Court Refuses To Dismiss Entity That Worked On Development Of The ANDA Product

In a recent decision of interest, the Southern District of New York interpreted the term "submit" in 35 U.S.C. § 271(e)(2) to find that an entity that did not formally submit the ANDA could nevertheless be held liable for infringement under the Hatch-Waxman Act. In re Oxycontin Antitrust Litigation, 04-MD-1603 (SHS) (S.D.N.Y. October 19, 2012). Read the court's decision here.

Plaintiffs, makers of OxyContin® brand oxycodone hydrochloride extended release tablets, sued Defendants, Varam, Inc. ("Varam") and KVK-Tech, Inc. ("KVK"), for infringement under § 271(e)(2) after Varam submitted an ANDA to FDA containing a Paragraph IV certification against Plaintiffs' Orange Book patents. KVK moved to dismiss Plaintiffs' infringement claims arguing that the court lacked subject matter jurisdiction and that Plaintiffs failed to state a claim because only Varam had submitted the ANDA under § 271(e)(2). See Slip Op. at 6.

In denying KVK's motions to dismiss, the court cited various facts demonstrating KVK's substantial involvement in the preparation of the ANDA. For example, the court found that KVK "ha[d] taken every relevant action save for the final review, signing and mailing of the ANDA." Id. at 8. Varam's sole employee and shareholder had "no scientific or technical expertise" and "relied on KVK's assurance" that the ANDA was "in order" before submitting it to FDA. Id. at 4. KVK, as Varam's official agent, had also communicated with FDA about the ANDA, and KVK was entitled to receive monetary benefit if, by KVK's efforts, the ANDA was approved. Id. at 4, 8.

The court discussed two lines of Hatch-Waxman cases in which plaintiffs have attempted to add as parties entities connected to the ANDA filer. The court distinguished the first line of cases, which included SmithKline Beecham Corp. v. Geneva Pharm., Inc., 287 F. Supp. 2d 576 (E.D. Pa. 2002) and SmithKline Beecham Corp. v. Pentech Pharm, Inc., No. 00-cv-2855, 2001 U.S. Dist. LEXIS 1935 (N.D. Ill. Feb. 16, 2001), wherein the Eastern District of Pennsylvania and the Northern District of Illinois found that API suppliers could not be liable for infringement under § 271(e)(2) even though their drug master files were referenced in the respective defendants' ANDAs. The court noted that the API manufacturers in those cases "provided ingredients and information that were used in the ANDA, as specifically protected by section 271(e)(1), but they did not take the extra step of handling the ANDA process...