Addressing a motion to dismiss for lack of subject matter jurisdiction, a New Jersey district court held that Merck could maintain a Hatch-Waxman lawsuit against Actavis, Inc. n/k/a Allergan Finance LLC (Actavis), despite Actavis having sold all interest in the abbreviated new drug application (ANDA) in question. Merck Sharp & Dohme Corp. v. Actavis Labs. FL, Inc. et al., 15-cv-6075 (D.N.J. Mar. 24, 2017) (Sheridan, J.). The court found that subject matter jurisdiction is measured as of the suit's inception, and Actavis did not divest the department responsible for the ANDA until midway through the lawsuit.

The case related to an ANDA directed to posaconazole, which Actavis Laboratories FL, Inc. (Actavis Florida) filed in June 2015. Actavis Florida, then a subsidiary of Actavis, sent its notice letter to Merck on June 25, 2015, and Merck initiated its lawsuit on August 6, 2015, suing Actavis, Actavis Florida and other Actavis corporations. In the complaint, Merck alleged that all of the companies were collectively responsible for causing Actavis Florida to file the ANDA. The companies collectively admitted that they sought approval to market the ANDA product in their answer, and that doing so would trigger liability under § 271(e) if the patents were valid and infringed.

A year into the lawsuit Allergan, Actavis' parent company, sold its generic pharmaceuticals business to Teva. This sale included Actavis Florida and the other subsidiaries, but Allergan maintained control of Actavis as a wholly owned subsidiary. Following the sale, Actavis moved to dismiss the case against it, arguing that it no longer had any interest in the ANDA. Actavis also acknowledged that it could still potentially be liable for money damages, but it raised a ripeness challenge to that, arguing it would only be relevant if the drug launched at risk, the patents are held valid and infringed, and the defendants sold to Teva could not satisfy the monetary damages.

The court disagreed, noting that subject matter jurisdiction is based on the allegations in the complaint at the time they are made. Here, Actavis admitted in its answer that it caused the ANDA to be filed and sought approval to market the drug for a potentially infringing use. The fact that it later divested itself of the relevant business units does not impact the fact that it previously undertook allegedly infringing acts. As such, subject matter jurisdiction was satisfied at the time of filing and the court denied Actavis' motion to dismiss.

ANDA Update

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