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Takeda Pharmaceuticals Co. Ltd. v. Sandoz

October 9, 2007

TAKEDA PHARMACEUTICALS COMPANY LIMITED AND TAKEDA PHARMACEUTICALS NORTH AMERICA, INC., PLAINTIFFS,
v.
SANDOZ, INC., DEFENDANT.



The opinion of the court was delivered by: Denise Cote, District Judge

OPINION AND ORDER

This is the fifth case in a series of related lawsuits filed by Takeda Pharmaceuticals Company Limited and Takeda Pharmaceuticals North America, Inc. (collectively, "Takeda"), against pharmaceutical companies seeking to manufacture generic versions of pioglitazone, a chemical compound used in the treatment of diabetes and for which Takeda holds certain patents. This Opinion addresses defendant Sandoz's motions for judgment on the pleadings and to dismiss, and Takeda's cross-motion to stay the proceedings. For reasons to be discussed, Sandoz's motions are denied, and Takeda's cross-motion is granted.

BACKGROUND

Takeda owns several patents related to the chemical compound pioglitazone, which is manufactured and sold as the diabetes drug Actos®. Three of these patents are particularly relevant to this case: U.S. Patent No. 4,687,777 (the "'777 Patent"), which covers the chemical compound itself, and U.S. Patents Nos. 5,965,584 (the "'584 Patent") and 6,329,404 (the "'404 Patent"), which cover the combination of pioglitazone with other antidiabetic agents. The '777 Patent is slated to expire in 2011; and the '584 and '404 Patents will expire in 2016, as will the remainder of Takeda's combination-use patents.

The patents are covered by the regulatory framework established under the Hatch-Waxman Act. See Takeda Chem. Indus., Ltd. v. Watson Pharm., Inc., 329 F. Supp. 2d 394, 397-98 (S.D.N.Y. 2004) ("Takeda I"). To date, five generic drug manufacturers, including Sandoz, have filed an abbreviated new drug application ("ANDA") with the Food and Drug Administration ("FDA") seeking to market a generic version of pioglitazone. Takeda has filed suit against each of these manufacturers in order to protect its patent rights under the Hatch-Waxman Act, alleging patent infringement and inducement of infringement.

In three of those suits, the generic drug manufacturer defendants moved to dismiss certain counts of Takeda's complaints for lack of subject matter jurisdiction or failure to state a claim. Each of these motions to dismiss was denied. See Takeda I, 329 F. Supp. 2d 394; Takeda Chem. Indus., Ltd. v. Ranbaxy Labs., No. 03 Civ. 8250 (DLC), Docket No. 40; Takeda Chem. Indus., Ltd. v. Alphaharm Pty. Ltd, et al., No. 04 Civ. 1966 (DLC), Docket No. 30. Additionally, in two of those suits, the defendant generic drug manufacturer claimed that the '777 Patent was invalid. This challenge was rejected, see Takeda Chem. Indus. v. Mylan Labs, 417 F. Supp. 2d 341 (S.D.N.Y. 2006), and that decision was affirmed by the United States Court of Appeals for the Federal Circuit, see Takeda Chem. Indus. v. Alphapharm Pty., Ltd., 492 F.3d 1350 (Fed. Cir. 2007), reh'g and reh'g en banc denied, No. 2006-1329 (Fed. Cir. Sept. 27, 2007). In 2005, the four previous suits were consolidated and, in March 2006, the consolidated cases were stayed so that the parties could revisit their claims closer to the expiration of the '777 Patent in 2011. A status letter is due in January 2009, to set the stage for the completion of the litigation, which may entail additional discovery to prepare for the trial on these claims.*fn1

Sandoz is the fifth generic drug manufacturer to be sued by Takeda over pioglitazone. Sandoz filed a Paragraph III certification with respect to the '777 Patent, indicating that it agreed not to sell pioglitazone until 2011 when the '777 Patent expires. See 21 U.S.C. § 355(j)(2)(A)(vii)(III). It filed Paragraph IV certifications with respect to the '584 and '404 Patents, see 21 U.S.C. § 355(j)(2)(A)(vii)(IV), and Section viii statements with respect to the '584 and '404 Patents, as well as five additional Takeda method-of-use patents for pioglitazone. A Paragraph IV certification asserts that the patent is invalid or will not be infringed by the sale of the generic drug. 21 U.S.C. § 355(j)(2)(A)(vii)(IV). With a Section viii statement, a filer represents that it is not seeking approval for the patented method of use. Id. § 355(j)(2)(A)(viii).

Counts I and II of Takeda's complaint allege infringement and inducement of infringement of the '584 and '404 Patents under 35 U.S.C. § 271(e)(2)(A), which provides that it "shall be an act of infringement to submit [an ANDA] for a drug claimed in a patent or the use of which is claimed in a patent." Under the Hatch-Waxman Act, Sandoz's filing of the Paragraph IV certifications for these two patents required Takeda to file suit within forty-five days of receiving notice of the certifications if it wished to delay FDA approval of the ANDA. See Takeda I, 329 F. Supp. 2d at 397 n.1. Sandoz has challenged these two claims through a Rule 12(c) motion on the ground that it cannot, as a matter of law, induce infringement of these two patents.

Counts III through IX of the complaint allege that Sandoz's sale of pioglitazone will induce infringement of the '584 and '404 Patents as well as other Takeda combination-use patents, in violation of 35 U.S.C. § 271(b). Section 271(b) provides that whoever "actively induces infringement of a patent shall be liable as an infringer." 35 U.S.C. § 271(b). The substantive analysis of an infringement claim is the same for each of the counts on which Takeda has sued Sandoz; § 271(e)(2) "simply provides an 'artificial' act of infringement that creates case-or-controversy jurisdiction to enable the resolution of an infringement dispute before the ANDA applicant has actually made or marketed the proposed product." Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1365 (Fed. Cir. 2003).

Takeda seeks both a judgment declaring that Sandoz's making, using, offering for sale, selling, and/or importing pioglitazone, or inducing such activities, will infringe at least one of Takeda's combination-use patents, as well as a permanent injunction barring these activities. Takeda also seeks a declaratory judgment providing that the effective date of any FDA approval of Sandoz's sale of a product containing pioglitazone be no earlier than the expiration of the last to expire of Takeda's patents.

DISCUSSION

Sandoz does not contest that this Court has subject matter jurisdiction over this action and counts I and II. As a consequence, this Opinion will first address the motion to dismiss each of the claims in this action for its failure to state a claim. It will then address the argument that counts III through IX should be dismissed for lack of subject matter jurisdiction. Finding that each of these motions to dismiss should be denied, the Opinion will conclude with a discussion of Takeda's motion to stay this action due to the substantial evidentiary and legal overlap between it and the four consolidated actions, which are presently stayed.

I. Motions to Dismiss

Sandoz moves to dismiss counts III through IX pursuant to Federal Rule of Civil Procedure 12(b)(6), and for judgment on the pleadings on counts I and II under Federal Rule of Civil Procedure 12(c).*fn2 Under the pleading standard set forth in Rule 8(a) of the Federal Rules of Civil Procedure, complaints must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "[A] plaintiff is required only to give a defendant fair notice of what the claim is and the grounds upon which it rests." Leibowitz v. Cornell Univ., 445 F.3d 586, 591 (2d Cir. 2006). Rule 8 is fashioned in the interest of fair ...


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