New Jersey District Court Denies Preliminary Injunction Motion in Generic CARBATROL Pre-MMA 180-Day Exclusivity Case; An Appeal Quickly Follows

By Kurt R. Karst –      

Earlier this week, Judge Joel A. Pisano of the U.S. District Court for the District of New Jersey issued a 19-page decision in Nostrum Pharmaceuticals, LLC. v. FDA denying the injunctive relief sought by Nostrum in a Complaint and a Motion for a Preliminary Injunction filed last month.  The case stems from FDA’s decisions on pre-Medicare Modernization Act (“MMA”) 180-day exclusivity with respect to Nostrum’s ANDA No. 76-697 for a generic version of CARBATROL (carbamazepine) Extended-release Capsules, 300 mg, which FDA approved on May 20, 2011.  As we previously reported, at issue in the case is FDA’s application of the so-called “holding-on-the merits” standard with respect to one Orange Book-listed patent on which Nostrum qualified for 180-day exclusivity (U.S. Patent No. 5,912,013 (“the ‘013 Patent”)), and FDA’s interpretation that 180-day exclusivity terminates with the expiration of another patent on which Nostrum qualified for 180-day exclusivity (U.S. Patent No. 5,326,570 (“the ‘570 patent”)).  Lerner, David, Littenberg, Krumholz & Mentlik, LLP and Hyman, Phelps & McNamara, P.C. represent Nostrum in the lawsuit.

In a May 20, 2011 Letter Decision, FDA says that Nostrum’s exclusivity with respect to the ‘013 patent was triggered by a June 14, 2009 ruling in Shire Labs, Inc. v. CorePharma, LLC, C.A. 06-2266 (D.N.J.), in which the court entered a final judgment of its previous order granting a Motion for Summary Judgment of Non-infringement of the ‘013 patent filed by CorePharma (another ANDA sponsor).  According to FDA, this “holding is adequate as a basis to trigger the running of exclusivity as to the '013 patent,” and thus “Nostrum's exclusivity with respect to the '013 patent has expired.”  According to Nostrum, however, “the holding in CorePharma was a decision on the ground of judicial estoppel, not a decision on the merits of infringement,” and therefore, “there was no decision on the merits that could trigger Nostrum's exclusivity . . . and FDA's decision to the contrary in the Approval Letter, characterizing the ruling as a finding on the merits, was incorrect as a matter of law.”

On the ‘570 patent, FDA ruled that Nostrum is eligible for 180-day exclusivity, which was triggered on May 20, 2011 when Nostrum began commercial marketing.  The ‘570 patent, however, expires on July 23, 2011, several months before the November 16, 2011 date that is 180 days from May 20, 2011.  (Previously, the Orange Book showed the ‘570 patent expiring on July 5, 2011.  After Nostrum filed its lawsuit, the Orange Book was updated to reflect a July 23, 2011 expiration.  The ‘570 patent was filed on July 23, 1991, and issued on July 5, 1994.  For patent applications that were pending on and for patents that were still in force on June 8, 1995, the patent term is the longer of either 17 years from the date of issuance or 20 years from the filing date.  So it appears that the NDA sponsor switched from the issued plus 17 years date to the filed plus 20 years date.)

Judge Pisano was not convinced that FDA incorrectly applied its holding-on-the merits standard with respect to the triggering of 180-day exclusivity associated with the ‘013 patent, saying in his opinion that:

As an initial matter, the FDA has never interpreted the court decision trigger provision to require a court to compare the claims of the asserted patents to the accused generic product.  Rather, the FDA has interpreted the statute’s express requirement of a court decision “holding the patent which is the subject of the certification to be invalid or not infringed” as resolution of the issues of validity, infringement and enforceability “on the merits.”  Nothing suggests that the only way a court can reach a decision “on the merits” of an infringement claims is in the manner suggested by Nostrum.  Indeed, in the context of a motion for summary judgment a court is called upon to examine evidence, weigh substantive arguments and perform legal analysis.  The court must determine whether there exists a genuine dispute of material fact and whether the undisputed facts entitle a party to judgment as a matter of law.  Addressing such a motion, the CorePharma court concluded that there were no facts from which infringement could be found and entered judgment of noninfringement of the ‘013 patent as a matter of law.  The FDA need not look any further than that. [(Internal citation omitted)]

With respect to 180-day exclusivity stemming from the ‘570 patent, Nostrum argued, among other things, that the plain language of the statute does not limit 180-day exclusivity to the term of a patent.  Judge Pisano disagreed, however:

The statutory provision entitling Nostrum to exclusivity, by its terms, applies only to paragraph IV certifications, “which cease to exist upon patent expiration.”  Applying step one of Chevron, the Court finds the FDCA unambiguously supports the FDA’s determination that it is not prohibited by 21 U.S.C. § 355(j)(5)(B)(iv) (2002) from approving later-filed ANDAs upon expiration of the ‘570 patent.

Within hours of the district court issuing its decision, Nostrum filed a notice to appeal Judge Pisano’s decision to the U.S. Court of Appeals for the Third Circuit (Case No. 11-2837).  Nostrum also says in a filing that the company intends to ask the Third Circuit for an injunction pending appeal.