• Judge’s district is second-busiest patent litigation docket in country • New Jersey, Delaware handle 90 percent of all brand-generic drug patent suits

New Jersey is home to a large concentration of life sciences companies and its federal district court judges hear many high-profile pharmaceutical patent and product liability cases.

Chief Judge Jose L. Linares is no exception. Linares has presided over patent litigation involving some of the nation’s top-selling drug products including Merck & Co.'s litigation over its cholesterol drugs Zetia (ezetimibe) and Vytorin (ezetimibe/simvastatin) and Purdue Pharmaceutical Products LP’s litigation over its sleep aid Intermezzo (zolpidem tartrate). There’s often a lot of money at stake in these cases.

The New Jersey federal district court has an outsize impact on pharmaceutical patent litigation because it ranks just behind the U.S. District Court for the District of Delaware in the number of cases it handles between brand and generic drug companies over generic companies’ abbreviated new drug application (ANDA) submissions.

ANDA litigation involves brand-name drug companies suing generic drug companies for patent infringement based on their submission of an ANDA to the Food and Drug Administration. An ANDA seeks approval of a generic version of a branded drug before patents covering the branded drug expire.

“New Jersey and Delaware handle 90 percent of all the ANDA litigation in the country,” Linares told Bloomberg Law in a May 31 telephone interview.

According to data from Bloomberg Law, in 2017, 196 patent cases were filed in federal district court in New Jersey, and of those, 106, or 54 percent, were ANDA cases. In addition, there are a large number of pharmaceutical companies with locations in New Jersey, including Bristol-Myers Squibb & Co., Celgene Corp., Merck & Co., Pfizer Inc., and Roche.

Linares has handled 47 patent cases over the last five years, and 15-or nearly a third-of those involved life sciences companies, according to Bloomberg Law’s Litigation Analytics data. Merck & Co. tied with TeleBrands Inc., the leader of the “As Seen on TV” retail category, for the companies appearing most frequently before Linares in patent litigation. The other companies on the list with the most appearances are also life sciences companies: Bayer HealthCare Pharmaceuticals, Bayer Pharma AG (Bayer HealthCare’s parent company), and Merck Sharp & Dohme (the name under which Merck operates outside the U.S.).

Two Billion Dollar Settlement

Linares handled Pfizer Inc.'s litigation over its acid reflux treatment Protonix (pantoprazole), which resulted in the “biggest pharmaceutical settlement ever,” Linares said.

Teva Pharmaceuticals Industries Ltd. and Sun Pharmaceutical Industries Ltd. paid Pfizer Inc. and partner Nycomed Inc. (now part of Takeda) $2.15 billion in 2013 to end patent infringement litigation stemming from their at-risk launches of generic versions of the blockbuster acid reflux medicine.

Generic drugs are considered to have launched at-risk when they are launched before patent litigation over the branded drug has been resolved.

Court Ranks First in Affirmances

Linares’s court ranks number one out of all federal district courts in the number of affirmances of ANDA cases at the U.S. Court of Appeals for the Federal Circuit, he said.

“As chief judge, I’m extremely proud of this court,” he said. “We’re affirmed [on ANDA cases] 90 percent of the time, more than any other district court.”

“And ANDA cases get appealed all the time because of the amount of money involved,” he said.

Stress From Vacancies

But the court is under stress. It’s facing the challenge of hearing time-sensitive ANDA cases while operating with far fewer judges than it needs, Linares said.

At full strength, the New Jersey federal district court is supposed to have 17 judges, but it currently has 14. Two more judges are scheduled to step down this year and another judge is slated to retire in early 2019.

“I think it’s a fact our court is under a tremendous amount of stress due to these vacancies,” Linares said. “Some of these vacancies are nearly three years old.”

“Our court is a court that should have 20 judges,” Linares said. “It has only 17. In a perfect world, we should be at 20.” The Judicial Conference of the United States has recommended the court have 20 judgeships because of the volume of cases it handles, but Congress hasn’t acted to increase the number of judgeships. The Judicial Conference is the national policy-making body for the federal courts.

Nor has the Trump administration put forth any nominees for the vacant judgeships in New Jersey.

“I need qualified bodies that can come in and dig in alongside of us,” he said.

But he said he’s not sanguine about the timing of filling the vacant judgeships. “We’re looking into next year, optimistically speaking,” he said.

Complex, Labor-Intensive Docket

Beyond the vacancies, there are other stressors on the court, Linares said. The Speedy Trial Act, which requires federal criminal prosecutions to be completed within a certain time frame, and the large volume of ANDA cases are putting pressure on the court, he said. The opioid epidemic has also led to an increase in the number of criminal cases, he said.

Other factors affecting the court are the number of Social Security and bankruptcy administrative appeals it hears and the complexity of the cases it handles. New Jersey ranks seventh in the nation in terms of complex case filings.

“We have a lot of class actions, multidistrict litigation, and securities fraud cases in this court,” he said. And many of the complex cases wind up tying up individual judges for long periods of time, he said.

For example, Judge Madeline Cox Arleo recently was tied up on a Racketeer Influenced and Corrupt Organizations Act (RICO) trial for five months. Now that case is heading for a retrial so she’s going to be tied up again. “We have to lose her again,” Linares said. “It’s like having another [judicial] vacancy.”

Time Pressure

Hatch-Waxman brand-generic drug patent litigation also adds stress on the court due to its unique time pressures.

Under the Hatch-Waxman Act, an automatic 30-month stay on regulatory approval is triggered when a branded drugmaker sues a generic drugmaker over its filing of an ANDA seeking FDA approval to sell a generic version of the branded drug.

ANDA cases “are judge trials that have to be done in 30 months,” he said. “These are very complicated cases,” Linares said. “You have to conduct a Markman hearing on claim construction; it’s very labor-intensive. And you can’t go trial until Markman is done.”

During a Markman hearing, parties argue their positions on how disputed patent claims in the case should be construed.

Limit Claims

But lawyers in ANDA cases can help the court make the cases go faster, Linares said. “I think lawyers need to be cognizant of the judicial crisis we’re in,” he said. Lawyers can consult with their clients and try to limit the amount of patent claims they’re going to ask the court to interpret, he said.

“A lot of times, interpreting every claim is going to draw out the case,” he said. “Don’t bring borderline claims; it delays the ability to get Markman done,” he said.

“Give serious consideration as to whether these things are worth the fight because they make the case last longer,” he said.

Creative Solutions

Linares is working on alleviating the stress on the court engendered by the vacancies.

He’s requested additional funding for one or two more magistrate judges to help handle the court’s caseload. He’s also increased the number of positions in the Prison Litigation office. “I have tried to think outside the box to help alleviate the problem,” he said.

And he said the vacancy issue is a “citizen problem” not a court problem.

“The stress is because of our duty to serve the citizens and litigants that appear before us and to resolve the disputes in a timely manner.”

“The problem is at the back end; it’s taking longer to get through motions,” he said.

Named Chief Judge in 2017

Linares became chief judge in 2017, succeeding Judge Jerome Simandle who took senior status. Linares is the first Hispanic chief judge on the state’s federal court. President George W. Bush nominated Linares to the bench in 2002.

He was a state court judge in Essex County, N.J., from 2000 to 2002. Prior to that, he worked in private practice in New Jersey for 20 years. His first position after graduating from law school was as a supervising attorney in the New York City Department of Investigation.

He graduated from Jersey City State College and from Temple University School of Law.

To contact the reporter on this story: Dana A. Elfin in Washington atdelfin@bloomberglaw.com

To contact the editor responsible for this story: Randy Kubetin atrkubetin@bloomberglaw.com