District Court Vacates 30-Month Stay Extension; Says Stay Only Applies to ANDAs Containing a Paragraph IV Certification

By Kurt R. Karst –      

A recent decision from the U.S. District Court for the Eastern District of North Carolina in patent infringement litigation concerning Sandoz, Inc.’s (“Sandoz’s”) pending ANDA for a generic version of XYZAL (levocetirizine dihydrochloride) is one of the rare instances in which a court has vacated a 30-month litigation stay triggered by a timely filed patent infringement lawsuit pursuant to FDC Act § 505(j)(5)(B)(iii).

Under the FDC Act, a timely filed patent infringement lawsuit in response to a Paragraph IV certification means that “the [ANDA] approval shall be made effective upon the expiration of the [30-month stay] . . . or such shorter or longer period as the court may order because either party to the action failed to reasonably cooperate in expediting the action . . . .”  FDC Act § 505(j)(5)(B)(iii).  As we previously reported, in May 2008, Sandoz submitted an ANDA to FDA containing a Paragraph IV certification to U.S. Patent No. 5,698,558 (“the ‘558 patent”), which is listed in the Orange Book for XYZAL as a method-of-use patent with a U-812 patent use code (“RELIEF OF SYMPTOMS ASSOCIATED WITH SEASONAL AND PERENNIAL ALLERGIC RHINITIS”) and that is subject to a period of pediatric exclusivity that expires on March 24, 2013.  In February 2010, Sandoz reportedly revised its Paragraph IV certification to the ‘558 patent to a “section viii” statement and requested ANDA approval for chronic idiopathic urticaria and labeling that carves out seasonal and perennial allergic rhinitis.  (FDA ruled in response to a citizen petition – Docket No. FDA-2010-P-0545 – that such a labeling carve-out is permissible.)

Despite the change from a Paragraph IV certification to a “section viii” statement, Magistrate Judge William A. Webb issued a Memorandum and Recommendation/Order on December 3, 2010 extending the 30-month patent litigation stay on the basis that Sandoz had failed to cooperate reasonably in expediting the patent litigation.  Sandoz appealed Judge Webb’s Order and asserted lack of subject matter jurisdiction, that a stay is no longer applicable because the company’s ANDA no longer contains a Paragraph IV certification to the ‘558 patent, and that the facts upon which Magistrate Judge Webb based his decision simply do not warrant an extension of the 30-month stay.

Judge Malcolm J. Howard agreed with Sandoz on this issue.  According to Judge Howard:

The stay authorized by 21 U.S.C. § 355(j)(2)(B)(iii) applies only where an ANDA contains a paragraph IV certification.  In light of Sandoz’s withdrawal of its paragraph IV certification, plaintiffs were not entitled to an extension of the the [sic] thirty-month stay.  In the event Sandoz is subsequently required to amend its section viii statement to a paragraph IV certification, plaintiffs may be entitled to an additional stay or injunctive relief delaying FDA approval.  Absent such a determination, however, no basis exists for extending the stay of FDA approval. [(Emphasis added)]

Despite vacating the 30-month litigation stay extension, Judge Howard denied a separate Motion to Dismiss for Lack of Subject Matter Jurisdiction filed by Sandoz.  In that motion, Sandoz argued that the patent infringement case should be dismissed because the change from a Paragraph IV certification to a “section viii” statement divested the court of subject matter jurisdiction.