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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

AstraZeneca Pharmaceuticals LP, ) AstraZeneca UK Limited, IPR ) Pharmaceuticals Inc., and ) Civ. No. Shionogi Seiyaku Kabushiki Kaisha ) 07-806-JJF-LPS Plaintiffs, ) V. ) Sun Pharmaceutical Industries, ) Ltd., ) Defendant. ) _____________________________________________________ AstraZeneca Pharmaceuticals, LP, ) AstraZeneca UK Limited, IPR ) Pharmaceuticals Inc., and ) Civ. No. Shionogi Seyaku Kabushiki Kaisha ) 07-809-JJF-LPS Plaintiffs, ) V. ) Apotex Inc. And Apotex Corp., ) Defendants. ) _____________________________________________________ AstraZeneca Pharmaceuticals, LP, ) AstraZeneca UK Limited, IPR ) Pharmaceuticals Inc., and ) Civ. No. Shionogi Seyaku Kabushiki Kaisha ) 07-810-JJF-LPS Plaintiffs, ) V. ) Aurobindo Pharma Ltd. And ) Aurobindo Pharma USA Inc., ) Defendants. ) _____________________________________________________ AstraZeneca Pharmaceuticals, LP, AstraZeneca UK Limited, IPR Pharmaceuticals Inc., and Shionogi Seyaku Kabushiki Kaisha ) ) ) Civ. No. ) 07-811-JJF-LPS ) Plaintiffs, ) V. ) Cobalt Pharmaceuticals Inc., and ) Cobalt Laboratories Inc. ) Defendants. ) _____________________________________________________

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1 2 3 4 BEFORE: 5 6 7 8 9

Thursday, July 3, 2008 10:00 a.m. Courtroom 2A 844 King Street Wilmington, Delaware THE HONORABLE LEONARD P. STARK, United States District Court Judge

APPEARANCES: FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, LLP BY: CHARLES LIPSEY, ESQ. BY: MARY FERGUSON, ESQ. -and-

10 11 12 13 14 15 16 17 18 19 20 Counsel for Defendant Aurobindo 21 22 23 24 -andBAYARD BY: RICHARD D. KIRK, ESQ. MICHAEL BEST & FRIEDRICH LLP BY: THOMAS P. HENEGHAN, ESQ. BY: JEFFREY S. WARD, ESQ. Counsel for Plaintiff AstraZeneca CONNOLLY, BOVE, LODGE & HUTZ LLP BY: MARY W. BOURKE, ESQ. -andFITZPATRICK, CELLA, HARPER & SCINTO BY: HENRY RENK, ESQ.

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1 2

KATTEN MUCHIN ROSENMAN LLP BY: ROBERT B. BREISBLATT, ESQ. -and-

3 4 5 Counsel for Defendant Apotex 6 7 8 Counsel for Defendant Cobalt 9 10 11 12 13 Counsel for Defendant Mylan 14 15 16 17 18 Counsel for Defendant Sun 19 20 21 22 23 24 ABRAMS & LASTER LLP BY: JOHN M. SEAMAN, ESQ. -andWINSTON & STRAWN LLP BY: JOHN K. HSU, ESQ. MORRIS JAMES LLP BY: MARY MATTERER, ESQ. -andRAKOCZY, MOLINO, MAZZOCHI, SIWIK LLP BY: ERIC HUNT, ESQ. FOLEY & LARDNER BY: JEREMY EDWARDS, ESQ. BY: STEVEN MADDOX, ESQ. POTTER, ANDERSON & CORROON LLP BY: RICHARD HORWITZ, ESQ.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Honor.

THE COURT:

Good morning,

everyone. We have a full house. I would like to begin in some fashion by knowing who is in front of me and if you could indicate if you're planning to speak as well. MR. LIPSEY: If I may, Your Honor,

I'm Charles Lipsey from the Finnegan Henderson firm representing the plaintiffs, whom I shall collectively refer to as AstraZeneca. I will do

most of the talking unless I fall in battle, at which point my colleagues will stand to replace me. I'm joined by my colleague Mary Ferguson from our Boston office and by Mary Bourke from Connolly Bove. I'm also joined by

Mr. Henry Renk from the Fitzpatrick Cella firm in New York, Mr. Tom Stevens from AstraZeneca, and Dana Hamm from Connolly. We have some suggestions for how to proceed when the time comes, Your Honor. MR. HENEGHAN: Good morning, Your I'm here on

My name is Tom Heneghan.

behalf of Aurobindo Pharma Limited and Aurobindo USA. With me is my partner, Jeff Ward, and

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Richard Kirk from the Bayard firm. The defendants have coordinated our arguments where we have similar motions, so we're prepared to address that. THE COURT: Tell me what you

would like to do in terms of coordination, and then we'll have everyone else introduce themselves. MR. HENEGHAN: There are two

motions that deal with personal jurisdiction, so obviously those particular parties will argue those motions. There is a motion in relation to

Count 2 and whether it's appropriate for subject-matter jurisdiction and declaratory judgment action, and that applies to four different parties. And defendants have agreed

that I'll argue that particular motion. THE COURT: MR. HENEGHAN: That you will? I will.

There is also a motion -subject-matter jurisdiction -- as to Count 1 as to two particular parties, the U.S. subsidiaries of Aurobindo and the U.S. subsidiary of Apotex. Mr. Breisblatt will address that argument, and I

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will follow up with any specific facts that apply to Aurobindo separately. main arguer of that. THE COURT: And on the two He will be the

personal jurisdiction motions? MR. HENEGHAN: Mr. Ward will

address the Aurobindo motion, and Mr. Breisblatt will address the Apotex motion. And I think

that covers all of them because to my understanding, the Parr matter was resolved. THE COURT: right. I believe that's

Let's continue with the introductions,

and we'll continue. MR. BREISBLATT: Your Honor,

Robert Breisblatt from Katten Muchin on behalf of Apotex, Inc. statement. subsidiary. And I do have to correct one

Apotex Corp. is not a U.S. It's a separately incorporated

corporation, and I represent both Apotex, Inc. and Apotex Corp. MR. MADDOX: Honor. Cobalt. Good morning, Your

Steven Maddox from Foley and Lardner for This is my colleague, Jeremy Edwards.

We have only pending a motion to dismiss the

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declaratory judgment claim with reference to Aurobindo for primary argument. If we feel we

need to add something, Mr. Edwards will speak. MR. HORWITZ: Honor. Good morning, Your

Richard Horwitz from Potter Anderson,

and I am co-counsel with Mr. Breisblatt for Apotex and with Mr. Edwards for Cobalt. MR. HSU: Honor. Good morning, Your We're

John Hsu for Sun Pharmaceuticals.

in the same position as Cobalt, and we'll defer to Mr. Heneghan's argument. if we feel it necessary. MR. SEAMAN: Honor. John Seaman. Good morning, Your We'll add anything

I'm from Abrams and

Laster, Delaware counsel with Mr. Hsu. MS. MATTERER: Honor. Good morning, Your

I'm Mary Matterer from Morris James

representing Mylan today with Eric Hunt from the law firm of Rakoczy, Molino, Mazzochi, and Siwick. MR. BLOW: Honor. Good morning, Your

Edward Blow of the Cohen Matani firm. Sandoz is not a party to

We represent Sandoz.

any of the motions today.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 everyone. Honor. Honor.

MS. GONEGAL:

Good morning, Your

Patricia Gonegal with Sytes, Contract,

and Green, local counsel to Sandoz. MR. KIRK: Good morning, Your I'm

Richard Kirk from Bayard, P.A.

local counsel for Aurobindo, and Mr. Heneghan and Mr. Ward are my co-counsel. THE COURT: I think that's

Mr. Lipsey, what is your

recommendation as to how we should proceed? MR. LIPSEY: I was thinking

through how to handle this amalgam of motions we've got. There is some heavy overlap, in that

some issues are raised in one motion that are similar to issues raised in a different part of a different motion. It struck me that ultimately it was incumbent on the plaintiffs here to explain to the Court why it is that we feel that the various claims we brought are appropriately before the Court. I was going to suggest that I

take a stab at summarizing those points for the Court. Anybody who feels that I'm wrong can

stand up and explain to the Court why they feel

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I'm wrong. I was going to propose to start with the less evidentiarily complex motions, the Count 2 issue and then the 271(e) issue on the U.S. corporations, and then proceed to the personal jurisdiction motions, which are much more complex. And I could handle those either

all together, or I could handle them piece-wise. It seems to me it might make sense, given the way it's going to be argued, if I explain why Count 2 is properly in the case, and why the U.S. corporations are appropriate parties to the 271(e)(2) count -- and we have a responsive argument on that -- and then move to the jurisdiction motions, if that is satisfactory to the Court. THE COURT: Have you conferred

with defense counsel on that? MR. LIPSEY: I have not. This

came to me in the middle of the night. THE COURT: I'm sure they Can you

appreciate you not calling them then.

folks on that side tell me how you feel about that?

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MR. BREISBLATT:

Your Honor, it

seems to me though it's a generous offer by Mr. Lipsey that the defendants in this case are the ones that filed the motions, and normally in motion practice we should go first. And my

suggestion would be the first argument we do have an agreement on is -- it should be on the declaratory judgment action -- which is Count 2, and we should lead with that. Then Mr. Lipsey

can respond, and we would have our reply, and that would be tendered to the Court. And then the next step would be the kind of overlapping on the Delaware corporations and an argument as to why there is no subject-matter jurisdiction. And then

finally it seems to me, because those parties who don't have a stake in it could leave if they so chose, the jurisdictional arguments would be the last ones. THE COURT: jurisdiction arguments. Well, I think, notwithstanding the insight you had in the middle of the night, I'm going to stick to the more standard practice. The two personal

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And we'll deal first with -- the issues are basically the same order that you proposed in any event, but you'll get a chance to stand up several more times. We'll hear first on the Count 2 issue. We'll hear from the defense and then

plaintiff response and brief rebuttal if necessary from the defense, and then move to the Count 1 issue, and then the personal jurisdiction questions. MR. HENEGHAN: Honor. Thank you, Your

Tom Heneghan on behalf of Aurobindo We first

Pharma Limited and Aurobindo USA.

discussed our motion to dismiss Count 2 of the plaintiff's complaint based upon subject-matter jurisdiction. Count 2 is what I would call a garden-variety declaratory-judgment action alleging that Aurobindo Pharma is going to infringe AstraZeneca's patent in the future. And in order for that claim to have subject-matter jurisdiction, there has to be an actual controversy. It has to be sufficiently

immediate to justify jurisdiction under 271(a).

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In this case, those facts just aren't here. The most interesting part about this approach is that under 271(e), there's a safe harbor for the kind of conduct that the defendants here have engaged in in preparing their abbreviated new drug application for submission to the FDA. If that safe harbor can

be eviscerated by a declaratory judgment action, there isn't much point in even having it. So what we have here is we have a very unique jurisdictional situation with the claims under the Hatch-Waxman Act in Count 1 which are appropriate jurisdictionally in that regard. But then we have this tack-on 271(a)

claim, which just simply does not have declaratory judgment jurisdiction. THE COURT: Does safe harbor go

to immunity from liability or immunity from suit? MR. HENEGHAN: from suit, Your Honor. It goes to immunity

If it weren't for the

ability to sue us under the Hatch-Waxman Act for the filing of our application for that artificial act of infringement, there's no

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question they couldn't bring this declaratory judgment action. So they have -Why is that? Where

THE COURT:

would their declaratory judgment act, 271(a), fall short? That is, you're prepared to go to

market, you've done some research, you're ready to go forward. their 271(a)? MR. HENEGHAN: facts. On precisely those We Where would they fall short on

We are not ready to go to market.

are waiting for FDA approval, FDA approval that will not come for at least two to three more years. The problem here is really the immediacy We could not take our drug to

of the situation.

market tomorrow because we don't have FDA approval. The FDA approval is currently stayed

by the Hatch-Waxman Act. THE COURT: isn't it? That's what it is,

It's the thirty-month stay that is

the only thing that stands between them and the ability to bring the 271(a) action. MR. HENEGHAN: The thirty-month

stay and FDA approval, which are related but not the same. We could not bring this drug to

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market tomorrow because we don't have FDA approval. FDA approval is not automatic.

There's a process involved, and no one is close to having approval from the FDA even without the stay. So really what we have is this future possible activity that is a long way from being right, and that's why the Count 2 jurisdiction just doesn't exist yet. THE COURT: Is the situation in The

your view at all analogous to Medimmune? facts there, as I recall, were you had a

licensee that was continuing to pay royalties but under protest. And the Federal Circuit, I

think, had an issue, dismissed the declaratory judgment lawsuit by the licensee, saying, "There isn't sufficient immediacy in the case and no controversy because you're continuing to pay the royalties, so how can they oversee you?" But of course, we all know the Supreme Court reversed that, arguably on the grounds that the only thing that was stopping there from being jurisdiction in that context was an action of the licensee. That is, paying

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the royalty under protest. Why is it not entirely analogous here that the only thing that is preventing AstraZeneca from pursuing 271(a) is their action of filing the Hatch-Waxman and triggering the thirty-month stay? Why isn't that entirely

analogous to what the Supreme Court said there is declaratory judgment on? MR. HENEGHAN: Because the

difference is that there is, for lack of a better word, third party involved here, and that's the FDA. Unlike Medimmune where

Medimmune's situation was in their control, they made a choice about the licensing fee and set that up. In our case, we have no control over when the FDA approves our application. only thing -- the only force that is being applied now is the stay. Even without the stay, The

we would not have FDA approval any time in the near future. The approval process takes a It's an administrative process,

period of time.

and we're not in a situation where we have any control or AstraZeneca has any control over

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whether or not the actual infringement can occur. Remember, there's no actual infringement here. All we have is this

artificial act of infringement that's created by the Hatch-Waxman Act. THE COURT: One of the parties,

though, said -- I think it was Cobalt -- that if AstraZeneca waived, for lack of better word, the thirty-month stay, I should go forward with Count 2. position. It sounds like that's not your Your position is even if the

thirty-month stay didn't exist or they voluntarily said we don't want it, you would still be trying to dismiss Count 2. MR. HENEGHAN: I guess my response to the Cobalt argument was, that's an interesting idea. I think it is highly unlikely

that AstraZeneca would ever agree to waive that stay. If they are willing to waive that stay, But I

we are certainly willing to consider it.

think that's just not something that's going to happen. I think it's an interesting argument. But the bottom line is we don't

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have the immediacy.

We don't have the ability

to actually commit an act of infringement, and under 271(a), there has to be an actual act of infringement, not just this artificial act indentified by 271(e). And we have 271(e) jurisdiction. The issues are before the Court properly with proper subject-matter jurisdiction, and that is what distinguishes Count 1 from Count 2. Did you have another question, Your Honor? THE COURT: If the 271(a) is not

timely now, at what point -- in your view -would it be timely? Hatch-Waxman 271(e)? MR. HENEGHAN: I guess it could When there is a pending

become -- it could ripen if you had a situation where the thirty-month stay had expired and FDA approval had been granted and there was an ability for the defendants to actually launch their product. But the issues related to the

271(e) case have not yet been resolved, except the issues are the same. So we're really talking about a

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redundancy here in this claim.

The issues in

the 271(e) case, infringement and validity, are going to resolve the issues that exist in the 271(a) case on the same patent. THE COURT: You're not concerned

that if the court order rules that you can't do what AstraZeneca is doing, that that could lead to protracted litigation, which I know Hatch-Waxman is trying to prevent? That is,

where someone in AstraZeneca's position, not being able to do 271(a) at the same time as E, will do the E, get as much mileage and delay out of that as they can, and then hit you for an A. You're not concerned with that? MR. HENEGHAN: I'm not concerned

with that, Your Honor, because the ability to have all the issues resolved during the 271(e) case really resides with us, too, as long as we raise the issues of invalidity that need to be raised. As long as we defend the issues that

AstraZeneca raises, then there would be a resolution on the issues that will relate to a future 271(e) case. So they're not going to

have the opportunity to piggy-back the second

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case. THE COURT: Okay. Thank you.

Mr. Lipsey, your first chance. MR. LIPSEY: Honor. The question of the viability or propriety of Count 2, the count for a declaratory judgment of threatened future infringement under 271(a), is really fully answered by the Glaxo v. Novapharm opinion which we cited in our brief. Just to address some of Mr. Heneghan's points right off the bat, because it is an action for threatened future infringement, it does not require an actual act of 271(a) infringement in order to be a legitimate claim. The Glaxo Court made it clear that that sort of declaratory judgment action looks to the time after the drug has been approved, is perfectly appropriate under traditional patent jurisprudence, and perfectly appropriately made in a case where there is a 271(e)(2) claim -admittedly on other patents -- and perfectly appropriate notwithstanding that the activity Thank you, Your

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that created the threat of future infringement was itself protected by the safe harbor of 271(e)(1). Those were exactly the facts in Glaxo v. Novapharm. situation. It was exactly this

There was a notice letter, there was

a suit, there was a suit on some patents under 271(e)(2) for the filing of the ANDA, there was a declaratory judgment count on there for threatened future infringement, and the Court found that to be a perfectly appropriate claim to be joined in that case. THE COURT: I think, though, in

that case some of the alleged infringing activity was not within the safe harbor; is that correct? MR. LIPSEY: No, that is not

correct, and that's one of the things in their reply briefs that's dead wrong. The alleged act of infringement was under 271(g) which is the so-called process patent bill, that importation into the United States of a product made by a patented process is an act of infringement, just as making,

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using, and selling is an act of infringement under 271(a). The safe harbor under 271(e)(1) applies to both of those. The activity of

importing it for the purposes of getting FDA approval, if that had been an act of infringment, there would have been no need for a declaratory judgment action. There would have That's a

been straight infringement action.

critical error in their analysis of Glaxo v. Novapharm. There's certainly no statute case or anything that they've cited or that I'm aware of that says you cannot bring a declaratory judgment action for threatened future infringement if you also bring a 271(a)(2) action for filing the ANDA. Indeed, one of the

cases they cite, Abbott v. Zenith, declined to allow the declaratory judgment action where you could not bring the 271(e)(2) claim. So it

seems perfectly appropriate to join the two together. THE COURT: It is a little odd

when you acknowledge Congress went to the

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trouble of setting up this matter of 271(e) process. It seems odd that they would go to

that much trouble if you could just do 271(a). MR. LIPSEY: The point is -- and

this is actually my final point -- why bother? Which is, I'm sure, the question. Why bother?

The 271(a) declaratory judgment count clearly binds the U.S. corporations, these Delaware corporations that are the sales and marketing arms of these foreign companies -- who are the ones, after all, who are actually going to be marketing the product -- they are the ones who are threatening to infringe under 271(a). And it is contended -- we'll hear lots of argument in a minute -- it is contended that they are not proper parties to the other infringement count, the 271(e)(2). And we're dealing here with a question of patent certainty. There are

provisions that allow them patent certainty. They can bring declaratory judgment actions on patents we don't sue on. It's appropriate for

us to have patent certainty as well, and that is, that if we are going to litigate these

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issues, that everybody who is involved in the transaction is ultimately bound by the outcome. That's why it's important to have that count in here, and to have it in here now. THE COURT: I think what you're

saying is -- I think Congress thought they were creating a method for patent certainty when they adopted Hatch-Waxman, but you're saying at least in the circumstances here, that goal would not be served by limiting your 271(e) remedy. MR. LIPSEY: Where the ANDA

applicant and the party that is going to be committing the acts of infringement is the same, as is the case with a normal U.S. corporation, that's probably correct. It's probably correct

that the remedy under 271(e)(2) would be absolutely adequate. Where you have this divided situation where the ANDA owner is a foreign company and claims it's not going to be selling, and you have a U.S. domestic company that's going to be selling, and it's contended they're not a proper party to the infringement action, that's where you really need to have it, and

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that's why it's here in this case. Thank you, Your Honor. THE COURT: MR. HENEGHAN: be brief. Thank you. Your Honor, I'll

I just want to address a couple of

things that Mr. Lipsey mentioned. First, the Glaxo/Novapharm case is a very, very different kettle of fish. As

Mr. Lipsey correctly pointed out, that claim involved a method of making patents that is specifically outside of 271(e). It's a claim

under 271(g), and 271(e)(2) specifically says, and the Glaxo court specifically found, that 271(e)(2) does not provide jurisdiction to hear infringement cases regarding claims directed to methods for making drugs. So there isn't a

271(e) claim that could have covered what the Glaxo court was talking about, this 271(g) claim. It's a very, very different factual and procedural situation in that case because it was a 271(g) case. This is not a

271(g) case, and to try to shoehorn the facts here into that Glaxo case, I think, is just

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plain wrong. THE COURT: Let me ask you,

though, there is some language at a minimum in Glaxo that is very helpful to plaintiffs. I

want to make sure I have your position on that. For instance, on page 1569, the Federal Circuit said, "271(e)(2) provided patentees with a defined act of infringement sufficient to create a case of controversy jurisdiction to enable the Court to promptly resolve any dispute concerning infringement and validity." So the question, obviously, is why is it the Federal Circuit's declaration there in that sentence of "promptly resolve any dispute relating to infringement and validity"? Why

doesn't that encompass a 271(a) in this context? MR. HENEGHAN: The reason, Your

Honor, is because in that particular situation we had a group of patents, and not all of them were listed in the Orange Book; therefore, not really contemplated within the Hatch-Waxman Act. So Glaxo brought suit only on one Orange Book patent.

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And there was this method of making patent outside the Orange Book, but that was related to this process. In that case, the

Glaxo Court identified that for the purpose of getting all these issues resolved, it made sense under 271(g) to allow that patent to be brought in. Here we don't have that situation. The patents at issue are all in front of the Court already under 271(e) action. There is no

tag-along patent that ought to also be resolved in order to bring all these others to a head in this case. In fact, Mr. Lipsey's stated reason of "why bother" I think tells us a lot here. Essentially what they're trying to do is

assert jurisdiction over companies they would not otherwise have jurisdiction over under the Hatch-Waxman Act in order to try to get more protection than they're entitled to. Their

concern seems to be that three years from now these U.S. companies might illegally sell some drugs that might infringe their patent. think that can be a basis for declaratory I don't

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judgment jurisdiction. First of all, there are no facts to support that. If AstraZeneca were to win

this case, their patent was upheld, and the defendants were found to infringe, no U.S. drug company would have the ability to get FDA approval to sell. There could be no future act

of infringement because, again, you come back to you can't sell these drugs without FDA approval. There's no way, for example, if you want to talk about Aurobindo USA as one of the U.S. marketing arms, there's no way for Aurobindo USA to sell this drug without FDA approval, unless they want to do it illegally. And to suggest that jurisdiction lies in what a company might do illegally three years from now with no facts to support that I think doesn't carry weight. THE COURT: Before you sit down,

there are four defendants that have moved to dismiss Count 2. But if I'm not mistaken, I So

think Count 2 is asserted against all seven. if it's jurisdictional, even though three of them didn't bother to move, I assume that if I

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agree, I'm going to dismiss for all of them? MR. HENEGHAN: That would be my I don't know if

assumption as well, Your Honor. Mr. Lipsey agrees with that. MR. LIPSEY: address that as follows:

I would like to Which is, we are not

the ones who are making up the dilemma here. It's addressed in one of the Lupin cases which is Aventis v. Lupin case. There's a footnote at

the end which I think the Court may have seen. "This is what is known as a 'heads, I win; tails, you lose' situation. If

Lupin Limited" -- which was the Indian company -- "prevails in this suit, the dismissal of its subsidiary" -- the U.S. subsidiary -- "is of no consequence. Marketing the drug may proceed If Lupin Limited" -- the

with no problem.

Indian company -- "loses the suit, the dismissal of its subsidiary allows that subsidiary to proceed anew." That's why we need it in this case. I would agree that if there is no

jurisdiction to entertain in one of the cases -I would distinguish the situation where there is

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this division of responsibility.

Certainly if

the Court were to find that there's no jurisdiction even in the case where there is a foreign company that owns the ANDA and a U.S. company that's going to market it, that we should probably dismiss that case. THE COURT: Thank you.

Mr. Heneghan, did you or any of the other defendants have anything more to say with respect to the Count 2 issues? MR. MADDOX: May it please the Not to cite new

Court, Steve Maddox for Cobalt.

cases for you here, but just to examine briefly. The first time we were here -there's a clear reason why this extra count is in there. We've got a situation where what

we're hearing is you need this declaratory judgment count. We need this as plaintiffs

because the people who filed the ANDAs that are at issue here might have friends and might have subsidiaries -- do have some subsidiaries -that if they lose, these subsidiaries might start down a regulatory path again. Frankly, it seems to me it's the

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Court's job to deal with those who are seeking approval for their products and not to worry or attempt to adjudicate all those who, starting three or four years from now, might decide to proceed, even apparently in the face of an adverse judgment on patents. It seems to me

more like this was thrown in for good measure, and now, we're desperately seeking for some reason. The second thing I'd like to emphasize, it got discussed very quickly up front. Congress said there are some things that

shall not be infringed upon because we have reasons for not wanting the infringement. Work If

you do in preparation for an FDA submission. you let these claims stay, it will be Congress

said these things are not infringement, but the Court said if you put the words declaratory judgment in front of them, it can be infringement that you litigate. It seems to me

that would be a flat-out reversal of Congress. Thank you. THE COURT: Before I give you a

chance to respond if you want to, anybody else

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on Count 2? MR. BREISBLATT: be repetitious. I don't mean to

I'm going to focus on one of

the things Court noted. This is a legislative scheme set up by Congress with a very specific intent and purpose. Every Court that's dealt with it

refers to the suits under 271(e) to be artifical acts of infringement. were. That's exactly what they

They were created for a specific purpose. The DJ action has no place in

here.

If, in fact, the parties who filed the

ANDA are held to infringe, one of the remedies is an order that goes to the FDA prohibiting approval of their ANDA. If that ANDA is not

approved, they can't sell the drug through any party. That will stop it, period. There's no

reason for a DJ action. THE COURT: Thank you. That's it

from the defense on Count 2? MR. HSU: nothing further. MR. HENEGHAN: of us. I think that's all John Hsu. We have

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THE COURT:

Did you want to

MR. LIPSEY:

I think we fully

briefed it, and I don't think our position improves with repetition, Your Honor. THE COURT: Let's turn the page

from Count 2, then, and we'll move to the arguments of Aurobindo and Apotex on Count 1 and start with the defense. MR. HENEGHAN: I think

Mr. Breisblatt will address that one, Your Honor. MR. BREISBLATT: Your Honor, it is

kind of the follow-through, and that is Apotex Corp. is a company whose main headquarters is in western Florida. It's a Delaware corporation.

It is not the entity that has prepared the ANDA. Under the regulations, one is required to list an organization that is in the United States for receipt of service so that there's someone in the United States that can receive information if need be. That is the role that Apotex Corp follows on the ANDA. It is listed solely as the

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agent for purposes of those communications on the ANDA, but it does not have a stake. not the one who filed the ANDA. Inc. It is

That is Apotex,

Apotex, Inc. would be the manufacturer of

any products should it receive FDA approval. Therefore, there is no subject-matter jurisdiction over Apotex Corp. And I think

Aurobindo is in the same situation. There happens to be an entity, Aurobindo, who is a domestic corporation who is listed on the ANDA solely as an agent for those purposes. Therefore, under the Hatch-Waxman

statute, they are not the filer of it. Therefore, they are not subject to the suit. It's a very simple argument. THE COURT: a 12(b)(1) motion? MR. BREISBLATT: It's both. It's Is this a 12(b)(6) or

a 12(b)(1) because there's no subject-matter jurisdiction over them under the Hatch-Waxman statute, and there is no claim for which relief can be granted for that very basic reason. They're not the proponent of this artificial act of infringement. They weren't the filer of the

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ANDA. THE COURT: Is that standard, the

legal standard, not important because, for instance, AstraZeneca makes allegations that the American entities were involved in the preparation of the ANDA? But you're telling me

and put in evidence that arguably indicates that they weren't involved. How do I, in this

procedural stage, address a dispute like that? MR. BREISBLATT: The only evidence

that has been put in and the only thing they concede and the only thing they can concede is that they are listed as a U.S. agent for purposes of it. There is absolutely -- we've

put in affidavits and they haven't replied to them -- that the ANDA was prepared in our case in Canada. That's where the product will be They have not in the least bit

manufactured. disputed that.

So the only issue is simply listing the U.S. entity as agent for purposes of this ANDA sufficient to create subject-matter jurisdiction, and we say under the Hatch-Waxman provisions it is not, and therefore, there is a

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failure to state cause of action. THE COURT: Two courts -- I

believe only two courts have addressed this, and they both disagreed with your position. MR. BREISBLATT: I think the

Courts that have looked at it -- and it depends on the situation. My recollection is those were

wholly-owned subsidiaries, if I'm not mistaken, of the company that was putting it out. They

weren't independent companies as Apotex Corp. is. I think that's the major distinction. company. Apotex Corp. is an independent It's

It is not part of Apotex, Inc. It's an

not simply a U.S. subsidiary.

independent corporation whose sole tie to this ANDA at this point in time is it is listed as agent. If the ANDA is approved down the road,

they will more likely than not be the entity that sells the product. But again, it is a

separate U.S. corporation. THE COURT: They also, though,

even just as agent, as I understand it, by signing the application, they're making certain

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certifications such that the application contains true statements. promise to supplement it. They're making a Isn't that an act of

some significance in this context? MR. BREISBLATT: being the owner of the ANDA. Not in terms of In fact, what

they're listed as is the authorized U.S. agent, and they do list Apotex Corp. And then under

the certification, they do sign that they will do that, but it is understood that they will do it as the agent for the entity that is actually listed on the front page as the applicant. And

the entity that is listed as the applicant is Apotex, Inc. And the FDA wants somebody in the United States if the applicant is not to sign, and that's the purpose of the agent in this case. That does not mean they are the Remember, it is only the applicant

applicant.

who files the ANDA who becomes the -- or does the artificial act of infringement. The act of

infringement here is the filing of the ANDA, the artificial act of infringement. THE COURT: It's the party who

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submits the application who is committing the artificial act of infringement; is that right? MR. BREISBLATT: I would argue

it's the party that prepares and owns the application. The applicant is the only one who

is actually committing the artificial act of infringement. THE COURT: for that argument? MR. BREISBLATT: at the application. Well, just look What would you cite

The applicant is listed,

and they give their address, and the statute says the artificial act of infringement is filing the ANDA. That would tend to lead the

person who prepares it, the applicant, is the one who does it. THE COURT: have? MR. BREISBLATT: got, Your Honor. THE COURT: Aurobindo on this one? MR. HENEGHAN: a couple things to add. Your Honor, I have Are you speaking for That's what I've Okay. Is that all you

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Mr. Breisblatt is correct that there are some great similarities between Aurobindo's situation and Apotex's situation. Really what this comes down to is, who submitted this application? Who did the work? Who's Who is

going to benefit from the application?

the party who understands the technology, can make the drug, is going to provide the drug to the U.S. market? applicant. And that, in this case, is the

In our case, Aurobindo Pharma

Limited, which is an Indian corporation. Aurobindo USA, which is a separate corporate entity, signed the application only as the U.S. agent, and only because it's required by law to have -- when you have a foreign corporation filing an application -- to have a U.S. agent so that the FDA has a way of contacting and passing through information to the foreign entity. When we talk about the obligation to supplement, I would say it's no different than the obligation we as attorneys have to supplement Discovery Rule 26. We're not We are a

actually providing the information.

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conduit for the information to the other side or to the Court. supplement. We have that obligation to It's not our information. It's the

information of the party for which we are an agent. In this context in Court, in the context

of an application to the FDA. THE COURT: Can you cite any case

or anywhere in the statute that I could rely on to accept your argument that the cosigner is merely a conduit, merely a mailbox, merely there for service process? MR. HENEGHAN: Your Honor, there

isn't any language one way or another which answers that question. But I think if you look

at what the application process is, to hold otherwise would assume that this agent understands all the technology involved in this ANDA application, they understand the formulation, they understand the organic chemistry involved, they understand all the other aspects. And that's really not what that role is. That role is to have an identity in

the U.S. that can be contacted more easily than

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the foreign corporation.

But for the

requirement to have that kind of agency, there wouldn't be a signature from the agent. The

information is possessed, has been generated, it is in the control of the foreign corporation. They're the ones who know. have done the work. That's why it doesn't make sense to hold the agent accountable, any more than -if I had signed as the U.S. agent in my role as attorney, under the plaintiff's theory, I would then be a defendant in this case as well. I They're the ones who

think we can see that would be a bit ridiculous. The other thing I wanted to answer was your question about 12(b)(1). this is a 12(b)(1) motion. Our belief is

I think the

plaintiffs would like to convert it to a 12(b)(6) because they would like to avoid the, sort of, neutral evaluation of a jurisdictional pass that comes with a 12(b)(1) motion. They

would like the facts viewed in a light more favorable to a nonmoving party. happens in a 12(b)(1) motion. There has been jurisdictional That's not what

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discovery.

We've been very cooperative and

provided them with everything they asked for. We provided them with two depositions, and they haven't brought forth any facts to demonstrate that Aurobindo USA was anything other than the agent for the ministerial purpose of signing the application. THE COURT: In terms of the

corporate relationship, do I have the same issues before me on the Apotex as the Aurobindo? That is, your relationship to the Aurobindo entities is the same as the relationship of the Apotex entities? MR. HENEGHAN: I'm not sure how to

answer that because I'm not sure I understand what the Apotex relationship is. But I can tell

you that Aurobindo USA is a subsidiary of Aurobindo Pharma Limited, but it's a separate corporate entity incorporated in the United States. It has a separate Board of Directors,

has separate officers. There are some directors of one who are officers of the other, or some officers of one who are directors of the other. But

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there are no common directors and no common officers at the same time, if that makes sense. THE COURT: you. Mr. Lipsey? MR. LIPSEY: I detect from the That does. Thank

Court's questions that the Court has read our brief and understands the essence of our position. THE COURT: first one. MR. LIPSEY: belabor the point. There are, indeed, two cases on point, Wyeth v. Lupin and Aventis v. Lupin, both of which hold under circumstances which are fundamentally indistinguishable from this case, that where you have two related companies, a foreign company that makes the drug and the domestic company that's going to sell it in the United States, and they act together as one in order to sell it, and one signs the ANDA on behalf of the other, then both are submitters under the meaning of the statute. I will try not to I can say yes to the

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THE COURT:

Unless I missed it,

there wasn't a whole lot of statutory analysis in either of those cases that would tell me exactly why it is under the statute I should view the American agents as submitters. MR. LIPSEY: Fair enough. And we

attempted to deal with that in our brief. The first point is, the statute doesn't say applicant. The statute says submit.

And then the question becomes, can there be more than one applicant? And we cited the FDA

regulation that indicated that, indeed, the owner and the submitter can be two separate people. here. We also included with our responsive materials what's called the form FDA-356-H, which is the actual document that accompanies the abbreviated new drug application. In both instances, you can see And indeed, that's exactly what we have

there is one and only one signature on this ANDA, and the company name on Apotex is Apotex Corp. with a signature, and the company name on the form for Aurobindo is Aurobindo Pharma

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U.S.A., and the Court is exactly correct. And the piece of analysis that really is unstated in the Lupin decisions comes from the certifications that are made when that is filed. And the Court is absolutely correct

that the signer here agrees to update the application with new safety information, agrees to submit safety update reports, agrees to comply with all applicable laws and regulations in applying for approved applications, agrees to comply with labeling regulations, and most importantly, states the data and information on this submission have been reviewed and, "to the best of my knowledge are certified to be true and accurate," warning that any false statement is a defense under Title 18 in the United States Code. That's the only signature that you're going to find. these ANDAs here. mailbox. That is the submitter of

That's why it's more than a

If one were to grope for an analogy,

and this may not be particularly apt, this Court has a rule. It says you have to have associated That local counsel is not a

local counsel.

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mailbox.

When that local counsel signs a

pleading, that local counsel is taking responsibility under Rule 11 to make sure that pleading is correct. And they're very much the same obligations here, and the person who signs and submits that ANDA is more than a mere mailbox. THE COURT: Your argument, then, I

is it's really the fact that they signed it. don't need to go beyond that and determine are they intending to market the product, do they have a corporate relationship with the manufacturer?

It's once they sign that and make

that sort of relationship you alluded to, they're on the hook. MR. LIPSEY: correct. I believe that is

If one wanted to fit squarely under

the analysis in the Lupin cases, one would go one step further and satsify those requirements. The argument on Apotex is somewhat artificial. If you read the web site, you get

the impression that Apotex, Inc. is the head of this group. We're told now in discovery that in

fact there's a holding company that is actually

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above both. But the fact remains, and it was clear from the jurisdictional discovery, that Apotex, Inc. manufactures drug product for the United States and Canada and has nothing to do with it other than to transfer it to Apotex Corp for sale in the United States. relationship. That is the

That is exactly the relationship

that was in the Lupin cases as well. I also agree with the point that this is really a 12(b)(6) motion. It really was

treated as a 12(b)(6) motion in the Lupin cases and probably should be here. One of these

motions raises the issue of what happens if one of the foreign companies is not amenable to suit here. Must the case be dismissed? And we

contend the answer is an unambiguous no. We have here two Delaware corporations unambiguously amenable to suit here who have signed and certified and acted in concert in submission of an ANDA, which is a technical act of infringement, who have also indicated the intention as soon as they are allowed to do it to sell the product, which

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would be a threatened act of infringement under 271(a). We're going to try all these issues here with at least five other defendants, and submit we should be entitled to try those issues against these Delaware defendants here together with those other five. The issue then becomes, is it absolutely essential to have the foreign companies here also? answer is no. First, a judgment against the actual marketer will suffice for our purposes. That's what we're trying to prevent, and the actual marketers are the Delaware corporations. Secondly, their interests are completely aligned. same counsel. Thirdly, if either of the parents wishes to help or participate involuntarily, or even voluntarily appear, they certainly know how do to that. We've shown the Court that both They are represented by the And to that, we say the

parties are involved in active litigation here in this Court as we speak.

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And lastly, the allegations made that there might be inconsistent judgments. That's just not so. If we did have to try the

case twice, if the patent's declared invalid in this Court and collaterally stopped in the other one, if it's declared invalid in the second court, they win either way. of an inconsistent judgment. That's it. THE COURT: Thank you, Your Honor. Thank you. I assume we're And what I So there's no risk

MR. BREISBLATT: still arguing on Apotex Corp.

thought I would do is I would draw the Court's attention to the CFR because now the question becomes -- we've looked at the document Mr. Lipsey showed to the Court and that I referred to, and that's the application form which makes it quite clear that the only applicant here is Apotex, Inc. and it has an agent. And the Court asked, rightfully so, why

do you need an agent? We do it because the CFR tells us This is on page three of our motion Footnote 1

to dismiss, but they're important.

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is 21 CFR, Section 314.52(c)(7)(c).

It states

that, "If the ANDA applicant does not reside or have a place of business in the United States, the applicant must provide the name and address of an agent in the United States authorized to accept service of process for the applicant." So therefore, the name Apotex Corp. Because Apotex, Inc. is a Canadian company headquartered up in Toronto. Then 21 CFR, Section 314.50(5) states, "The applicant or the applicant's attorney, agent, or other authorized official shall sign the application. If the person

signing the application does not reside or have a place of business within the United States, the application is required to contain the name and address of, and be countersigned by, an attorney, agent, or otherwise official who resides or maintains a place of business within the United States." Having represented the Government for a number of years before I went into private practice, I know and the Court probably knows that when they do forms, it doesn't always

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follow the reg.

So if you look at form FDA 356

H4/06 page two of three, there isn't a place for two signatures. There's only room for one. And

it says, "Signature of responsible official or agent." So the reg requires an agent to sign it if the applicant doesn't reside in the United States. There's only one place on the It calls for

government form for a signature.

the agent or responsible official, but since the reg says it's got to be signed by, if you're not a U.S. corporation, someone in the U.S., you wind up with the signature of Apotex Corp. And all of the material which we supplied in discovery shows that everything for this ANDA is going to be done by Apotex, Inc. Apotex, Inc. is the only proper party, not Apotex Corp. To answer the Court's question, the reg required an agent. We have an agent. The

The reg requires the agent to countersign. form only has one place for one signature. THE COURT: MR. HENEGHAN: Thank you.

Your Honor, just

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again very briefly.

I think it's important to

note in the Lupin cases that Mr. Lipsey addressed and the Court asked about that in that case, the Court found that Lupin, the U.S. subsidiary of Lupin, was actively involved in the ANDA process. That's the difference between

our situation and the Lupin situation. I agree with you that in that situation it appeared that the Court made a determination that Lupin was a proper party. The reason they made that decision is because the Lupin U.S. subsidiary was actively involved in the ANDA process. We don't have that

situation here, and definitely not on behalf of Aurobindo, and from what I can see of the evidence, not on behalf of Apotex, either. These U.S. entities merely signed the application as they were required to do but were not involved in gathering the information,

doing the testing, getting the bio-equivalency data, and all the rest that goes into the two: Having the ANDA completed and submitting that to the FDA. THE COURT: But we know that

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they're likely to be involved in marketing, don't we? MR. HENEGHAN: But, Judge, that

gets into a little bit of what we talked about in Count 2, which is in order for them to be a proper party, then we're talking about something they might do in the future, and there just isn't subject-matter jurisdiction for that. 271(e) is very specific about who is subject to jurisdiction on that artificial act of infringement. infringement here. We don't have real So what the U.S. subsidiary

or U.S. entity might do three years from now upon approval is not what's before the Court. What's before the Court is this artifical act of infringement created by the Hatch-Waxman Act, and the Hatch-Waxman Act is very clear about who is subject to jurisdiction with that artificial act of infringement. it's the person who submits the ANDA application. In order to submit the ANDA application, there's a tremendous amount of work and data that has to be generated. All of that And

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has been done by the foreign entities.

U.S. company did was sign it, and I don't think that it's possible on those facts to find that they were actively involved in the way the Lupin cases were actively involved. THE COURT: Thank you. That

leaves us with just a couple of personal jurisdiction matters; is that right? Let's move on to those. MR. BREISBLATT: I was going to

suggest it be done alphabetically, but both Aurobindo and Apotex start with an A. go first. Your Honor, the jurisdictional argument is a heavily -- and the personal jurisdiction argument is -- the burden is on the plaintiff to show that there's jurisdiction in Delaware over Apotex, Inc., and they have failed at that. It was their burden to show it, and So I'll

there simply is no basis for it. They're finally reduced to saying that since Apotex, Inc. has been sued a number of times and did not contest personal jurisdiction, in other words, there was no

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finding of it, somehow that creates jurisdiction, and the cases don't support it in Delaware. The closest they can come to making an argument that one of those pieces of litigation somehow benefitted Apotex, and I thought it was an imaginative argument, was the Quinipil litigation argument. And that was the

Apotex suit against Pfizer in 2003, which was a DJ action brought in Delaware because this is Pfizer's home. And it was an attempt by Apotex to cause the first filer, which was not Apotex's, 180 days to begin. Pfizer successfully moved to

dismiss, and the District Court granted it based on no subject-matter jurisdiction at that time. It was pre-Medimmune. Apotex appealed, and

Pfizer gave Apotex a covenant not to sue in 2005, and the appeal was dismissed. no Court ruling whatsoever. Two years later, Apotex goes to market. No connection to the litigation, yet So there's

their argument is somehow that was Apotex using litigation in Delaware to make money. And it

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just doesn't work. Also, I think their argument that somehow Apotex, Inc. is in the business of litigation is interesting, but, again, is of no avail. Apotex is the one who gets sued because That simply is the legislative

it files ANDAs.

regime of the Hatch-Waxman statu