Opinion
No: 02 Civ. 2255 (RWS)
August 14, 2002
Robert L. Baechtold, Esq. and Thomas H. Beck, Esq., FITZPATRICK, CELLA, HARPER SCINTO., New York, NY.
Evan R. Chesler, Esq. and Richard J. Stark, Esq., CRAVATH., SWAINE MOORE., New York, NY., Attorneys for Plaintiff.
Anthony F. LoCicero, Esq., AMSTER, ROTHSTEIN EBENSTEIN., New York, NY.
Alan H. Bernstein, Esq., Robert J. Silver, Esq. and William J. Castillo, Esq., CAESAR, RIVISE, BERNSTEIN, COHEN POKOTILOW., Philadelphia, PA. Attorneys for Defendants.
OPINION
Defendants Apotex Inc. and Apotex Corp. (collectively "Apotex") have moved to strike the jury demand of plaintiffs Sanofi-Synthelabo, Sanofi-Synthelabo Inc. and Bristol-Myers Squibb ("BMS") Sanofi Pharmaceuticals Holdings Partnership (the "Partnership") (collectively "Sanofi") in this patent infringement action pursuant to 35 U.S.C. § 271(e)(2).
For the following reasons, that motion is granted.
Facts
Parties
Sanofi-Synthelabo is a corporation organized and existing under the laws of France, having its principal place of business at 174 Avenue de France, Paris, France. Sanofi-Synthelabo is a global health care company, whose core therapeutic areas are cardiovascular disease and thrombosis, diseases of the central nervous system, cancer and internal medicine.
Sanofi-Synthelabo Inc. is the U.S. subsidiary of Sanofi-Synthelabo, and is a Delaware corporation having commercial headquarters at 90 Park Avenue, New York, New York 10016.
The Partnership is a partnership registered in the State of Delaware, and having a mailing address at P.O. Box 4000, Route 206 and Province Line Road, Princeton, New Jersey 08543. The Partnership is responsible for the marketing and sale of Plavix in the United States and numerous countries in the Americas and elsewhere.
Apotex Inc. is a Canadian corporation having its principal place of business at 150 Signet Drive, Toronto, Canada M9L 1T9.
Apotex Corp. is a corporation incorporated under the laws of the State of Delaware, and has its sales and marketing headquarters in Weston, Florida.
Background
Sanofi-Synthelabo Inc. holds approved new drug application ("NDA") 20-839 for Plavix, the active ingredient in which is clopidogrel bisulfate and which is indicated for the reduction of atherosclerotic events (myocardial infarction, stroke and vascular death) in patients with atherosclerosis documented by recent stroke, recent myocardial infarction, or established peripheral arterial disease. The FDA approved Plavix on February 17, 1997.
Sanofi-Synthelabo is the owner of U.S. Patent No. 4,847,265 (the "265 Patent") and No. 5,576,328 (the "328 Patent"). The 265 Patent discloses and claims clopidogrel, clopidogrel bisulfate, other salts of clopidogrel, and pharmaceutical compositions containing those compounds. The 265 Patent was issued on July 11, 1989, and is exclusively licensed to the Partnership. The 328 Patent discloses and claims among other things a method for the prevention of secondary ischemic events by administering clopidogrel or its salt. The 328 Patent was issued on November 19, 1996, and is exclusively licensed to the Partnership.
Apotex submitted to the FDA an ANDA under the provisions of 21 U.S.C. § 355(j), also known as Section 505(j) of the Food, Drug and Cosmetic Act ("FDCA"), seeking approval to engage in the commercial manufacture, use, and sale of clopidogrel bisulfate tablets prior to the expiration of the 265 and 328 Patents. As part of this application, Apotex included a certification under 21 U.S.C. § 355(j)(2) (vii) (IV) that, in its opinion and to the best of its knowledge, both the 265 and 328 Patents were invalid and/or would not be infringed by the manufacture, use, or sale of its clopidogrel bisulfate formulation.
Pursuant to Section 505(j)(2)(A) of the FDCA, when an applicant such as Apotex submits an ANDA to the FDA, the applicant must certify one of four things: (1) that such patent information has not been filed by the patentee (a "paragraph I Certification"); (2) that such patent has expired (a "paragraph II Certification"); (3) the date on which the patent will expire (a "paragraph III Certification"); or (4) that such patent is invalid or that it will not be infringed by the manufacture, use or sale of the new drug for which the ANDA is submitted (a "paragraph IV Certification") 21 U.S.C. § 355(j)(2)(A)(vii). Apotex thus filed a paragraph IV Certification, the purpose of which is to obtain quicker FDA approval as compared with waiting for patent expiration as is the case with a paragraph III Certification. Including a paragraph IV Certification in an ANDA is deemed an act of infringement under the laws of the United States to provide case or controversy jurisdiction to decide the patent issue. 35 U.S.C. § 271(e)(2)(A).
Pursuant to § 271(e)(2) of the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Waxman-Hatch Act (the "Act"), this ANDA filing provided Sanofi with a constructed artificial act of infringement to create case or controversy jurisdiction. Sanofi filed suit pursuant to the Act on March 21, 2002, and demanded a jury trial on April 5, 2002. Apotex filed an answer and counterclaim on April 9, 2002. The counterclaim seeks a declaratory judgment that the 328 Patent would not be infringed by a product made in accordance with Apotex's ANDA and that the 265 Patent is invalid.
On May 10, 2002, Apotex filed the instant motion. Oral argument was heard on June 19, 2002, and the motion was considered fully submitted at that time.
Discussion
I. Subject Matter Jurisdiction
This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 and 1338(a).
II. The Legal Standard
The Federal Rules of Civil Procedure contemplate that a jury trial will be conducted on all issues properly triable before a jury once a demand has been made unless,
(1) the parties or their attorneys of record, by written stipulation made in open court and entered in the record, consent to trial by the court sitting without a jury or (2) the court upon motion or of its own initiative finds that a right to a trial by jury of some or all of those issues does not exist under the Constitution or statutes of the United States.
Sanofi rests its claim to a jury trial on the Constitution. The Seventh Amendment to the United States Constitution guarantees the right to trial by jury only for "[s]uits at common law." U.S. Const. Amend. VII. The phrase "[s]uits at common law" refers to "suits in which legal rights rare] to be ascertained and determined, in contradistinction to those where equitable rights alone [are] recognized, and equitable remedies were administered." Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 41 (1989) (quoting Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 447 (1830)).
To determine whether a particular action will resolve legal rights, courts look first to the nature of the issues involved by comparing the action to the 18th-century action brought in the courts of England prior to the merger of the courts of law and equity, and second to the nature of the remedy sought. German v. Connecticut Nat'l Bank, 988 F.2d 1323, 1328 (2d Cir. 1993) (citing Granfinanciera, 492 U.S. at 42). The second stage of this analysis is more important than the first. Granfinanciera, 492 U.S. at 42.
III. The Right to a Jury Trial on Counterclaims of Patent Invalidity and Non-Infringement in Cases Brought Pursuant to § 271(e)(2)
There is no question that Sanofi has no right to a jury trial on its claims pursuant to § 271(e)(2), and Sanofi does not so assert. Warner-Lambert Co. v. Purepac Pharmaceutical Co., 2001 WL 883232 (D.N.J. March 30, 2001) ("[Plaintiff] could not obtain a jury trial on its § 271(e) claims, which are equitable in nature."); Pfizer Inc. v. Novopharm Ltd., 2001 WL 477163, at *5 (N.D. Ill. May 3, 2001) ("[Plaintiff] admittedly has no right to a jury trial on its equitable claims for relief under § 271(e)(2) .
Sanofi does, however, claim that it is entitled to a jury trial on Apotex's counterclaims seeking a declaratory judgment of invalidity and non-infringement. Although a handful of district courts have addressed the topic, the Federal Circuit has not yet addressed the issue of a right to a jury trial where such counterclaims arise in Waxman-Hatch cases brought pursuant to § 271(e)(2). Brian D. Coggio Timothy E. DeMasi, The Right to a Jury Trial Under the Waxman-Hatch Act — The Question Revisited and Resolved, 57 Food Drug L.J. 155, 158 (2002) . As a result, Sanofi relies on Federal Circuit cases involving patent infringement suits brought pursuant to a different section than the one at issue here, § 271(a). Tegal Corp. v. Tokyo Electron America, Inc., 25 F.3d 1331 (Fed. Cir. 2001), cert. denied 122 S.Ct. 1297 (2002); In re SGS-Thomson Microelectronics, 60 F.3d 839 (Fed. Cir. 1995) (unpublished); In re Lockwood, 50 F.3d 966 (Fed. Cir.), cert. granted, 515 U.S. 1121, vacated 515 U.S. 1182 (1995).
Federal Circuit law controls substantive and procedural issues that pertain to patent law. Midwest Indus. Inc. v. Karavan Tailers, Inc., 175 F.3d 1356 (Fed. Cir. 1999).
Pursuant to Rule 47.6 of the Federal Circuit Rules, this order is not citable as precedent. Fed. Cir.R. 47.6.
After accepting certiorari in Lockwood, the Supreme Court later vacated the Federal Circuit's opinion without comment after Lockwood withdrew the jury demand, thereby mooting the issue. American Airlines v. Lockwood, 515 U.S. 1182 (1995). However, Lockwood is still considered "persuasive as a "source of guidance and as an indication of the Federal Circuit's likely position on the Seventh Amendment question." Pfizer Inc. v. Novopharm Ltd., 2001 WL 477163 (N.D. Ill. May 3, 2001) (quoting Christianson v. Colt Indus. Operating Corp., 870 F.2d 1292, 1298-99 (7th Cir. 1989)); see also Tegal Corp. v. Tokyo Electron America Inc., 257 F.3d 1331 (Fed. Cir. 2001) (expressly re-affirming the reasoning of Lockwood).
A. Federal Circuit Cases
The seminal case involving a right to a jury trial in cases brought pursuant to § 271(a) is Lockwood. There, the patentee brought suit pursuant to 35 U.S.C. § 271(a), alleging that American Airlines' computerized reservation system infringed two Lockwood patents. Lockwood, 50 F.3d at 969. Lockwood sought damages and an injunction and also demanded a jury trial. Id. American asserted affirmative defenses and counterclaims for declaratory judgments of non-infringement and invalidity. Id. The district court granted American's motion for summary judgment on the issue of non-infringement, and ordered that the case proceed on American's claim for a declaratory judgment of invalidity. Id. The district court also struck Lockwood's demand that the issue of invalidity be tried to a jury. Id.The Federal Circuit granted Lockwood's petition for a writ of mandamus and directed the district court to reinstate Lockwood's jury demand. Lockwood, 50 F.3d at 980. The Court observed that declaratory judgment actions, which did not exist at common law, are only as legal or equitable as the controversies on which they are founded. Id. at 973. The Court then determined that the closest eighteenth-century analog to American's claim for declaratory judgment of invalidity was a suit for patent infringement where the affirmative defense of invalidity was pleaded. Id. at 974. It was up to the patentee whether such actions would be raised at law or in equity, depending on the patentee's choice of remedy. Id. at 976. If the patentee sought damages, the patentee brought an action at law, and the issue of validity would be tried to a jury; if the patentee sought only to enjoin future acts of infringement despite suffering past acts of infringement, the patentee could bring a suit in equity before the bench. Id. The Court reasoned that it could not, consistent with the Seventh Amendment, deny Lockwood the same choice merely because the validity of his patents was raised in a declaratory judgment counterclaim rather than as an affirmative defense to a claim of infringement by Lockwood. Id. Therefore, the Court concluded that Lockwood was entitled to have the factual issues relating to validity tried to a jury. Id.; see also SGS, 35 U.S.P.Q.2d at 1573 (relying on Lockwood and reinstating jury demand).
In SGS, the patentee sued SGS for patent infringement, seeking an injunction to prohibit future infringement. SGS asserted affirmative defenses and counterclaimed for declaratory judgments of non-infringement and invalidity. SGS demanded a jury trial on its counterclaims, which the district court denied. On SGS's petition for a writ of mandamus, the Federal Circuit directed the district court to reinstate SGS's jury demand. SGS, 35 U.S.P.Q.2d at 1573. Relying on Lockwood, the Court reasoned that if SGS had brought an action seeking declaratory judgments of non-infringement or invalidity, either SGS or the patentee would have had a right to a jury trial. Id. The Court rejected the patentee's argument that it determined whether SGS was entitled to a jury trial by the type of relief that it chose to seek to enforce its patent, because "the court based its decision on the legal nature of the declaratory judgment action, not the nature of the patentee's claim." Id.
In describing the eighteenth-century analog, the Lockwood Court described the patentees' choices in a situation where they "fac[ed] past acts of infringement" and so could choose either to pursue a legal or equitable remedy. Lockwood, 50 F.3d at 976. It is not clear that the analogy holds true where, as in § 271(e)(2) cases, no past infringement has occurred. The Lockwood Court's discussion of a Ninth Circuit case, Shubin v. United States District Court, 313 F.2d 250 (9th Cir. 1963) (striking jury demand), suggests that its rule may not be applicable to instances where there is no infringement, no damages, and therefore no choice as to whether to sue at law or at equity. In Shubin, the parties stipulated that infringement had not yet occurred, and therefore the patentee could not have brought a claim for damages. Because the patentee's only remedy was equitable, the Ninth Circuit held that there was no right to a jury on the accused infringer's action for declaratory judgment of invalidity. Id. at 252. The Federal Circuit stated that, as in Shubin, it was focusing on the type of action the patentee could have brought at common law to raise the issues presented in the case. Lockwood, 50 F.3d at 977. Because Lockwood, unlike the patentee in Shubin, could have sought damages in addition to an injunction, he could have brought an action at law and sought a jury trial.
The Federal Circuit addressed Lockwood most recently in Tegal. This decision does not, however, clarify what result should follow in the current situation. Tegal, the patentee, sued Tokyo Electron America ("TEA") for patent infringement and sought both damages and injunctive relief and requested a jury. TEA asserted affirmative defenses, but did not file any counterclaims. Six days before trial, Tegal dropped its claim for damages and the district court ordered the trial to proceed without a jury. TEA's motion for reconsideration of the court's order was denied. Following a bench trial, the court found that Tegal's patent was willfully infringed, enforceable and valid.
On appeal, the Federal Circuit affirmed the district court's decision on the jury trial issue, holding that a defendant, asserting only affirmative defenses and no counterclaims, does not have a right to a jury trial when the only remedy sought by the plaintiff-patentee is an injunction. Tegal, 257 F.3d at 1341. The Federal Circuit based its analysis on Lockwood, finding that the reasoning was still "pertinent." Id. Applying the framework described above, the Federal Circuit concluded that because Tegal sought only an injunction, it would have needed, in eighteenth-century England, to bring its case in a court of equity. Because Tegal's sole requested remedy was purely equitable, the Court concluded the neither party had a right to a jury trial. Id.
Sanofi cites Lockwood and its progeny for the proposition that a patentee or defendant has the right to a jury trial where invalidity is asserted in a counterclaim, even if the plaintiff cannot claim monetary damages. The discussion above reveals that Sanofi's interpretation is too broad. Lockwood turns on whether money damages could have been, but were not, sought. It is on the basis of this fact that Lockwood distinguished the Ninth Circuit case, Shubin. Further, the Federal Circuit's most recent analysis of Lockwood, in Tegal, focused on the fact that Tegal sought only an injunction in determining that a jury trial was not warranted. As noted above, these cases did not involve the statutorily constructed cause of action under § 271(e)(2).
Sanofi argues that Tegal is distinguishable as it involved only affirmative defenses rather than counterclaims. As a result, there was only one cause of action — the initial one that the plaintiff commenced, that was clearly equitable in nature. Sanofi argues that a counterclaim, on the other hand, initiates another cause of action that, in the case of an action seeking a declaration of invalidity or non-infringement, is always legal in nature regardless of the remedy sought. Even if this argument explains the result in Tegal, Sanofi fails to explain the Lockwood Court's reading of Shubin.
B. District Court Opinions
At least four other districts have addressed the specific topic before this Court. The Northern District of Illinois and the District of Minnesota have both found that there is no right to a jury trial on counterclaims seeking a declaration of non-infringement or invalidity in cases brought pursuant to § 271(e)(2). Biovail Labs, Inc. v. Torpharm, Inc., No. 01 Civ. 9008 (N.D. Ill. July 23, 2002) (citing Glaxo Group Ltd. v. Apotex, Inc., 2001 WL 1246628 (N.D. Ill. Oct. 16, 2001); Pfizer Inc. v. Novopharm Ltd., 2001 WL 477163, at *5 (N.D. Ill. May 3, 2001)); Minnesota Mining v. Alphapharm Pty. Ltd., 2002 WL 1352426 (D. Minn. March 20, 2002) The District of New Jersey has held that there is such a right. Warner-Lambert Co. v. Purepac Pharm. Co., 2001 WL 883232 (D.N.J. March 20, 2001) (holding that defendant was entitled to jury trial on counterclaim seeking a declaration of non-infringement, invalidity and unenforceability) (citing Hoechst Marion Roussel Inc. v. Par Pharm., Inc., 39 U.S.P.Q.2d 1363 (D.N.J. 1996) (marked not for publication)). Finally, the District of Massachusetts has held in this situation that it would be safer to have a jury trial and not need one than to need a jury trial and not have one. Zeneca Ltd. v. Pharmachemie B.V., 1998 U.S. Dist. LEXIS 21499, at *3-4 (D. Mass. 1998) (refusing to strike jury demand because of uncertainty in law and "proceeding with a protracted non-jury trial runs the risk that if the right to a jury trial is sustained on appeal, the whole case would have to be retried").
By letter dated August 8, 2002, Sanofi attempted to distinguish Biovail as it only involved a case of non-infringement rather than patent invalidity. In discussing Pfizer, the court stated that "[h]ere, however, Torpharm does not raise the issue-of patent invalidity; instead it argues that the patents were not infringed." By this letter, Sanofi appears to argue for the first time that a declaratory judgment regarding patent invalidity merits a jury trial while one regarding non-infringement does not. Biovail does not support this argument-in fact it refutes it. After distinguishing Pfizer, it nonetheless stated that it "strongly support[s]" the argument that a right to jury trial does not exist in this case. Slip op. at 3. Biovail therefore is precedent in support of the finding that there is no right to a jury trial in a case involving either invalidity or non-infringement.
All three of the cases in opposition to the holding above were decided prior to the Federal Circuit's most recent Seventh Amendment decision, Tegal.
This Court is in accord with the Northern District of Illinois and the District of Minnesota that no jury trial should attach "[i]n the absence of any issue of past infringement for which damages could conceivably be recovered." Pfizer, 2001 WL 477163, at *3.
For instance, in Glaxo, the defendant Apotex answered the amended complaint with affirmative defenses of invalidity and non-infringement along with counterclaims for the same relief, demanding a jury trial. Glaxo successfully moved to strike the jury demand. The court noted that, unlike in Lockwood, "[t]he controversy in the instant case is not the inversion of a traditional infringement lawsuit . . . [but] a controversy of recent purpose of posturing drug patent claims for adjudication before actual infringement occurs." Id. at *5 (citing Pfizer). As a result, "it is inherently equitable, and the remedies are limited accordingly." Id.
The defendant is related to the present Defendant Apotex.
The district's most recent case, Biovail, concludes: "Merely because some patent infringement actions may have been entitled to jury trials does not mean that all patent infringement actions have a right to a jury trial. No activities have yet occurred that would entitle the plaintiffs to damages in the present suit." Biovail, Slip Op., at 4.
Commentators who have analyzed the Federal Circuit case law as it relates to counterclaims asserted in Waxman-Hatch cases brought pursuant to § 271(e)(2) have also concluded that a patentee must seek damages in order to be entitled to a jury trial:
[I]n a patent infringement action where the accused infringer does not assert any counterclaims, the parties' right to jury trial will depend on the patentee's requested remedy. If the patentee seeks damages, either party can demand a jury. If, however, the patentee demands only an injunction, neither party has the right to a jury. In an action that includes a request for a declaration of non-infringement or invalidity, asserted as either an original claim or a counterclaim, either party can demand a jury if the patentee sought damages.
Coggio DeMasi, supra, at 158.
Sanofi relies on the District of New Jersey cases in arguing that its jury demand not be stricken. In Hoechst Marion Roussel Inc. v. Par Pharm., Inc., 39 U.S.P.Q.2d 1363 (D.N.J. 1996) (marked not for publication), the court cited Lockwood and held that a jury trial is permissible in an ANDA case where there is a counterclaim of invalidity:
I conclude that the Federal Circuit would hold that Lockwood and SGS-Thomson control in the circumstances of this case. Notwithstanding that Hoechst brought this action pursuant to § 271(e)(2) rather than § 271(a), the counterclaim seeks declaratory judgment of non-infringement and invalidity. Par could have sought such relief under § 271(a) had it initiated a declaratory judgment action rather than filing a counterclaim. Under the ruling of Lockwood and SGS-Thomson, it cannot be deprived of a jury trial.
IV. The Motion Is Not Premature
Sanofi urges the Court to deny the motion as premature, suggesting that damages might be incurred at some future time.
Pursuant to § 271(e)(4)(C), "damages or other monetary relief may be awarded against an infringer only if there has been a commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of an approved drug." 35 U.S.C. § 271(e)(4)(C). Apotex has not yet engaged in such activities.
It is, of course, possible that Apotex will engage in such activities prior to the resolution of this case. Under the relevant statutes, the FDA must suspend approval of Apotex's ANDA for a maximum of thirty months, or until the court rules. 21 U.S.C. § 335(j)(4)(B) (iii) (I)-(III). If a trial takes place after thirty months have expired, the ANDA may be approved prior to trial. Should this action go to trial after the thirty-month period has elapsed and Apotex has started to manufacture, market or sell clopidogrel bisulfate, the possibility of damages would then exist. If that situation arises, Sanofi can request leave to file an amended complaint with a jury demand. Biovail, slip op. at 5 (granting permission to file amended complaint with jury demand if prior to trial defendant engaged in manufacture, use, sale or offer of sale of subject of disputed ANDA); see also Minnesota Mining, 2002 WL 1352426, at *3 (denying motion to strike jury where plaintiff moved two weeks after defendant began to engage in manufacture, use, sale or offer of sale of drug, and "this case has transformed into a typical patent infringement case involving both legal and equitable claims").
Conclusion
For the foregoing reasons, Apotex' s motion to strike is granted. Sanofi has leave to file a motion to amend its complaint to include a jury demand prior to trial if damages should be incurred as discussed above.