Teva Loses Appeal in Prominent Declaratory Judgment Case

A federal appeals court has ruled against Teva Pharmaceutical in its attempt to force a district court to hear its patent challenge to Pfizer's antidepressant Zoloft -- a ruling that is a blow to generics seeking to use the declaratory judgment provision in the 2003 drug patent reforms to settle patent disputes.

In a 2-1 ruling, the U.S. Court of Appeals for the Federal Circuit upheld a December 2003 ruling by a district court in Massachusetts, which had dismissed Teva's motion for a declaratory judgment of noninfringement against Pfizer.

The appeals court majority agreed with the district court that, because Pfizer had not sued Teva, the generic firm had failed to establish a "reasonable apprehension" of suit, which is one half of a two-prong test required for establishing court jurisdiction under Article III of the Constitution.

The case centers on the fact that Pfizer did not sue Teva for infringement within a 45-day notification period after Teva filed a July 2002 abbreviated new drug application (ANDA) challenging patents on Zoloft (sertraline HCl). Pfizer said the district court dismissed Teva's lawsuit because Pfizer had not accused Teva of infringing its Zoloft patent, and Teva had no reasonable basis to expect Pfizer would do so.

But Teva and others, including the Generic Pharmaceutical Association, FTC and AARP, had argued that a "case or controversy" -- required to establish a reasonable apprehension of a suit -- is implicit when a generic firm challenges a patent under the Hatch-Waxman Act patent rules, which were amended under the 2003 Medicare Modernization Act (MMA).

The appeals court, however, concluded that Teva had not established that an actual controversy existed between it and Pfizer.