Merck Victorious over Apotex in Fosamax Counterclaims Case

 |  Includes: MRK, TEVA
by: Aaron F. Barkoff

Merck & Co. v. Apotex, No. 2007-1362 (Fed. Cir. 2008)

Fosamax (alendronate sodium) is one of the all-time best-selling drugs for the treatment and prevention of osteoporosis, with over $3 billion in U.S. sales last year.  Merck (NYSE:MRK) listed ten patents in the Orange Book for Fosamax:  U.S. Patent No. 4,621,077, which claims a method of inhibiting bone resorption by administering alendronate sodium; U.S. Patent No. 5,994,329, which claims other methods of use; and eight other patents on formulations and methods.

In 1999, Teva (NYSE:TEVA) filed an ANDA for a generic version of Fosamax, with paragraph IV certifications to all ten Orange Book-listed patents.  Teva was the first ANDA filer, earning 180-day exclusivity.  According to Teva's approval letter, a district court upheld the validity of the '077 and '329 patents and dismissed the cases with respect to the other patents-in-suit.  The Federal Circuit affirmed the validity of the '077, but, in a January 2005 opinion, held two claims of the '329 patent to be invalid for obviousness.

Apotex filed an ANDA for generic Fosamax sometime later, with a paragraph III certification to the '077 patent and paragraph IV certifications to the other nine Orange Book-listed patents.  Merck sued Apotex for infringement and Apotex counterclaimed for invalidity and noninfringement.  Following discovery, Merck granted Apotex a covenant not to sue and moved to dismiss the case.

Apotex opposed the motion, arguing that as long as it was blocked by Teva's 180-day exclusivity, there was an Article III case or controversy and thus it should be allowed to pursue its counterclaims.  Apparently, Apotex aimed to trigger Teva's exclusivity by obtaining an early "court decision."  Apotex further argued that dismissal might not lift the automatic 30-month stay of FDA approval of Apotex's ANDA.  However, the district court granted Merck's motion to dismiss (click here for opinion), based largely on the covenant not to sue.  Apotex appealed to the Federal Circuit.

The Federal Circuit issued its opinion on Wednesday morning.  The court began its analysis by noting that "depending on the circumstances, a justiciable Article III controversy may continue to exist between a patentee drug company and a Paragraph IV ANDA filer in the context of the Hatch-Waxman Act even after the patentee drug company has granted the Paragraph IV ANDA filer a covenant not to sue," citing its decision in Caraco v. Forest earlier this year.  The court continued:

This case, however, has been rendered moot by two factual developments that were brought to this court's attention after oral argument.  First, the FDA decided to treat the thirty-month stay on Apotex's ANDA as dissolved once the district court dismissed this case.  Second, the first Paragraph IV filer (i.e., Teva) triggered its 180-day exclusivity period . . . by marketing its generic drug on or about February 6, 2008.  As a result, Apotex no longer suffers a delay in entering the market under either the thirty-month stay provision or the 180-day exclusivity provision that is traceable to Merck and redressible by a court judgment.  Indeed, Apotex's only remaining delay in entering the market is the balance of Teva's 180-day exclusivity period, which expires on or about August 5, 2008.

Thus, the Federal Circuit vacated the district court's dismissal of Apotex's counterclaims as moot.