Public Threats Of Enforcement Don’t Establish DJ Jurisdiction

Posted on | May 27, 2008 | 6 Comments

2008-1373 Impax Labs v. Medicis Pharmaceutical
ND/CA 08-0253

Impax appeals from Judge Maxine Chesney’s Order granting Medicis’s Motion to Dismiss Impax’s Declaratory Judgment Complaint.

Medicis manufactures Solodyn®, a minocyclene extended release tablet used as an oral acne medicine, and is the assignee of 5,908,838, directed to the treatment of acne using an oral tetracycline antibiotic in a slowly dissolving dosage form.

Impax filed an Abbreviated New Drug Application (ANDA) to manufacture and sell a generic form of Solodyn.  In December 2007 it notified Medicis of its filing and requested Medicis provide a covenant not to sue on the ‘838.  Medicis replied that it would "consider [the letter] and have a response to [Impax] within two weeks."  Impax didn’t wait for the response, and filed the declaratory judgement action a few days later.

Under these circumstances, Judge Chesney found that no actual case or controversy existed at the time of filing, stating that Medicis had not taken any "affirmative act sufficient to contitute a threat of ‘imminent injury.’"  In doing so, the court gave no significance to Medicis’s repeated public statements threatening generics with litigation, including:

• During a conference call with investment analysts, the CEO stated that Medicis would "be very vigorous…in enforcing the patents" and "[W]e have hired a couple of [law] firms that I think are vicious in their enforcement and protection of patents, because we want to send a very strong message that this needs to be an inpenetrable defense around this brand.";

• At a health care conference, the CEO stated that Medicis intended "to enforce with the ultimate vigor the patents that had issued" to it; and

• Approximately 7 other instances where Medicis threatened to use its patents against parties seeking to market a generic form of Solodyn.

The court found no precedent to support Impax’s arguments that generalized threats of patent enforcement were, by themselves, sufficient to trigger DJ jurisdiction.  The court also found that Medicis response that it would consider the matter and respond within 2 weeks a "reasonable" action and not a "threat of imminent injury." 

The court concluded:

Lastly, even if plaintiff’s showing were sufficient to give rise to standing, the Court would, under the circumstances presented, use its “substantial discretion in deciding whether to declare the rights of litigants,” MedImmune, 127 S.Ct. at 777 (internal quotation and citation omitted), to decline to exercise jurisdiction over the instant action. In particular, plaintiff’s allegation of jurisdiction rests on the existence of the ‘838 patent, plaintiff’s filing an ANDA, and defendant’s failure to immediately agree to a covenant not to sue. If, under such circumstances, the Court were to exercise declaratory judgment jurisdiction, it would promote the premature filing of declaratory judgment actions and reduce the incentive for potential infringers to communicate with patentees before filing suit.

The case–as well as two other recent Federal Circuit decisions on declaratory judgment jurisdiction, particularly in pharma cases–is very nicely covered by Aaron Barkoff over at Orange Book Blog.

Notes and Comments:  Did the court gave too little weight to Medicis’s public statements?  These statements were obviously meant to give generics some pause (and to make Medicis appear tough to the industry).  If a patentee is going to make affirmative, public pronouncements of its "vicuousness" in litigation and patent enforcement, those statements should be give some weight in the DJ analysis.

Also, Medicis’s "we’ll get back to you within 2 weeks" is not as innocuous as the court makes it out to be.  Medicis didn’t promise not to sue before responding, nor is there any limit to the form of the response–i.e., a letter, telephone call, Complaint.

Impax’s ANDA was filed in December 2007–as of today, it does not appear that Medicis has filed a suit against Impax based on the ANDA filing.

More reading:

Order on Motion to Dismiss

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