Dr. Reddy's Laboratories announced that because the time needed to obtain a favourable Federal Circuit decision prior to patent expiration would not be met, the company has decided not to pursue further its district court challenge and to amend its ANDA for terbinafine hydrochloride tablets from a Paragraph IV Certification to a Paragraph III Certification on the remaining unexpired Orange Book Patent listed for the drug.

On July 18, 2002, Novartis had filed a lawsuit against the company in the United States District Court for the Southern District of New York alleging patent infringement of the '534 patent. Although the Court had recently granted a bifurcation motion, the Court denied Reddy's request to set a trial date.

According to Dr Reddy's release, in view of the length of time necessary to get through summary judgment motions, a trial and an appeal, the company has decided not to pursue further the litigation directed to the '534 patent which will expire in late 2006. The parties have dismissed all pending claims against each other.