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eva Pharmaceuticals USA, Inc. v. Novartis Pharmaceuticals Corp.

    Brief Fact Summary. Novartis (Defendant) sued Teva (Plaintiff) for patent infringement of one of its five patents.  Plaintiff sued Defendant in a declaratory judgment action requesting “patent certainty” regarding validity of the other four patents.  The action was dismissed by the district court for lack of subject matter jurisdiction as Plaintiff did not face the imminent threat of a suit of infringement on the other four patents.

    Synopsis of Rule of Law. A federal court has jurisdiction over a declaratory judgment action even if a party is not required to have reasonable apprehension of imminent suit, so long as all the circumstances show an actual or imminent injury through declaratory judgment.

    Facts. Novartis Pharmaceuticals Corp. (Defendant) holds the New Drug Application (NDA) for three strengths of Famvir.  Its NDA has five listed patents related to Famvir, including the ‘937 patent.  Plaintiff filed its Abbreviated New Drug Application (ANDA) for a generic version of Famvir.  In the application, a paragraph IV certification was included that Defendant’s patents were not valid.  Defendant filed an infringement suit against Plaintiff on the ‘937 patents but not the other four.  Plaintiff next filed a declaratory judgment action on the four remaining patents for a finding that the patents were invalid.  Defendant moved to dismiss on grounds that Plaintiff did not have an imminent threat of an infringement suit for the other patents, therefore the district court had no jurisdiction in a declaratory judgment action.  The district court applied the Federal Circuit’s two-prong Pfizer test and dismissed.  Plaintiff appealed.

    Issue. Must a party have a reasonable apprehension of imminent suit before a federal court has jurisdiction over a declaratory judgment action, so long as all the circumstances show an actual or imminent injury through declaratory judgment?

    Held. (Gajarsa, J.)  No.  A party does not have to have a reasonable apprehension of imminent suit before a federal court has jurisdiction over a declaratory judgment action, so long as all the circumstances show an actual or imminent injury through declaratory judgment.  The Supreme Court’s recent opinion in MedImmune, 549 U.S. 118 (2007), disagreed with the two-prong Pfizer test by this court, 395 F.2d 1324 (Fed. Cir. 2005).  For federal jurisdiction, an actual case or controversy is required, therefore the court will no longer use the Pfizer test but instead the standard of an actual case or controversy as set forth in MedImmune.  The MedImmune standard is whether “all the circumstances” show an actual or imminent injury can be redressed by judicial relief justifying a declaratory judgment.  In this case, the Pfizer precedent bound the district court, but the appropriate standard is MedImmune.  Under “all the circumstances” of this case, Plaintiff has a justiciable Article III controversy.  Defendant created the controversy by filing a suit of infringement on the fifth patent, which placed Plaintiff’s ANDA in actual dispute.  The two are different cases but resulted from the same controversy.  In addition, Plaintiff’s ANDA automatically creates a justiciable controversy regarding infringement, so if Defendant has an Article III case, it would then follow that the other party also has an article III declaratory judgment action.  Third, Defendant made efforts to claim the protections a patentee receives under Hatch-Waxman while avoiding its responsibility to expedite the process regarding confirming the validity of the other four patents.  Fourth, uncertainty is created by the pending infringement litigation as to Plaintiff’s ANDA, which creates a justiciable controversy.  Lastly, Defendant has created the possibility of future litigation on the four patents, which could protect Defendant’s patents until they expire.  When the circumstances are examined as a whole, Plaintiff has suffered actual injury that can be traced to Defendant’s actions and Plaintiff has made out an Article III case or controversy.  The court has jurisdiction over the declaratory judgment action.  Reversed.

    Concurrence. (Friedman, J.)  In MedImmune, the Supreme Court noted in a dicta footnote that it rejected this court’s “reasonable apprehension of imminent suit.”  Therefore, this court must apply the MedImmune test and stop applying the Pfizer test immediately.  The court took an unnecessarily long time coming to the correct conclusion today.  After submission of Plaintiff’s Paragraph IV certification, the threat to Plaintiff created justiciable controversy, placing the case within the court’s jurisdiction.

    Discussion. This was the Federal Circuit’s first opinion setting forth the new rule governing subject matter jurisdiction of the federal courts over declaratory judgment actions.  The majority went out of its way to analyze the totality of the circumstances and demonstrate the applicability of the decision by the Supreme Court in MedImmune.  The case may not have called for such a complicated analysis, as noted in the concurring opinion, however the Federal Circuit was overruling its long-standing past precedent.


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