COVID-19 and Hatch-Waxman Litigation in the District of New Jersey

In March 2020, as federal and New Jersey states of emergency were declared in an effort to stop the spread of COVID-19, the United States District Court for the District of New Jersey also quickly made a number of changes to its ordinary policies and procedures. While the court remains open for business, in order to further public health and safety for its personnel, counsel, litigants, and the general public, Chief Judge Wolfson has entered a number of Standing Orders over the last five months to address the exigent and unprecedented circumstances created by the COVID-19 pandemic.

Notably, nearly all proceedings have been held by video conference or telephone, and jury selection and jury trials have been continued through August 31, 2020. In civil cases, filing and discovery deadlines were granted automatic extensions—45 days for deadlines falling between March 25, 2020, and April 30, 2020, and 30 days for deadlines falling between May 1, 2020, and May 31, 2020. The court’s Security Committee has recently published “District of New Jersey COVID-19 Recovery Guidelines” to facilitate a phased approach to reopening the courthouses, but even as the court staff and litigants return, the effects of the COVID-19 pandemic will be felt by the court for months or even years to come.

The District of New Jersey is a popular venue for filing patent infringement lawsuits. As the home of many biopharmaceutical and biotechnology companies, it is inevitably a forum for life-science patent suits, particularly those brought under the Hatch-Waxman statute. Not surprisingly, a review of litigation statistics from Docket Navigator reveals a reduction in both new Hatch-Waxman proceedings and new docket entries in Hatch-Waxman cases in the District of New Jersey in 2020 to date as compared to 2019. Docket Navigator shows this same trend with respect to Hatch-Waxman cases across all federal district courts.

Despite the overall reduction in Hatch-Waxman cases and filings, cases have continued to move forward—albeit with COVID-19-related modifications. Litigants in the District of New Jersey quickly came to agreements on protocols for conducting remote-video depositions and, in certain cases, requested additional extensions in light of client communication challenges created by the global pandemic, particularly with respect to international clients. Litigants have also expressed a willingness to conduct claim construction hearings remotely, and at least one trial has been postponed from the fall of 2020 until 2021.
While nearly every civil and criminal case currently pending in the District of New Jersey and in federal courts throughout the country has been impacted in some way by the COVID-19 pandemic, Hatch-Waxman litigations subject to 30-month stays are in a particularly unique position with respect to the effects of the inevitable delays caused by the global pandemic. Under 25 U.S.C. §355(b)(2)(A), an Abbreviated New Drug Application (ANDA) filer must make any one of four (I-IV) certifications for each Orange Book listed patent. A Paragraph IV certification is an ANDA filer’s statement that it intends to market its bioequivalent pharmaceutical product before the expiration of a patent listed as covering that product because the ANDA filer believes such patent is either not infringed or invalid. An ANDA filer who makes a Paragraph IV certification is required under 35 U.S.C. §§355(b)(3), (j)(2)(B) to send a Notice Letter to the patent holder advising it of the ANDA filing and the ANDA filer’s bases for contending that the applicable patents are invalid or not infringed.

After a patent holder receives a Notice Letter, it may immediately file a lawsuit alleging patent infringement against the ANDA filer because filing a Paragraph IV certification is considered a statutory act of patent infringement under 35 U.S.C. §271(e)(2) and, pursuant to 21 U.S.C. §§355(c)(3)(C), (j)(5)(B)(iii), if the case is filed within 45 days of receipt of the Notice Letter, the United States Food and Drug Administration (FDA) cannot grant final approval of the ANDA for 30 months—the 30-month stay. A district court has the authority to modify the length of the 30-month stay if there is a failure by any party to “reasonably cooperate in expediting the action.” The 30-month stay ends, and the FDA can approve an ANDA, when a district court enters an order finding that the patent at issue is invalid, unenforceable, or not infringed.

In Hatch-Waxman cases, district courts and litigants generally endeavor to conclude the case before or by the termination of the date of any applicable 30-month stay. In the District of New Jersey, schedules often provide for several months from the date of a trial to the conclusion of the 30-month stay to allow time for post-trial briefing and the court’s issuance of an opinion. If a 30-month stay concludes before the end of a Hatch-Waxman case, the FDA can approve an ANDA and an ANDA filer can launch its product “at-risk.” An “at-risk” launch is one in which an ANDA filer may still be liable to a patent-holder for patent infringement. If it appears that a Hatch-Waxman case will not be resolved before the conclusion of the 30-month stay, the parties can come to an agreement to extend the stay or, if no such agreement can be reached, the patent holder can file a motion for a preliminary injunction to prevent an ANDA filer from launching at-risk, which is a costly and time-consuming endeavor.

In the District of New Jersey, Hatch-Waxman litigants have already been faced with the issue of how to address looming 30-month stay deadlines in light of the litigation delays caused by COVID-19.

For example, in Mitsubishi Tanabe Pharma Corporation v. Sandoz Inc., Case Number 3:17-cv-5319, the final pretrial conference took place on March 31, 2020, and the trial was originally scheduled to begin on May 4, 2020. After an adjournment of the trial date, the parties agreed in late April to an extension of the 30-month stay from Sept. 29, 2020, until 120 days from the trial’s conclusion and requested that the court set a new trial date in July 2020. A trial was never scheduled, however, as the parties informed the court that they had resolved the matter on May 29, 2020, and a Consent Judgment and Order was entered on June 1, 2020.

In In re Fetzima, Case Number 2:17-cv-10230, a case in which the 30-month stay is set to expire on Jan. 25, 2021, the defendants, without objection from the plaintiffs, requested at the beginning of May that the court set a date for the final pretrial conference and trial. The April 1, 2020, scheduling order stated that the pretrial conference and trial would be held in July and August 2020 respectively, subject to the court’s availability. Thereafter, the court held a telephone conference on June 30, 2020 regarding the pretrial and trial schedule, and the defendants have filed sealed letters regarding their positions on scheduling, but a trial date has not yet been set.

As the COVID-19 pandemic continues, and even as the District of New Jersey begins its reopening process, it is likely that an increasing number of litigants in Hatch-Waxman cases, especially those subject to the 30-month stay, will have to continue to adjust and adapt their litigation strategies to accommodate the scheduling changes that will continue to occur. Barring rapid progress in the development and distribution a COVID-19 vaccine, courts and litigants not only will have to continue preparing remotely, but it is likely that they will begin trying cases in that manner as well.

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Reprinted with permission from the September 14, 2020 issue of the New Jersey Law Journal. © 2020 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved. For information, contact 877-257-3382 or reprints@alm.com or visit www.almreprints.com.</p