Pharmaceutical Hatch-Waxman litigation proceeds under a unique framework.  In this case, Hatch-Waxman declaratory judgment (“DJ”) defendants Gilead Sciences, Inc. (“Gilead”) and Astellas Pharma US, Inc. (“Astellas Pharma”) sought to dismiss Astellas Pharma for lack of personal jurisdiction and improper venue, and to dismiss pursuant to Federal Rule of Civil Procedure 19 non-joined and “necessary party” Astellas US LLC (“Astellas LLC’), the exclusive licensee.[1]  DJ plaintiff Apotex Inc. (“Apotex”) did not contest dismissing Astellas Pharma, nor seriously contest lack of personal jurisdiction or improper venue of Astellas LLC.  Instead, Apotex sought to apply the plain language of the Hatch-Waxman Act and its specific provisions regarding Hatch-Waxman DJ actions to prevent dismissal under Rule 19 for failure to join a required party.[2]  Thus, the dispute centered on whether Rule 19 of the Federal Rules of Civil Procedure (“FRCP”) applied to Hatch-Waxman DJ actions and, if so, whether Astellas LLC was a required party necessitating dismissal.

Chief Magistrate Judge Spero agreed that Rule 19 applies, even in Hatch-Waxman DJ actions.  Apotex had argued that 21 U.S.C. § 355(j)(C)(i), the Hatch-Waxman DJ provision, directed the Abbreviated New Drug Application holder (generic company) to bring a DJ action against the “[patent] owner” or “[New Drug Application] holder” (branded company)—not any “licensee.”[3]  In Apotex’s view, Astellas LLC, as an exclusive licensee, was unnecessary in a Hatch-Waxman DJ action.[4]  The Court rejected Apotex’s position that the Hatch-Waxman Act created an independent cause of action or otherwise altered federal jurisdiction, finding instead that it merely placed certain additional limitations on bringing a DJ action.[5]  Specifically, the Court rejected Apotex’s arguments that 28 U.S.C. § 2702 (FRCP “shall not abridge, enlarge or modify any substantive right”) or Rule 82 (federal jurisdiction may not be limited or extended by the FRCP) rendered Rule 19 inapplicable.[6]  Similarly, the Court rejected the argument that 21 U.S.C. § 355(j)(5)(C)(i)(II)—which does not expressly require exclusive licensees to be joined—trumps the general patent case rules of standing: “[T]he Court interprets [§ 355(j)(5)(C)(i)(II)] only as establishing venue as to the ‘the owner or holder [of the New Drug Application]’ named as a defendant and not as abrogating the joinder rules set forth in Rule 19 or any other requirements of the Federal Rules of Civil Procedure.”[7]

Accordingly, Rule 19 required dismissal in this case.  The Court agreed that Astellas LLC was the exclusive licensee of the patents-in-suit and agreed that an exclusive licensee is a necessary party and must be joined.[8]  The Court found no reason to apply a different rule to Hatch-Waxman DJ actions.[9]  The Court further found that Astellas LLC was not subject to the Court’s jurisdiction.[10]  Finally, the Court determined that Astellas LLC was an indispensable party under Rule 19(b): (1) it would be prejudiced by an adverse judgment on the patents-in-suit, marketing of a competing generic product before the patents-in-suit expire, and differences in interests with Gilead; (2) the Court could not lessen hose prejudices; (3) any judgment without Astellas LLC would likely be inadequate; and (4) all the required parties were already involved in litigation in the District of Delaware.[1]  As Astellas Pharma was an indispensable party that could not be joined in the Northern District of California, the action was dismissed without prejudice for failure to join Astellas LLC as a required party.[12]

 

Apotex Inc. v. Gilead Sciences, Inc. et al, Case No. 3:18-cv-06475-JCS, Dkt. 63 (N.D. Cal. Apr. 23, 2019).


Endnotes:

[1]  See Apotex Inc. v. Gilead Sciences, Inc. et al., Case No. 3:18-cv-06475-JCS (“Apotex”), Dkt. No. 27-3 (N.D. Cal. Nov. 30, 2018); Apotex, Dkt. 45 (N.D. Cal. Jan. 18, 2019).

[2]  Apotex, Dkt. No. 38-3 (N.D. Cal. Dec. 28, 2018).

[3]  Id. at 16.

[4]  See id. at 15-22.

[5]  Apotex, Dkt. No. 63 at 8 (N.D. Cal. Apr. 23, 2019) (“Order”).

[6]  Id.

[7]  Id. at 9.

[8]  Id. at 9-10.

[9]  Id. at 10.

[10]  Id.

[11]  See id. at 10-11; see also Astellas US LLC et al. v. Apotex Inc., Case No. 1:18-cv-01675 (D. Del.).

[12]  Order at 12.