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Teva Pharm. USA, Inc. v. Pfizer Inc. - 395 F.3d 1324 (Fed. Cir. 2005)

Rule:

Under the two-part test formulated by the United States Court of Appeals for Federal Claims to determine whether an actual controversy exists in a patent infringement suit, there must be both: (1) an explicit threat or other action by the patentee which creates a reasonable apprehension on the part of the declaratory judgment plaintiff that it will face an infringement suit, and (2) present activity by the declaratory judgment plaintiff which could constitute infringement, or concrete steps taken by the declaratory judgment plaintiff with the intent to conduct such activity. 

Facts:

Teva Pharmaceuticals USA, Inc. ("Teva") was the second to file an Abbreviated New Drug Application (“ANDA”) pursuant to 21 U.S.C.S. § 355 of the Federal Food, Drug and Cosmetic Act, for a generic version of Zoloft (sertraline hydrochloride). The first generic manufacturer, Ivax Pharmaceuticals USA, Inc. ("Ivax") had been sued for infringement, but had entered into a settlement agreement with Pfizer, Inc. ("Pfizer"). Although Pfizer refused to execute a covenant not to sue Teva, the district court concluded that Teva failed to satisfy the "reasonable apprehension" of an infringement suit prong of the Federal Circuit's two-part test for whether a case or controversy existed for purposes of the Act and U.S. Const. art. III. Pfizer had made no explicit threat or other action, and its listing of the patents in the Orange Book was merely required under the statute. Teva’s subjective belief that it would be sued because Pfizer had sued Ivax did not amount to an explicit threat indicating the imminence of suit.

Issue:

Was Teva able to establish that an actual controversy existed between it and Pfizer as required under the Declaratory Judgment Act, 28 U.S.C. § 2201(a)?

Answer:

No

Conclusion:

The court agreed with the district court that Teva failed to establish that an actual controversy existed between it and Pfizer, as required under the Declaratory Judgment Act, 28 U.S.C. § 2201(a). The court also found that the recent "Medicare Amendments" to the statute did not apply to create a controversy. Under the two-part test formulated by the United States Court of Appeals for Federal Claims to determine whether an actual controversy exists in a patent infringement suit, there must be both: (1) an explicit threat or other action by the patentee which creates a reasonable apprehension on the part of the declaratory judgment plaintiff that it will face an infringement suit, and (2) present activity by the declaratory judgment plaintiff which could constitute infringement, or concrete steps taken by the declaratory judgment plaintiff with the intent to conduct such activity. 

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