. AaiPharma Inc.,
01cv10102(LAP), 2002 WL 31059289, at *8 (S.D.N.Y. 2002) (holding
that three previous suits filed by defendant against plaintiff involving the manufacture of
generic versions of Prozac were "additional support for
[plaintiff's] reasonable apprehension of an infringement suit"
regarding its attempt to manufacture a generic version of
Abbott's refusal to provide a covenant not to sue is simply
irrelevant in this case. Teva's request for a covenant from
Abbott mentioned only the immediate release product. A refusal to
covenant not to sue on one product cannot provide a reasonable
apprehension of suit on a different product.
In short, the only objective facts supporting Teva's
apprehension of a patent infringement suit involving its extended
release clarithromycin product are prior legal proceedings, in
the United States and Canada, involving different products from
the one at issue in this action. This is insufficient to make
Teva's apprehension of suit "reasonable."
Teva points out that its generic versions of both BIAXIN IR and
BIAXIN XL contain the same active ingredient. Thus, it argues
that the Teva I patents, which relate only to the active
ingredient, are equally implicated by both products and,
consequently, a lawsuit on one of the products creates a
reasonable apprehension of suit on the other. This argument leads
directly to another basis upon which the decision reached above
may be supported. Jurisdiction for a declaratory judgment action
must exist with regard to each claim in suit. Jervis B. Webb
Co. v. S. Sys., Inc., 742 F.2d 1388, 1399 (Fed. Cir. 1984)
("[T]he existence of a case or controversy must be evaluated on a
claim-by-claim basis."); see also 8 Chisum on Patents §
21.02[d][iii] ("The existence of an actual controversy must be
evaluated on a patent by patent and claim by claim basis.").
Abbott has never asserted nor threatened to assert any claims
against anyone involving the '616 and '718 patents, specific to
the extended release product. Thus, Teva can have no reasonable apprehension of an infringement suit involving those
patents. Any claims relating to those patents must be dismissed.
This leaves only the Teva I patents. Teva I will resolve
the question of the validity of the Teva I patents. If the
patents are ultimately found to be invalid, then the claims in
this case involving the Teva I patents become unnecessary
because Teva's extended release product "could not possibly
infringe a nonexistent patent." International Harvester,
623 F.2d at 1218. This is an appropriate basis for the court to
decline to exercise its discretionary jurisdiction. See id. at
1218 ("A declaratory judgment should issue only when it will
serve a useful purpose. . . . the pending suit may make
resolution of the issues presented by this declaratory judgment
suit unnecessary."). In exercising its discretion, a federal
court must consider the public interest and the plaintiff's need
for the requested relief. Id. at 1218. The court finds that, in
view of the issues pending in Teva I, Teva's need for
declaratory relief in this case does not outweigh the interest in
judicial expediency and in avoiding unnecessary court decisions.
Thus, even if there is a justiciable case or controversy between
the parties on the Teva I patents, the court declines to
For the reasons stated above, Abbott's Motion to Dismiss is
granted [#21]. This case is terminated.