District Of Delaware Rules That API Manufacturer Cannot Be Sued Under Section 271(E)(2)

by John L. Abramic

Leo Pharma A/S v. Tolmar, Inc., No. 10-269-SLR (D. Del.)

LEO Pharma A/S sued Tolmar, Inc. in the District of Delaware for patent infringement under 35 U.S.C. § 271(e)(2) after Tolmar submitted an ANDA for a generic version of DOVONEX, certifying that a certain LEO Pharma patent is invalid or would not be infringed by Tolmar's ANDA products.  Subsequently, LEO Pharma sought to amend its complaint to, among other things, add Teva Pharmaceutical Industries Ltd. as a defendant.

LEO Pharma asserted that Teva manufactures the API used in Tolmar's ANDA products and submitted the Drug Master File for the API to the FDA for reference in Tolmar's ANDA.  According to the court, LEO Pharma asserted that Teva was liable for infringement under three theories:

1. "pursuant to 35 U.S.C. § 271(e), because Teva participated in, contributed to, aided, abetted and/or induced the submission of Tolmar's ANDAs";
2. "pursuant to 35 U.S.C. § 271(a), (b), (c) and/or (g), if Teva 'commercially manufactures, uses, offers for sale or sells,' or 'imports . . . into the United States, or induces or contributes to any such conduct,' the API of the ANDA products"; and
3. "pursuant to 35 U.S.C. § 271(b), because Teva has 'engag(ed) in a cooperative venture with Tolmar to submit the ANDA and (has) incorporate(d) by reference Teva's DMF thereto to the FDA to obtain approval to engage in the commercial manufacture, use, sale and/or importation' of Tolmar's ANDA products. . . ."

In a Memorandum Order last week, the court granted the motion with respect to the second theory, but denied the motion to the extent that LEO Pharma's claims related to the filing of the ANDAs.  The court stated that "an API manufacturer like Teva cannot be held liable for 'inducing' the submission of the ANDAs."  The court also found that Teva was not involved in preparing the ANDAs such that it could be held liable under section 271(e)(2):

Although "(p)arties 'actively involved' in preparing an ANDA are deemed to have 'submit(ted)' the ANDA," Cephalon, Inc. v. Watson Pharmaceuticals, Inc., 629 F. Supp. 2d 338, 349 (D. Del. 2009), I decline to extend liability under § 271(e)(2) to third parties for work protected under § 271(e)(1).  In this regard, I conclude that the allegation that Teva "participated in the work related to the submission" is distinguishable from actually preparing the ANDA.

In doing so, the court recognized a fine line between "engaging in protected work under § 271(e)(1), which 'enables generic manufacturers to test and seek approval to market' ANDA products, Warner-Lambert, 316 F.3d at 1358, and being 'actively involved in preparing the ANDA,' e.g., by 'contributing employees to the various teams responsible for preparing the ANDA,' and having employees of each prepare and execute ANDA-related documents, Cephalon, 629 F. Supp. 2d at 349. . . ."