Court Opinion Explains Dismissal of Merck's Fosamax Suit

Last month , the U.S. District Court for the District of Delaware granted Merck's (MRK) motion to dismiss the patent suit that Merck filed against Apotex concerning generic Fosamax. The court indicated at the time that an opinion would "follow at the court's earliest convenience." On Monday, the court issued the promised opinion.

Merck moved to dismiss the case after granting Apotex a covenant not to sue on any of the nine patents-in-suit. Apotex opposed the motion on grounds that it was entitled to a "court decision" of invalidity or non-infringement, which would have triggered the first ANDA filer's 180-day exclusivity period. That would have allowed Apotex to launch its own generic Fosamax sooner-either by forcing the first filer to launch its generic Fosamax earlier or by causing the first filer to forfeit its exclusivity.

Predictably, the court concluded that the covenant not to sue extinguished any case or controversy. In it, the court stated:

Having received a covenant not to sue, Apotex does not and cannot allege "unlawful conduct" attributable to Merck. Further, Apotex's articulated injury-delayed entry to the market-is not fairly traceable to Merck. There is no evidence to conclude that Apotex's delayed entry into the market is any different than what it would have been had Merck never sued it. Thus, Apotex's advancement of this case against Merck becomes merely a means to an end, where the desired "end" is a triggering event but the means to that end, the litigation itself, is not sanctioned under the current legal framework. To proceed to a substantive "court decision" on the merits of Apotex's claims of non-infringement or invalidity would amount to an impermissible advisory opinion.

The court also addressed Apotex's motion to amend its pleadings to add an antitrust counterclaim. Apparently, in its motion to amend Apotex argued that Merck's 30-month stay on FDA approval of Apotex's ANDA would not be terminated upon dismissal of the lawsuit, causing additional antitrust injury to Apotex. My understanding has always been that dismissal of a case terminates the 30-month stay. According to the district court, however, that is not so clear.

The relevant statute is 21 USC 355(j)(5)(B)(iii). Merck argued that the statutory language instructs that a dismissal for lack of jurisdiction would lift the 30-month stay. Apotex, on the other hand, asserted that the FDA has not yet construed the statute. According to the court, "neither the parties nor the court can be certain of how the provision will be applied to Apotex." Interestingly, the court noted that at one time the FDA proposed a rule that would have answered the question directly (with the answer being that dismissal lifts the stay), but later withdrew the rule without comment. (Does anyone know of a case in which the FDA lifted a 30-month stay because the lawsuit was dismissed?)

The court acknowledged the potential for abuse, "if the mere filing of a patent infringement suit can result in an irrevocable 30-month stay," but in the end, concluded that Merck's actions were perfectly legal under the Hatch-Waxman regime. Therefore, according to the court, Apotex does not have a cognizable antitrust injury.