Hatch-Waxman Litigation Alerts: Recent Federal Circuit Decision on Section viii Carve Outs and Inducement


Haynes and Boone, LLP
Hatch-Waxman Litigation Alerts
November 5, 2010

Recent Federal Circuit Decision on Section viii Carve Outs and Inducement

By C. Kyle Musgrove, Partner C. Kyle Musgrove

On November 1, 2010, a divided 2-1 panel of the Federal Circuit issued a decision in AstraZeneca LP v. Apotex, Inc. that addresses inducement of infringement in the context of a Section viii "carve out" under 21 U.S.C. § 355(j)(2)(A)(viii) and 21 C.F.R. § 314.92(a)(1). The decision upheld a preliminary injunction that prohibited Apotex from launching a generic version of AstraZeneca's ("AZ") PULMICORT RESPULES® (budesonide).

The primary issue of interest in this alert deals with the preliminary finding of inducement of infringement of a claim in one of AZ's Orange Book-listed patents. This claim taught a new method of using budesonide through treatment "not more than once per day." In contrast to the narrow claim language, AZ's NDA label indicated that the composition could be administered either once or twice daily.

Apotex attempted to avoid inducing infringement of the method claim by removing any explicit reference to once-daily administration in its proposed label. Thus, the proposed label specified only twice-daily usage. Apotex, however, retained a reference to downward-titration of the dosage over time in the proposed label.

A previous related ANDA filed by Ivax had made similar changes in its proposed labeling. AZ filed a citizen petition regarding Ivax's ANDA asking the FDA to require that the label include the once-daily dosing language and questioning the downward-titration language. The FDA denied the petition to require the once-daily dosing language and indicated that, in its view, the downward-titration language did not "teach" once-daily dosing but could include once-daily dosing. Apotex attempted to use the FDA's response to argue that its own label's downward-titration language would not induce infringement of AZ's "not more than once per day" method claim.

Despite the absence of explicit reference to the once-daily administration in Apotex's proposed label, the District Court determined that AZ was likely to prevail on inducement based on the downward-titration language. The District Court reasoned that, given the single-use dosing of a respule, the only way to titrate down from taking two doses per day of the smallest dosage was to decrease the frequency of dosing, i.e., take one dose a day. The Federal Circuit affirmed and determined that the downward-titration language would inevitably lead some consumers to practice AZ's claimed method. Furthermore, the Federal Circuit stated that, rather than supporting Apotex's non-inducement theory, the FDA's response to the earlier citizen petition put Apotex on notice that there were infringement issues. Thus, based on the language of the proposed label and the FDA's response, the Federal Circuit affirmed the finding that AZ would likely prove inducement at trial.

The Federal Circuit was unconvinced that the fact that the language in Apotex's proposed label was required by the FDA demonstrated an absence of intent. Rather, the Federal Circuit noted that Apotex could have submitted Paragraph III or IV certifications, attempted to appeal the language of the proposed label, etc., instead of pursuing a Section viii "carve out."

In affirming the injunction, the Federal Circuit also dismissed an invalidity challenge based on a prior art advertisement that was similar in many regards to the dosing language in Apotex's proposed label. While the majority characterized the question as close, it determined that the "most natural reading" of the advertisement instructs twice-daily administration. Thus, the majority was "not left with a definite and firm conviction that the district court clearly erred by concluding that at trial Apotex will likely not be able to demonstrate by clear and convincing evidence that the advertisement anticipates the asserted method claims." Notably, the majority decision does not use the "substantial question of validity" standard for reviewing the propriety of a preliminary injunction in rendering its conclusion.

FDA Grants Genzyme's Citizen Petition Requesting a Second 30-Month Stay

By Scott A. Cunning, Associate Scott A. Cunning

On October 26, 2010, the FDA issued a letter decision addressing whether submission of a second PIV certification could give rise to a second, or superseding, 30-month stay. The FDA issued its letter decision in response to Genzyme's citizen petition regarding ANDA No. 90-040 (filed by Pentech and subsequently acquired by Cobrek), which seeks approval for a generic version of Hectorol® (doxercalciferol injection). The FDA granted Genzyme's request for a second, or superseding, 30-month stay.

Genzyme's NDA No. 21-207 for Hectorol® was first approved on April 6, 2000. The original NDA specified that the injection would be packaged in ampules. Genzyme later submitted a supplemental application that identified minor changes to the inactive ingredients and also proposed a change in packaging from ampules to stoppered vials.

Cobrek's ANDA originally cited Genzyme's ampule NDA formulation as the RLD and contained a PIV certification. Genzyme timely filed suit after receiving notice of Cobrek's first patent certification, which triggered the first 30-month stay in the case. Then, shortly after the FDA approved Genzyme's sNDA, it notified Cobrek that its ANDA could not be approved because the formulation was not Q1/Q2 the same as Genzyme's reformulated RLD in vials. The FDA recommended that Cobrek reformulate and informed Cobrek that it would not accept its amendment without additional patent certifications. Cobrek chose to reformulate and submitted new patent certifications with its amendment. Genzyme filed suit within 45 days of receiving notice of the new patent certifications, and then submitted its petition for a second 30-month stay.

According to FDA's letter decision, the re-submission of the patent certifications and subsequent timely filing of suit by the NDA holder did trigger a superseding 30-month stay. The FDA determined that the plain language of the statute required an additional 30-month stay regardless of whether the 30-month stay provisions of the MMA, which generally prohibit successive 30-month stays, were implicated.

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