By Kevin E. Noonan —

Last week, Judge Claude M. Hilton, District Court Judge for the Eastern District of Virginia, denied APP Pharmaceuticals request to intervene in The Medicines Company's lawsuit against the U.S. Patent and Trademark Office over the timeliness vel non of its Patent Term Extension Request for its patent on the blockbuster drug Angiomax® (bivalirudin).  Coupled with indications from the Solicitor General (cited in APP's briefs) that the government is not inclined to appeal Judge Hilton's order that the Office accept as timely MDCO's Request, there seems to be few remaining obstacles that could prevent the term of MDCO's patent from being extended.  Thus, in due course MDCO's U.S. Patent No. 5,196,404 (which nominally expired on March 23, 2010), will have its term extended by 1773 days, having a new expiration date of January 30, 2015.

APP argued in its brief that it was entitled to intervene as of right, or in the alternative that the District Court should permit the company to intervene using its discretion, because it was injured by the Court's "retrospective changes" in the law mandating extension of the '404 patent.  Specifically, APP argued that it had relied on the expiration dates for patents listed in Orange Book and the U.S. Patent and Trademark Office's "final determination" that the '404 patent was not entitled to extension because MDCO had not timely filed its Request.  Accordingly, APP's ANDA for generic Angiomax® was filed with a Paragraph III certification (21 U.S.C. § 505(j)(2)(A)(vii)(III)), that is the company certified that it would not request regulatory approval until expiration of the '404 patent.  Accordingly, the Court's order mandating an extension of the term of the '404 patent will delay APP receiving regulatory approval for 1773 days.  As a consequence, APP argued, it had a "substantial investment" in developing generic Angiomax®, including lost expenditures of "time, money and people."  Recovery of this investment is now being substantially delayed as a result of the Court's order extending the patent term.  APP also argued that in addition to its investment, it had suffered from lost opportunity costs (in pursuing generic Angiomax® instead of other drugs).  The company also raised the harm to the public due to lack of generic drugs, as well as its own interest (and reliance upon) "promulgation, maintenance, and enforcement of consistent rules and procedures by the PTO and FDA."

APP addressed the standards for intervention as of right under 4th Circuit law based on:  (1) timely motion; (2) an interest in the subject matter; (3) protection of the interest impaired because of the action; and (4) interest not adequately represented by the parties to the litigation.  Its request was timely, according to APP's brief, because it occasions no prejudice to the other parties:  APP requests permission to intervene solely to pursue an appeal of the Court's order.  Its interest in the subject matter was the alleged one million dollars per day of Angiomax® revenues to MDCO to which APP is denied a portion thereof due to the Court's order.  Impairment of this interest is "indisputable," APP argues, since without regulatory approval it cannot enter the Angiomax® market.  Finally, APP argued that its interests are not adequately represented by the government in view of the Solicitor General's disinclination to appeal.  (Even the potential that the government may not appeal, or may not pursue the appeal adequately, is sufficient interest according to APP's brief.)  APP argued that these facts support intervention by right, but further argued that the equities (specifically, that without an appeal from the government it has no remedy) demand that the Court exercise its discretion to permit APP to intervene for the limited purpose of pursuing an appeal of the Court's order.

MDCO opposed APP's motion, arguing that APP has neither Constitutional nor prudential standing to intervene.  There is no basis for the Court to permit APP to "stand in the government's shoes," because inter alia the statutory regime of patent term extension is exclusively ex parte, with no 3rd party rights to challenge.  MDCO's brief cites Federal Circuit precedent — Syntex (U.S.A.) Inc. v. U.S. Patent and Trademark Office, 882 F.2d 1570, 1575 (Fed. Cir. 1989), affirming No. 08-527-A (E.D. Va. July 22, 1988) (Hilton, J.), and Boeing Co. v. Commissioner of Patents & Trademarks, 853 F.2d 878, 882 (Fed. Cir. 1988) — that a 3rd party must have an independent right to challenge agency action.  APP's "remedies," insofar as it is entitled to them, are limited to the provisions of the Hatch-Waxman Act (specifically, by refiling its ANDA with a Paragraph IV certification) and § 282 remedies under the Patent Act (regarding invalidity and unenforceability defenses to an infringement action).  In addition, MDCO argued that APP had no Article III standing, if only because the FDA has not yet approved APP's ANDA and thus any injury was speculative at best.  "[APP] is just a third party hoping to obtain a financial windfall if MDCO's patent rights are prematurely cut short," MDCO argued in its brief, saying that this was not enough to confer jurisdiction.  Its brief also argued that there was no jurisdictional basis for APP to intervene under either the Patent Act or the Administrative Procedures Act, and that the right of a third party to challenge agency action is limited to defenses in infringement suits (as set forth in the statute), citing Syntex:

[E]very perceived injury caused by improper agency action does not carry a right to immediate judicial redress.  A right to immediate judicial review must be granted or reasonably inferred from a particular statute.  For example, a potential infringer may not sue the PTO seeking retraction of a patent issued to another by reason of its improper allowance by the PTO.  A remedy must await confrontation with the patent owner [in an infringement suit].

Syntex, 882 F.2d at 1576 (emphasis added).

Turning to APP's arguments, MDCO asserted that APP has not satisfied the requirements to intervene as of right, because at best it had a  "contingent economic interest — depending on FDA approval of its ANDA — but not a legally-cognizable interest."  MDCO also argued that APP's motion was untimely, since the government had not definitively stated that it would not appeal (although the Court would be creating a Catch 22 for APP should it base its decision on this aspect of MDCO's argument).

In rebuttal, APP argued that MDCO had applied the wrong law to the issue, since the standards for permitting a party to intervene were governed by 4th Circuit law (not falling under the Federal Circuit's exclusive jurisdiction).  Substantively APP argued that it was not challenging agency action but rather the Court's decision that "retroactively" changed the PTE timing requirements, which was the proximate cause of APP's injury.  Accordingly, MDCO's prudential arguments were irrelevant according to APP's brief.  The company argued that it satisfied the 4th Circuit's requirements for intervening as of right, or alternatively that it deserved the exercise of the Court's discretion to permit it to intervene.

The Court did not agree, denying APP's motion from the bench in a hearing held last Friday.  The Court has not rendered (and may not render) a formal opinion, but the transcript of the hearing will become available 90 calendar days after the hearing, or on December 13, 2010.

For additional information regarding this and other related topics, please see:

• "The Medicines Company Prevails in Patent Term Extension Dispute," August 4, 2010
• "House Passes Patent Term Extension Bill," June 27, 2008