Cobalt Pursues “Belt & Suspenders” Approach with Generic Acarbose; Files Declaratory Judgment Action to Preclude ‘769 Patent Orange Book Delisting

Last week we reported that on October 24, 2007, Cobalt Pharmaceuticals Inc. (“Cobalt”) submitted to FDA an emergency petition for stay of action in which Cobalt publicly disclosed the company’s status as a first applicant eligible for 180-day exclusivity for generic acarbose tablets — marketed by Bayer Pharmaceuticals under the tradename PRECOSE.  Cobalt’s petition requests that FDA stay the approval of all subsequent acarbose tablets ANDAs until Cobalt’s 180-day exclusivity period expires.  In September 2007, FDA established a public docket soliciting comment on certain 180-day exclusivity forfeiture and Orange Book patent “delisting” issues.  FDA’s September 26, 2007 letter establishing the docket states:

There is one patent listed for Acarbose Tablets, U.S. Patent No. 4,904,769 (the ‘769 patent), which expires on September 6, 2009. . .   [A]t least one ANDA for Acarbose Tablets containing a paragraph IV certification was received by the agency on March 22, 2005. By virtue of this filing, at least one applicant became eligible for 180-day generic drug exclusivity.

As of [September 26, 2007], which is more than 30 months from March 22, 2005, no first applicant’s ANDA has been approved. Also, on April 16, 2007, Bayer requested that the ‘769 patent be “delisted” as to Precose, i.e., they withdrew the patent information. On September 26, 2007, FDA indicated in [the Orange Book] . . . that the request to delist this patent had been submitted on April 16, 2007.

As a result of this scenario, in which Bayer did not sue Cobalt for patent infringement, FDA requested comment on whether the first applicant for generic acarbose forfeited 180-day exclusivity eligibility because of a failure to obtain tentative ANDA approval within 30 months after the date on which the application was filed (i.e., FDC Act § 505(j)(5)(D)(i)(IV)), or by operation of the “failure to market” or patent delisting forfeiture provisions at FDC Act §§ 505(j)(5)(D)(i)(I) and 505(j)(5)(D)(i)(I)(bb)(CC), respectively. 

FDA Law Blog recently learned that in addition to petitioning FDA to stay the approval of all subsequent acarbose tablets ANDAs until Cobalt’s 180-day exclusivity period expires, Cobalt also filed a complaint against Bayer in the U.S. District Court for the Northern District of Illinois (Eastern Division) seeking a declaratory judgment of non-infringement and invalidity of the ‘769 patent, and to preclude the delisting of the ‘769 patent from the Orange Book “until after the natural expiration of Cobalt’s 180-day exclusivity.”  As a basis for the company’s declaratory judgment action, Cobalt asserts that “[t]he listing of the ‘769 patent in the Orange Book also objectively creates the necessary case or controversy and subject matter jurisdiction for an ANDA-filer to file and maintain a declaratory judgment action if it is not sued by Bayer within the requisite 45-day period.” 

The standard for obtaining a declaratory judgment in Hatch-Waxman cases has been the topic of intense debate.  In December 2003, the Medicare Modernization Act (“MMA”) (§ 1101) amended the FDC Act to affirmatively permit a generic applicant with an application containing a Paragraph IV certification to bring an action for declaratory judgment of patent invalidity or noninfringement (referred to in the law as a “civil action to obtain patent certainty”), provided: (1) the NDA holder or patent owner has allowed the 45-day period in which to file a suit for patent infringement to expire without bringing an action for patent infringement or invalidity; and (2) if the generic applicant’s notice to the NDA holder or patent owner relates to patent noninfringement, the notice includes an offer of confidential access to the generic applicant’s application for purposes of determining whether the NDA holder or patent owner should bring an action for patent infringement.  The MMA also amended the patent statute to provide that “courts of the United States shall, to the extent consistent with the Constitution, have subject matter jurisdiction in any action brought  . . . under [28 U.S.C. § 2201] for a declaratory judgment” of invalidity or noninfringement.

In the Conference Report (page 836) accompanying the MMA, Congress stated its expectations with respect to the declaratory judgment provisions:

[C]ourts will find jurisdiction, where appropriate, to prevent an improper effort to delay infringement litigation between generic drug manufacturers and pioneer drug companies.  The conferees expect courts to apply the “reasonable apprehension” test in a manner that provides generic drug manufacturers appropriate access to declaratory judgment relief to the extent required by Article III. . . .  [T]he conferees do not intend for the courts to modify their application of the requirements under Article III that a declaratory judgment plaintiff must, to the extent required by the Constitution, demonstrate a “reasonable apprehension” of suit to establish jurisdiction. . . . The conferees expect the courts to examine as part of their analysis the particular policies served by the Hatch-Waxman Act.  In determining whether a reasonable apprehension of suit exists where an ANDA has been filed with a paragraph IV certification and the patentee has not brought an infringement suit within the 45 days, the conferees expect courts to examine these specific factors as part of the totality of the circumstances. . . .  In any given case, the conferees expect a court may or may not find a reasonable apprehension of suit where these two specific factors are present.

Pursuant to the recent Supreme Court decision in MedImmune v. Genentech, in which the Court held that a patent licensee is not required to terminate or be in breach of its license agreement before seeking a declaratory judgment that the subject patent is invalid, unenforceable, or not infringed, the Federal Circuit held in Teva Pharms. USA v. Novartis Pharms., which concerned a declaratory judgment action involving generic famciclovir (FAMVIR), that:

A justiciable declaratory judgment controversy arises for an ANDA filer when a patentee lists patents in the Orange Book, the ANDA applicant files its ANDA certifying the listed patents under paragraph IV, and the patentee brings an action against the submitted ANDA on one or more of the patents.  The combination of these three circumstances is dispositive in establishing an actual declaratory judgment controversy as to all the paragraph IV certified patents, whether the patentee has sued on all or only some of the paragraph IV certified patents.

After analyzing the Teva decision, Orange Book Blogger Aaron Barkoff noted that the Federal Circuit’s opinion suggests that “unless an innovator grants a covenant not to sue, the mere listing of a patent in the Orange Book coupled with a paragraph IV certification may be sufficient to establish declaratory judgment jurisdiction.  In other words, generic drug companies may be able to pursue declaratory judgment actions even if the innovator declines to file suit on any of its Orange Book-listed patents.”  Indeed, this is precisely the argument that Cobalt makes in its declaratory judgment action against Bayer.

Whether the court will agree with Cobalt’s basis for its complaint for declaratory judgment is as of yet unclear.  In a recent docket entry in the case, the court states that “[a]fter careful review of this recently filed complaint, the Court has serious concerns about the appropriateness of venue and jurisdiction in this district.  The parties should address this issue in the joint status report which will be due on or before 11/29/2007.”  We will continue to update you on this and other issues concerning generic acarbose as we learn additional information.