Is a Hatch-Waxman 30-Month Stay Terminated if the Dismissal of a Patent Infringement Action is Later Vacated? FDA Says “No”

It never ceases to amaze this blogger how a law, like the Hatch-Waxman Amendments, can still generate new fact patterns and controversy after more than 30 years in existence! In today’s post, we look at how one of those new issues arose and how FDA resolved the controversy.

Like so many recent and interesting Hatch-Waxman controversies, the issue arose in the context of an abuse-deterrent drug product – here, Collegium Pharmaceuticals, Inc.’s (“Collegium’s”) NDA 208090 for XTAMPZA ER (oxycodone) Extended-release Capsules. But the controversy surrounding the approval of XTAMPZA ER didn’t concern (at least not initially) the existence of a potentially blocking period of non-patent exclusivity (which is where some new issues have arisen in the context of abuse-deterrent drug products – see our previous post here), but rather the existence of a 30-month patent litigation stay under FDC Act § 505(c)(3)(C). The stay stemmed from a Paragraph IV certification contained in the XTAMPZA ER 505(b)(2) NDA to patents listed in the Orange Book for the listed drug identified in NDA 208090 – i.e., Purdue Pharma L.P.’s (“Purdue’s”) NDA 022272 for OxyContin (oxycodone HCl controlled-release) Tablets.

By way of background, after FDA acknowledged the filing of NDA 208090, Collegium timely provided notice of its Paragraph IV certifications to Purdue and to the owners of certain patents listed in the Orange Book for OxyContin. Purdue and certain patent owners subsequently filed complaints in two district courts alleging patent infringement, and triggering a 30-month stay on the approval of NDA 208090. See Purdue Pharma LP et al. v. Colleaium Pharmaceutical Inc., Case 1:15-cv-00260 (D. Del. Mar. 24, 2015); Purdue Pharma L.P. et al. v. Collegium Pharmaceutical. Inc., Case 1:15-cv-l 1294 (D. Mass. Mar. 26, 2015).  On July 23, 2015, the action filed in Massachusetts was voluntarily dismissed by Purdue, thereby terminating the litigation.  On August 6, 2015, the U.S. District Court for the District of Delaware issued a Memorandum Opinion and Order dismissing the litigation in that jurisdiction for lack of personal jurisdiction.

But then, on October 7, 2015, a funny thing happened . . . . The Delaware District Court issued a Memorandum Order that appears to have vacated the court’s August 6, 2015 Order dismissing for lack of personal jurisdiction patent infringement litigation timely initiated by Purdue.  (We say “appears” because the court’s Order is not expressly characterized as vacating the earlier dismissal order.) The Delaware District Court’s apparent vacatur raised the question of whether or not the previously-terminated 30-month litigation stay was revived. Or, as FDA put it in a Memorandum included in the Approval Package for NDA 208090: “At issue is whether dismissal of a patent infringement action for lack of personal jurisdiction, which is later vacated and transferred to another venue, terminates a 30-month stay of approval of a 505(b)(2) application.”

Collegium (represented by Hyman, Phelps & McNamara, P.C.) argued that the stay was terminated and could not be revived by a subsequent reversal or vacatur. This result, argued Collegium, was dictated by:

(1)       The text of FDC Act § 505(c)(3)(C)(i) (“if before the expiration of [a 30-month stay] 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), the approval shall be made effective on— (I) the date on which the court enters judgment reflecting the decision.”);

(2)       FDA guidance (“Neither a stay nor reversal of a district court decision finding the patent invalid, unenforceable, or not infringed will have an effect on the approval of the [generic application]. . . .”); and

(3)       FDA and court precedent.  Specifically, a case involving the approval of both an ANDA and a 505(b)(2) NDA for versions of Oxaliplatin Injection (ELOXATIN), which approvals the DC District Court affirmed notwithstanding vacatur of a district court decision of non-nfringement. See Sanofi-Aventis v. FDA, 725 F. Supp. 2d 92 (D.D.C. 2010) (see our previous post here).

FDA, however, disagreed in resolving this case of first impression, and affirmed that the 30-month stay remained in place:

The precise issue here is whether the Delaware district court’s dismissal of the infringement action for lack of personal jurisdiction terminated the 30-month stay, even though the district court later vacated that decision and the patent issues continue to be litigated. We conclude that the stay remains in effect.

As described in the MMA proposed rule, “the statute does not address whether a 30-month stay may be terminated and a 505(b)(2) application or ANDA approved if the court enters an order of dismissal without a finding of patent infringement.” FDA’s general policy has been that a court entry of an order of dismissal, with or without prejudice, of patent infringement litigation that was timely initiated in response to notice of a paragraph IV certification will terminate the 30-month period if the order does not state a finding of patent infringement. In the proposed MMA rule, FDA explained that “[i]t is appropriate that a 30-month stay terminates under these circumstances because the statutory purpose of the stay is to allow time for claims of patent infringement to be litigated prior to approval.”

To our knowledge, FDA has not addressed a case in which the order of dismissal (without a finding of patent infringement) was vacated, and the infringement action giving rise to the 30- month stay remains pending at the time FDA is ready to act on the 505(b)(2) application. Under the unique and specific facts at issue here, we have determined that the 30-month stay remains in effect. The purpose of the above-described general policy is to interpret the statutory ambiguity in section 505(c)(3)(C) in a manner that furthers Congress’ intent — to allow the parties time to litigate claims of patent infringement. As described in the MMA proposed rule, in the common example where the patent owner or exclusive patent licensee dismisses the patent infringement action voluntarily on terms that the court considers proper, and the litigation thereby ends, Congress’ intent is served by terminating the stay. In this case, because the Delaware district court ultimately determined that its dismissal was not proper and the order of dismissal was vacated, and the original infringement action giving rise to the stay remains pending, Congress’ intent is served by considering the stay to be in effect.

As a result of FDA’s decision, the Agency tentatively approved NDA 208090 for XTAMPZA ER, citing the unexpired stay as a basis for the approval action. At that time, there was also a period of unexpired 3-year non-patent exclusivity applicable to OxyContin; however, as FDA noted in the XTAMPZA ER tentative approval letter: “We need not determine at this time whether approval of your 505(b)(2) NDA for XTAMPZA ER would otherwise be blocked by any other drug’s marketing exclusivity expiring before termination of the 30-month stay.”). And that’s a topic we already covered (here).