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No Actual Controversy Existed Between Pfizer and Teva over Pfizer’s Zoloft® Patent

January 21, 2005

Decision icon Decision

Last Month at the Federal Circuit - February 2005

Judges: Schall (author), Clevenger, and Mayer (dissenting)

In Teva Pharmaceuticals USA, Inc. v. Pfizer, Inc., No. 04-1186 (Fed. Cir. Jan 21, 2005), the Federal Circuit affirmed a district court’s decision dismissing the action for no jurisdiction because Teva Pharmaceuticals USA, Inc. (“Teva”) had failed to establish that an actual controversy existed between it and Pfizer, Inc. (“Pfizer”).

The dispute centered on Pfizer’s Zoloft® drug, which is generically identified as sertraline hydrochloride. Pfizer holds two patents relating to Zoloft®: U.S. Patent Nos. 4,356,518 (“the ‘518 patent”) and 5,248,699 (“the ‘699 patent”). Teva, a manufacturer of generic pharmaceuticals, filed an ANDA seeking to market its generic version of sertraline hydrochloride. Accordingly, Teva filed a Paragraph III certification saying that it would not market its generic drug until the ‘518 patent expired, and a Paragraph IV certification stating that its generic drug did not infringe the ‘699 patent or, alternatively, that the ‘699 patent is invalid. Under the Hatch-Waxman amendments, Pfizer then had forty-five days to sue Teva for infringement of the ‘699 patent, but Pfizer chose not to. After Teva filed suit for a DJ of noninfringement or invalidity of the ‘699 patent, the district court dismissed the suit for lack of jurisdiction.

Previously, under similar circumstances, Pfizer filed suit against Ivax Pharmaceuticals USA, Inc. (“Ivax”) for infringement of the ‘699 patent. Pfizer and Ivax then entered into a settlement agreement whereby Pfizer agreed to grant Ivax a royalty-bearing license on the ‘699 patent. As the first filer of an ANDA, Ivax had a 180-day generic market exclusivity period. In this case, however, because Pfizer elected not to sue Teva for infringement of the ‘699 patent, Teva filed a DJ action.

The Federal Circuit ruled that Teva’s reliance on Pfizer’s listing of the ‘699 patent in the “Orange Book” as a basis for a DJ action was misplaced. Pfizer’s compliance with the Hatch-Waxman listing requirement cannot be construed as a blanket threat to all potential infringers as far as Pfizer’s patent-enforcement intentions are concerned. Moreover, neither Pfizer’s history of defending its patents nor its refusal to grant Teva a covenant not to sue was dispositive in this case. Because Teva could not demonstrate a reasonable apprehension of imminent suit on the part of Pfizer for infringement of the ‘699 patent, the Federal Circuit agreed that no actual controversy existed.

The Court further concluded that Congress did not intend for the Medicare amendments to alter the requirements of the two-part test for a DJ plaintiff to demonstrate a reasonable apprehension of suit. The fact that Teva is disadvantaged from a business standpoint by Ivax’s 180- day exclusivity period and the fact that Pfizer’s decision not to sue Teva creates an impediment to Teva’s removing that disadvantage are matters separate and distinct from whether an Article III controversy existed between Teva and Pfizer.

Judge Mayer dissented, concluding that the filing of an NDA and subsequent listing of a pharmaceutical patent in the “Orange Book” is conduct giving rise to a reasonable apprehension that an ANDA filer will face a patent-infringement suit.