Does a Hatch-Waxman Patent Delisting Counterclaim Terminate a 30-Month Litigation Stay?

By Kurt R. Karst –       

From time to time throughout Hatch-Waxman history the question has come up: What court decisions terminate a 30-month litigation stay arising as a result of a timely filed patent infringement action in response to a Paragraph IV certification (in either an ANDA or a 505(b)(2) aplication)?  We were thinking about this issue recently – for no particular reason other than our obsession with Hatch-Waxman – and wondered whether a court decision as a result of a counterclaim asserted pursuant to the provisions added to the FDC Act by the 2003 Medicare Modernization Act (“MMA”) might terminate a 30-month litigation stay.

By way of background, the patent delisting counterclaim provisions at FDC Act §505(j)(5)(C)(ii)(I) applicable to ANDAs, as added by the MMA, state that:

If an owner of the patent or the holder of the approved application under [FDC Act § 505(b)] for the drug that is claimed by the patent or a use of which is claimed by the patent brings a patent infringement action against the applicant, the applicant may assert a counterclaim seeking an order requiring the holder to correct or delete the patent information submitted by the holder under [FDC Act § 505(b)] or (c) on the ground that the patent does not claim either – (aa) the drug for which the application was approved; or (bb) an approved method of using the drug.

The MMA also added an almost identical counterclaim provisions at FDC Act § 505(c)(3)(D)(ii)(I) applicable to 505(b)(2) application sponsors. 

Although it has been almost nine years since the enactment of the MMA, there are less than a handful of cases we know about in which a patent delisting counterclaim has been asserted by a defendant.  A couple of those cases have been with respect to patent use code correction – most famously in litigation over generic PRANDIN (repaglinide) Tablets (see here), but also in litigation over generic BONIVA (ibandronate sodium) Tablets (see here).  In a couple of cases, the patent delisting counterclaim has been used to seek actual delisting of Orange Book-listed patents on the listed drug – for example in litigation involving Auvi-Q (epinephrine) Auto-Injector (see here) and in litigation in the U.S. District Court for the Southern District of New York involving generic OxyContin (oxycodone hydrochloride) Controlled-Release Tablets (Case No. 10-cv-03734).  In both of these cases, the litigation was ultimately resolved with respect to the counterclaim without a court decision.  As such, the question of whether a decision on a patent delisting counterclaim is a stay-terminating decision appears to remain unanswered.

FDC Act § 505(c)(3)(C)(i) states that the 30-month litigation stay, if it does not naturally expire at the end of the 30-month period, is terminated once “the district court decides that the patent is invalid or not infringed (including any substantive determination that there is no cause of action for patent infringement or invalidity)” (emphasis added).  Could the parenthetical language at FDC Act § 505(c)(3)(C)(i) include a court-ordered patent delisting?  After all, such a delisting would seem to mean that there is no cause of action under the Hatch-Waxman Amendments with respect to that patent.  We did some digging and came up with something interesting.

Way back in October 2002, as Congress was debating a draft bill that largely became part of the MMA, the Subcommittee on Health of the House Energy and Commerce Committee held a hearing to examine issues related to competition in the pharmaceutical marketplace, and in particular the Federal Trade Commission’s then-recent July 2002 report, titled “Generic Drug Entry Prior to Patent Expiration.”  Then-FTC Chairman Timothy J. Muris made some interesting comments in testimony before the Subcommittee.  A copy of the hearing transcript is available here). 

First, during the hearing, Mr. Muris commented (page 69 of the transcript) in response to concerns raised by Representative Henry Waxman (D-CA) over the need for “an artificial 30-month stay” that “the counterclaim would terminate, if you went with the counterclaim, it would terminate the 30-month stay, just as now, if you win, it terminates a 30-month [stay]” (emphasis added).  Second, in follow-up written testimony, Mr. Muris responsed to several questions posed by former Congressman Michael Bilirakis (R-FL).  Representative Bilirakis had asked, in relevant part (pages 133-134 of the hearing transcript), about creating a private right of action for delisting patents.  Mr. Muris responded:

[T]he FDA does not review the propriety of patents listed in the Orange Book, and courts have ruled that generic applicants have no private right of action to challenge those listings.  The lack of any mechanism to challenge a listing may have real world consequences in that the Commission is aware of a few instances in which a 30-month stay was generated solely by patents in which the propriety of the Orange Book listing was questionable.  To address this situation, the Commission suggested that the FDA may want to clarify its listing regulations along the lines the FTC Report suggested.  It also recommended that Congress consider enacting a private right to counterclaim and raise the issue of whether the patent properly claims the brand-name product; this may eliminate the delay that the 30-month stay could be causing for improperly listed patents in the Orange Book. [(Emphasis added)]

Of course, these statements were the position of the FTC.  FDA has not publicly addressed the issue, and has not had to do so to our knowledge.  Perhaps it is an issue FDA will tackle in the Agency’s proposed regulations implementing the MMA.  For those of you counting, we are now at 3,258 days since the enactment of the MMA.