Posted On: December 14, 2007 by

Does MedImmune "Abrogate" Federal Circuit Cases Regarding Covenant not to Sue?

As everyone is aware, the Supreme Court in MedImmune Inc. v. Genentech, Inc. announced a new standard for determining whether a case or controversy exists thereby replacing the former "reasonable apprehension of imminent suit test." But how does this new standard effect a situation where there is a covenant not to sue on an original patent where a reissue application is pending? This is one of the questions the Delaware District Court was faced with in Pfizer Inc. v. Ranbaxy Laboratories Ltd., et al., C.A. No. 07-138 (D. Del. Nov. 29, 2007) (Farnan, J.). The Court found that in light of the MedImmune standard there cannot be a "current and concrete" case or controversy between the parties unless a valid and enforceable patent exists. Id. at 8. In this case, one claim of the patent-at-issue had been declared invalid during a prior lawsuit and the covenant not to sue between the parties contained an agreement not to sue on any other claims in the patent. Id. at 8-9. There was no specific language in the covenant not to sue referencing reissue applications, but the Court said the "question of whether a new patent will ever be reissued is speculative, purely hypothetical and unripe for judicial determination" therefore, there can be no subject matter jurisdiction over the claims. Id. at 9.

Pfizer further moved to dismiss certain of Ranbaxy's counterclaims on the basis of res judicata. These same parties had been involved in prior litigation over the same patent where the defendant, Ranbaxy, challenged the validity of the patent-in-suit. The defendant conceded that it was aware the prior art it now wants to assert against Pfizer but argued that it did not have all the facts related to the data. The Court held that Ranbaxy was required to raise all invalidity defenses during the earlier litigation and because they were informed about the data during that litigation they could not raise it now. If they felt that there was not enough time to analyze the data they should have sought an extension of trial in that Court, but will not be able to raise the invalidity claim now. Id. at 13-14. Furthermore, the Court stated that a change in the law does not alter the res judicata effect of a judgment and therefore refused to recognize an exception to the rule based on KSR/Teleflex. Id. at 15