United States: Dismissal Of Declaratory Judgment Counterclaims In Fosamax Case Vacated As Moot

Addressing the Article III case or controversy requirement in the context of the exclusivity forfeiture position of the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA), the U.S. Court of Appeals for the Federal Circuit, in a non-precedential per curiam opinion, affirmed a district court's dismissal of Apotex's counterclaims for declaratory judgment of invalidity and non-infringement. Merck & Co., Inc. v. Apotex Inc., Case No. 08-1133 (Fed. Cir., Aug. 21, 2008) (per curiam).

In the course of obtaining U.S. Food and Drug Administration (FDA) approval for its glaucoma medications Trusopt® and Cosopt®, Merck informed the FDA that three patents covered the drugs: U.S. Patents No. 4,787,413 (the '413 patent), No. 6,248,735 (the '735 patent) and No. 6,316,443 (the'443 patent). In April 2006, Merck filed disclaimers of the '735 and '443 patents under 35 U.S.C. § 253. In March 2006, Apotex filed an Abbreviated New Drug Application (ANDA) to market generic versions of Trusopt® and Cosopt®. Merck filed suit in December 2006 alleging infringement of the '413 only. Apotex counterclaimed, seeking declaratory judgments of invalidity and non-infringement of the '443 and the '735 patents. Because of the Court's decision in a related case, Apotex was enjoined from marketing any generics under the '413 patent until October 28, 2008, and another company, Hi-Tech, retained generic marketing exclusivity on the '735 and '443 patents, barring a forfeiture event. Apotex pursued the theory that a declaratory judgment of invalidity or non-infringement would trigger a forfeiture and would allow it to bring its generic to market as soon as its ANDA was approved. However, the district court dismissed Apotex's counterclaims for failure to state an Article III case or controversy.

The Federal Circuit affirmed under MedImmune, stating the proper standard for determining whether a declaratory judgment action satisfies the Article III case or controversy requirement as "whether the facts alleged, under all circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Article III also requires that the dispute "admit of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts." In this case, the Court found itself unable to provide any realistic relief because the October 28, 2008 deadline would have passed long before Apotex could have obtained a final judgment on its counterclaims. Therefore, the counterclaims did not present a justiciable case or controversy.

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